Thailand: Thai- Austalia FTA
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Thai-Australia FTA: Australian Investors Can Take Advantage of Special Privileges in Holding the Majority of Shares in Thai Companies
Under Thailand’s Foreign Business Act B.E. 2542 (1999) (“FBA”), a foreign individual or juristic person (in which a majority of shareholders are foreigners) is not allowed to operate certain restricted businesses in Thailand, unless they obtain a foreign business license in order to operate such restricted businesses under the FBA. Typically, the process for obtaining a foreign business license is quite complicated and lengthy. However, there are certain Free Trade Agreements such as the Thailand-Australia Free Trade Agreement (“TAFTA”) which exempts Australian citizens or juristic persons (in which a majority of the shareholders are Australian citizens) from the requirement of a foreign business license to engage in some of the restricted business activities under the FBA.
Foreign business certificates under TAFTA are generally issued to those qualified Australian investors, who invest in large businesses that require substantive investment, such as in large hotels and resorts, restaurants and mines. They are also issued to those engaging in the specific service businesses of auditoriums, international exhibition centres, higher education institutions of science and technology, aquariums, amusement parks or zoos. Qualified Australian investors will be able to hold up to 60% of the share capital in a Thai incorporated company that engages in the aforementioned businesses. Qualified Australian investors can also hold up to 100% of the share capital of a Regional Operating Headquarter, businesses that engage in construction of infrastructure or in the distribution and installation of products produced by Australian juristic persons incorporated in Thailand.
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