Commerce Minister Chaiya Sasomsap last week said he would soon ask the Cabinet to approve the setting up of a committee to consider amendment of the FBA, as a way to increase confidence among foreign investors amid the continuing political uncertainty.
The ministry plans to revise the business types listed in Annexes I to III - the list of protected businesses under the Act - by removing some businesses in which Thailand is deemed ready to compete with foreign investors.
"The ministry will also hold discussions with other agencies to ensure that, this time, amendment will create fair conditions for both Thai and foreign businessmen," said Chaiya.
However, the ministry will still reserve some business sectors for Thais if it finds there are still major concerns over low competitiveness in particular industries.
The amendments should make the Act more concise and flexible for foreign investors, enabling them to keep up the momentum of foreign investment in Thailand, Chaiya said.
The minister said there would, however, be no change in the definition of "foreign investors", who can hold no more than 50 per cent of the shares in firms in business listed in Annexes I to III unless they receive permission to do so from the FBA subcommittee.
The ministry will not introduce the concepts of "controlling voting rights" or "management control" for foreign shareholders, as such a move would destroy investor sentiment.
Last year, the National Legislative Assembly voted to tighten the scope of foreign business operations by expanding the definition of "management" and "voting rights" from simply the control by foreign shareholders of a company, as in the original Foreign Business Act of 1999. The final version of the definition was not, however, made public after the end of the assembly's term early this year.
Businesses listed in Annex III are expected to become more flexible towards foreign investment under the latest proposed changes. These include rice milling, fisheries, forestry, accountancy services, service businesses, legal services, agriculture, engineering, leasing, advertising agencies and retail and wholesale.
Chaiya said the panel that would consider amendment of the Act was expected to complete its task by the end of the year, to ensure that the new conditions can take effect next year - and that foreign direct investment will be stimulated as a result.