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Foreign Business Act Amendment English Translation 19 Jan 2007


Whereas it is expedient to amend the Foreign Business Act B.E. 2542 (1999)
 

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

Section 2 This Act shall come into force from the day following the date of its publication in the Government Gazette.

Section 3 The definition of “foreigner” under Section 4 of the Foreign Business Act B.E. 2542 (1999) shall be repealed and replaced by the following:

 “foreigner” means

(1) A natural person not of Thai nationality;

(2) A juridical person not registered in Thailand; or

(3) A juridical person registered in Thailand having the following characteristics:

(a) A juridical person which has half or more of its capital shares held by person(s) under (1) or (2), or a juridical person in which person(s) under (1) or (2) invest with a value of half or more of its total capital, or a juridical person where person(s) under (1) or (2) have the power, by laws, articles of association or agreement, to exercise half or more of the total voting rights of such juridical person; or

(b) A limited partnership or a registered ordinary partnership which has person(s) under (1) as managing partners or managers.

(4) A juridical person registered in Thailand which has half or more of its capital shares held by person(s) under (1), (2) or (3), or a juridical person in which person(s) under (1), (2) or (3) invest with a value of half or more of its total capital.

For the purpose of this definition, the shares of a limited company of which share certificates have been issued to bearers shall be deemed as the shares of foreigners, unless otherwise provided by ministerial regulations.”

Section 4 Section 35 of the Foreign Business Act B.E. 2542 (1999) shall be repealed and replaced by the following:

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

Section 5 Section 36 of the Foreign Business Act B.E. 2542 (1999) shall be repealed and replaced by the following: “Section 36 Any Thai national or juridical person which is not a foreigner under this Act, aiding or abetting or taking part in the business operation of a foreigner whose business is prescribed in the Lists attached hereto where such foreigner is not permitted to operate such business; or taking part in the business operation of a foreigner by representing that he or it is the sole owner of the business; or holding shares on behalf of a foreigner in any partnership, limited company or juridical person in order for such foreigner to operate the business in evasion or violation of the provisions of this Act; including the foreigner who allows any Thai national or juridical person that is not foreigner under this Act to do the above-mentioned acts, shall be punishable by an imprisonment for a period of not exceeding three years or by a fine of 500,000 Baht to 5,000,000 Baht or both, and the Court shall order cessation of such aiding or abetting or order cessation of such joint business operation, share holding or partnership, as the case may be. Any violation of the Court's order shall be punishable by a fine of 50,000 Baht to 250,000 Baht per day throughout the period of violation.”

Section 6 Section 37 of the Foreign Business Act B.E. 2542 (1999) shall be repealed and replaced by the following: “Section 37 Any foreigner who operates a business in violation of Section 6, Section 7, or Section 8 shall be punishable by an imprisonment for a period of not exceeding three years or by a fine of 500,000 Baht to 5,000,000 Baht or both, and the Court shall order cessation of the business operation, the dissolution of the business, or order cessation of the shareholding or partnership, as the case may be. Any violation of the Court's order shall be punishable by a fine of 50,000 Baht to 250,000 Baht per day throughout the period of violation.”

Section 7 Section 41 of the Foreign Business Act B.E. 2542 (1999) shall be repealed and replaced by the following: “Section 41 In the case where a juridical person commits an offence under Section 34, Section 35, Section 36, or Section 37, its directors, partners or persons authorized to act on its behalf who collaborate with the offence or fail to reasonably act to prevent the occurrence of such offence shall be punishable as prescribed by laws for such offence.”

Section 8 A juridical person registered in Thailand that is not a foreigner as defined under the Foreign Business Act B.E. 2542 (1999) but is a foreigner as redefined under this Act and operates a business of the type as prescribed in the Lists attached to this Act on the date it comes into force, shall notify the Director-General in accordance with the criteria and procedures set forth by the Director-General in order to obtain a Certificate if such juridical person intends to continue operating such business. The notification shall be made within one year from the date this Act comes into force. After the Certificate is obtained, the juridical person may continue to operate the business under the following conditions:

(1) In case of a business under List Three, such business may continue to be operated until its cessation;

(2) In case of a business under Lists One or Two, such business may continue to be operated for two years from the date this Act comes into force.

A foreigner falling within Paragraph One, who does not make a notification to obtain a Certificate within the specified period and continues to operate such business in violation of the provisions of this Act, or in case of a business under List One or List Two, a foreigner who continues to operate such business in violation of the provisions of this Act after the expiration of the two-year period, shall be deemed to be operating the business without authorization and shall be punishable as prescribed by the Foreign Business Act B.E. 2542 (1999) as amended by this Act.

Section 9 Any person, who violates Section 6, Section 7 or Section 8 of which a punishment is prescribed under Section 37 or violates Section 35 or Section 36 of the Foreign Business Act B.E. 2542 (1999) prior to the date this Act comes into force, shall not be subject to any punishment prescribed for such offence, if such person, within ninety days from the date this Act comes into force, notifies the Director-General of such act in accordance with the criteria and procedures set forth by the Director-General, and, within one year from the date this Act comes into force, rectifies the situation or takes action so that such person is not in violation of Section 6, Section 7, Section 8, Section 35 or Section 36, or ceases to operate the business that is in violation of such provision(s), as the case may be.

The provisions of Paragraph One shall not apply to a violator of Section 6, Section 7, Section 8, Section 35 or Section 36 of the Foreign Business Act B.E. 2542 (1999) that is under legal proceedings at the stage of investigation or trial.

Section 10 Items (18) of List Three of the Foreign Business Act B.E. 2542 (1999) shall be repealed.

Section 11 Items (13), (14), (15) and (21) of List Three of the Foreign Business Act B.E. 2542 (1999) shall be repealed and replaced by the following:

(13) Domestic trade relating to native agricultural products or produce not prohibited by any law except futures trading pursuant to the law on agricultural futures trading, only where there is no delivery of the products.

(14) Retailing of all categories of goods.

(15) Wholesale trade of all categories of goods.

(21) Other categories of service businesses, except:

(a) service businesses relating to futures trading pursuant to the law on agricultural futures trading;

(b) securities, derivatives, and related businesses pursuant to the law on securities and stock exchange;

(c) commercial banking businesses pursuant to the law on commercial banking;

(d) financial and credit financier businesses pursuant to the law on financial, securities and credit financier businesses; and

(e) other service businesses as prescribed by ministerial regulations.

 

__________________________

English translation by Department of Trade Negotiations and the Department of International Economic Affairs 19 January 2007

UNOFFICIAL TRANSLATION 19/01/2007

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