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Foreign Business Act Amendments

English Language Translation provided by Chaninat & Leeds

Note: Amendments were passed by the Cabinet in early January 2007 and are pending approval from the Council of State and publication in the Royal Thai Government Gazette.

Section 1: This Act shall be called the "Foreign Business Act" (Number…) (Year..)

Section 2: This Act shall go into effect immediately from the day after its
publication in the Government Gazette.

Section 3: The definition of "foreigner" in Section 4 of the Foreign Business Act of 1999 shall be repealed and replaced with the following:

"Foreigner" means

(1) Natural person not of Thai nationality.
(2) Juristic person not registered in Thailand.
(3) Juristic person registered in Thailand having the following characteristics:

(a) Having half or more of the juristic person's capital shares held by persons under (1) or (2) or a juristic person having the persons under (1) or (2) investing with a value of half or more of the total capital of the juristic person or a juristic person having the persons under (1) or (2) having half or more of the juristic person’s total voting rights under law or under a regulation or an agreement

(b) Limited partnership or registered ordinary partner-ship having the person under (1) as the managing partner or manager.

(4) Juristic person registered in Thailand having half or more of its capital shares held by the person under (1), (2) or (3) or a juristic person having the persons under (1), (2) or (3) investing with the value of half or more of its total capital.

For the purpose of the definitions, the shares of a limited registered Thailand company represented by share certificates that are issued to bearers shall be deemed as the shares of aliens unless otherwise provided by ministerial regulations.

Section 4: Section 35 of the Foreign Business Act of 1999 shall be repealed and replaced with the following:

"Section 35. Any foreigner, being granted the license to operate any business under this Act, takes part in a business owned by other foreigners not permitted to operate the business under this Act or operated the business jointly owned by such other foreigners by showing that he is the sole owner of the business in order for such other foreigners to avoid or violate the provisions of this Act, shall be subject to punishment with an imprisonment of not exceeding three years or a fine from 500,000 Baht to 5,000,000 Baht or both and the Court shall order the dissolution of such joint business or business operation. Any violation of the Court's order is punishable with a fine of 50,000 Baht to 250,000 Baht per day throughout the period of violation."

Section 5: Section 36 of the Foreign Business Act of 1999 shall be repealed and replaced with the following:

"Section 36: Any Thai national or juristic person that is not a foreigner under this Act, aiding or abetting or taking part in the business operation of the foreigners whose business falls under the Lists attached hereto and the aliens are not permitted to operate the business or taking part in the business operation of the foreigner by showing that he or it is the sole owner of the business or holding shares on behalf of the foreigners in any partnership or limited company or juristic person in order for the foreigners to operate the business in avoidance of or violation to the provisions of this Act, including the foreigners allowing Thai nationals or juristic persons that are not foreigners under this Act to do so, shall be punished with an imprisonment of not exceeding three years or a fine from 500,000 Baht to 5,000,000 Baht or both and the Court shall order a stoppage of the aiding or abetting or order a stoppage of the joint business operation or order a stoppage of share holding or a cessation of the partnership as the case may be. Violators of the Court's order shall be subject to a punishment with a fine of 50,000 Baht to 250,000 Baht per day throughout the period of violation."

Section 6: Section 37 of the Foreign Business Act of 1999 shall be repealed and replaced with the following:

"Section 37. Any foreigner who operates a business in violation of Section 6, Section 7, and Section 8 shall be punishable with an imprisonment of not exceeding three years or a fine from 500,000 Baht to 5,000,000 Baht or both and the Court shall order a stoppage of the business operation or the dissolution of the business or order a cessation of the shareholding or partnership as the case may be. Violators of the Court's order shall be subject to punishment with a fine of 50,000 Baht to 250,000 Baht per day throughout the period of violation."

Section 7: Section 41 of the Foreign Business Act of 1999 shall be repealed and replaced with the following:

"Section 41. In the case where the juristic person commits the offense under Section 34, Section 35, Section 36, and Section 37, the directors, partners or persons authorized to act on behalf of juristic person collaborate with such offense or do not reasonably manage to prevent such offense shall be subject to the punishment stipulated under law for that offense."

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