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.¬