Thailand: Three service fields to open for foreign firms
The government looks set to remove three service businesses from List 3 under the Foreign Business Act (FBA) to facilitate foreign investment in Thailand, with the move to take effect next year.
Kulanee Issadisai, director-general of the Business Development Department, said the Foreign Business Commission’s meeting, chaired by the commerce permanent secretary, on Tuesday agreed to withdraw three service businesses from List 3.
The three are lending services to affiliated domestic firms, office building rental services to local affiliate firms, and consulting services to affiliate firms for four activities: management, marketing, human resources and technological consulting.
Mrs Kulanee said the move will not only improve efficiency and service quality of affiliated companies operating in Thailand, but also build a more business-friendly environment and facilitate trade and foreign investment.
The move will not have an adverse impact on Thai companies, she said, because the removal is limited to affiliated companies.
Mrs Kulanee said the removal is pending the consideration of Commerce Minister Sontirat Sontijirawong before being submitted to the cabinet for further consideration.
After that, the removal would be filed with the Council of State for vetting and approval.
Upon approval, the commerce minister will issue a new ministerial regulation for publication in the Royal Gazette.
The FBA has three lists of activities that foreign participation may be prohibited from or restricted in.
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 with prior 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.
Earlier this year, the Foreign Business Commission’s meeting, chaired by the permanent secretary for commerce, committed to reconsider what types of service businesses on List 3 of the act should be removed to facilitate trade and investment.
The review will largely focus on businesses that have specific laws governing fields in which Thai nationals are ready to compete, as well as businesses related to the targeted S-curve industries being promoted by the government.
The targeted industries are next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; medical services; and defence.
Nonetheless, the review of List 3 is nothing special, as it is the panel’s duty to review it every year to ensure that the act falls in line with the current trade and investment situation, Mrs Kulanee said earlier.
The Business Development Department has also already hired the Thailand Development Research Institute to study businesses on List 3 that Thais are ready to compete in.