Commerce Ministry clarifies plan to amend the foreign business act; says 'no retroactive impact'
The Commerce Ministry has reassured concerned investors overseas that the government will not stringently control foreign businesses under a plan to amend the Foreign Business Act (FBA). The Commerce Ministry has reassured concerned investors overseas that the government will not stringently control foreign businesses under a plan to amend the Foreign Business Act (FBA).
It will focus instead on "relaxation, reducing procedures facilitating investment, and not deal retroactively with existing firms", as it aims to create an investment-friendly atmosphere with a positive impact on investors.
Commerce Minister General Chatchai Sarikulya said yesterday that following some concern about its plan for FBA amendments, the government would not stringently control foreign investors.
"The government is aimed at amending the law to be more flexible and become international by helping reduce investment obstructions and not control any firms retroactively," Chatchai said.
He said the ministry had not yet come out with a draft amendment, but was so far only studying how to amend the law first enforced in 1999.
Pongpun Gearaviriyapun, director-general to the Business Development Department, said the FBA should be more flexible and help increase business competitiveness, both domestic and international.
Based on the amendment plan, the government advised the department to focus on four key principles – relaxation, reduce procedures, facilitate investment, and not act retroactively with existing firms.
The department is still studying the amendment plan, and has not yet come out with a new draft law.
To ensure fair benefits for all, the department is conducting a study and a public hearing get concerns from all involved. The hearing is expected to be finalised next month before approval is sought from the minister and Cabinet for amendments to the draft law.
Many agencies at attend public hearing
Involved agencies that will take part in the hearing are 20 government agencies, the Board of Trade of Thailand, the Federation of Thai Industries, the Thai Bankers Association, the Joint Foreign Chamber of Commerce, local Thai enterprises, and academics.
Pongpun clarified that foreign investors should not be worried about the plan to amend this law, since the government aimed to make it more flexible and relaxed.
Under the plan to amend the draft law, the department would change the definition of "foreigners" to one based on international principles.
It would also adjust some qualifications for foreign investors to facilitate more investment, review business lists under Annex III to be more flexible, consider exemption requirements for initial capital investment in accordance with international agreements, increase efficiency for foreign investors to get approval, and adjust some penalties for nominees.
To facilitate investors, the department will soon remove four businesses on the Annex III list from FBA regulations, as those businesses already have specific laws. The four industries are banking, banking agencies’ offices, life insurance and non-insurance.
To remove those businesses, the ministry’s Foreign Business Board will finalise the proposal this week and come out with a regulation declaration. Other businesses to be removed from Annex III involve the trading of agricultural products in future markets and other businesses related to banking and insurance.
Meanwhile, in a separate interview, the Thai European Business Association (TEBA) president Uli Kaiser said the association had gained confidence about the issue since the ministry had reassured them that any changes to the act would only effect new foreign investment – not existing foreign investors and companies.
Uli said the FBA had never been implemented in the way it was written and authorities were often lenient in regard to foreign companies that have opened and controlled businesses in Thailand on the restricted list through special structures.