The Business Development Department just announced the creation of a special unit dedicated to check companies’ compliance to the Foreign Business Act. The purpose of the new agencies is to insure more efficiency in insuring compliance to the Foreign Business Act. What does it mean for foreign investors in Thailand?
Firstly, this new agency is being created as a result of recent complains by Thai farmers that foreign investors hold major stakes in businesses planting rice which is a protected activity under the Foreign Business Act. The Business Development Department did not have up to date the resources to follow up on that investigation which is why the BDD is proposing to the Cabinet the creation of a new unit.
So what does it means for foreign investors?
What is transpiring to date about this new unit is that when it is created its first objective will be to follow up on Thai farmers’ complaints. So providing that you are not farming rice you should be safe for the moment.
What then? Here we have two schools of thought.
One the one hand, you have those who believes that the creation of the agency is to humor Thais who have been scandalized by the farming issue but that the creation of the agency should not result in a massive and systematic “nominees witch hunt” because such hunt would only worsen Thailand image as a safe place to invest.
Then you have those that believe that the creation of the new agency is only another step in what has been a coherent attitude from Thai authorities for the past 3 years and at some point in time foreign investors will have to rethink the way they do business in Thailand.
Unfortunately I do not have scrying powers and I’m unable to tell you which one it will be.
My best guess is that as often in Thailand the authorities will at the end of the day chose the middle road, making enough examples to shows they are doing something about it but not to many as to endanger the reputation of Thailand as a safe place to invest, but this is only a personal guess and only time will tell whether I was right about it or not.
About the Author:
The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.
© Copyrights 2009 – Rene Philippe Dubout – This article may be reprinted if information about the author, the websites, and the URLs remain intact
Originally posted 2009-12-06 09:49:32.