Government will open up five services to foreign firms
As part of its steady drive to liberalize Thailand’s business sector, the Ministry of Commerce said last week it will open up five service industries to competition from foreign firms, including accounting and some legal services, with the goal of promoting more investment and trade for the Kingdom.
The decision was made during the Ministry’s annual review of the Foreign Business Act. “The review will be submitted to the cabinet for approval soon, and the department expects an effective date around September,” said Kulanee Issadisai, director general of the Business Development Department at the Ministry of Commerce.
The five services that the Ministry proposed be liberalized are accounting, legal services given to subsidiaries, space and facility rental, lending to subsidiaries and consulting services. While opening the services to foreign competition should make Thailand more competitive, raise standards and increase the ease of doing business, it should also benefit more developed economies, such as the United States, where exports of services are a major component of their trade balances.
Kulanee said that a range of government agencies and industry groups had been consulted and their opinions sought on the matter of opening up these five services. Most had agreed with the idea, she said. Among those consulted were the Board of Investment, the Bank of Thailand, the Industrial Estate Authority of Thailand, the Federation of Accounting Professions and the Lawyers Council.
Thailand has benefitted for decades from its economic openness, reaping reams of foreign investment that has helped propel economic development. As an emerging economy, however, it has long protected some industries and professions from foreign competition because policymakers believed that Thais were not yet ready to compete against foreign firms in those sectors and professions.
But the Kingdom has been steadily moving towards reducing the number of those sectors and professions as the economy and society have progressed and strengthened.
The restrictions are contained in the Foreign Business Act, and the professions are reviewed every year for possible changes.
Thailand also does restrict foreign ownership of most businesses to 49 percent, requiring them to have a majority Thai shareholder or owner. But citizens of the United States are permitted to fully own their own businesses in Thailand under the Thai-U.S. Treaty of Amity and Cooperation, a right and privilege enjoyed by no other Western country in the Kingdom.