Draft Foreign Business Act

Draft

Foreign Business Act (No………..) B.E. …………

 

Whereas it is appropriate to amend the Foreign Business Act B.E. 2542

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Section 1         This Act shall be called the “Foreign Business Act (No………..) B.E…….”

Section 2         This Act shall come into force immediately after the date of its publication in the Government Gazette.

Section 3         To dismiss the definition “Foreigner” in section 4 of Foreign Business Act B.E. 2542 and to enforce the following definition.

“Foreigner” means

• Natural person not of Thai nationality.
• Juristic person not registered in Thailand.
• Juristic person registered in Thailand having the following characteristics:

(a) Having half or more than half of the juristic person’s capital shares held by persons under (1) or (2); or a juristic person with the persons under (1) or (2) investing with a value of half or more than half of the total capital of the juristic person; or juristic person with the persons under (1) or (2) have legal authority or the regulation or the settlement for half or more than half of the voting rights of the total voting rights of the juristic person.

(b) A limited partnership or registered ordinary partnership with the person under (1) as the managing partner or manager.

(4) A juristic person registered in Thailand with half or more than half of its capital shares held by the person under (1), (2) or (3); or a juristic person having the persons under (1), (2) or (3) investing with the value of half or more than half of its total capital.

For the purpose of the definitions, the shares of a limited company represented by share certificates that are issued to bearers shall be deemed as the shares of aliens unless otherwise provided by ministerial regulations.

Section 4         To dismiss the contents in section 35 of Foreigner Business Act B.E. 2542 and to enforce the following contents shall be enforced.

“ Section 35    Any foreigner granted the license to operate any business under this Act, who takes part in a business owned by other foreigners that is not permitted to operate under this Act or who operates a business jointly owned by such other foreigners by showing that he is the sole owner of the business in order for such other foreigners to avoid or violate the provisions of this Act, shall be punished with an imprisonment not exceeding three years or a fine of 500,000 Baht up to 5,000,000 Baht, or both, and the Court shall order the dissolution of such joint business or business operation. Any violation of the Court’s order is punishable by a fine of 50,000 Baht up to 250,000 Baht per day throughout the period of violation.”

Section 5         To dismiss the contents in section 36 of Foreigner Business Act B.E. 2542 and to enforce following contents.

“Section 36     Any Thai national or juristic person that is not a foreigner under this Act, who aids or abets or takes part in the business operation of the foreigners whose business falls under the Lists attached hereto and/or the business operation of the foreigners who are not permitted to operate the business; or takes part in the business operation of the foreigner by showing that he or it is the sole owner of the business; or holds shares on behalf of the foreigners in any partnership or limited company or juristic person in order for the foreigners to operate the business in avoidance of or violation to the provisions of this Act, including instances where the foreigners allow Thai nationals or juristic persons that are not foreigners under this Act to do so, shall be punished with an imprisonment not exceeding three years or a fine of 500,000 Baht up to 5,000,000 Baht, or both, and the Court shall order a desist of the aiding or abetting, or shall order a desist of the joint business operation, or shall order a desist of share holding, or a cessation of the partnership as the case may be. Violators of the Court’s order shall be subject to a punishment with a fine of 50,000 Baht up to 250,000 Baht per day throughout the period of violation.”

Section 6         To dismiss the contents in section 37 of Foreigner Business Act B.E. 2542 and to enforce the following contents.

“Section 37     Any foreigner who operates a business in violation of Section 6, Section 7, and Section 8 shall be punishable with an imprisonment of not exceeding three years or a fine of 500,000 Baht up to 5,000,000 Baht, or both, and the Court shall order a desist of the business operation or the dissolution of the business, or shall order a cessation of the shareholding or partnership as the case may be. Violators of the Court’s order shall be subject to punishment with a fine of 50,000 Baht up to 250,000 Baht per day throughout the period of violation.”

Section 7         To dismiss the contents in section 41 of Foreigner Business Act B.E. 2542 and to enforce the following contents.

“Section 41     In the case where the juristic person commits the offense under Section 34, Section 35, Section 36, and Section 37, if the directors, partners or persons authorized to act on behalf of juristic person, collaborate with such offense or do not reasonably manage to prevent such offense shall be subject to punishment by the law for such offense.”

Section 8         Any juristic persons having registered in Thailand that are not foreigners under the definition in the Foreign Business Act of 1999 but are foreigners under the amended definition in this act and who conduct a type of business stipulated in the Restricted Business Lists on the day in which this Act goes into effect must alert the Director General within one year after this Act goes into effect and request an authorization certificate according to the rules that the Director General stipulates if they wish to continue to conduct their business. After receiving the Certificate of Authorization they are permitted to conduct their business according to the following conditions:

• If it is business in List Three, they can operate such business until termination of business.
• If it is business in List One or List Two, they can operate such business for 2 years since the date this act enforced.

Foreigner pursuant to paragraph one, if the juristic person does not request to obtain a certificate within the specified period and further operates a business, or in the event a business in List One or List Two has operated business over 2 years, it is considered that such business is operating without approval. The juristic person shall be punished by the law for such offense in the Foreign Business Act B.E. 2542 amended by this act.

Section 9         Any person who violates Section 6, Section 7, or Section 8 of which the penalties are prescribed in Section 37, or has violated Section 35 or Section 36 of the Foreign Business Act B.E. 2542 before this act is enforced, if the juristic person has informed such violations to the Director-General according to the specified criteria within 90 days since this act is enforced, or who has performed correctly so that it is not considered to have violated Section 6, Section 7, Section 8, Section 35 or Section 36, or who has terminated the business in violation of said sections (as the case may be) within 1 year since this act is enforced, such person shall not be punished by the law for such offense.

Contents in paragraph one shall not be enforced against a person who violates Section 6, Section 7, Section 8, Section 35 or Section 36 of the Foreign Business Act B.E. 2542 who is involved an investigation or in court.

Section 10       To dismiss (18) of List Three of the Foreign Business Act B.E. 2542

Section 11       To dismiss contents in (13) (14) (15) and (21) of List Three of the Foreign Business Act B.E. 2542 and to enforce the following contents:

“(13)    Internal trade connected with products or native agricultural product that is not prohibited by law except anticipatory trade according to anticipatory trade of agricultural products particularly not having good deliver.

(14)     Retail trade of all products

(15)     Wholesale of all products

(21)     Operating other service business except the following:

(A)       Service businesses that are related to futures trading according to the law on agricultural futures trading.

(B)       Securities, derivatives and associated businesses according to the law on securities and stock exchange.

(C)       Commercial banking businesses pursuant to the law on commercial banking.

(D)       Financial and credit foncier businesses according to the law on financial, securities and credit foncier businesses.

(E)       Other service business as stipulated by ministerial regulations.”

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