Thai govt reviews Foreign Business Act

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Thai govt reviews Foreign Business Act 
Bangkok Post: 14 Jan 2010
FOREIGN INVESTMENT
FBA liberalisation to be considered


The government will consider liberalising the Foreign Business Act to make the country more open to foreign investment and to comply with free trade agreements to which it has committed, says Deputy Commerce Minister Alongkorn Ponlaboot.

Facilitating investment in the country is the key to its economic growth. Making Thailand more attractive to foreign firms is a key part of this strategy, the deputy minister said.

"The government sees improving the Foreign Business Act as essential to allowing wider foreign investment in Thailand," he said. "Particularly when it comes to making [Thailand] compatible with free trade area agreements such as Asean Free Trade Area and agreements made under other Asean co-operative frameworks."

But the government needed to weigh the competitiveness and strength of local businesses before opening up any service industries to greater foreign participation, he said.

The latest study by the Fiscal Policy Office, a Finance Ministry agency, prepared last year proposed that 13 business sectors on List 3 of the FBA, which excludes foreign participation, should be liberalised over the next three years.

The sectors include engineering services, construction, brokerage or agency businesses, retailing and wholesaling, advertising, hotels, food and beverage retailing, computer services, logistics and domestic transport, business consulting and management services, schools, and entertainment or cinemas.

Auctions and plant cultivation and propagation businesses are among those that the office recommends are opened up to foreign competition over the next four to six years.

The FPO also proposed that foreign firms should be allowed greater, if not unlimited, participation in internal trade connected to the farming sector over the next seven years.

The study's recommendations were based on commitments Thailand has made under free trade agreements with its trading partners, and their possible impact and benefit to local operators and the wider economy.

List 3 of the FBA covers sectors in which Thai businesses are considered not ready to compete with foreign firms.

Mr Alongkorn said that to facilitate business development, the government plans to team up with local educational institutions to set up an academy to build the capacity of Thai businesses in several sectors such as retail, logistics and franchises.

www.bangkokpost.com/business/economics/30984/fba-liberalisation-to-be-considered