Global tour companies will be able to own 70 per cent of any Asean travel firm by simply establishing a firm in Singapore where they can hold 100 per cent of the shares. The Singapore backdoor will then open the entire Asean business market to international firms as they can own up to 70 per cent of the shares in companies registered in the other Asean member countries.
Former Tourism and Sports Minister and International Institute for Trade and Development executive director, Weerasak Kowsurat, delivered the warning at the Association of Domestic Travel annual general meeting on Wednesday.
He told agents not to underestimate the impact of AEC on tourism companies as the free trade regulation allows Asean companies to hold up to 70 per cent in companies in any of the 10-nation community.
“Although the AEC regulation will allow Asean members to hold 70 per cent of the equity in Asean countries up from 49 per cent under Thai law, we already know that through nominees foreigners are already controlling companies,” said Mr Weerasak.
But he warned that under AEC, foreign companies would be entitled to own 70 per cent outright, giving them control without nominees, which is technically an illegal tactic that side steps the commercial registration laws.
He noted that Thailand’s travel companies had to try to understand the AEC regulation to preserve their business advantage.