Government may open more industries to foreigners
Thailand’s decades of economic success has been built on openness, and more foreign businesses may soon be welcome to compete in Thailand as the Ministry of Commerce said last week it is considering opening up more industries to foreign participation, especially higher-tech industries and service industries, as it began its annual review of the Foreign Business Act.
Thailand has been putting serious efforts into increasing competitiveness and ease of doing business, and ministry officials indicated the review of the Foreign Business Act (FBA) would support those efforts. As Thailand strives to build a higher-tech economy driven by innovation, the government understands it needs to attract even more foreign investment and partnerships.
The government is keen to allow competition in the 10-targeted industries for promotion as part of Thailand 4.0, the 20-year national strategy to upgrade the Thai economy to one driven by innovation, creativity and research and development.
The targeted industries are: next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and bio-chemicals; digital businesses and medical services.
The ministry has hired the Thailand Development Research Institute, the Kingdom’s premier think tank, to study which businesses are now competitive enough to be liberalized for foreign competition and ownership.
The annual review of the FBA has on occasion incited anxiety among the foreign business community in Thailand when protectionist groups try to pressure the government to increase restrictions on businesses not owned by Thai nationals. Those protectionist agendas have rarely succeeded, however, and this year the ministry is clearly moving in the opposite direction towards greater openness.
“The review of List 3 is nothing special, as it is the panel’s duty to review it every year to ensure the act falls in line with the current trade and investment situation,” said Kulanee Issadisai, director general of the Business Development Department at the Ministry of Commerce.
The FBA contains three lists of businesses that have restrictions placed on foreign ownership. List 1 prohibits foreigners from operating certain businesses because of ‘special reasons.’ List 2 restricts foreign ownership of some businesses because of security concerns or to protect certain cultural assets.
List 3 restricts foreigners from owning or operating businesses on that list because Thai businesses in those categories are not yet deemed ready to compete with foreign rivals. Foreigners are not completely banned from List 3 industries, but must apply to take part in them. Thai businesses are, however, becoming more competitive every year, and so List 3 should gradually contain fewer business categories.
Photo courtesy of http://www.boi.go.th