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ResourcesCorporate and Tax AdvisoryThailand Corporate LawThe "Regulatory Guillotine" to Ease Doing Business in Thailand?

The "Regulatory Guillotine" to Ease Doing Business in Thailand?

Transcript of the above video:

As the title of this video suggests, we are discussing the notion of the "Regulatory Guillotine". We have discussed this topic in another video discussing the "regulatory guillotine". In short, it is basically the notion of cutting out a lot of "red tape". We have talked about this, it is coming from a business context.

To go ahead and quote from the Business Section of the Bangkok Post, print edition from Monday March 29th, 2021. The article is titled: Making it out of the Maze. Quoting directly: "When starting a business in Thailand, many people find themselves in a maze of regulatory procedures and licenses not to mention conflicting legal interpretations by different state agencies." Quoting further: "Such complications discourage some from even starting a business while those who decide to jump in, may end up facing unnecessary cost and time wasting through a string of legal requirements." Quoting further: "Thailand Development Research Institute, TDRI, suggests efforts be scaled up to tackle outdated or unnecessary laws known as "Regulatory Guillotine" otherwise Thailand will find it difficult to boost its competitiveness or return to strong economic growth."

I do think this notion is laudable. However, I often think especially when this stuff is kind of a top down mentality, the paradigm is kind of more from a top-down rather than a bottom-up evolution of changing the regulatory structure, there can be a, I don't know how you want to call it, I hesitate to use the word of tyranny but a tyranny of good intentions. I have heard that phrase used in the context of COVID recently and I do think people have good intentions but their intentions can manifest themselves in a policy way and especially in a legal way and can have effects that they don't really intend. There is unintended consequences of laudable policy changes. I will just give one just tiny little example of this that we saw when the rules were changed with respect to Work Permits for Representative Offices in Thailand. Foreigners that were heading generally, a Representative Office in Thailand did not need a Work Permit. They changed the statute and said "yeah you don't need that" and on the face of that, that was great. It knocked out something that folks wanting to do business here, they didn't need to have that. As a practical matter, it was a nightmare. We were dealing with clients in that situation because Immigration wasn't used to dealing with Business Visa extensions without a Work Permit and notwithstanding the law said something, Immigration took the position that their regulations dictated you have to have a Work Permit. It caused all sorts of unforeseen, unintended problems. I am not saying that is necessarily going to happen here by cutting some "red tape" but generally speaking there is a reason why things come into existence.

Now sometimes over time, they accrete where conflicting policies manifest themselves in regulations and laws that conflict with each other practically but the point of talking about this is while it is generally good to hear about changes to the "red tape", cutting back on bureaucracy etc., etc., it has been my experience, we saw this in a US Immigration context and it had a lot it cost a lot of problems at least temporarily. Now, sometimes longer term it smoothed out but generally speaking, I have never found bureaucracies as a general rule get easier to deal with; they generally get more Byzantine and more complicated as time goes by. That is not to say that initiatives can't be made to counteract that but just be careful because unintended consequences can have real problems at a practical level down the road.