BANGKOK, Thailand – Thailand’s Commerce Ministry has rejected claims that a new regulation allows foreigners to operate hotels, restaurants and tour businesses without a licence, describing the reports circulating online as fake news. The regulation removes the licensing requirement under the Foreign Business Act of 1999 for eight specific services divided into three groups, but online posts had incorrectly claimed that the measure covered seven businesses closely linked to Thai livelihoods, including hotels, tour operators, restaurants, souvenir shops, sports services and language schools.

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Poonpong Naiyanapakorn, director-general of the Department of Business Development, stated that these seven businesses are not included in the regulation. The changes have also drawn criticism from those who argue that the government is weakening Thailand’s economic protection, putting Thai small and medium-sized businesses at a disadvantage and failing to address nominee companies. Poonpong said the measure should not be considered liberalisation because businesses remain subject to sector-specific laws and regulatory oversight, with the main purpose being to eliminate unnecessary duplication in licensing procedures.

The first group consists of four services already supervised by specialised regulators, including telecommunications services provided by operators without their own networks, which remain subject to licensing by the National Broadcasting and Telecommunications Commission, which has issued 525 such licences including 171 to foreign companies. The group also includes treasury centres regulated by the Bank of Thailand, with the central bank saying these centres provide services only to companies within the same corporate group and do not compete directly with Thai businesses, as well as securities-backed lending regulated by the Securities and Exchange Commission, along with agent, adviser and fund manager services involving derivatives outside the scope of the Derivatives Act, with the SEC saying Thai operators were already capable of competing in these areas and had proposed removing the licensing requirement.

The second group covers services provided exclusively between affiliated companies, including administrative, human resources and IT services, as well as domestic debt guarantees, with authorities having approved all 334 applications in this category, leading the department to conclude that the additional licensing step served little practical purpose.

The third group consists of two narrowly defined services, one allowing companies to rent part of their own premises for ATMs or vending machines intended for employees, aimed at foreign companies employing between 1,000 and 2,000 people, and the other concerning petroleum drilling services, with the Energy Ministry, Petroleum Institute of Thailand and PTT Exploration and Production agreeing that the activity could be removed from the licensing list because Thailand needs additional service providers and offshore drilling requires substantial capital and advanced technology. Officials said no Thai company currently provides offshore drilling services.

The latest move is not the first revision of the Foreign Business Act’s list, as in May the Cabinet approved removing nine businesses from its annex, with eight assigned to ministerial regulation while agricultural futures trading was removed through a royal decree. Poonpong said the annex had already been revised five times following consultations with and approval from the relevant regulators, and under the law the Foreign Business Board must review the list at least once a year. Addressing concerns about nominee structures, Poonpong referred to an order from the Central Partnership and Company Registration Office that came into force on 1 August, which tightened documentation requirements for companies with foreign shareholders or authorised signatories.

The department now treats newly registered companies with foreign shareholdings between 0.01 per cent and 49.99 per cent as requiring closer scrutiny for possible nominee arrangements, and the number of registrations in this range fell to 163 in August compared with 894 a year earlier, an 81.77 per cent decline. Poonpong said around 100 of the 163 companies appeared to be genuine Thai-foreign joint ventures, and the department has asked the directors and shareholders of the remaining 63 companies to provide explanations and will take legal action if irregularities are discovered.

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The Commerce Ministry therefore says the new regulation is intended to simplify licensing for narrowly defined services rather than open Thailand’s hotel, restaurant or tourism sectors to foreign operators without the required licences.

-Thailand News (TN)