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Thailand: 4 categories under review for FBA List 3 elimination
The government is mulling removal of four business types from List 3 of the Foreign Business Act (FBA) as it tries to reduce obstacles to foreign investment.
Poonpong Naiyanapakorn, deputy director-general of the Business Development Department, said the four businesses types are telecommunication services for licence type 1 (telecommunications business operator without its own network for services); treasury centres; aviation/aircraft maintenance; and software development.
“A panel tasked with revising the FBA, chaired by Vuttikrai Leewiraphan, director-general of the Business Development Department, met on Wednesday and agreed to propose to the Foreign Business Commission removal of four businesses from List 3,” Mr Poonpong said. “The move will help reduce redundancy on the part of state officials, as those four businesses are already supervised by specific acts.”
Thailand’s FBA has three lists of activities in which foreign participation is prohibited or restricted.
Activities in List 1 are designated as “businesses not permitted for foreigners to operate due to special reasons”. Foreign companies are completely restricted from engaging in these activities.
Activities in List 2 are designated as “businesses related to national safety or security, or affecting arts and culture, traditional and folk handicraft, or natural resources and environment”. Foreign companies may only engage in these activities upon receiving cabinet approval.
Activities in List 3 are designated as “businesses in which Thai nationals are not yet ready to compete with foreigners”. Foreign companies must apply for and obtain a foreign business licence before taking part in these activities.
The FBA also limits foreign shareholding to 49% of a business.
If these business types are removed, foreign investors will no longer need to ask for a licence from authorities when operating such a business, Mr Poonpong said.
Liberalising the four business types is expected to draw foreign investment, particularly in aviation/aircraft maintenance, facilitating technology transfer and improving Thailand’s competitiveness, he said.
Mr Poonpong said removal of the four types from List 3 would complement the country’s economic development strategy focused on high-value and high-tech businesses.
The effort is in line with the government’s recently announced investment stimulus package, he said.
On Sept 10, the cabinet approved fresh perks to woo foreign investors looking to relocate their production bases amid the Sino-US trade war.
The package covers tax incentives, special investment zones for individual countries and future amendments to the FBA to ease foreign investment.
The package also offers incentives to support human resource development in advanced technology, with non-promoted projects under the Board of Investment made eligible for tax privileges.
Source: https://www.bangkokpost.com/business/1759359/4-categories-under-review-for-fba-list-3-elimination