Bangkok, January 24:

Thailand’s army-installed prime minister Surayud Chulanont told foreign investors Wednesday that the country still wants their business, despite moves earlier this month to tighten investment rules.

He defended the government’s proposal to close a widely exploited loophole in Thai law, which would effectively limit foreigners to having 49 per cent of the shares and the voting rights in companies in Thailand.

Under the existing system, international companies often use Thai proxies to get around the limit but the changes proposed two weeks ago would end that. Surayud said the amendments to the Foreign Business Act were part of an effort by Thailand’s post-coup government to strengthen the rule of law.

“We know businesses welcome predictability and like to see fairness and transparency,” the premier told some 700 foreign business leaders and diplomats.

“The amended act is expected to strengthen our oversight capacity, address previous loopholes while avoiding the creation of unnecessary obstacles to FDI (Foreign Direct Investment).” Analysts have warned that foreign direct investment could dry up until the government clarifies the rule change.

FDI is critical to Thailand’s export-based economy but since the September 19 coup, investors have becoming increasingly nervous following new capital control rules, deadly bombings in Bangkok and the tightened investment rules.

Surayud’s open support for creating a vaguely defined “sufficiency economy” has also raised questions about the direction of economic policy but the premier insisted that Thailand was not closing the door to foreign investment.

“I wish to reiterate that the proposed revision (to the Foreign Business Act) should not be construed as an act of ‘de-liberalising’ the Thai economy,” said Surayud. “We will not, by design or by default, kill the goose that lays the golden eggs,” he said.

He noted the raft of exemptions to the revised Foreign Business Act — including provisions that leave out exporters and companies operating under previously negotiated bilateral agreements.

“Thailand does not take contributions of the foreign business community for granted. We need the trust and confidence of our partners for these actions to succeed.”