Courtesy of e.Thailand.com

If a foreigner wishes to engage in a business activity in Thailand that is included on List Two or Three, the Foreigner must obtain a Foreign Business License.

The FBA specifies that the licenses will be issued pursuant to regulations to be issued by the Commercial Registration Department.

As of September 14, 2000, the draft regulations were still under consideration. Applications for licenses are not yet being processed and the exact procedures are not yet known.

However, the provisions of the FBA and various draft regulations give us some guidelines for the criteria and procedures that will be forthcoming.

The FBA provides that a foreigner applying for a Foreign Business License must meet minimum capital requirements that are to be contained in regulations issued by the Commercial Registration Department.

The law itself specifies that the minimum capital shall in no event be less than 3 million baht.

Under the provisions of draft regulations not yet in force, the minimum capital will be 25 percent of projected operating expenses during the first three years of business or 3 million baht, whichever is greater.

Under the terms of the draft regulations, these minimum capital requirements would also apply to “treaty companies” operating under the terms of the Thai-U.S. Treaty on Amity and Economic Protection.

Imposing the minimum capital requirement on treaty companies appears to violate the terms of the treaty, and probably even the terms of the FBA itself.

Under the FBA, at least 40 percent of the capital of a foreigner seeking a license to engage in an activity under List Two must be held by Thais. However, under special circumstances the percentage of Thai shareholding can be reduced to as low as 25 percent. Such reduction requires special approval from the Thai Cabinet.

Not all applicants meeting the minimum capital requirement will be granted a Foreign Business License. The decision as to whether to grant the license will be at the discretion of the Thai Cabinet for List Two activities or the Director-General of the Commercial Registration Department for List Three activities. The following factors are to be considered in implementing the FBA:

i. the advantages and disadvantages to Thailand’s safety and security;
ii. economic and social development;
iii. public order and good morals;
iv. the art, culture and traditions of Thailand;
v. natural resource conservation;
vi. energy and the environment;
vii. consumer protection;
viii. size of the proposed enterprise;
ix. impact on employment;
x. technology transfer;
xi. research and development

The FBA provides that all applications for Foreign Business Licenses be submitted to the Director-General on forms that will be prescribed by regulation.

The application will be then be taken under consideration by the Thai Cabinet or the Director-General Commercial Registration Department, as appropriate.

The consideration period should not exceed 60 days; however, an extension of up to an additional 60 days can be granted.

Next week: Penalties

TNT Loop to enable company to capture 25% of the market for E-fulfilment in Asia

TNT, a global leader in express distribution, logistics and international mail, has unveiled the world’s most complete e-fulfilment solution called TNT Loop in a region-wide road show with the theme ‘TNT Loop: Delivering reality in a virtual world.’ TNT Loop, an integrated demand chain management system, links the entire chain of e-fulfilment processes such as order processing, payment processing, warehousing, transportation and delivery, as well as post transaction processes into one seamless flow for e-commerce customers. It is expected to reshape the marketplace for e-fulfilment services for successful e-commerce players and secure TNT’s leadership in e-commerce-based service delivery.

TNT Loop is a complete demand chain management system integrating high-quality e-fulfilment building blocks that facilitate seamless information and physical flows. It is a modular system that provides superior scalability, flexibility and reliability that offers fast set-up and time-to-market for complicated solutions. With its highly customised service, greater efficiency and cost-effectiveness is possible. This e-fulfilment system enables e-commerce companies to have a global geographic scope which strengths at the pan-European, pan-Asian and selected country levels.

Noud Leussink, Regional Manager, E-commerce Solutions, Asia, TNT believes that the growth potential in the Asia Pacific for TNT Loop is great given the sustained growth of e-commerce in the region married with the superiority of TNT Loop to anything else in the market place. Commenting on TNT Loop, he said, “The most successful e-commerce players in the future must have in place a complete demand chain management strategy, both from a cost and customer satisfaction perspective. You can have the most marketable online product offering but without the correct e-fulfilment management model the business will fail. That is why TNT is so focused on e-fulfilment and we intend to become the partner of choice for e-commerce in the region.”

The Asian launch of TNT Loop comes at a time when the rate of dot.com failures has been increasing due to fulfilment problems such as bottlenecks. The ability to respond quickly and reliably is now critical to giving e-commerce companies the competitive edge they need to survive. To meet e-commerce demand, e-fulfilment solutions need to be fast, flexible and responsive; qualities that are primary to TNT Loop.

TNT Loop is the result of TNT’s strategic IT partnership with industry leaders such as OrderTrust, Inc, a leading e-commerce network providing scalable order management and Descartes Systems Group, a leading technology innovator for logistics. TNT predicts a dramatic increase in its e-fulfilment business and on-line services in Asia in the next three years. The company forecasts that by 2002, its e-fulfilment business will account for 30 percent of the company’s business in the region while 70 percent of all consignments in Asia will be handled electronically.