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Thailand to Adopt Law Barring Sole Foreigners from Running Business



Pongpun said the new law should help reduce costs and prevent disputes.

Pongpun said the new law should help reduce costs and prevent disputes.



BANGKOK – Thailand’s Business Development Department has reviewed a new draft law and added in the document that a foreign individual cannot register a business in the Kingdom.

The move aims to prevent foreign enterprises from competing against Thais in many businesses that should be preserved for Thais.

The original draft, known as “one person, one company”, states only that a single person can register a business in Thailand.

Pongpun Gearaviriyapun, director-general of the department, said the department planned to propose the law allowing a single Thai person to establish a new company to the Cabinet soon.

The law would facilitate business growth, she said.

Currently, the law requires a company to have at least two partners for a partner company limited and at least three for a limited company. Pongpun said the new law should help reduce costs and prevent disputes.

“If this law is enforced, the number of new businesses could double from the currently active 600,000 firms to 1.2 million,” she said. “Thailand’s ranking in the World Bank’s competitiveness ranking, or Ease of Doing Business, should improve.”

She said many small businesses would be able to reduce costs and use their time more effectively while avoiding complex registration procedures, as only one person could manage the process. The law should also reduce internal disputes.

According to a department study, 12 countries already use a “one person, one company” law. They are the United Kingdom, the United States, China, Singapore, Vietnam, Germany, Canada, the Netherlands, Italy, New Zealand, India and Japan.

If Thailand adopts this law, it will be the third nation in Asean to do so. Malaysia is also looking at adopting a similar law.

Chulalongkorn University has been commissioned to study the potential of the law, and Pongpun said all of the enterprises contacted by the university had agreed with the idea and were looking forward to a bill.

After the public hearing process, the department hopes Cabinet will fast-track the ratification process so it can become law next year. This law will include 60 articles.

By Patchanet Pratruangkrai – The Nation
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