Protectionism Past, Present and Future: Addressing the Legal Issues of Foreign Investment Treatment in Thailand

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Alessandro Stasi
Tan Weng Chiang David


The aim of this paper is to discuss and critically analyze the legal hurdles posed by Thailand’s Foreign Business Act B.E. 2542 (A.D. 1999) in the light of the relevant international legal framework. The first part of the paper reviews the three lists of business activities which are regulated under the Foreign Business Act and outlines the types of activities in which foreign participation is restricted or prohibited. It points out the several conditions that a foreigner must fulfill in order to operate a business in Thailand if the business activity falls under the scope of the Foreign Business Act B.E. 2542 (A.D. 1999).

The second part of the paper discusses the engagements of Thailand in a number of international agreements which grant special exemptions to the Foreign Business Act with particular focus on the key legal issues related to the Treaty of Amity and Economic Relations between Thailand and the United States, the ASEAN Framework Agreement on Services and the ASEAN Comprehensive Investment Agreement.

The third part of the paper looks at some of the practical issues which arise when foreign investors design preference share structures which are believed to be in compliance with the requirements of the Foreign Business Act and the Civil and Commercial Code. More precisely, it focuses on the three most common share structures (i.e. nominee shareholding, preference shareholders schemes and super minority quorum rules) and suggests that the preference share scheme appear to provide a perfect combination between Thai ownership and foreign control of the business activity. As there are high chances that new protectionist measures will be adopted in a near future, the last part of the paper assesses the effects that these amendments may have on existing Thai registered juristic persons with foreign participation and control as well as their impacts on international treaties.


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Stasi, Alessandro, and Tan Weng Chiang David. “Protectionism Past, Present and Future: Addressing the Legal Issues of Foreign Investment Treatment in Thailand”. Naresuan University Law Journal 10, no. 2 (December 21, 2017): 171–193. Accessed May 24, 2022.
Research Articles


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