Changes to Foreign Business Law

In a move to keep the existing law updated and increase regulating efficiency, the Thai government has recently approved a draft royal decree that amends the types of business activities prescribed by the Foreign Business Act B.E. 2542 (1999) specifically by granting an exemption for activities involving the sale of agricultural futures on the Agriculture Futures Exchange of Thailand where the contract is satisfied without the underlying agricultural commodity being delivered or received within Thailand.

The government has also approved a draft ministerial regulation on the 18 types of business services under three laws that do not require a foreign business license:

1. Securities business as prescribed by the Securities and Exchange Act:

– securities investment advisory services;

– securities dealing;

– securities financing;

– underwriting;

– borrowing and lending securities;

– registrar of securities;

– maintenance and preservation of property for securities company or futures exchange customers;

– financial advisor;

– fund management;

– private fund (including provident fund) management;

– trustee of mutual fund;

– custodian of private fund;

– management in venture capital;

– shareholders representative.

2. Futures trading business as prescribed by the Derivatives Act:

– a derivatives dealer;

– a derivatives advisor;

– a derivatives fund manager.

3. Services business as prescribed by the Trust for Transactions in Capital Market Act

– business of a trustee

The revised law is expected to impose tighter controls as all investors in Thailand are required to seek Commerce Ministry approval. Additionally, more strict rules lie ahead for retailers and wholesalers, following the increasing gap in competitiveness between local and foreign business operators.

Contact ThaiLawyers for guidance and consultation on Foreign Business Law.