A number of years ago, a client wished to establish a base in Thailand for its software operations. It chose Thailand over India because of its preferred infrastructure.

We advised obtaining BOI approval for the incentives offered. On the issue of foreign ownership, I told them not to put it in their presentation but ask the BOI officials at the end of the meeting if 100% foreign ownership would be acceptable - almost as an afterthought.

It was at a time that the Thai Government was courting international tech companies. Not only was 100% foreign ownership acceptable but they did not need to locate in Bangkok's Software Park which was a normal Board of Investment condition at the time for software businesses. They could set up near their other offices on Rama 4. (At the time, Software Park had no vacancies so this was a practical solution.) So enthusiastic was the BOI that they invited them to attend an international BOI roadshow before formal approval was granted.

From a sketch outline on a piece of paper in a meeting room, the operation grew to around 500 employees.

The Thai Government has now indicated that it proposes to amend the Foreign Business Act to deal with the issue of control and nominee arrangements.

Others have stated that any amendments should also include a relaxation of the number of business activities restricted to Thais under the FBA's Schedules, particularly Schedule 3. I agree.

The reality is that a vast number of non-US Treaty and non-BOI approved foreign-controlled businesses in Thailand operate under nominee style arrangements. These can vary from bare nominee arrangements to more sophisticated arrangements involving preference shares, voting and management control.

We used to call this the Nominee Spectrum - with bare nominees at the dark grey (riskier) end and more sophisticated models at the lighter grey end. But it was all grey and relied on the Ministry of Commerce's interpretation of the FBA - not looking behind share ownership at the issue of control.

Over the years, the MOC has clamped down on certain arrangements such as preference shares but this only resulted in the emergence of more sophisticated arrangements.

A more vigorous crackdown may be about to occur.

The MOC has announced a review of the FBA with particular emphasis on complex cross-shareholding structures and a significant increase in penalties to deter violations of the FBA, including asset seizures and tougher criminal penalties.

The MOC is at an early stage on its reform road and the final outcome is yet to be determined. Any real reform of the issue of control is likely to necessitate the unwinding of many foreign-controlled businesses in Thailand that would fail any scrutiny.

Thai Government to Reform Foreign Business Act

April 2026

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Interesting BBC piece on exploitation of Cambodia's resources. The only thing that seems to have changed over the past 30 years is the nationality of those doing the exploiting.

In the mid to late 1990s, French and Malaysian investors attempted, often successfully, to take advantage of Cambodian government officials.

Almost 30 years later, it is Chinese investors although they now deal with a far more sophisticated government apparatus as indicated by the increasing wealth disparity between Cambodian government and business figures and the rest of the population.

Looking back at the land speculation deals dressed up as rice farming projects and the favourable airport concession arrangements, one ultimately unsuccessful deal stands out.

In late 1996 and early 1997, there was a grand plan to erect a sound and light show at Angkor Wat. This proposal would have seen management of the temple complex outsourced to a Malaysian conglomerate which would have had full authority over the area. Cambodians were to be excluded from their own temple other than on particular religious holidays. The Malaysian group was to have total control over the content of the sound and light show and would be entitled to make modifications to the temple complex as they erected their equipment and built fencing.

Equally concerning was the plan to build hotels right up to the front of Angkor Wat, a detrimental step that was unlikely to have ever been reversed.

The contract was a particularly one-sided affair with the Cambodians effectively ceding sovereignty over Angkor to a foreign corporation.

The deal reached an impasse and, in the second half of 1997, an economic tsunami hit Asia. A number of Asian economies fell like dominoes commencing with Thailand. Malaysia enacted currency and capital controls, effectively walling itself off from the rest of Asia.

The economic crisis severely impacted the Malaysian conglomerate and it went home to try to revive its finances. Its grand plans for Angkor Wat came to nothing. The economic crisis had saved what would arguably have been Angkor Wat's destruction.

Today, as tourists return post-Covid to gaze at the wonder of Angkor Wat, they should say a quick thank you to one of the silver linings of the Asian Economic Crisis.

The shadowy Chinese firms that own chunks of Cambodia

October 2023