INVESTMENT / FOREIGN OWNERSHIP
Cabinet exempts telecoms, retail, hotel businesses from
FBASource:Bangkok Post April 11 2007
CHATRUDEE THEPARAT & PHUSADEE ARUNMAS
Foreign companies using illegal nominees could face five years in jail under a plan to toughen foreign ownership rules. Cabinet ministers yesterday endorsed the revisions to the Foreign Business Act, which also increases fines by five-fold to up to five million baht, according to Commerce Minister Krirk-krai Jirapaet.
''The cabinet agreed to raise the penalty for violations, both in terms of fines and prison terms,'' he said.
The original FBA draft approved by the cabinet on Jan 9 called for maximum sentences of three years and fines of up to one million baht.
The government also scrapped a proposed amnesty that would allow foreign-controlled businesses operating in List 3 sectors to maintain minority voting rights.
The Council of State, the government's legal advisory body, noted that the ''grandfather'' clause was unfair to other companies.
But companies will be given three years instead of two to comply with the law.
Critically, the cabinet yesterday exempted businesses in the telecommunications, retail and hotel sectors from the FBA rules, under the principle that these businesses operated under their own separate laws.
Companies in these sectors can continue to operate with foreigners holding majority voting rights until they cease operations.
The 1999 FBA outlines 43 types of businesses restricted to foreign companies. List 1 represents businesses banned to foreigners, including media and rice farming. List 2 sectors, which include firearms production and transport, are restricted for national security reasons, while List 3 covers most service sectors.
Pramon Sutivong, the chairman of the Thai Chamber of Commerce, cautioned that the latest changes did not necessarily represent the final version of the final law, as the National Legislative Assembly was likely to set up a separate panel to consider the draft.
