Re­cent Le­gal Changes Af­fect­ing Busi­ness Gov­ern­ment May Lib­er­al­ize Some Ser­vice Sec­tor Busi­nesses to For­eign­ers

Thai-American Business (T-AB) Magazine - - Property Trends -

Thailand’s For­eign Busi­ness Act ( FBA) lists 21 cat­e­gories of busi­nesses in An­nex 3 where for­eign ma­jor­ity own­er­ship of such busi­nesses is re­stricted be­cause the gov­ern­ment con­tends Thais are “not yet ready to com­pete with for­eign­ers.” This list in­cludes “other ser­vice busi­ness, un­less specif­i­cally ex­empted by Min­istry of Com­merce reg­u­la­tions,” and the Min­istry of Com­merce ( MOC) has in­ter­preted the term “ser­vices” very broadly.

An­nex 3 is sup­posed to be re­viewed at least once an­nu­ally for pur­poses of de­ter­min­ing if busi­nesses listed on that an­nex can be opened up to for­eign com­pe­ti­tion, and on July 12, the Thai Cab­i­net ap­proved draft MOC reg­u­la­tions open­ing six cat­e­gories of ser­vice busi­nesses to for­eign com­pe­ti­tion: Busi­nesses re­lat­ing to or nec­es­sary for the op­er­a­tion of com­mer­cial banks ( with 12 sub- cat­e­gories); As­set man­age­ment busi­nesses un­der the As­sets Man­age­ment Com­pa­nies Act; Rep­re­sen­ta­tive of­fices; Re­gional of­fices; Pro­vi­sion of ser­vices to state agen­cies; and Pro­vi­sion of ser­vices to state en­ter­prises. The draft is be­ing sent to the Coun­cil of State for fur­ther re­view. Once the MOC reg­u­la­tions are fi­nal­ized and pub­lished in the Royal Gazette, for­eign ma­jor­ity owned busi­nesses will no longer need to ob­tain an FBA li­cense to en­gage in these busi­ness op­er­a­tions ( although the FBA’S min­i­mum cap­i­tal­iza­tion re­quire­ment of two mil­lion Baht will con­tinue to ap­ply for each such busi­ness op­er­ated by a for­eigner).

For more in­for­ma­tion con­tact Price­sanond at dman­cill@ price­sanond. com

The Thai gov­ern­ment re­cently pro­mul­gated new reg­u­la­tions for fi­nan­cial in­sti­tu­tions on ac­cept­ing de­posits or re­ceiv­ing money from the pub­lic. The reg­u­la­tions aim to en­hance the se­cu­rity and sta­bil­ity of these pro­cesses, and there­fore im­prove the cred­i­bil­ity of com­mer­cial bank­ing busi­ness.

Un­der Bank of Thailand No­ti­fi­ca­tion Sornor­sor 7/ 2559, fi­nan­cial in­sti­tu­tions must set up mech­a­nisms to en­sure ef­fec­tive and ac­cu­rate iden­ti­fi­ca­tion and ver­i­fi­ca­tion of their cus­tomers, com­monly re­ferred to as “Know Your Cus­tomer” ( KYC). The reg­u­la­tions im­pose strict re­quire­ments and re­stric­tions on ac­cept­ing de­posits of money or re­ceiv­ing money from the pub­lic via elec­tronic means.

The stan­dard of the iden­ti­fi­ca­tion and ver­i­fi­ca­tion process must be the same as ser­vices ren­dered to cus­tomers who are phys­i­cally present at banks. If cus­tomers are not avail­able in per­son, fi­nan­cial in­sti­tu­tions must use elec­tronic de­vices, such as video con­fer­enc­ing equip­ment, to en­able bank of­fi­cers to in­ter­view and ob­serve a cus­tomer’s be­hav­ior on a re­al­time ba­sis.

If fi­nan­cial in­sti­tu­tions ac­cept de­posits of money or re­ceive money from the pub­lic through a virtual teller ma­chine, kiosk, com­puter, or other elec­tronic de­vice, they must ex­am­ine the in­for­ma­tion and iden­ti­fi­ca­tion doc­u­ments of their cus­tomers by us­ing a smart card reader. They may use the gov­ern­ment’s iden­ti­fi­ca­tion and ver­i­fi­ca­tion sys­tem or its fin­ger­print ver­i­fi­ca­tion sys­tem, to­gether with their smart card reader, to be more ac­cu­rate.

Fi­nan­cial in­sti­tu­tions have un­til the end of this year to im­prove their in­ter­nal sys­tems, stan­dards, and risk man­age­ment.

For more in­for­ma­tion con­tact Tilleke & Gib­bins at cyn­thia. p@ tilleke. com.

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