FBA is a fiction. A virtual reality.

Shocked ? Probably. But some hard data will help you to understand.

From march 2000 to may 2007, 1 757 licenses were issued under the FBA. When a “foreign” company has a business related to List 3, a special “licence” must be granted. You can see the process here.

On thoses 1 757 “foreign” companies, the details show :
-669 for “regional office”
-587 for “services businesses (list 3)”
-360 for “construction, engineering service and project management with government or state enterprise”
-93 for “broker or agent, business, Retailing, wholesaling and related services”
-44 for “accounting service busines and legal service business”
-4 for “other”

Source
http://www.dbd.go.th/mainsite/index.php?id=1499&L=1

Now , some other figures to put things in perspective.

In 2006, a total of 46 826 businesses (Limited companies, Limited partnerships and Ordinary partnerships) were created in Thailand ( 49 602 in 2005).

Source
http://www.dbd.go.th/thai/statistics/newreg20.phtml

To complete the picture, here are some data about the other special laws that can apply to foreigners :
From march 2000 to may 2007, 1 278 Foreign Business Certificates were issued.

A Foreign Business Certificate is the permission to do business, under a special treaty or by receiving investment promotion under the investment promotion law : Amity Treaty (for US), BOI (Board of Investment), CER-FTA.

Source
http://www.dbd.go.th/mainsite/index.php?id=1500&L=1

So to summarize : in seven years, a total of 302 500 “thais” companies were created.

Against 1 757 “foreign” companies under FBA.

Therefore, we can reasonably say that FBA is a fiction.

Indeed, no need to go to Harvard Business School to see that something is wrong with thoses figures…

The only explanation possible is that many foreign investors have created… “thai” companies, in order to avoid the FBA. Why ? To know more about the systems used to bypass FBA, read here.

Fiction regarding the figures, and fiction regarding the legal process too.

Section 9 of FBA says : “The Committee shall review the business categories under the Lists attached hereto at least once every one-year period from the date this Act comes into force and shall submit its opinion to the Cabinet.

It’s enough to say that since march 2000, thoses Lists (1, 2 and 3 for service businesses) were never… updated

FBA 1 (1999) does exist on paper. But not really on the ground…

BACK TO SUMMARY

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Thailand Crisis

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The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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