The answer is simple : basic capitalist rules and basic human behavior.
You want to keep control on your money.
Any investor planning to invest his money by creating a business in Thailand, wants to keep the control.
If you buy an existing company, you want to keep the control.
With the project FBA 2 it won’t be possible anymore. BOI, Amity Treaty (for US citizens) would still be there. But, for all the services businesses for instance, that will be a big problem.
Economy is not only export and not only cars manufacturing…
For instance, a foreign brand of, let’s say, cosmetics would like to control its distributor in Thailand. Impossible (like all other imports and retailing and wholesaling actually).
A foreign chain of restaurants would like to expand in Thailand, open joints and keep the control. Impossible (like all food related businesses).
With FBA 2, the thai authorities are basically telling us : “Come to Thailand, invest your money. But you’ll kind enough to give us the control. Thanks. Don’t forget to turn off the light before leaving. Have a good day. ”
We are joking, but actually it’s not fun at all.
Again, it can’t work like that.
Usually people take the example of China, where it’s compulsory to make joint ventures (sometimes). And they say “you see ! Why not Thailand ?“. Why not ? Because Thailand is a tiny economy, the one you can ignore if you’re not happy.
China is different. You’re not happy (sure), but you can’t complain. The market and the stakes are just too huge.
Second objection of the defenders of FBA 2 : you are wrong, a foreigner can control 100 % even if the business is listed on list 3.
First, I disagree, formally. The law says explicitly “List 3 forbidden.. unless”. Oh yes there is a door open : “unless“. Unless the foreigner ask for a… licence from a dedicated committee. You don’t know the criterias. You’re totally naked in front of the thai bureaucracy monster.
Again : foreigners don’t like uncertainty. We like to know the exact rules of the game before to play.
With the FBA logic, excepted the rule to define a company as “foreign” and other provisions, everything else is in the hands of a committee and/or bureaucrats.
But this trick allows the thai authorities to save face and to pretend that the game is open. But again it’s totally untrue.
Thanks to the hypocrisy of the thai authorities , FBA 1 was simply ignored : foreign investors were creating “thai” companies, and were using nominees and/or different class of shares
But FBA version 2 changes this totally (read here).
After that, one question arises : why on earth could they make such a gross mistake, such a gross misjudgement ?
Is it really a mistake ? Or, is there a hidden agenda ? A political will to curb foreign investments and influences inside the country ?