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  1. #1
    Thailand Expat
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    Thailand to limit foreign stake in firms to 50 per cent

    Thailand to limit foreign stake in firms to 50 per cent

    Thai government will limit foreign investors to holding no more than 50 per cent of the shares or the voting rights in companies here under legal changes approved Tuesday, Finance Minister Pridiyathorn Devakula said.




    "Foreign investors who altogether hold more than a 50 per cent stake in a company must lower their stake within a year," Pridiyathorn Devakula said after a cabinet meeting.

    "Foreign investors who hold more than 50 per cent of voting rights must also reduce their voting rights within two years,"he added.

    The 50-per cent cap will only apply to companies that deal with areas considered important to national security, or that have an impact on natural resources or Thai culture, he said.

    The cabinet approved the changes to the Foreign Business Act "in principle" on Tuesday.

    Surayud said the government's top panel of legal advisers would continue to work on the details of the law to ensure precision and transparency.

    "The Council of State is authorized to work on the details to make the law precise and transparent, without any need to be resubmitted for cabinet approval again," he told reporters.

    "It will take some time for the law to take effect," he added.




    The Cabinet approved Tuesday the foreign business law amended by the Commerce Ministry.

    The amended act would include the requirement on the voting rights of the board members and increase the penalty for violators.
    Netpreeya Chumchaiyo, deputy government spokesman, said after the Cabinet meeting that the Council of State is assigned to review the draft amendments.

    Earlier, Joint Foreign Chambers of Commerce warned that the amendment might affect their decisions to do business decision.

    Commerce Ministry and Finance Ministry are scheduled to make seperate press conference at 3pm.

    Earlier Finance Minister Pridiyathorn Devakul vowed to press ahead with legal change that could overhaul the way foreign companies do business here despite warnings of potentially disastrous economic fallout.

    Pridiyathorn insisted that foreign companies would not be scared off by the final version of the law, which has not yet been released.

    Foreign business community in Thailand has urged the government to postpone the changes for at least six months.

    "Why should we withdraw it? They have not yet seen the details. If they had seen the details, I am sure that they would be happy," Pridiyathorn said.

    "Why should we postpone it when we have worked on it for three months. This is Thailand," he added.

    The minister was speaking after attending the cabinet meeting which will consider the changes.

    Pridiyathorn said he had consulted some foreign investors about the changes to the Foreign Business Act and more than half of them had found the new rules acceptable.

    "I myself will talk with them. I have held talks with many investors but they have not seen all of the details and the commerce minister cannot disclose the bill before the cabinet gives its approval," he said.

    "We have a record of welcoming foreign investment. We are not hostile to them. Foreign investors have made Thailand develop and we are certainly still adhering to this policy," he said.

    The revised law is expected to redefine shareholder rights and ownership structures for local subsidiaries of international firms.

    Companies have traditionally set up their operations in Thailand so that the local subsidiaries are nominally owned by Thais but controlled by foreigners.
    Agence France Presse/The Nation

  2. #2
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    thai compromise as usual,
    as an investor I would not like to oprate under the new 50% cap,
    before the the 49/51 deal with vote control on the part of the actual foreign owners was more palatable, this new shit is unacceptable

  3. #3
    Thailand Expat
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    As the Finance Minister said, "This is Thailand". Sort of sums it up.

  4. #4
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    yep so it seems he did...
    hence ... will SET (and the LoS in general) soon be at the same level with zimbabwe?

    stupid decisions made by incompetent assholes tend to lead down paths of economic destruction

  5. #5
    ding ding ding
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    Quote Originally Posted by William
    "We have a record of welcoming foreign investment
    Yes you do but it was always on your terms with foreigners forced to eek around the law using nefarious loopholes like voting rights to secure some kind of just method of doing business here.
    These changes remove part of that security and will see more farangs relent investment and walk away.
    I'm not one of these guys who think that Thailand runs on farang money, it clearly does not. This news for me just puts another small nail in the coffin of my planned long term future here.

  6. #6
    I am in Jail
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    The BBC has picked up the story, not good

    BBC NEWS | Business | Thailand revises business rules

  7. #7
    watterinja
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    These clowns are really SET to break the bank - idjits.

  8. #8
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    Maybe that Finance minister is trying to sabotage the coup politically from the inside.

    I am starting to miss Thaksin

  9. #9
    watterinja
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    Quote Originally Posted by Butterfly View Post
    Maybe that Finance minister is trying to sabotage the coup politically from the inside.

    I am starting to miss Thaksin
    Isn't he a relative of team-yellow?

  10. #10
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    Quote Originally Posted by watterinja View Post
    Quote Originally Posted by Butterfly View Post
    Maybe that Finance minister is trying to sabotage the coup politically from the inside.

    I am starting to miss Thaksin
    Isn't he a relative of team-yellow?


    just how big is the chinese influence in thailand these days.

    my mrs seems to think they still run the country, albeit behind closed doors.

  11. #11
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    the commerce minister cannot disclose the bill before the cabinet gives its approval
    Is this rule a good or a bad idea?

  12. #12
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    Quote Originally Posted by Skulldigger View Post
    the commerce minister cannot disclose the bill before the cabinet gives its approval
    Is this rule a good or a bad idea?
    The optimistic view is it will enable them to gauge public/business reaction before finalising the bill - which if today's reaction is heeded would see the bill killed or heavily amended.

    The pessimistic view is that they cannot disclose the bill because they want to get their personal money out before the economy collapses.
    Lord, deliver us from e-mail.

  13. #13
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    The WSJ has picked up the story, not good.

    SET might rebound today actually, waiting a bit before buying more

  14. #14
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    Gleaned from The Nation:
    The Foreign Business Law covers three lists of business sectors - deemed critical to national security - subject to the degree of protection. The most protective category is Annex 1, followed by Annex 2 and Annex 3.
    Industries listed in Annex 1 include rice farming, forestry, agriculture and protected professions such as hairdressing.
    Hairdressing is obviously critical to national security.
    Annex 2 comprises national security-related sectors such as telecommunications, handicrafts, media, weaponry, ammunition, military equipment, the culture-related sector, environment, transportation, marine and air transport, domestic aviation, antique sales, salt farming and mining.
    Handicrafts? They've obviously heard of the rafia mafia.
    Companies operating in industries listed in Annex 3 of the law will be exempt from the rule.
    Annex 3 includes rice milling, fisheries, forestry, accountancy services, the service business, legal service business, agriculture, engineering, and retail.
    So Forestry and Agriculture are restricted under annex 1 but allowed under annex 3. Well I'm glad that has cleared up the confusion and created the transparency we all craved.
    ..........
    Foreign Minister Nitya Pibulsonggram asked for Cabinet's comments on how he should explain the new law to foreigners. Eventually, Prime Minister Surayud Chulanont assigned Krirk-krai to explain the issue to avoid confusion.
    Surayud was maybe concerned that if he tried to explain it would only add to the confusion.
    Surayud also tried to ward off investors' concerns, saying the decision was right and the government would be able to explain it.
    Just as soon as they've found out what it is they are doing.
    He said the changes would not take effect for "some time", as a panel of legal experts needs to review the changes and the government would try to reassure nervous investors.
    "We think that it needs to be worked out in detail for the law to be more transparent, and to make investors more confident," Surayud said.
    Oh but the details are already revealed -
    Only 15 listed companies at most would have to restructure their shareholdings to meet the new foreign business ownership rules approved yesterday, according to Stock Exchange of Thailand president Patareeya Benjapolchai.
    "Most of them are in the telecom and property sectors," she said.
    "We thought the impact would have been greater due to the lack of information and understanding of the draft amendments. But when the details were revealed, we found out that the impact for the entire market, which has nearly 500 listed companies, is quite limited."
    What's that sound I hear? Is it someone desperately backpedalling?

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