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Environment
Environmental
issues
The principal Thai environmental law is the Enhancement and
Conservation of National Environmental Quality Act B.E. 2535 (1992) (NEQ Act).
The NEQ Act provides the framework for pollution control and other
environmental protection measures by, among other matters, setting the
standards to measure noise, air and water pollution, requiring projects which
meet certain specified criteria to prepare an environmental impact assessment
report (EIA Report) in respect of the project.
In addition, where a license is required from any regulatory
authority (for instance, under the Factory Act B.E. 2535 (1992) or the Building
Control Act B.E. 2522 (1979)), the NEQ Act requires the EIA Report to be
submitted to those authorities and the Office of Natural Resources and
Environmental Policy and Planning (ONEP), with and the grant of the relevant license
will be subject to ONEP’s approval of the EIA Report.
Business environment
Business environment
Banking law
All financial institutions in Thailand are governed by the
Financial Institutions Act B.E. 2551 (2008) (FIA). The FIA consolidated various
acts which had, separately, governed commercial banks, finance companies and
other types of financial institutions. Commercial banks are licensed under the
FIA, which also prescribes a 25 per cent limit on the aggregate foreign
shareholding, a 25 per cent limit on foreign directors and a 10 per cent limit
on any single shareholding. These limits can be waived by the Bank of Thailand
(BoT) or the Minister of Finance, depending on the nature and extent of the
waiver required. Thai banks (and other financial institutions) are primarily
under the supervision of the BoT.
Securities law
The Securities and Exchange Act B.E. 2535 (1992) (SEC Act)
governs securities business in Thailand. The SEC Act established both the
Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand
(SET). Generally, securities business and/or securities-related activities in
Thailand require the approval of the SEC. The SET is the only institution authorized
to operate a securities exchange in Thailand. Public companies wishing to offer
their shares to the public and list their shares for trading on the stock
exchange require the approval of the SEC and the SET, respectively.
The SEC also administers the laws and regulations applicable
to the acquisition of securities in companies listed on the SET (Takeover
Code). Under the Takeover Code, any acquisition of shares in a listed company
(Target) by an acquirer which will result in the total voting rights held by
the acquirer and its “related persons” reaching or exceeding 25 percent, 50 percent
or 75 percent of the total voting rights of the Target (each a Trigger Point)
will trigger a mandatory obligation on the acquirer to make a tender offer for
all of the shares and equity linked securities of the Target. For the purposes
of determining whether a Trigger Point has been reached or exceeded, the “chain
principle” aggregates the direct shareholding of the acquirer with those of all
intermediate companies over which the acquirer has a “significant degree of
control”. This includes holding 50 percent or more of the total voting rights
or having the ability to control the management or operation of an entity.
There are no specific Thai law requirements to disclose the
proposed acquisition of shares in listed companies. However, any acquisition of
shares which results in the acquirer’s shareholding in a listed company hitting
or passing a 5 percent threshold (being each multiple of 5 per cent of the
total issued shares) will require it to make a notification to the SEC within
three business days.
The SEC Act imposes various disclosure obligations on companies
listed on the SET, including an obligation to disclose all material information
concerning its affairs and an obligation to issue public statements in response
to any rumor or report which is likely to impact on the trading of its shares.
Competition law
The Trade Competition Act B.E. 2542 (1999) (TCA) prohibits
agreements between business operators which reduce or restrict competition in a
market for particular goods or services. The TCA also prohibits the abuse of
market power by businesses in a dominant position. The TCA subject’s mergers
“which may result in monopoly or unfair competition” to the prior approval of
the Thai Competition Commission. However, at present the regulations to
implement this particular provision have yet to be introduced.
Exchange control
Foreign exchange regulations in Thailand are contained in
the Exchange Control Act B.E. 2485 (1942) and related regulations. Generally,
the Thai baht is freely convertible and both local and (subject to certain
conditions) foreign currency accounts can be kept in Thailand. There are,
however, restrictions on the transfer of funds (in local or foreign currency)
out of Thailand.
The BoT has, under the notice of the Exchange Control
officer, authorized commercial banks to approve certain transactions on its
behalf.
Generally, the inward remittance of foreign currency into
Thailand does not require prior approval, but the foreign currency must, in
effect, be exchanged into local currency by authorized agents (that is, banks)
or deposited into a foreign currency account with an authorized agent within a
specified period.
Repatriation of profits and repayment of overseas borrowings
in foreign currencies can be generally remitted upon submission of supporting
evidence of the profit and repayment obligation, respectively.
Repatriation of initial capital investment is allowed in the
event of a reduction of capital or liquidation upon submission of supporting
evidence of the reduction or liquidation process, respectively.
Please note that these requirements change from time to time
and up-to-date advice should be sought in each case.