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New Alien Business Act in force on March 3, 2000

A very severe penalty with maximum 3 years imprisonment is a major concern for small and medium Thai companies established for foreigners to operate business in this country. Even though, such a company was established legally with preferential shares empowering the minority foreign shareholders to control the company in terms of voting rights and dividends, such an establishment can be construed as a violation of the New Alien Business Act as it stipulates that “Any Thai national or Thai juristic person who provides assistance or holding shares on behalf of the alien, including an alien who allows Thai nationals or juristic person to conduct such act shall be subject to not more than 3 years imprisonment or fine of Thai Baht 100,000.- to Thai Baht 1,000,000.- or both imprisonment and fine”. As such, such an establishment should be transformed from a Thai company into a foreign firm as soon as possible. It is to risky to maintain the Thai status as the intention behind is violating the Alien Business Law. It is advisable for these companies to acquire wholesale license, service license and/or retail of machinery-equipment license, whatever required, prior to the 3rd of March as approval can be obtained easier under the present Alien Business Law.

The Director-General of the Commercial Registration Department, Ministry of Commerce, alone can approve such an application. It will be very difficult for a small and medium foreign enterprise with capital registration of less than Thai Baht 100 million to get the above-mentioned licenses after the 3rd of March, as the application has to be approved by a committee of 21 persons comprising of high-ranking authorities from various ministries etc. This committee will protect small and medium Thai enterprises.


Please click here for the full text of the inofficial translation of the law or download it here as zip-file.

A Chakrin Chamber member release

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