Bankers, financiers watching as Thailand changes Foreign Business Act

BANGKOK - Under the Foreign Business Act, which regulates activities in which foreign companies may engage in Thailand, service businesses including commercial banking, representative offices of foreign banks, and life and non-life  insurance, are restricted businesses under Schedule III, in which foreign companies may engage only upon obtaining a foreign business license.

On May 12, the Thai Cabinet approved in principle a draft Ministerial regulation removing commercial banking as well as representative offices of foreign banks and life and non-life insurance businesses from restricted business activities under Schedule III. The removal will be effective once Ministerial regulation is issued by the Ministry of Commerce (MOC).

As commercial banking and life and non-life insurance businesses are already regulated by their own specific laws, the Cabinet has agreed with the MOC's proposal to remove these businesses from the list of restricted activities in order to eliminate duplication in the regulation of these activities.

Lawyers Baker & McKenzie say that at this stage, it remains to be seen whether and to what extent the scope of the Ministerial regulation will include “connected businesses” of commercial banking, representative offices of foreign banks, and life and non-life insurance.

“When the MOC issues the Ministerial regulation to this effect, relevant businesses listed under such regulation will no longer require a foreign business license from the MOC but will still be subject to licensing requirements from their own specific regulators,” B&M says. www.bakerandmckenzie.com (ATI).