Draft of the new Alien Business Law (Inofficial Translation) Translation Draft Alien Business Act B.E.------ PLEASE NOTE: THIS IS AN UNOFFICIAL TRANSLATION OF THE DRAFT ALIEN BUSINESS ACT. THE TRANSLATION WAS UNDERTAKEN BY THE FOREIGN CHAMBERS OF COMMERCE COORDINATING COMMITTEE (FCCCC) FOR REFERENCE USE ONLY - IT IS NOT AN OFFICIAL TRANSLATION. PLEASE CLARIFY ANY SPECIFIC POINTS WITH YOUR LEGAL ADVISORS. CLAUSES OMITTED IN THE NEW ACT ARE SHOWN DELETED AND NEW CLAUSES ADDED ARE SHOWN UNDERLINED. Whereas it is expedient to revise the alien business law, this Act involves human right restriction according to Clause 35 and 50 of the Thai Constitution which is permissible. Section 1. This Act is called the "Alien Business Act, B.E.___" Section 2. This Act shall be in effect 90 days after the date of its publication in the Government Gazette. Section 3.The following shall be repealed: National Executive Council Decree No. 281, dated November 24, 1972; Act to Amend National Executive Council Decree No. 281, dated November 24, 1972, 1978 and 3.Act to Amend National Executive Council Decree No. 281, dated November 24, 1972 (No. 2), 1992. Section 4: This Act is a law concerning restricted freedom in households and in business operations or engaging in occupations and laissez-faire competition, enacted by virtue of Articles 35 and 50 of the Constitution of Thailand. Section 5. In this Act, "Alien" means: A non-Thai person; a legal entity not incorporated in the country; a legal entity incorporated in the country and being of the following nature: (a) a legal entity of which one-half or more of the capital is held by persons or entities under clauses (1) or (2), or one-half or more of its total capital is invested by persons or entities under clauses(1) or (2); and (b) a limited partnership or a registered ordinary partnership whose managing partner or manager is a person under clause (1). A legal entity registered in Thailand which one-half of the capital is held by persons or entities under clauses (1) (2) or (3) or legal entity which comprises of persons under clauses (1) (2) or (3) invest one-half of the total capital of such entity. For the benefit of this meaning it is counted that shares are issued for Alien except any issued Ministerial Regulation will declare otherwise. "Capital" means the registered capital of a limited company, the paid-up capital of a public limited company or the amount of money or the value of assets invested as shares by partners or members in a partnership or a legal entity. "Minimum capital" means an alien's capital upon incorporation as a legal entity in the country, and if the alien is a legal entity not incorporated in the country or a person, money or assets or technology used by the alien at the commence of business operations in the country. "Business" means the carrying on of activities in agriculture, industry, handicrafts, commerce, and services or other activities for commercial or profit-seeking purposes. "License" means a business license. "Licensee" means an alien granted a business license. "Certificate" means certificate for doing business. "Certificate holder" means an alien granted a business certificate. "Board" means the Alien Business Board. "State Agency" means a central, provincial or local authority, a state enterprise under the budget law and other agencies prescribed in ministerial regulation. "Registrar" means a person appointed by the Minister to act as the Alien Business Registrar. "Director-General" means the director-general of the Commercial Registration Department. "Minister" means the minister administering this Act. Section 6. The size of the business, employment, positive and negative effective effects on national safety and security, national economic and social development, public order, tradition and culture, national resource conservation, energy and environmental conservation, technological transfer, scientific development, business protection and consumer protection shall be taken into consideration in granting a license to an alien to operate business. Section 7. The following aliens are prohibited from the operation of a business in the Kingdom: Not be a deported person or a person pending deportation under the deportation law; and not enter the Kingdom without permission under the immigration or other laws. Section 8: The following aliens may operate a business upon receipt of a license from the Minister upon the advice of the Board Director-General and may operate business only of the type and in the locality determined by the Minister with the approval of the Cabinet and published in the Government Gazette, which publication may contain any conditions deemed appropriate by the Minister: An alien born in the Kingdom but not given Thai nationality under the law on nationality or other applicable laws; and an alien by operation of the revocation of nationality under the law on nationality or other applicable laws. The application for the issuance of and the period of a license shall be in accordance with rules and procedures under ministerial regulations. If the Board Director-General is of opinion that an alien under the first paragraph should not be granted a business license, the alien shall have the right to file an appeal against such opinion with the Minister and the provision of Section 22, first and third paragraph, shall apply mutatis mutandis. Section 9. Subject to Section 7, 8, 11 and 13 no aliens shall operate the business related to special reason as prescribed in Schedule 1. No alien shall operate the business related to national safety or security, or affecting culture, arts, tradition customs, folk handicrafts or natural resources and the environment, as prescribed in Schedule 2, unless licensed by the Minister with the approval of the Cabinet; and no alien shall operate the business in which Thai nationals are not yet ready to compete with aliens, as prescribed in Schedule 3, unless licensed by the Director-General with the consent from the Board. Section 10. Revision of or amendment to the business categories under schedules annexed hereto will be amended by Royal Decree, except the business under the Schedule 2, Chapter 1 shall be effected by Act. The Board shall consider reviewing the business categories attached to this act at least once annually from the date this Act comes into force, and propose their comments to the Cabinet. The aliens who conduct any business which are not in Schedule 2 or 3 before the adjustment of the type of business according to clause1 and the business falls into the category that need permission and if such alien intend to continue conducting the business, then he has to proceed for a permission according to the rules and time indicated in the Ministerial Regulation. During such period of time it is not considered that such alien conducts any prohibited business. Section 11. The provisions of Sections 6, 7, 8, 9, 16, 18, 19 and 20 shall not apply to aliens operating business in the Kingdom with the permission of the government of the Kingdom of Thailand as a temporary condition. Aliens in the Kingdom, under the Schedules annexed hereto, under treaties to which Thailand is a party or has obligations shall be exempted from the enforcement of the provisions of the sections, specified in the first paragraph, only when their countries have caused the obligations, thereunder, to be given effect by granting rights to the citizens of the parties of such agreements or treaties, including Thai citizens and Thai enterprises, to operate the same kind of businesses in their respective countries. Section 12. An alien, under Section 11, desiring to operate businesses under the Schedules within this Act, shall submit a report to the Director-General in accordance with the rules and procedures prescribed in ministerial regulations to request for a certificate, and the Director-General shall expeditiously issue a certificate to him as soon as possible, but not more than 30 days from the date of receipt of the report from the alien, unless the Director-General is of opinion that the report is not accordance with the rules and procedures under ministerial regulations or the case is not accordance with Section 11. In such case, the Director-General shall inform the alien as soon as possible but not more than 30 days after the date of receipt of the report from the alien. The certificate must also include the conditions, if any prescribed by the government or by the treaty. Section 13. If an alien business has received investment promotion under the investment promotion law or written permission for the operation of an export-oriented industry or a business under the law on the Industrial Estate Authority of Thailand or other laws, which is a business under the Schedules 2 and 3 annexed hereto, the alien shall report to the Director-General in order to obtain a certificate. Upon examination by the Director-General or an authorized competent official of the validity of such investment promotion certificate or such written permission, a certificate shall be issued by the Director-General as the evidence as soon as possible but not more than 30 days from the date of receipt of the report on the investment promotion certificate or the written permission as the case may be. In such case, the alien shall be exempted from the application of this Act, except for Sections 23, 24, 40, 41, 42 and 43, during the period which the business receives investment promotion or the date of receipt of the permission for the export-oriented industry or business operation. The issuance of the certificate under the first paragraph carried out within 30 days from the date of receipt of the report on the investment promotion certificate or the written permission as the case may be shall be in accordance with the rules and procedures prescribed by the Director-General. Section 14. If there are other laws prescribed shareholdings, entering into partnerships or investing by aliens, restricting or granting rights to aliens in the operation of certain businesses, or prescribing rules on the operation of businesses by aliens, such laws shall apply, and the provision of this Act shall not apply to those matters specially prescribed by such other laws. Section 15. The minimal capital, to be used in the alien business business under the Schedules within this Act, must be foreign money or other assets brought in or remitted from abroad or be technology brought in or remitted from abroad, must be the equity of alien shareholders, share subscribers, partners or members only in accordance with. The minimal capital according to Clause 1 must be a sum or value not less than that prescribed in the ministerial regulations and should not be less than three million Baht. Section 16. An alien desiring to operate a business under the Schedule Two requires Thai nationals or Thai legal entities not alien as specified in this act holding shares of at least 40 percent of the capital of such alien that is a legal entity, unless there are reasonable grounds, in which case the Minister may, with the approval of the Cabinet, reduce the percentage of shareholding, but not less than 25 percent and requires Thai directors in the number of not less than two-fifth of the total number of directors. Section 17. An alien operating a business in the Kingdom has the right to repatriate money in foreign currency from the Kingdom in accordance with the provisions of the Exchange Control Law, provided that such money is: the initial capital in the business operations, and dividends or other benefits derived therefrom a foreign loan brought in by the alien to invest in the business operations, including the interest thereon, or a fund under the alien's commitments with a foreign country under a license or service agreement in the business operations, and suchagreement is not contrary to or inconsistent with the Bank of Thailand's rules and regulations. Section 18. An alien who applies for a license must have the qualifications and be free from the prohibited characteristics, as follows: Be at least 20 years of age; and Not have had a license revoked under this Act or under NEC Decree No. 281, dated November 24, 1972, during the five years before the date of application for the license. Where a legal entity is the applicant, the alien directors, managers or persons responsible for its operations must also have the qualifications and be free from the prohibited characteristics under the first paragraph. Section 19. In applying for a license to operate a business, an alien shall submit an application to operate the business to the Minister in accordance with the rules and procedures under ministerial regulations. The Cabinet, for the case of business under the Schedule Two, or the Director-General, for the case of business under Schedule Three shall grant an approval or a license, as the case may be, within 60 days after the date of submission of the application. Otherwise the approval or the license shall be deemed granted. In the case where the approval from the Cabinet cannot be granted within the stated time then the deadline may be extended as it seems necessary but should not be more than 60 days from the stated time. Upon the approval by the Cabinet or the grant of the license by the Director-General under paragraph one, the Minister or the Director-General shall issue the license as soon as possible but not later than 30 days within fifteen days after the date of approval by the Cabinet or grant of the license by the Director-General. In granting a license, the Cabinet may prescribe conditions as set forth by the Cabinet or prescribed in ministerial regulations issued by virtue of Section 20 for the case of business under the Schedule two or the Director-General may prescribe conditions as prescribed in ministerial regulations issued by virtue of Section 20 for the case of business under the Schedule three. If the Cabinet does not grant to an alien an approval to operate a business under the Schedule one, the Minister shall notify the alien in writing without delay within 30 days and shall give explicit reasons for the disapproval. If the Director-General does not grant to an alien a license to operate a business under the Schedule three the Director-General should notify the alien for the disapproval in writing within 15 days and shall give explicit reasons for the disapproval. The alien shall have the right to file an appeal against the refusal order of the license with the Minister, and the provisions of Section 22 paragraph one and paragraph three shall apply apply mutatis mutandis. Section 20. The Minister, with advice of the Board, is empowered to issue ministerial regulations prescribing any of the following conditions to be met by an alien licensee: A ratio between the equity and loans to be used in the
operation of the licensed business; and Other necessary conditions. Section 21. When a licensee or a certificate holder is
found to have: or Committed an offence under Section 37. In the event of (1), (2) and (3), the Director-General shall first notify the licensee or the certificate holder in writing requiring the performance of Section 8, first paragraph, Section 12, second paragraph or Section 19, third paragraph, or the performance of the conditions under Section 16, as the case may be, within a period of time deemed appropriate by the Director-General. If the licensee or the certificate holder fails to perform as notified in writing by the Director-General, without proper reasons, the Director-General shall have authority to temporary suspend the use of a license or temporary suspend business operations within the period that the Director-General deems proper, but not exceeding 30 days after the date of the order. Upon the due date, if the alien has not taken proper action, the Director-General shall revoke such license or certificate or propose the cabinet to revoke the license, as the case may be. In the event of (4) and (5), the Director-General shall revoke such license or propose the cabinet to revoke the license, as the case may be. Section 22. In the event of the Director-General temporary suspending the use of a license or temporary suspending the business operations or revoking license or certificate, under Section 21 paragraph two, the license or the certificate holder has the right to appeal in writing, which must be filed with the Minister within 30 days after the date of receipt of the order. The appeal shall not stay the execution of the order of the Director-General except the Minister has made the order with the recommendation from the Board. The Minister shall give his ruling on the appeal within 30 days after the date of filing of the appeal. The Minister's ruling shall be final. Section 23. According to Section 8, 21, and 22, a license shall remain valid until the aliens licensee ceases his business that license have been granted. The certificate which has been issued under Section 12 and 13, shall remain valid for the granted period of such business received from the Thai Government or under the conditions of treaty or during the period that such business received the investment promotion under the investment promotion law, or industry under the law on the Industrial Estate Authority of Thailand or the date of receipt of the permission for the export-oriented business. The licensee or the certificate holder shall display the license or the certificate at a conspicuous place in his place of business operations. If the license or the certificate is materially damaged or lost, an application for a substitute shall be submitted to the Registrar within 15 days after the date of learning of the damage or loss. The application for and the issuance of a substitute for the license or the certificate shall be in accordance with the forms and procedures prescribed by the Minister, but the period of time for the issuance of the substitute shall not exceed 30 days after the date of receipt of the application, and the substitute shall be regarded as the substitute document for the license or the certificate until a new license or certificate is obtained. Section 24. Upon cessation of business operations, the alien who has been approved to conduct such business under Section 12 and 13 or relocation of the office or place of business operations, the licensee or the certificate holder must filed with the Registrar within fifteen days after the date thereof on the forms and under the procedures prescribed in ministerial regulations. Section 25. There shall be an Alien Business board comprised of the Permanent Secretary for Commerce, as Chairman, the secretary-generals to the National Economic and Social Development Board and the Board of Investment, representatives from the Ministry of Defense, the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Agriculture and Co-operatives, the Ministry of Transport and Communications, the Ministry of Interior, the Ministry of Labor and Social Welfare, the Ministry of Science Technology and the Environment, the Ministry of and Environment, the Ministry of Industry, Ministry of Education, Ministry of Public Health, Lawyer's Council, Consumer Protection Office, Police Bureau Office, Chairman of Board of Trade of Thailand, the Federation of Thai Industries, and not more than five qualified persons appointed by the Minister, as Board Members, and the director-general of the Commercial Registration Department, as Board Member and Secretary. The qualified persons must have knowledge and expertise in economics, law, commerce, science, technology, the environment, trade or investment, and must not be an advisor to a political party or hold a political position. Section 26. The qualified-person Members shall serve for a two-year term. If a Member vacates office fore his term expires, or if an additional Member is appointed by the Minister during the term of office of an appointed Member, the person appointed as the replacement or appointed in addition shall remain in office for the remaining term of office of the originally appointed Member. A qualified-person Members who vacated office may be re-appointed but not for more than two terms in total but can only is re-elected not more than two terms consequently. Section 27. In addition to vacation of office under Section 26, qualified-person Members retires from office upon: Death; or Lacking the qualifications under Section 25, second paragraph. Section 28. The Board has the authority prescribed herein and shall have a duty in the following matters: To give advice, make recommendations and present
opinions to the Minister relating to the enactment of
Royal Decree or identify type of business and business
location of the alien under Section 8 or seeking the
consents from the Cabinet under Section 9 (1)(2); and in
other matters as being authorized by the Minister; Section 29. Meetings of the Board require the presence of at least one-half of the total number of the Members to form the quorum. If the Chairman is not present or unable to perform that function, the Members present shall elect one of them to act as the Chairman of the board of that meeting. Decision at a meeting requires a majority of the votes. Each Member shall have one vote. In the event of a tie vote, the chairman of the meeting shall cast a second vote as the deciding vote. Section 30. The Board shall have the power to appoint committees to consider or perform acts delegated by the Board, and Section 29 shall apply mutatis mutandis. Section 31. The Commercial Registration Department of the Ministry of Commerce shall perform the functions of the office of the secretary to the Board of Directors and shall have the following authority: Carry out work in accordance with resolutions of the
Board or as delegated by the Board; and Carry on the Board's general administrative work. Section 32. The Registrar and competent officials are empowered to: Issue letters requiring or summoning persons to give explanations of facts and submit documents or evidence necessary for verification of facts and Enter places where aliens operate businesses, during business hours, for the purpose of inspections in the administration of this Act with the prior written consent of the Minister Director-General, except in the event of extreme urgency with the presence of at least two police officers in performing such duty. Have the authority to inquire and request information or documents or evidence extremely necessary for verification of facts from persons at that place. In performing the functions under paragraph (2), the owner or occupant of the place shall provide reasonable cooperation to the competent officials. The competent officials shall not act in a threatening manner or as a search under the Penal Procedure Code, shall give at least three business days' prior written notice to the owner or occupant, except in the event of extreme urgency, and shall expeditiously report to the Minister in writing on the results of performance of these functions. Section 33. If a person applies to examine or copy a document or requests the Registrar to make a copy or photocopy of a document, to certify a document, to issue a certificate of information kept by the Registrar, the Registrar shall expeditiously grant permission, unless that document is barred from disclosure under the law on official data and information or other laws, and the applicant shall pay a fee prescribed in ministerial regulations. Section 34. Competent officials must carry identify cards in the form prescribed in ministerial regulations, and in performing their functions they shall show their identity cards to the persons involved. Section 35. In performing their functions hereunder, the Board members, the Director-General, the Registrar and the competent officials are officials under the Penal Code. Section 36. An alien awarded a license or a certificate, which license is ordered suspended or revoked or whose business operations under the certificate are ordered suspended and his/its right of appeal has been extinguished, or his/its license is ordered suspended or revoked or his/its business operations are ordered suspended under a Minister's final ruling and the alien continues to carry on business operations, shall be subject to imprisonment of not more than three years or fine from Baht 100,000 to Baht 1,000,000 or both fine and imprisonment and a fine of Baht 10,000 per day throughout the period of the violation. Section 37. If an alien awarded a license to operate a business hereunder jointly operates a business belonging to another alien not awarded a license to operate a business hereunder, or operates a business jointly owned by such other alien by showing that the business is owned by himself/itself alone in order to enable such other alien to evade or violate the provisions of this Act, such alien or alien joint venture shall be subject to imprisonment of not more than three years or fine from Baht 100,000 to Baht 1,000,000 or both fine and imprisonment and a court order to cancel any joint business activities he/it are doing if the alien does not act according to the Court Order, he/it will be subject to a fine of Baht 10,000 to Baht 50,000 per day throughout the period of the violation. Section 38. A Thai person or legal entity who is not aliens according to this Act assists, facilitates or joins in the operation of a business or any activity of an alien as prescribed in Schedules annexed hereto whereby that alien is not licensed to operate that business, or joins in the operation of an alien's business by showing that the business is owned by himself/itself alone, or holds shares for a alien partnership, limited company or legal entity to enable that alien or alien joint venture to operate that business in evasion or violation of the provisions of this Act, including an alien permitting a Thai person or entity who is not alien according to this Act to carry on such act, shall be subject to imprisonment of not more than three years or a fine from Baht 100,000 to Baht 1,000,000 or both. The court order to terminate any support or assistance, cancel any joint business activities, revoke holding of shares for an alien partnership, limited company or legal entity as the case may be. If the court order is being violated then will subject to a daily fine of Baht 10,000 to Baht 50,000 throughout the period of violation. Section 39. An alien operating a business in violation of Sections 7, 8, and 9 will be subject to imprisonment of not more than three years or a fine of Baht 100,000 to Baht 1,000,000 or both and court order will be issued to cancel and business activities or terminate the business or revoke holding of shares for an alien partnership, limited company or legal entity as the case may be. If the court order is being violated then will be subject to a daily fine of Baht 10,000 to Baht 50,000 throughout the period of violation. Section 39(bis) An alien operating a business in violation of Section 15 for violation of the condition in Section 20(3) will be subject to a fine of Baht 100,000 to Baht 1,000,000 or a daily fine of Baht 10,000 to Baht 50,000 throughout the period of violation. Section 40. A licensee or a certificate holder failing to comply with Section 23, second or third paragraphs, shall be subject to a fine not exceeding Baht 5,000. Section 41. A person failing to comply with a written inquiry or a summons of the Registrar or competent officials or refusing to give information, documents or evidence upon inquiry or examination by the Registrar or competent officials or failing to provide cooperation to the Registrar or competent officials in accordance with Section 32 without proper reasons, or violating Section 24, shall be subject to a fine not exceeding Baht 5,000. Section 41(bis) In case of a legal entity commit a crime by violating the Section 27, 38 and 39, the director, partnerships or any authorized person of such entity who jointly conduct such violation or do not show any attempts to prevent the violation will be subject to a imprisonment of not more than three years or a fine of Baht 100,000 to Baht 1,000,000 or both. Section 42. For offences under Section 40 and 41, the Director-General, or a person authorized by him, shall have the power to settle the case, and once the alleged offender has paid the fine in the amount fixed by the Director-General or the person authorized by him, within 30 days after the settlement date, the case shall be closed. Section 43. The prescription period of offences under Sections 36, 37, 38, 39 and 41 shall be five years. Section 44. All the Royal Decrees, Ministerial Regulations, Notifications and Orders being in force one the day preceding the date of enforcement of this Act shall apply further so long as they are not contrary to or inconsistent with the provisions of this Act, until the enforcement date of the Royal Decrees, Ministerial Regulations, Notifications and Orders issued in accordance with this Act. Section 45. An alien granted a right or a license to operate a business under National Executive Council Decree No. 281, dated November 24, 1972, before the effectiveness of this Act shall have the right or the license to continue operating that business under the conditions and for the period of that right or license until the expiration of that right or license. Section 46. If an alien, engaging in a business which is specified in the Schedules annexed to this Act on the date this Act comes into force, but is not specified in the National Executive Council Decree no. 281, dated November 24, 1972, wishes to continue engaging in the business, he shall submit an application with this Act within one year from the date this Act comes into force. Section 47. The Minister of Commerce shall have charge and control of the execution of this Act and shall have the power to appoint the Registrar and competent officials and to issue ministerial regulations prescribing fees not exceeding those annexed hereto, and also to exempt fees and to prescribed other matters for the execution of this Act. ------------------------------------------------------------------------ FEES Application for the license in Thai Baht (a) Application for the license under Section 8: 1,000 (b) Application for the license under Section 19: 2,000 (c) Application for the Certificate under Section 12 or 13: 2,000 License: (a) License under Section 8: 5,000 (b) License for business in category 2: (1) Person: 40,000 (2) Legal entity:10 Baht for each 1,000 Baht of registered capital, but not less than 40,000 Baht or more than 500,000 Baht; a fraction of 1,000 Baht shall be counted as Baht 1,000 (c) License for business in category 3: (1) Person: 20,000 (2) Legal entity: 5 Baht for each 1,000 Baht of registered capital, but not less than 20,000 Baht or more than 250,000 Baht; a fraction of 1,000 Baht shall be counted as Baht 1,000 Certificate: 20,000 Substitutes license or certificate: 5,000 Appeal: (1) Appeal for the disapproval under Section 8: 1,000 (2) Appeal for the disapproval under Section 19: 2,000 (3) Appeal for suspension or cancellation of the license and certificate under Section 22: 2,000 Notification for ceasing or relocation of business premises: 1,000 Notification for amendment of registration, license or Certification: 1,000 Document examination or copying: 200 Baht per page Application to copy or photocopy, together with Certification: 100 Baht per page Issuance of certificate of contents of the records: 100 Baht each ------------------------------------------------------------------------ Schedules Annexed to the Act Schedule 1 Businesses prohibited to the aliens because of special
reasons Schedule 2 Business Related to National Safety or Security or Affecting Culture, Arts, Traditional Customs, Folk Handicrafts or Natural Resources and the Environment Chapter 1: Business related to national safety or security Manufacture, Distribute and Maintenance of Firearms,
ammunition, gunpowder, explosives, components of
firearms, ammunitions and explosives, military ships,
aircraft or vehicles, accessories or components of war
equipment of all kinds Chapter 2: Business affecting cultural arts, traditional customs and folk handicrafts Rice, field crop or orchard farming Chapter 3: Business affecting natural resources or the environment Production of sugar from sugarcane Schedule 3 Businesses in which Thai people are not yet ready to
compete with Aliens © 2000 Trade
Partners Limited © 2000 Trade
Partners Limited |