See, I told you all not to panick ..........
Restrictions on foreigners' voting rights relaxed - The Nation
The Cabinet has relaxed the restrictions on foreigners' voting rights as well as extended the grace period in voting right adjustment.
At the meeting Tuesday, the Cabinet approved the proposed amendments to the Foreign Business Act: foreign voting rights in companies in Annex 3 can exceed 50 per cent while the grace period for voting rights in companies in Annexes 1 and 2 is extended from 2 years to 3 years.
Under the previous draft, any firm in which foreigners held 50 per cent or more of the shares, or 50 per cent or more of shareholders' voting rights, would be considered a foreign company, excluded from business activities reserved for Thais.
So to summarise, once again they had the chance to clampdown on foreigners owning companies to buy land and house, and once again they exempted us.
Clampdown on foreigners my ar$e.
Burger
New company ownership rules might affect you
Time to celebrate!? 
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Wanderlust
- Legend
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- Location: Hua Hin
It appears that this is good news in some way for the farang property market, but can someone explain in simple terms for everyone why it is? Does it, for example, reduce the risk of a foreign non-trading company being investigated by the relevant authority? Or does it eliminate that possibility altogether? Does it mean that foreigners who had companies set up to buy land with a group of named but unknown Thai shareholders have nothing to worry about? I am sorry if I appear to be dense but the implications of this change are lost on me, and I am sure that is true of others, so for the benefit of us, please explain.
P.S. One more question - can anyone guarantee that the current situation will not change again (for good or bad) when the next contenders take power? (whenever that may be)
P.S. One more question - can anyone guarantee that the current situation will not change again (for good or bad) when the next contenders take power? (whenever that may be)
The easing of restrictions in Annex 3 will benefit most people who simply formed companies to buy property, but for anyone involved in other areas of business take note of:
BANGKOK (XFN-ASIA) - Violators of Thailand's new foreign investment law could face up to five years in prison, under a revised version of the proposed amendments approved by the cabinet, Commerce Minister Krirk-Krai Jirapaet said.
The changes, originally proposed in January, would limit foreigners to holding not more than 49 pct of the shares or voting rights in Thai companies.
The original proposal would have punished violators with only a fine of up to 100,000 baht, but the revised version raised the fine five-fold and also threatens to imprison violators for five years, Krirk-Krai said.
Companies would also have three years rather than two to adjust to the new regime, he added.
'The cabinet agreed to raise the penalty for violations both in fines and imprisonment. Those who violate the law would face five years in prison and fine of five times the amount in the earlier draft,' he said.
'We added the criminal penalty in order to promote good corporate governance in the business sector,' Krirk-Krai said, adding the draft would be submitted to parliament before Friday.
'I personally believe that the amendment will not affect foreign investment in Thailand or investor confidence because direct investment usually focuses on the rate of return and the investment opportunity,' he said.
The latest draft still needs approval from the military-installed parliament before taking effect.
The original proposal drew widespread complaints from foreign investors here who warned that new investment could be switched to neighbouring countries with fewer restrictions.
The bill also allows for broad exemptions, including the service sector, which is governed by a separate law. Companies operating under bilateral trade deals would also be exempt.
BANGKOK (XFN-ASIA) - Violators of Thailand's new foreign investment law could face up to five years in prison, under a revised version of the proposed amendments approved by the cabinet, Commerce Minister Krirk-Krai Jirapaet said.
The changes, originally proposed in January, would limit foreigners to holding not more than 49 pct of the shares or voting rights in Thai companies.
The original proposal would have punished violators with only a fine of up to 100,000 baht, but the revised version raised the fine five-fold and also threatens to imprison violators for five years, Krirk-Krai said.
Companies would also have three years rather than two to adjust to the new regime, he added.
'The cabinet agreed to raise the penalty for violations both in fines and imprisonment. Those who violate the law would face five years in prison and fine of five times the amount in the earlier draft,' he said.
'We added the criminal penalty in order to promote good corporate governance in the business sector,' Krirk-Krai said, adding the draft would be submitted to parliament before Friday.
'I personally believe that the amendment will not affect foreign investment in Thailand or investor confidence because direct investment usually focuses on the rate of return and the investment opportunity,' he said.
The latest draft still needs approval from the military-installed parliament before taking effect.
The original proposal drew widespread complaints from foreign investors here who warned that new investment could be switched to neighbouring countries with fewer restrictions.
The bill also allows for broad exemptions, including the service sector, which is governed by a separate law. Companies operating under bilateral trade deals would also be exempt.
Wanderlust wrote:
No you're right WL, it does not remove the risk totally of anything changing down the line.
But this supposed anti-foreigner military government had the chance to bury once and for all the 'shelf' company situation and decided not too because they welcome the foreign investment. As did the government before.
This is the 5th or 6th law/regulation change (by this and the previous government) where everyone feared the worst but when the details were clarified property buyers were exempted every time.
For the sceptics (I don't mean you WL) the penny never seems to drop that Thailand welcomes this kind of foreign investments. It's generally decent middle to late aged couples who invest in a house and then spend their money here without causing trouble.
It's not like it's a mass influx of lager louts like Spain has suffered.
Just my opinion like.
Burger
It appears that this is good news in some way for the farang property market, but can someone explain in simple terms for everyone why it is? Does it, for example, reduce the risk of a foreign non-trading company being investigated by the relevant authority? Or does it eliminate that possibility altogether?
No you're right WL, it does not remove the risk totally of anything changing down the line.
But this supposed anti-foreigner military government had the chance to bury once and for all the 'shelf' company situation and decided not too because they welcome the foreign investment. As did the government before.
This is the 5th or 6th law/regulation change (by this and the previous government) where everyone feared the worst but when the details were clarified property buyers were exempted every time.
For the sceptics (I don't mean you WL) the penny never seems to drop that Thailand welcomes this kind of foreign investments. It's generally decent middle to late aged couples who invest in a house and then spend their money here without causing trouble.
It's not like it's a mass influx of lager louts like Spain has suffered.
Just my opinion like.
Burger
how new co rules may affedt you
Does this new decision mean that the company route is once again a viable option in land/house purchasing?
Although we would all welcomw the idea of a relaxation of the FBA there seems to have been once again on this forum the need by some posters to jump the gun.
Update:
Cabinet okays Business Act amendments
New rules for foreign business still have to clear National Assembly
BANGKOK: -- The Cabinet yesterday approved the revised amendments to the Foreign Business Act, but it remains uncertain whether the bill will pass the National Legislative Assembly.
The assembly will debate the amendments on April 18. Some 50 of its members have been up in arms against the changes, saying they jeopardise foreign investment.
Commerce Minister Krirk-Krai Jirapaet said he was ready to bring the amendments to the assembly.
The Cabinet approved the new draft of the Foreign Business Law after the Commerce Ministry agreed to revise it to make it friendlier to foreign investment. An earlier draft submitted for Cabinet approval in February was rejected.
There are six key amendments.
First, the new draft will focus on the voting rights of foreign shareholders. If a company is 49 per cent foreign owned but foreigners hold more than 50 per cent of its voting rights the company will be defined as a foreign one.
Second, it will take out more businesses covered under Annex III. This will allow these businesses, such as insurance and non-commodity futures market, to be covered by specific laws.
Third, the new draft will remove the amnesty for those violating the nominee law.
Fourth, the draft will increase the penalty for those violating the Foreign Business Law - from three to five years in jail, and from Bt100,000 to Bt1 million in fines to Bt500,000 to Bt5 million.
Fifth, it will expand the period from two to three years for foreign companies operating in Annex I and Annex II to revise their ownership structure to conform to the new law. Moreover, foreign companies in Annex III must inform the Commerce Ministry within one year that they have foreign ownership status before continuing to operate as normal.
Sixth, a 17-member committee will be formed to rule whether a company is Thai or foreign owned in case of a dispute.
The Commerce Ministry says the amendments create more transparency by clearly defining foreign ownership and delineating the types of businesses that are open to foreigners.
It is also aiming to make it clear once and for all that using nominees to circumvent foreign-ownership caps is prohibited.
The draft is a compromise between an earlier version from the Commerce Ministry and those of the Council of State and the assembly.
The assembly can reject it and introduce its own for a vote.
However, the Commerce Ministry insists that its draft is better than those from the assembly and the Council of State.
The ministry's new draft takes into account key concerns raised by the Cabinet and the foreign business community, said Skol Harnsuthivarin, secretary to Krirk-Krai.
The draft maintains the clause on voting rights, which is a major concern of the Thai government.
However, the draft will not focus on management control as the Council of State suggested, as the government considers that it would be too stringent for foreign investors, Skol said.
The new draft removes the amnesty clause because it would like to create fairness for Kularb Keaw, now under police investigation over allegations it acted as nominee for Singapore's Temasek Holdings in the Shin Corp takeover.
Another 14 companies are also facing a complaint that they might have used nominees to circumvent the foreign business law. They are now being investigated by the Commerce Ministry.
Pramon Suthivong, chairman of the Board of Trade of Thailand and Thai Chamber of Commerce, said most businesses affected would find the latest draft more satisfying but there would be some who might be unhappy with it.
"It is impossible to satisfy all parties, particularly foreign investors. But since it is necessary to amend the law, the government has to go ahead and do it" Pramon said.
Asked about the impact of the new draft on foreign investors' confidence, Pramon said he believed they would not withdraw from the Kingdom. All existing businesses will be able to operate freely under the new draft, but new ones might need time to study it more closely, he said.
Board of Trade deputy secretary-general Pornsilp Patcharintanakul said the private sector was delighted with the government's move to put all companies on an equal footing.
Keisuke Matsumoto, secretary-general of the Japanese Chamber of Commerce in Bangkok, said Japanese investors were still concerned about voting rights as the change would force many to restructure their companies.
However, Keisuke said Japanese investors expected the government to become more flexible and hold discussions with them before implementing the new rules.
-- The Nation 2007-04-11
Easy on the gas guys.
ST
Update:
Cabinet okays Business Act amendments
New rules for foreign business still have to clear National Assembly
BANGKOK: -- The Cabinet yesterday approved the revised amendments to the Foreign Business Act, but it remains uncertain whether the bill will pass the National Legislative Assembly.
The assembly will debate the amendments on April 18. Some 50 of its members have been up in arms against the changes, saying they jeopardise foreign investment.
Commerce Minister Krirk-Krai Jirapaet said he was ready to bring the amendments to the assembly.
The Cabinet approved the new draft of the Foreign Business Law after the Commerce Ministry agreed to revise it to make it friendlier to foreign investment. An earlier draft submitted for Cabinet approval in February was rejected.
There are six key amendments.
First, the new draft will focus on the voting rights of foreign shareholders. If a company is 49 per cent foreign owned but foreigners hold more than 50 per cent of its voting rights the company will be defined as a foreign one.
Second, it will take out more businesses covered under Annex III. This will allow these businesses, such as insurance and non-commodity futures market, to be covered by specific laws.
Third, the new draft will remove the amnesty for those violating the nominee law.
Fourth, the draft will increase the penalty for those violating the Foreign Business Law - from three to five years in jail, and from Bt100,000 to Bt1 million in fines to Bt500,000 to Bt5 million.
Fifth, it will expand the period from two to three years for foreign companies operating in Annex I and Annex II to revise their ownership structure to conform to the new law. Moreover, foreign companies in Annex III must inform the Commerce Ministry within one year that they have foreign ownership status before continuing to operate as normal.
Sixth, a 17-member committee will be formed to rule whether a company is Thai or foreign owned in case of a dispute.
The Commerce Ministry says the amendments create more transparency by clearly defining foreign ownership and delineating the types of businesses that are open to foreigners.
It is also aiming to make it clear once and for all that using nominees to circumvent foreign-ownership caps is prohibited.
The draft is a compromise between an earlier version from the Commerce Ministry and those of the Council of State and the assembly.
The assembly can reject it and introduce its own for a vote.
However, the Commerce Ministry insists that its draft is better than those from the assembly and the Council of State.
The ministry's new draft takes into account key concerns raised by the Cabinet and the foreign business community, said Skol Harnsuthivarin, secretary to Krirk-Krai.
The draft maintains the clause on voting rights, which is a major concern of the Thai government.
However, the draft will not focus on management control as the Council of State suggested, as the government considers that it would be too stringent for foreign investors, Skol said.
The new draft removes the amnesty clause because it would like to create fairness for Kularb Keaw, now under police investigation over allegations it acted as nominee for Singapore's Temasek Holdings in the Shin Corp takeover.
Another 14 companies are also facing a complaint that they might have used nominees to circumvent the foreign business law. They are now being investigated by the Commerce Ministry.
Pramon Suthivong, chairman of the Board of Trade of Thailand and Thai Chamber of Commerce, said most businesses affected would find the latest draft more satisfying but there would be some who might be unhappy with it.
"It is impossible to satisfy all parties, particularly foreign investors. But since it is necessary to amend the law, the government has to go ahead and do it" Pramon said.
Asked about the impact of the new draft on foreign investors' confidence, Pramon said he believed they would not withdraw from the Kingdom. All existing businesses will be able to operate freely under the new draft, but new ones might need time to study it more closely, he said.
Board of Trade deputy secretary-general Pornsilp Patcharintanakul said the private sector was delighted with the government's move to put all companies on an equal footing.
Keisuke Matsumoto, secretary-general of the Japanese Chamber of Commerce in Bangkok, said Japanese investors were still concerned about voting rights as the change would force many to restructure their companies.
However, Keisuke said Japanese investors expected the government to become more flexible and hold discussions with them before implementing the new rules.
-- The Nation 2007-04-11
Easy on the gas guys.
ST
canada1 wrote:
So yes, they will approve that particular one.
Burger
It was the National Legistative Assembly (NLA) who proposed this change to the governenment's initial hard line stance regarding annex 3 and foreigners voting rights being able to be in excess of 50%.Although we would all welcomw the idea of a relaxation of the FBA there seems to have been once again on this forum the need by some posters to jump the gun.
Update:
Cabinet okays Business Act amendments
New rules for foreign business still have to clear National Assembly
So yes, they will approve that particular one.
Burger
Last edited by Burger on Thu Apr 12, 2007 11:26 am, edited 1 time in total.
Re: how new co rules may affedt you
sonmic wrote:
What people need to appreciate is that IF in the future they change their minds and clampdown on these companies, in this latest bill they are giving 3 years for you to re-structure your company.
You could change from a Limited company to a lease in 3 days, let alone 3 years.
They do not line you up against a wall and shoot you, then bulldozer your house, they give you a long period to change your set-up.
Burger
It seems so, they have reviewed it and decided to leave it alone for FBA annex 3 companies.Does this new decision mean that the company route is once again a viable option in land/house purchasing?
What people need to appreciate is that IF in the future they change their minds and clampdown on these companies, in this latest bill they are giving 3 years for you to re-structure your company.
You could change from a Limited company to a lease in 3 days, let alone 3 years.
They do not line you up against a wall and shoot you, then bulldozer your house, they give you a long period to change your set-up.
Burger
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appleman_thai
- Amateur
- Posts: 48
- Joined: Tue Jul 26, 2005 8:26 pm
- Location: Dublin, Ireland
Clarify
Can someone please clarify something for me (if that is possible at all!!!?).
The new amendments to the FBA mostly allow annex 3 listed companies to go on as before - i.e. nomiee shareholders are allowed.
However, I understand that this includes hotels, retail outlets etc but nowhere does it say anything about owning house/land for personal use.
SO specifically, where does it say that it is OK to own land as a foreigner using a nominee company?
I think people are jumping on a bandwagon too fast - before fully analysing these amendments.
Dont forget that they DRASTICALLLY increased the penalties for people not complying!
PS - anyone want to rent a condo in Bangkok??
The new amendments to the FBA mostly allow annex 3 listed companies to go on as before - i.e. nomiee shareholders are allowed.
However, I understand that this includes hotels, retail outlets etc but nowhere does it say anything about owning house/land for personal use.
SO specifically, where does it say that it is OK to own land as a foreigner using a nominee company?
I think people are jumping on a bandwagon too fast - before fully analysing these amendments.
Dont forget that they DRASTICALLLY increased the penalties for people not complying!
PS - anyone want to rent a condo in Bangkok??
www.geroreilly.com
Former Expat in Cha-am - now back in Ireland!
Former Expat in Cha-am - now back in Ireland!
I would also like more info.
It seems so, they have reviewed it and decided to leave it alone for FBA annex 3 companies.
have i missed something?.
in this latest bill they are giving 3 years for you to re-structure your company.
Is this not only for annex 1 and 2
Fifth, it will expand the period from two to three years for foreign companies operating in Annex I and Annex II to revise their ownership structure to conform to the new law. Moreover, foreign companies in Annex III must inform the Commerce Ministry within one year that they have foreign ownership status before continuing to operate as normal.
So is the company route dead or not, seems like a lame duck to me but can one of the resident experts on property law clear this up.
Company Yes/No.
ST
Great quote i read somewhere on here before, another day, same old sh-t. Happy songkran everyone.
It seems so, they have reviewed it and decided to leave it alone for FBA annex 3 companies.
have i missed something?.
in this latest bill they are giving 3 years for you to re-structure your company.
Is this not only for annex 1 and 2
Fifth, it will expand the period from two to three years for foreign companies operating in Annex I and Annex II to revise their ownership structure to conform to the new law. Moreover, foreign companies in Annex III must inform the Commerce Ministry within one year that they have foreign ownership status before continuing to operate as normal.
So is the company route dead or not, seems like a lame duck to me but can one of the resident experts on property law clear this up.
Company Yes/No.
ST
Great quote i read somewhere on here before, another day, same old sh-t. Happy songkran everyone.
When you set up a company you specify what the companies objectives are.
Your solicitor will pick one or more businesses from List 3 of the FBA.
Therefore you have a company with the intention of doing busines sunder List 3 and not the more restricted bi\usinesses in List 1 & 2.
Your home is just your company office for your business.
Burger
Your solicitor will pick one or more businesses from List 3 of the FBA.
Therefore you have a company with the intention of doing busines sunder List 3 and not the more restricted bi\usinesses in List 1 & 2.
Your home is just your company office for your business.
Burger
Whatever our friendly real-estate-agents and developers are trying to tell around, it seems that this kind of investment (and others) is coming countrywide more and more under pressure!
Very, very uncertain times for any kind of foreign investment - IMO!
#1
Samui market in dire straits
Sales in Pattaya, Phuket also slow
KANANA KATHARANGSIPORN
The property market on Koh Samui is facing so many problems that some developers may dump their projects and offer them wholesale in overseas markets, while sales in Phuket and Pattaya have slowed due to capital controls and changes to the Foreign Business Act. Wasant Kongchan, deputy managing director of the property consulting firm Agency for Real Estate Affairs (AREA), said property sales and investments in the three tourist destinations slowed in the first quarter as foreign buyers were concerned about changes to Thai law.
Besides the nominee curbs and capital controls, Samui faced problems of land rights documentation and new environmental rules banning construction on land more than 150 metres above sea level.
Samui had 100 projects on sale worth around 60 billion baht, with only 10% offered in the overseas market.
''Buyers were not confident in the land rights documents,'' he said. ''Some projects may need to offer discounts of up to 100%, but they are overpriced by up to 300%.''
... whole story under:
http://www.bangkokpost.com/Business/12Apr2007_biz46.php
#2
Foreign investors rip into FBA draft again
WORANUJ MANEERUNGSEE
The foreign business community in Thailand is disappointed with the cabinet's latest version of the foreign business ownership law, saying the government did not listen to investor concerns. On Tuesday, the cabinet endorsed revisions to the Foreign Business Act (FBA) that were more relaxed than those proposed by the National Legislative Assembly.
However, the latest version of the Act increases fines five-fold to up to five million baht. In addition, the cabinet exempted businesses in the telecommunications, retail and hotel sectors from the FBA rules, under the principle that these businesses operated under their own separate laws.
It also keeps the grandfather clause for List 3, and allows foreign investors to retain management control.
''That is a small improvement,'' said Paul Strunk, executive director of the German-Thai Chamber of Commerce.
Mr Strunk stressed that a major concern of foreign investors was broadening the definition of a foreign company, which would take voting rights into account instead of simply shareholdings. Foreign investors came to Thailand for doing business, and wanted to be treated the same way as Thais, he added.
Concentrating on voting rights was a move in the wrong direction, he said, adding that Thailand had already sent many negative signals to the world last year, from Parliament dissolution to foreign ownership control.
''If the government does not want to listen to foreign investors, let it go ahead and see what would happen later in the year,'' he said. ''We are running out of ideas to make them listen to us.''
Mr Strunk said existing foreign firms were unlikely to leave Thailand, but new foreign investors would not come.
Peter Van Haren, president of the Joint Foreign Chambers of Commerce (JFCC), also expressed disappointment.
''We are very disappointed. The government won't listen to investors' concerns,'' he said from Europe.
''[Foreign investors] are quickly shifting to other countries like Vietnam for investment considerations.''
http://www.bangkokpost.com/Business/12Apr2007_biz34.php
Very, very uncertain times for any kind of foreign investment - IMO!
#1
Samui market in dire straits
Sales in Pattaya, Phuket also slow
KANANA KATHARANGSIPORN
The property market on Koh Samui is facing so many problems that some developers may dump their projects and offer them wholesale in overseas markets, while sales in Phuket and Pattaya have slowed due to capital controls and changes to the Foreign Business Act. Wasant Kongchan, deputy managing director of the property consulting firm Agency for Real Estate Affairs (AREA), said property sales and investments in the three tourist destinations slowed in the first quarter as foreign buyers were concerned about changes to Thai law.
Besides the nominee curbs and capital controls, Samui faced problems of land rights documentation and new environmental rules banning construction on land more than 150 metres above sea level.
Samui had 100 projects on sale worth around 60 billion baht, with only 10% offered in the overseas market.
''Buyers were not confident in the land rights documents,'' he said. ''Some projects may need to offer discounts of up to 100%, but they are overpriced by up to 300%.''
... whole story under:
http://www.bangkokpost.com/Business/12Apr2007_biz46.php
#2
Foreign investors rip into FBA draft again
WORANUJ MANEERUNGSEE
The foreign business community in Thailand is disappointed with the cabinet's latest version of the foreign business ownership law, saying the government did not listen to investor concerns. On Tuesday, the cabinet endorsed revisions to the Foreign Business Act (FBA) that were more relaxed than those proposed by the National Legislative Assembly.
However, the latest version of the Act increases fines five-fold to up to five million baht. In addition, the cabinet exempted businesses in the telecommunications, retail and hotel sectors from the FBA rules, under the principle that these businesses operated under their own separate laws.
It also keeps the grandfather clause for List 3, and allows foreign investors to retain management control.
''That is a small improvement,'' said Paul Strunk, executive director of the German-Thai Chamber of Commerce.
Mr Strunk stressed that a major concern of foreign investors was broadening the definition of a foreign company, which would take voting rights into account instead of simply shareholdings. Foreign investors came to Thailand for doing business, and wanted to be treated the same way as Thais, he added.
Concentrating on voting rights was a move in the wrong direction, he said, adding that Thailand had already sent many negative signals to the world last year, from Parliament dissolution to foreign ownership control.
''If the government does not want to listen to foreign investors, let it go ahead and see what would happen later in the year,'' he said. ''We are running out of ideas to make them listen to us.''
Mr Strunk said existing foreign firms were unlikely to leave Thailand, but new foreign investors would not come.
Peter Van Haren, president of the Joint Foreign Chambers of Commerce (JFCC), also expressed disappointment.
''We are very disappointed. The government won't listen to investors' concerns,'' he said from Europe.
''[Foreign investors] are quickly shifting to other countries like Vietnam for investment considerations.''
http://www.bangkokpost.com/Business/12Apr2007_biz34.php