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July 18, 2007

Doubts linger over FBA resolution
Foreign investors are not confident about how Thailand will resolve nominee problems as related laws and regulations such as the Land Act and Foreign Business Act (FBA) will not be revised to help them, Bangkok Post reported.

Kitipong Urapeepatanapong, a partner with the law firm Baker & McKenzie, said frequent changes in economic policies, including the imposition of capital controls and revisions to the FBA, made foreigners feel uncertain about the future of their investments in Thailand.

''They have still questioned whether Thailand is really friendly to foreign investors. Until now, foreign investors haven't understood the stance of the government in solving the nominee issue,'' he told a seminar at the Stock Exchange of Thailand on July 18.

''In general, the use of nominees is widely implemented in businesses around the world as some investors don't want others to know about them while some want to lower tax payments.''

If the nominees are legally used for business purposes and the government found that the laws have some loopholes, then it should close them immediately, Mr Kitipong said.

''Thailand can't resist foreign investors and their nominees. To cope with the issue, the government should update existing rules and encourage investors to disclose themselves.''

The FBA and the Land Act should be revised in line with the government's policy to solve nominee problems. ''If the rules and regulations are more friendly for foreign investors, the use of nominees may decline. And in the future, if the government wants to impose any new tax such as an environment tax or property tax, evasion will be minimised,'' Mr Kitipong said. Bangkok Post

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