According to the act, a business is recognized as foreign if it meets the following criteria: If it has been established under a foreign law; The act also identifies the limit of foreign participation in a business in Thailand. In casting votes, each member shall have one vote. However, there are two potential options for a foreign company to operate e-commerce business in Thailand. This Act is called the Foreign Business Act, B.E. The Organic Law to Counter Corruption criminalizes corrupt practices of public officials and corporations, including active and passive bribery of public officials. Eighteen heads of government agencies serve as Committee members. being of not less than twenty years of age; having a residence in the Kingdom or having been permitted to enter the Kingdom temporarily under the law on immigration; not being an incompetent or a quasi-incompetent person; not having been punished by a court judgment or ordered to pay a fine in settlement of any offence under this Act or under the Notification of the National Executive Council No. Thai business regulations are governed predominantly by criminal, not civil, law. It is possible for foreigners to have control of a Thai Limited company while still adhering to the ownership requirements of the FBA. On March 24, 2019, Thailand held its first national election since the 2014 military coup that ousted democratically elected Prime Minister Yingluck Shinawatra. Global AIDS Coordinator and Global Health Diplomacy, Office of the U.S. Special Presidential Coordinator for the Partnership for Global Infrastructure and Investment, Special Presidential Envoy for Hostage Affairs, Special Representative for Syria Engagement, U.S. Security Coordinator for Israel and the Palestinian Authority, Office of the U.S. a foreigner who has been deported or whose deportation is pending; a foreigner entering and staying in the Kingdom without permission under the law on immigration or other laws. 1109-1110. On March 04, 2000, the Foreign Business Act of Thailand which replaced the Alien Business Act came into force and it further classified business in Thailand into three categories. 281, dated 24th November B.E. . 2515 (1972); Act Amending the Notification of the National dated 24th November B.E. Thailand has a shortage of high-skill workers such as researchers, engineers, and managers, as well as technicians and vocational workers. A Thai national or a juristic person, not being a foreigner under this Act, who assists in or aids and abets or participates in the operation of a foreigners business specified in the Lists annexed hereto where such foreigner is not permitted to operate that business or who operates the business jointly with a foreigner in the manner holding it out as the formers sole business or who acts as a foreigners nominee in holding shares in a partnership or a limited company or any juristic person with a view to enabling the foreigner to operate the business in circumvention or violation of the provisions of this Act, or a foreigner who allows such act to be committed by a Thai national or a juristic person that is not a foreigner under this Act, shall be liable to imprisonment for a term not exceeding three years or to a fine of one hundred thousand Baht to one million Baht or to both, and the Court shall order the cessation of the assistance or the aiding and abetting or order the cessation of the joint operation of the business or order the cessation of shareholding or partnership, as the case may be. The Director-General will then issue the license within 15 days after the approval date. If any person opposes a filing, the receiver shall investigate the matter and approve, partially approve, or dismiss the application. Such Ministerial Regulations shall come into force upon their publication in the Government Gazette. Laws and Regulations on Foreign Direct Investment. There have been two notable cases of investor-state disputes in the last fifteen years, neither of which involved U.S. companies. The Thai government does not have specific laws or policies regarding performance or data localization requirements. The Foreign Business Act (FBA) of 1999 governs most investment activity by non-Thai nationals. Specifically, the U.S. government and private sector have expressed concern about inconsistent application of Thailands transaction valuation methodology and the Customs Departments repeated use of arbitrary values. The most significant privileges offered by the BOI for promoted projects include: corporate income tax exemptions; tariff reductions or exemptions on imports of machinery used in the investment; tariff-free treatment on imported raw materials used in production for export. Foreign companies in Thailand had for years structured their companies into different classes of, 3. Thailand imposes no limitations on the inflow or outflow of funds for remittances of profits or revenue for direct and portfolio investments. Any foreigner who operates a business in violation of section 6, section 7 or section 8 shall be liable to imprisonment for a term not exceeding three years or to a fine of one hundred thousand Baht to one million Baht or to both, and the Court shall order the cessation of the business operation or the cessation of the undertaking or order the cessation of shareholding or partnership, as the case may be. Thailand has a well-established system for land rights that is generally upheld in practice, but the legislation governing land tenure still significantly restricts foreigners rights to acquire land. This Act shall come into force after ninety days as from the date of its publication in the . 2515 (1972) prior to the date of the entry into force of this Act shall continue to enjoy the right or be permitted to operate such businesses in accordance with the conditions and the term of the rights or permission so acquired. Discover the worlds most comprehensive online database of national investment laws and regulations. A qualified member shall hold office for a term of two years. A second amendment to the Patent Act will authorize Thailands accession to the Hague Agreement Concerning the International Registration of Industrial Designs. The draft of this second amendment is expected to be submitted to the Council of State after the Council completes its review of the first amendment. Foreign Business xxx. Thai laws provide guarantees regarding protection from expropriation without compensation and non-discrimination for some, but not all, investors. Any person who fails to comply with a written enquiry or a written summons of the Registrar or the competent official or fails to provide facts or to furnish documents or evidence when so enquired or summoned by the Registrar or the competent official for the purpose of examination or fails to provide assistance to the Registrar or the competent official under section 30 without any reasonable cause shall be liable to a fine not exceeding five thousand Baht. The Act broadens the definition of a business operator to include affiliates and group companies, and broadens the liability of directors and management, subjecting them to criminal and administrative sanctions if their actions (or omissions) resulted in violations. Recently introduced technologies under this scheme include standardized QR codes for payments, blockchain funds transfers, electronic letters of guarantee, and biometrics. However, the law did not prohibit foreigners from being the majority in the board of directors and also did not prohibit having different classes of shares with differing voting rights. If the Supreme Court decides not to take up a case, the Specialized Appeal Court decision stands. The Foreign Business Act Thailand (FBA) defines the laws which governs businesses in Thailand by foreigners. Violations (Sections 39-43) Foreign Business Act. When a licence grantee or a certificate grantee ceases to operate the business or relocates an office or a place of business, notification of such cessation or relocation shall be made to the Registrar within fifteen days as from the date of such cessation or relocation in accordance with the form and procedures prescribed in the Ministerial Regulation. To register, an agent must meet certain qualifications and undergo prescribed training. Thailand's foreign investment regime could benefit from further liberalisation 167 Exemption schemes and legal loopholes under the Foreign Business Act 176 Potential implications of FDI restrictions 180 References 183 Annex 6.A. The roster of registered agents along with associated licensed copyrights is available on the DIP website. But what constitutes a foreigner or foreign owned company under the FBA? 2542 (1999) LISTS ANNEXED TO THE FOREIGN BUSINESS ACT, B.E. Corporatization is viewed as an intermediate step toward eventual privatization. The measures have also improved Thailands ranking in the World Banks Doing Business: Trading Across Borders 2020 index. Unemployment among youth (15-24 years old) is around 5.2 percent, while the rate is only 0.5 percent for adults over 25 years old. Sale by auction, with the exception of: a. a sale by auction which, in character, involves international bidding of items other than antiques, objects of antiquity or artistic objects that are artistic works or handicrafts or objects of antiquity of Thailand or of historical value of the country; b. sales by auction of other types as prescribed in the Ministerial Regulation, 13. 25, With the expansion of global trade, investment and technology over the last decades, international investment. However, as explained above, many U.S. businesses enjoy investment benefits through the U.S.-Thailand Treaty of Amity and Economic Relations (often referred to as the Treaty of Amity), which was established to promote friendly relations between the two nations. IEAT has an established network of industrial estates in Thailand, including Laem Chabang Industrial Estate in Chonburi Province and Map Ta Phut Industrial Estate in Rayong Province in Thailands eastern seaboard region, a common location for foreign-owned factories due to its proximity to seaport facilities and Bangkok. 281, dated 24th November B.E. A company is required to have registered capital of two million Thai baht per foreign employee in order to obtain work permits. When the Director-General or the entrusted competent official has examined validity of the investment promotion certificate or written permit, the Director-General shall issue a certificate without delay but no later than thirty days as from the date of receipt of the notification of the acquisition of the investment promotion certificate or written permit, as the case may be. The Department of Business Development, Ministry of Commerce, shall serve as the secretariat of the Commission and shall have the following powers and duties: The Registrar and competent officials have the following powers: In the performance of duties under (2), the owner or occupier of the premises shall provide the Registrar or competent officials with reasonable assistance. The law authorizes restructuring proceedings that require trained judges who specialize in bankruptcy matters to preside. However, the severe negative economic impact of the COVID-19 pandemic may reverse momentum on outward investment. The law focuses on the following areas: unlawful exercise of market dominance; mergers or collusion that could lead to monopoly; unfair competition and restricting competition; and unfair trade practices. In addition, the semi-public Thai Arbitration Center offers mediation and arbitration for civil and commercial disputes. Home Foreign Business Act, B.E. The Foreign Business Act restricts foreigners or foreign owned companies from undertaking over 50 business activities. The Office of Trade Competition Commission (OTCC) is an independent agency and the main enforcer of the Trade Competition Act B.E. To upgrade the countrys technological capacity, the BOI presently gives more weight to applications in high-tech, innovative, and sustainable industries. U.S. businessmen say that publicly affirming the need to comply with the FCPA helps to shield their companies from pressure to pay bribes. In February 2018, the Thai government launched a Smart Visa program for investors in targeted industries and foreigners with expertise in specialized technologies. The Commission shall consider and review categories of businesses in the Lists annexed hereto at least once every duration of one year as from the date of the entry into force of this Act and shall prepare an opinion for submission to the Minister. List 2. Additional information on migrant workers issues and rights can be found in the U.S. Thailand does not have a sovereign wealth fund and the Bank of Thailand is not pursuing the creation of such a fund. In the case of circumstances under (4) and (5), the Director-General shall consider giving an order revoking the licence or making a recommendation to the Minister for considering giving an order revoking the licence, as the case may be. Additionally, foreign companies may have no more than 20% foreign employees on staff. The 1966 U.S.-Thai Treaty of Amity and Economic Relations allows U.S. citizens and U.S. majority-owned businesses to engage in business on the same basis as Thai companies (national treatment). The second amendment remains in the drafting process. Although the number of deaths and violent incidents has decreased year-over-year, efforts to end the insurgency have so far been unsuccessful. In this regard, please note: The year indicated in brackets after the title of the law refers to the year of publication in the Official Gazette or, when this is not available, the year of adoption of the law. Restricted businesses in this list include: accounting, legal, architectural, and engineering services; retail and wholesale; advertising businesses; hotels; guided touring; selling food and beverages; and other service-sector businesses. The 1999 State Enterprise Corporatization Act provides a framework for conversion of SOEs into stock companies.