Integrity Legal

It recently came to this blogger’s attention that media outlets around the globe are discussing the pending elections in the Kingdom of Thailand. In order to provide more insight into these developments it may be best to quote directly from the official website of Channel News Asia, ChannelNewsAsia.com

BANGKOK – Thailand votes on Sunday in a closely fought election seen as pivotal to the future of the deeply divided kingdom, after years of political deadlock and often bloody street protests. The poll is the first major electoral test for the government since mass opposition rallies paralysed Bangkok last year, scaring away foreign tourists and sparking a military crackdown that left about 90 people dead. Now the tense vote could herald a comeback for fugitive former premier Thaksin Shinawatra and his political allies…

This blogger encourages readers to click upon the hyperlinks noted above to learn more on this story.

Politics in Thailand can have ramifications for the economy and the business community. Meanwhile, developments in Thailand can have reverberations throughout the Association of Southeast Asian Nations (ASEAN). This regional grouping is currently having a substantial regional and global impact upon geopolitics. Also, this organization’s ascendancy comes at the same time as international commentators discuss the increasing significance of the so-called BRICS nations (Brazil, Russia, India, China, South Africa). China has also received a great deal of international coverage recently as that nation’s Communist Party celebrated the 90 year anniversary of the Party’s founding. To quote directly from the official website of the Hindustan Times, HindustanTimes.com:

The world’s largest political party, in charge of the world’s fastest-growing economy, marked its 90th anniversary with a prolonged campaign of revolutionary Mao-era lyrics sung in schools, universities and parks. Television stations pulled out soaps and crime shows to air red propaganda. Employees of state-owned companies were told to troop into cinema halls to ensure that the film Founding of the Party, made with 108 actors, could claim blockbuster status…

This blogger asks readers to click upon the hyperlinks noted above to read this insightful article written by Reshma Patil.

As noted previously on this web log, China is becoming an ever more important player in the international economic arena as that nation’s Premier was recently noted for making a trip to Europe and the United Kingdom. In related news it was noted that China has previously announced plans to construct a high speed rail system to connect Southern China with the Thai city of Bangkok. It would appear that a plan is also in place to construct a large Chinese Trading Complex in the Bangkok metropolitan area. How such developments will play out in the future remains to be seen.

For related information please see: Thailand Company.

Tags: ASEAN, ASEAN news, ASsociation of Southeast ASian Nations, Association of Southeast Asian Nations News, Bangkok, Bangkok Metropolitan Area, Bangkok News, BRICS, BRICS News, China, China News, Chinese Trading Complex, foreign tourists, Founding of the Party, high speed rail, high speed rail system, Thailand, Thailand company, Thailand News, Thailand Poll, Thailand Vote, Thaksin Shinawatra, world's largest political party
Posted in ASEAN Business, China Business, Thailand Business | No Comments »

As the world economy continues to re-stratify in ways that have not been predictable, it recently came to this blogger’s attention that recent shareholder voting activity at a local Thai bottling company may have placed the soft drink giant Pepsi upon something of a “back foot”. To quote directly from the official website of Reuters, Reuters.com:

BANGKOK, April 29 (Reuters) – Shareholders in PepsiCo Inc’s Thai bottler, Serm Suk Pcl , voted on Friday to terminate its contracts with the U.S. soft drink maker after more than half a century in business together.

The move means the U.S. giant will have to find other partners to tap growth in the Southeast Asian country of 67 million people. It had no immediate comment.

From an American’s perspective as an observer in the Kingdom of Thailand the re-stratification mentioned above can be best observed by the increasing importance of regional organizations such as the Association of Southeast Asian Nations (ASEAN). Concurrently, American companies doing business in Thailand and Greater Asia are finding that some jurisdictions have different rules regarding corporate governance when compared to the United States. To continue quoting further from the aforementioned article:

About 99.41 percent of shareholders voted to end the business with PepsiCo. PepsiCo, maker of Pepsi-Cola, Sierra Mist and Tropicana juice, owns 41.54 percent of Serm Suk through Pepsi-Cola (Thai)Trading and Seven-Up Nederland BV. It remains unclear what it will do with this stake.

The administration of this web log recommends readers click upon the hyperlinks above to read further about this story in detail.

It is interesting to note that shareholder voting rights can have a tremendous impact upon the governance of a corporation in Thailand as a Thai Company may be governed by Thai corporate law which can be substantially different in many ways to U.S. law on the same subject matter. For American readers, it should be noted that there may be benefits to be had for US companies in Thailand pursuant to the provisions of the US-Thai Treaty of Amity. That stated, although Amity Treaty Companies may be of benefit to some endeavors not all business activity can be undertaken pursuant to this Treaty. Therefore, those interested in further information on this subject may be best informed by contacting a Thai lawyer.

The ramifications of the shareholder vote noted above may be felt not only by Pepsi, but by others in the soft drink business in the Kingdom of Thailand and Greater Southeast Asia. To quote directly from a recent article entitled SSC Seals Pepsi Divorce from the Business section of the Bangkok Post‘s official website BangkokPost.com:

The transition period could create opportunities for rival Coke and new players such as the fast-rising Peruvian brand Big Cola to steal market share from Pepsi. Thailand has long been one of only a handful of cola markets in the world where Pepsi outsells Coke.

The administration of this web log strongly recommends that readers interested in these topics click upon the hyperlinks above to read further from this insightful article in order to gain insight and perspective on this story and the possible ramifications thereof.

Clearly the reverberations of the recent corporate vote could accrue to the benefit of Pepsi’s competitors within the Thai market. This blogger, simply as a consumer, has noticed what appears to be some increasing popularity for Big Cola mentioned above. This recent popularity may not necessarily mean that this soft drink will take Pepsi’s place as the number one soft drink in Thailand, but the whole incident may go to show the way in which the local Thai soft drink market is beginning to show an increasing taste for novelty. This trend toward novelty is increasingly palpable across much of the Thai economy as consumers are presented with increasing purchasing choices in the Kingdom. Meanwhile, it could be argued that the biggest beneficiary of the recent vote is Pepsi’s major international rival Coca-Cola which might pick up further market share as a result of a possible Pepsi decline.

For related information please see: business in China or US Company Registration.

Tags: ASEAN, ASsociation of Southeast ASian Nations, Big Cola, Business in Thailand, Coca-Cola, Limited Company Thailand, Pepsi-Cola, PepsiCo Inc, Serm Suk Pcl, Seven-Up, Thai Company, Thai Lawyer, Thai Shareholder Voting Rights, Thailand company, Thailand Corporate Law, US Company Registration, US-Thai Treaty of Amity
Posted in American Business, ASEAN Business, Editorial, Opinion, Thailand Business | No Comments »

Over the years this blogger has seen large numbers of tourists flock to the Kingdom of Thailand as well as the neighboring nations of Laos, the Union of Myanmar (referred to by some as Burma), Malaysia, and the Kingdom of Cambodia. At the same time, this blogger has also witnessed the metamorphosis of some of these tourists into entrepreneurs by remaining in some of these countries (as well as other jurisdictions in Greater Asia such as Indonesia, Vietnam, China, Taiwan, Singapore, Hong Kong, South Korea, Nepal, Macau, India, and Sri Lanka; to name only a few) in a business context for many years and; for some, even decades or a whole lifetime. Whatever the circumstances of those Americans Resident Abroad remaining in the region of economies increasingly being labeled by both the mainstream and alternative media outlets by their affiliation with the Association of Southeast Asian Nations (ASEAN) one thing is clear: the economies of Asia are set to expand at an incredible rate by relative historical comparison. Therefore, it stands to reason that there are likely to be more Americans doing business in these jurisdictions. This state of affairs is occurring at a time when the potential of the internet and the World Wide Web first noted little more than a decade ago is beginning to become fully realized by businesses large and small. As e-commerce becomes an evermore ubiquitous facet of virtually every enterprise’s business strategy it is becoming more clear that many business functions are increasingly being performed by businesses of all sizes online and, in some cases, these businesses are even being maintained from an entrepreneur’s home.

This phenomenon is interesting for this blogger to note from the perspective of an American who is resident in Bangkok, Thailand as the Thai shop-house business model of maintaining a residence and business premises within close proximity has lead to a thriving small business community in the vast metropolis that is Greater Bangkok. This thriving business community, coupled with many of the other positive factors associated with doing business in Thailand, has lead to a vibrant economy that remains conducive to further foreign investment by entrepreneurs and businesses seeking to derive economic benefits both in Thailand and throughout the Asian markets. Of possible importance to Americans resident abroad or those thinking of residing abroad are the issues noted above as well as those associated with ownership of Thai property or Thai real estate especially in the form of a Thai Condominium.

In Thailand, as well as throughout many jurisdictions in Asia, there are restrictions placed upon foreign ownership of real estate. Although there are provisions allowing for foreign ownership of Thai property in many cases it is difficult, if not impossible, for a foreign national to secure freehold title (referred to as Chanote title in Thailand) in Thai real property such as land. However, it may be possible for a foreign national in Thailand, such as an American Citizen, to conveniently secure freehold title to a Thai Condo if the provisions of various laws and regulations on this issue, such as the Thai Condominium Act, are adhered to. Meanwhile, a foreign national who owns a Condo in Thailand may be qualified to receive a Foreign House Registration Booklet (referred to as a Tabien Baan for Thais or a Foreign Tabien Baan, or Yellow Tabien Baan for foreign nationals). Taking the aforementioned factors into consideration, in conjunction with the fact that for American Citizens and American Companies in Thailand there may be benefits pursuant to the provisions of various legal instruments such as the US-Thai Treaty of Amity which may provide the privilege of virtually 100% ownership of a Company in Thailand with “National Treatment” for certain business undertakings, one is left with little doubt that there are tangible legal benefits which could be accrued to the favor of Americans resident in Thailand conducting business in the ASEAN region as well as the regions of Greater Asia. Therefore,  investing in what this blogger would refer to as a “Thai Pad” (which non-literally alludes to the IPad-like gadgets allowing for increasingly easy real time access to the internet as well as the exponentially beneficial combination of privileges accruing to owners of Thai property registered on a Yellow Tabien Baan in conjunction with the advantages which may be had for Americans resident abroad utilizing a Thai company certified under the US-Thai Amity Treaty) could prove to have been prudent by future analysts in both tangible as well as intangible terms.

For related information please see: US Company Registration.

Tags: American Resident Abroad, Americans Resident Abroad, Amity Treaty Thailand, ASEAN, ASEAN Business, ASsociation of Southeast ASian Nations, Business in ASEAN, company in Thailand, Condo in Thailand, IPad, Thai Company, Thai Condo, Thai Condominium, Thai Pad, Thai Property, Thai Real Estate, Thailand Business, Thailand Business Law, Thailand company, Thailand Condo, Thailand Condo Law, Thailand Condo Lawyer, Thailand Condominium, Thailand Property, Thailand Property Title, Thailand Real Estate, Thailand Real Estate Title, US Citizen Resident Abroad, US-Thai Treaty of Amity
Posted in American Business, Amity Treaty, ASEAN Business, Cambodia Business, China Business, Ecommerce, Laos Business, Myanmar (Burma) Business, Thailand Business, Thailand company, Thailand Condo, Thailand Property, Thailand Real Estate, Thailand Work Permit, US Business, US Company Registration, US LLC, US Taxes | No Comments »

This blogger recently read a rather interesting piece about the future of the Association of Southeast Asian Nations (ASEAN). It is becoming increasingly clear that ASEAN will continue to play a key role in the regional politics of Southeast Asia notwithstanding the seemingly ever present role of domestic politics and bi-lateral relationships in all international contexts. To quote directly from a concisely written article by Amitav Acharya, American University, Washington and posted on the website EastAsiaForum.org:

ASEAN’s irrelevance or even death has been predicted several times before. At its birth in 1967, few people thought it would live to see another decade, given that the two previous attempts at regional cooperation in Southeast Asia — the Association of Southeast Asia and the MAPHILINDO (Malaysia, Philippines and Indonesia) concept — ended within a few years after their creation. The Malaysia-Philippines dispute over Sabah in 1969, the aftermath of the US withdrawal from Indochina in 1975, the Vietnamese invasion of Cambodia in 1979, the end of the Cold War in 1991 and the outbreak of the Asian financial crisis in 1997, have all been seen as critical blows to ASEAN. But ASEAN not only survived, it actually grew a bit stronger each time. So there is precedent, and hope, that ASEAN will be around in 2030.

But surviving is not the same as thriving. In 2030, ASEAN might keep plodding on, but will it still be a key player in regional peace, stability and prosperity in Asia? This question is more difficult to answer.

Clearly, the Association of Southeast Asian Nations (ASEAN) has been a steadfast regional organization and seems likely to remain one in the future. It would appear from implications in the above quotation as if there are those who believe that dynamism must be maintained by ASEAN in the future in order to ensure continued prosperity. That stated, deftly maintaining coherent regional policies amidst intra-ASEAN tensions also appears to be of concern:

A second question about ASEAN’s future is what the state of intra-ASEAN relations will be. The ongoing skirmishes on the Thai-Cambodian border do not inspire confidence. Simmering rivalries and mistrust continue to cloud relationships between Singapore and Malaysia, Thailand and Burma, and Malaysia and Thailand. But this is a far cry from the 1960s and 1970s, and there is every reason to hope that these intra-ASEAN conflicts will not doom the organisation. They would need, however, to be managed carefully, especially with the help of existing and new mechanisms that ASEAN is currently seeking to develop.

Meanwhile, it would appear as though looking ahead at all regions of the world the prospects for some nations are not nearly as upbeat as those of ASEAN. It would appear as though tensions are arising in the countries of Saudi Arabia and Iran to the point that some commentators in the United States and on the World Wide Web are dubbing the situation a “New Cold War”.  To quote directly from an article written by Bill Spindle and Margaret Coker and posted on the Wall Street Journal‘s official website WSJ.com:

For all the attention the Mideast protests have received, their most notable impact on the region thus far hasn’t been an upswell of democracy. It has been a dramatic spike in tensions between two geopolitical titans, Iran and Saudi Arabia.

This new Middle East cold war comes complete with its own spy-versus-spy intrigues, disinformation campaigns, shadowy proxy forces, supercharged state rhetoric—and very high stakes.

Those reading this blog are highly encouraged to click on the hyperlinks noted above to read further from what may prove to be an important article. Although the political and economic winds of change tend to move about the global geopolitical landscape incrementally there come times where changes can occur quite rapidly and the unfolding situation in the Middle East would appear to be evolving in unprecedented ways. That stated, if two poles of regional geopolitical power are indeed coalescing, then that would be an issue of interest for all nations throughout the world since such information can have a substantial impact upon trade, economics, and political matters in an international context. Hopefully, the current turbulence will resolve itself toward the maintenance of peace for all concerned, but such a hope may in the end prove to have been optimistic.

For related information please see: US-Thai Treaty of Amity or US Company Registration.

Tags: ASEAN, ASsociation of Southeast ASian Nations, Burma, Cambodia, Cold War, Cold War Iran, Cold War Iran Saudi Arabia, Cold War Saudi Arabia, Geopolitics, Indonesia, intra-ASEAN, Iran, Laos, Malaysia, Middle East cold war, Myanmar, New Cold War, New Cold War Saudi Arabia Iran, Philippines, Saudi Arabia, Singapore, Thailand, Thailand company, US Company Registration, Vietnam
Posted in ASEAN Business | No Comments »

The administration of this blog recently noticed an article from the Reuters news agency in which the Chief Executive Officer of General Electric was commenting upon the economic situation in China and how this impacts the relationship between the United States of America and Peoples’ Republic of China in both the economic and political spheres. To quote directly from the Reuters News Service:

(Reuters) – For Jeff Immelt, the CEO of General Electric (GE.N), the 130 year-old American industrial behemoth, the financial crisis marked the end of the age of America’s economic dominance.

This blogger has noticed that there seems to be a level of pessimism regarding the American economy. Although it is currently going through economic turbulence, and has been for a while, the US economy, in this blogger’s opinion; remains one of best countries in the world for trade and economic activity. Those doing business in the USA may enjoy the benefits that come from the American financial, economic, and physical infrastructure. Hopefully, the optimism for which America has, in the past, been noted for will return once the economy returns to an “even keel”. Reuters continues:

But Mr. Immelt said the future will be different. For the next 25 years, he said, the American consumer “is not going to be the engine of global growth. It is going to be the billion people joining the middle class in Asia, it is going to be what the resource-rich countries do with their newfound wealth of high oil prices. That’s the game.”

A lot of that game will be played in China. At a moment when it is compulsory on the American right to pay homage to the exceptionalism of the United States, Mr. Immelt, a lifelong Republican, is matter-of-fact about China’s inevitable rise.

The interesting piece of information that this blogger noted in the aforementioned article was the fact that the G.E. CEO took notice of the fact that the middle class is growing rapidly in Asia. The thought of an Asian middle class numbering 1 billion or more is truly staggering when one takes into account the economic impact of such growth. As Asians in general become more affluent the side effects will likely be increased trade and economic activity as these newly minted members of the middle class use their new found wealth to make purchases of property, goods, and services (in Asia, the EU, UK, and the United States). The most poignant line of this Reuters article, in this blogger’s opinion was:

“It is going to be the biggest economy in the world,” Mr. Immelt said of China. “The only question is when.”

There is little doubt that China has an incredible capacity for growth and those looking international investment or business opportunities are well advised to research the Chinese market. That said, China does not represent the only country in Asia which has economic opportunities that are becoming more readily available to investors and entrepreneurs due to globalization. The Kingdom of Thailand, a member of the Association of Southeast Asian Nations (ASEAN), has investment opportunities in the form of Thai Property, Thai Real Estate, and Thai businesses. Furthermore, for Americans conducting business in Thailand can prove profitable especially since the US-Thai Treaty of Amity allows Americans to own virtually 100% of a Thai Company with Amity Treaty certification (sometimes referred to as an Amity Company).

Meanwhile, the landlocked country of Laos recently opened a Lao Securities Exchange in an effort to raise capital through equity investment. The Kingdom of Cambodia recently announced that a Cambodian Stock Exchange is to be unveiled in mid-2011 while recent reports have noted that Burmese officials hope to be in the process of creating a Myanmar Stock Exchange as well. Such developments remain to be fully realized, but such examples clearly indicate that Mainland China is not the only “game in town” when it comes to investment opportunities and economic growth in Asia.

For related information please see: US Company Registration.

Tags: American Amity Treaty, American Amity Treaty Thailand, Amity Company, Amity Treaty Company, Burma Stock Exchange, Cambodia Business, Cambodia Securities Exchange, Cambodia Stock Exchange, China Business, China Economic Growth, G.E. CEO, General Electric, Jeff Immelt, Lao Securities Exchange, Lao Stock Exchange, Laos Business, Myanmar Securities Exchange, Myanmar Stock Exchange, Thai Company, Thailand Business, Thailand company, US Amity Treaty Thailand, US-Thai Treaty of Amity
Posted in Amity Treaty, Cambodia Business, China Business, Laos Business, Myanmar (Burma) Business, News, Opinion, Thailand Business, Thailand company, Thailand Property, Thailand Real Estate, US Business, US Company Registration | 1 Comment »

Fraud and white collar crime are significant concerns for any country as such activities can have a very harmful impact upon investors, consumers, and the overall economy. Apparently, there has been a noticeable rise in the number of certain types of white collar crime in the Kingdom of Thailand. Such schemes, called Pyramid schemes or Ponzi schemes have been prevalent in many western countries in the past and have seen a resurgence since the rise of the internet. In Thailand, such schemes appear to be on the rise. The website Thaivisa.com is reporting upon this issue in Thailand:

“Pyramid scheme businesses can survive at the expense of people being lured into the trap of hope to earn quick money although the authorities have been attempting to impede pyramid scheme swindlers by educating people about such incidents. Nonetheless, self-awareness to greed is the vital key to ensure that no one will fall into the trap, if we can change this value in each individual, pyramid scheme businesses will no longer appeal to anyone.”

Apparently, the Kingdom of Thailand has been a very popular place for those who specialize in Pyramid schemes and Ponzi schemes. That being said, most such enterprises claim to be something other than simply a Pyramid Scheme:

“In the last few years, pyramid scheme businesses have gained significant popularity Thailand as people have been lured into making investments in some intangible businesses. Nowadays, some of pyramid scheme swindlers disguise themselves as either direct sales or tourism enterprises, making it even more difficult for innocent people to differentiate and for authorities to trace the frauds.”

Most people understand that the forces of greed, if left wholly unchecked, can result in major aberrations in capitalist countries. Most nations, Thailand included, take measures to place a check upon those who would harness unwitting individuals’ greed and use it for their own purposes. However, at the end of the day, the population at large must be educated about the dangers of Pyramid Schemes:

“Legal officials have cautioned people to check before deciding to invest and to do some research on whether the companies have legally registered with the OCPB or if previous complaints have been filed by consumers or not. Furthermore, Ms Sareeya admitted that some companies did not conduct their businesses according to the plan submitted to the OCPB. She stressed that pyramid scheme businesses would focus more on financial return and recruitment of more members instead of tangible goods or services while some companies only had their goods available in catalogs.”

Those foreign nationals interested in investing in Thailand may be wise to conduct serious due diligence with regard to certain investment vehicles. Due Diligence may even need to be conducted for what turns out to be a legitimate Thailand Company in order to ascertain whether the buyer will receive what they bargained for. In any case, if a potential investor believes that “it sounds too good to be true,” then there is apparently a good chance that it probably is.

For more information on legal issues in Thailand please see: American Attorney Thailand.

Tags: American Attorney Thailand, Investing In Thailand, Ponzi Scheme, Ponzi Scheme Thailand, Pyramdi Scheme, Pyramid Schem Thailand, Thailand company
Posted in General Legal Information, Thailand Business, Thailand company | 1 Comment »

A common method of land ownership in Thailand is through use of a Thai Limited Company. In many cases, a juristic person is incorporated to hold Thai property on behalf of the principal investors in the company.  Over the past three years the Thailand Real Estate market has been somewhat stagnant, but recently there seems to have been something of an upward trend in Real Estate transactions. This has resulted in the Ministry of the Interior raising the fees for land transactions, particularly with respect to land transactions executed on behalf of a corporation. To quote a Pattaya Times article promulgated on the website Thaivisa.com:

“‘A nationwide increase in land offices fees will go in effect on March 2,’ a spokeswoman for the Ministry of Interior announced in Bangkok. The fees for purchases and sales involving a Thai company limited which most foreigners use to buy land will go up from one percent to six and a half percent of appraised or contract value, whichever is higher. The head of the Chonburi Land Office, Director Vaiyavuth Surapruik, said, ‘In 2008 the fees were lowered to help the economy. This has stimulated the sale of properties. Since the fees were lowered almost two years ago there has been no slow-down in the number of transactions at the land office in Banglamung which services Pattaya so now fees will go back up in order to increase government revenues.’”

On the one hand, the recovery of the Thailand Property market is definitely a positive development, and hopefully a sign of an underlying upsurge in the overall Thai economy. This upswing in Thai property sales may also be indicative of an overall upward trend in the world wide economy. However, for those who are thinking of purchasing Thai property be it land or another form of Thai Real Estate such as a Thai Condo, this development will likely be viewed negatively as it will result in increased fees for the buyer or seller of Thai property.

This fee increase will also have an impact on individuals as the aforementioned article concluded:

“Property transfered between individuals will be charged three percent fees if owned for more than two years by the current owner. If owned less than two years the fee is higher, between five and six and a half percent.” [sic]

Property transfers between individual foreigners is probably as common, if not less common, than property transfer between corporations controlled by foreigners. That being said, under certain conditions a foreigner can own a Thai Condominium in freehold and therefore could be effected by these increased individual transfer fees.

For related information on this blog please see: Thailand Property Law.

Tags: Thai Company, Thai Condo, Thai Property, Thai Real Estate, Thai Real Estate Law, Thailand company, Thailand limited company, Thailand Property, Thailand Property Law, Thailand Real Estate
Posted in General Legal Information, Thailand Business, Thailand Property, Thailand Real Estate, Upcoming Legislation | No Comments »

In recent weeks there has been some speculation about new regulations with regard to Thai work permits. In February of 2010, the Ministry of Labour regulations regarding work permits are to be updated. These updated rules will likely result in more stringent measures with regard to foreign labor in Thailand. Recently, there has been some talk about liberalizing certain sections of the Foreign Business Act (FBA). This Act restricts the type of activities that foreign nationals are allowed to engage in while present in the Kingdom of Thailand.

Under the provisions of the FBA, there are three lists of restricted activities. List 1 is the most restricted and is unlikely to be liberalized anytime in the near future. List 2 is also unlikely to be opened up to foreign participation anytime soon, but this is more likely to happen when compared to list 1. Finally, list 3 lists those activities that are the most likely to be opened up to foreign competition. There have been those in the current government floating the idea of liberalizing list 3, but the upshot of this would be more stringent enforcement of current work permit rules.

This leads us to the point of this post: what will happen to those certified under the US-Thai Amity Treaty? Under the provisions of this Treaty, American Citizens are accorded certain privileges when it comes to operating a business in the Kingdom of Thailand. In most cases, changes to the Foreign Business Act have little impact upon those operating under the Treaty as Treaty companies are accorded “national treatment.” This means that once a company has an Amity Treaty Certificate they are viewed, in the eyes of Thai law, as a Thai company. However, work permit regulations are applied to Thai companies in the same way that they would be applied to foreign companies. Therefore, those operating under a Treaty Certificate must still adhere to relevant Ministry of Labour regulations. Consequently, although the work permit regulations will not effect an Amity Treaty Company per se, they have a collateral impact upon any foreigners working in said company as the provisions of the Treaty only apply to the juristic entity and not to any of the foreign nationals working for that entity.

At this time, the US-Thai Treaty of Amity is still the law of the land in both the Kingdom of Thailand and the United States of America. There are certain benefits enjoyed by nationals of both countries as Americans are entitled to Treaty of Amity protection when conducting most types of business in Thailand while Thais are granted Treaty Trader visas should they meet the requisite qualifications pursuant to the relevant provisions of the Treaty.

Tags: Amity Treaty, Thai Company, Thai work permits, Thailand company, Thailand Work Permit, US-Thai Amity Treaty, US-Thai Treaty of Amity
Posted in Amity Treaty, Thailand Business, Thailand company, Upcoming Legislation | No Comments »

Thailand can be a difficult business market for some foreign firms to enter due to the many restrictions placed upon foreigners who operate in the Kingdom.The Foreign Business Act precludes foreigners from engaging in many business activities. However, over the past decade there have been repeated attempts to amend the Foreign Business Act. These attempts have been made for a variety of reasons. Some have hoped to liberalize the Thai market while others have tried to make the regulations more restrictive. In either case, these attempts have been just that because very few have been able to push through legislation to modify the law.

Recently the website Thaivisa.com in conjunction with The Nation Newspaper are reporting that changes may be coming for the Thai Foreign Business Act. To quote from Thaivisa.com:

“The planned liberalisation of certain business sectors currently limited to Thai firms will be accompanied by the imposition of more stringent restrictions on foreign-owned businesses operating in the Kingdom if a series of proposals by the Commerce Ministry are accepted by economic ministers. Under the ministry’s proposed amendments to the Foreign Business Act (FBA), voting rights of foreign shareholders will be more tightly controlled…In an effort to boost foreign investment, the government is considering removing some industries from the FBA’s Annex III, which lists industries that are off-limits to non-Thais. Annex III businesses that might be opened up include tour guide operators; trading in agricultural futures; stock trading; derivatives trading; commercial banking; insurance and assurance; pawnshop operators; warehousing; schools; and credit fonciers [sic]. ‘The amendments should create clear regulations for controlling each type of business. It should make the environment friendlier for foreign investors and streamline business regulations. However, it may affect some Thai businesses that are not competitive with foreign firms,” said a senior Commerce Industry source.’”

Although all of the implications of these proposed changes have not yet been deciphered it is clear that these changes will have a dramatic impact upon the foreign business community in Thailand.

This amendment may also come with new restrictions for some types of companies in Thailand:

“The proposed removal of some businesses from Annex III has prompted a concurrent proposal to impose stringent controls on the voting rights of foreign shareholder, which must not be higher than 50 per cent. The amended regulations would only apply to new foreign-owned companies.”

Some corporate structures in Thailand provide disproportionate voting rights for certain shareholders. If approved, this amendment would likely mean the end of disproportionate corporate voting rights. This section of the proposed amendment will probably not be warmly greeted by the foreign business community in Thailand. As it states above, in its current form, this legislation should not affect the operation of a Thai Company that is currently in existence, but the final draft of this legislation could be very different from what is being debated at this time.

Tags: Foreign Business Act Thailand, Foreign Business Thailand, Foreign Company Thailand, Thai Business, Thai Company, Thailand Business, Thailand Business Law, Thailand company, Thailand Foreign Business Act
Posted in Thailand Business, Thailand company, Upcoming Legislation | No Comments »

Many people in Thailand, both foreign and Thai, choose to incorporate Thai businesses. Thailand is one of Southeast Asia’s major trading locales and as a result many individuals and business concerns need a corporate presence in the Kingdom of Thailand. In many cases, companies are incorporated with substantially similar articles of incorporation. That being said, some companies opt to incorporate with unique provisions regarding different types of shareholder rights in the corporate charter. These different types of rights can have a major impact upon the running of the business because these rights can have a collateral impact upon employee compensation, shareholder vote tabulation, and banking issues. Therefore, an understanding of share classification can be helpful to those who are thinking of incorporating a Thai company.

In the articles of association (also known as articles of incorporation) of a Thai limited company, one could denote the rights associated with different share classifications. Therefore, some shares could simply hold an equity interest in the company while not having any voting rights at shareholder meetings. Other types of shares could hold little or no equity in the company, but maintain voting rights regarding the Directors of the company. If a company owns Thai property, there could be specific shares that have certain rights in relation to the Thai property concerned. For example, a Thai company that owns Thai real estate could place special rights in the hands of certain shareholders with regard to said real estate. If a Thai company owns a Thai Condo, then share classification could be used to delineate the rights of individuals with regard to the Condo premises.

For those who are interested in Thai limited companies certified under the US-Thai Amity Treaty, these same principals could apply to an Amity Company. One shareholder could retain a sizable equity holding while another holds certain voting rights. The same could be said about a Thai limited company that has obtained a Foreign Business License. A company such as this could incorporate special shareholder rights in the provisions of the articles of association or incorporation.

These issues bleed into the realm of Thai Immigration because the shareholder in a Thai company could apply for a Thai business visa. The basis for such an application could be an impending shareholder’s meeting that the foreign national must attend. The approval of such an application would depend upon the Thai Embassy or Consulate concerned. If present in the Kingdom on another type of visa, an O visa, for example, it may be possible for the shareholder to attend a meeting in order to vote his or her shares.

Tags: Amity Treaty, Amity Treaty Company, Corporate Law, Limited Company Thailand, Shareholder Classification, Thai Company, Thai Limited Company, Thailand company, Thailand limited company, Treaty of Amity Company, US-Thai Amity Treaty, Voting Rights
Posted in Amity Treaty, Thailand Business, Thailand company, Thailand Condo, Thailand Embassy, Thailand Property, Thailand Real Estate, Thailand Visa | 22 Comments »