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Officials in Thailand Discussing Reform of Certain Laws

Transcript of the above video:

In this video today, we're going to be discussing some recent announcements basically and some recent press reports with respect to Thai officials seriously discussing certain legal reforms in order to, if you will, bring the legal infrastructure of Thailand up with the times and up with the business community in this area in which we're living I guess you could say.

To quote directly from the Bangkok Post (www.bangkokpost.com), the article is titled Archaic Laws Handicapping Thailand 4.0. I’m just going to quote directly from this article, “A member of the government's Economic Reform Committee said legal reforms are necessary to embrace what authorities have dubbed the fourth Industrial Revolution noting the country has an undue share of anachronistic regulations. He said several were introduced as protective measures but they now pose as obstacles because the economic environment has changed.”

So I'm not going to go into any further detail with respect to that article. I strongly recommend viewers of this video go ahead and check that article out for themselves to read it in detail. I'm just going to throw in my two cents on what's going on here. Basically for quite some time in Thailand, there have been legal structures put in place that were essentially protective in nature. You can use the term protectionism. I wouldn't even quite go that far. People do forget there was a time that you know Thailand was not nearly to the point of modernity and to the point of sophistication that its economy is now and it was felt at the time that measures were necessary to sort of keep foreign elements from basically coming in and sort of monopolizing huge segments of the economy. So understand sort of where this was coming from, sort of on a paradigm level.

But that being said, what we're seeing here is serious discussion of certain legal reforms in order to I would say benefit the national economy. I think that that is probably the goal and objective in the possibility of reform or in even discussing reform. But what are we talking about? Well for folks have never done any business here in Thailand and for anybody who had, who has done business here in Thailand, there's this huge chasm of differentiated understanding. A lot of folks come in here and I deal with it by emails and things fairly frequently, a lot of folks come in, they sort of think they know because Thai culture is sort of a laid-back attitude, sort of calm and go with the flow kind of demeanor. Folks feel like that the legal system here operates the same way and I'm here to tell you and anybody that's been an expat in Thailand that is far from the case. The legal system is quite complex and there are many, many laws on the books and many regulations associated with those laws to sort of further their implementation. And this whole regulatory framework can be rather cumbersome depending on the type of Industry and individuals operate, an individual or an entity is operating in.

Just one example and I doubt they're going to radically change this but one example of a piece of legislation that one could argue has perhaps placed restriction, I mean clearly placed restrictions on for businesses is the Foreign Business Act. The Foreign Business Act specifically stipulates certain types of businesses that cannot be owned by foreigners in Thailand. There are now various international agreements between Thailand and other countries specifically the United States and Australia to name just two whereby nationals from those countries can own a majority stake or outright in the case of the Treaty of Amity. They can effectively own their companies outright under the treaty and the Thai Australian free-trade agreement allows Australians to own 60% of certain types of companies.

But that being said, I think moving forward and we've discussed this and I've read other articles on this channel or I've quoted some other articles on this channel where it looks like the current government in an effort to increase foreign direct investment, bringing foreign investors, bringing foreign business folks in order to enhance the Thai economy, they're looking at maybe scaling back some of the regulatory framework that's in place. Another thing is you've got a lot of regulations that just existed in a wholly different time and they're either sort of cumbersome and unnecessary now or they're almost only done on paper like they're the requirements are met but in some cases you know yeah it's met. But it's just a hurdle you have to jump over and there's no there's no practical benefit being gained by having these regulations operating.

That being said, legal reform is always a complicated and time-consuming process so those watching this video, I would not expect to see any massive overhaul of the legal system in Thailand any time particularly soon but I think it's a pretty good sign for those who are looking at directly investing in Thailand that the authorities here do take concerns of foreign investors and foreign business folks seriously and it's serious enough that they're discussing reforming certain aspects of the legal system to be more accommodating to foreigners and to foreign business moving forward.