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ResourcesCorporate and Tax AdvisoryThailand Corporate LawEasing Foreign Business Act Restrictions in Thailand

Easing Foreign Business Act Restrictions in Thailand

Transcript of the above video:

As the title of this video suggests, we are discussing the Foreign Business Tax here in Thailand. For those who are unaware, Thailand has some rather protectionist laws on the books that basically insulates certain Thai businesses from foreign competition most notably the Foreign Business Act which under certain circumstances either completely restricts foreign business activity of certain types here in the Kingdom or it restricts the ownership structure to where as a practical matter, the foreign entity or foreign individual can only be a minority shareholder

As part of a side note to the preface of this video, it should be noted that Americans may be able to gain benefits under what is called the US-Thai Treaty of Amity in order to have a company certified under that Treaty allow for 100% or virtually 100% American ownership in the Kingdom notwithstanding the provisions of the Foreign Business Act. So, for Americans this may or may not apply depending on the factual circumstances and whether or not an Amity Treaty Company is going to need to deal with some of these restrictions. That stated you know things that are in List 1 and 2 of the Foreign Business Act are oftentimes still restricted under the Treaty or the terms thereof I should say. 

Now getting back to the matter at hand. In a recent article from the Nation, nationthailand.com, the article is titled: Four More Businesses to be Removed From Foreign Business Act Annex. Quoting directly: "The Department of Business Development has discussed its plan to remove for more restricted businesses from the list annexed to the Foreign Business Act of 2542 with the Board of Investment, BOI, the Department's Deputy Director-general Poonpong Naiyanapakorn has said. These are the Type license of the Telecom Business and the treasury Ccnter, the aviation maintenance business in relation to certificates for type 2 and type 3 of the maintenance unit and high-value-added software development service." 

So, the thing to take away from this video is clearly Thailand is easing certain restrictions but they are easing them in areas in which they are trying to spur new innovation, spur new business activities here in the Kingdom of Thailand. Technology software development, things like telecom business, those types of things are things that are clearly within what is called the Smart Visa program we have seen the Thai Authorities trying to go ahead and encourage,  and I think that this is just in line with that overall policy and I think it is very likely we will see further easing especially in the tech sector in Thailand in the coming days and years.