April 27, 2011

Solutions to Foreign Ownership Problems

Bangkok Post, Corporate Counsellor Column

Most foreign investors doing business in Thailand are aware of the 49% limit on foreign ownership in reserved businesses under the Foreign Business Act (FBA). A wide range of common businesses, including trading and services, are reserved under the lists annexed to the FBA. Lacking proper legal advice on legitimate solutions, investors commonly take the easy path by engaging Thai nominees to hold a 51% stake in the business on their behalf. Even though this structure can circumvent the foreign ownership restriction, allowing the company to carry out any business and even own land, such structure is in violation of the FBA and involves risks. Therefore, aliens should first explore other possible solutions that could help them lawfully hold a majority stake or even full ownership from the outset.

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