公司新聞
The Foreign Business Act will have No Impact on Investor Equity Requirements for Manufacturing Companies Promoted by BOI or Residing in Industrial Estates
17/01/2007
January 11, 2007
Dear Sir/ Madam,
The amendment of the Foreign Business Act (FBA) B.E. 2542 (1999), primarily approved by the Thai Cabinet on 9 January 2007, has created some concern and confusion among the business community.
Hemaraj Land And Development Plc. has been consulting with government and reliable legal and investment sources and would like to inform you the following. The Foreign Business Act amendment will likely have no bearing on the equity structure of foreign manufacturing investors operating in Industrial Estates or those foreign manufacturing receiving promotion under The Board of Investment privilege. Equity being 100% foreign shares, in many cases, will continue with no changes fro these manufacturing required.
The Amendment principally focuses on the Section 4 of FBA B.E. 2542’s definition of “Foreign Juristic Persons” shall be described in the new Amendment Section 3 as whose shareholding stakes or voting rights is half or more and the penalties.
According to Section 12 in the FBA, B.E. 2542, establishment and manufacturing companies exempted include companies that fall under Board of Investment mandated waivers and those under Industrial Estate Authority of Thailand privileges. In this Amendment, this section has not been altered and shall remain the same.
There will be some time until the Amendment shall be enacted. It will have to receive the approval of the Council of State and to be published in the Government Gazette.
Hemaraj Land And Development will closely follow the issue and help to clarify if there is any uncertainty further as needed.
Investors should note with some caution however that under the recent Bank of Thailand capital controls due to the appreciation of the Baht, which hopefully will have a limited duration or to be modified further, that loans from off shore including parent company loans which could be supporting direct foreign investment would be subject to the 30% one year deposit as the Bank of Thailand without interest. We have found that some companies will borrow locally with offshore back-to-back guarantees to minimize this impact or to simply increase equity capital. However please consult your legal and tax advisors accordingly on your own situation.
If you have additional questions, please don not hesitate to contact our Customer Development Team at Tel. 02 719 9555.
Yours sincerely,
David R. Nardone
President & CEO
Dear Sir/ Madam,
The amendment of the Foreign Business Act (FBA) B.E. 2542 (1999), primarily approved by the Thai Cabinet on 9 January 2007, has created some concern and confusion among the business community.
Hemaraj Land And Development Plc. has been consulting with government and reliable legal and investment sources and would like to inform you the following. The Foreign Business Act amendment will likely have no bearing on the equity structure of foreign manufacturing investors operating in Industrial Estates or those foreign manufacturing receiving promotion under The Board of Investment privilege. Equity being 100% foreign shares, in many cases, will continue with no changes fro these manufacturing required.
The Amendment principally focuses on the Section 4 of FBA B.E. 2542’s definition of “Foreign Juristic Persons” shall be described in the new Amendment Section 3 as whose shareholding stakes or voting rights is half or more and the penalties.
According to Section 12 in the FBA, B.E. 2542, establishment and manufacturing companies exempted include companies that fall under Board of Investment mandated waivers and those under Industrial Estate Authority of Thailand privileges. In this Amendment, this section has not been altered and shall remain the same.
There will be some time until the Amendment shall be enacted. It will have to receive the approval of the Council of State and to be published in the Government Gazette.
Hemaraj Land And Development will closely follow the issue and help to clarify if there is any uncertainty further as needed.
Investors should note with some caution however that under the recent Bank of Thailand capital controls due to the appreciation of the Baht, which hopefully will have a limited duration or to be modified further, that loans from off shore including parent company loans which could be supporting direct foreign investment would be subject to the 30% one year deposit as the Bank of Thailand without interest. We have found that some companies will borrow locally with offshore back-to-back guarantees to minimize this impact or to simply increase equity capital. However please consult your legal and tax advisors accordingly on your own situation.
If you have additional questions, please don not hesitate to contact our Customer Development Team at Tel. 02 719 9555.
Yours sincerely,
David R. Nardone
President & CEO