Thailand: “Ease of Doing Business” in government focus

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The National Council for Peace and Order (NCPO) recently issued an order to amend provisions of the Civil and Commercial Code, Labor Protection Act, Public Limited Company Act, Social Security Act and Bankruptcy Act with immediate effect. Selected changes are outlined below.

 

  

1. Work rules are no longer required to be registered

Registration of work rules with local authorities has proven to be problematic and time consuming because officials have very broad authority when reviewing and requesting changes to work rules. Under the NCPO’s order, an employer can simply publish work rules at the work place without submitting them for registration. In case that any provisions of the work rules are inconsistent with Thai labor law, the labor law will apply.
 

2. Enhancement of Minority Shareholder Rights in Public Limited Companies

Now, fewer shares are required to call an extraordinary meeting of shareholders (EGM) and for requesting an official investigation. Shareholders holding at least 10% of total issued shares can request the board of directors to convene an EGM. If the board fails to convene a meeting within 45 days, shareholders can convene an EGM themselves, with the company responsible for facilitating such meeting and bearing all related costs and expenses. Shareholders who hold at least 5% of total issued shares may request an official investigation of the company’s business and financial status, including the board’s activities.
 

3. More flexibility under the Social Security Act

The Minister of Interior may, with approval from the cabinet, extend the prescription periods for filing obligations of any unemployed persons wishing to maintain social security rights and employee’s social security contribution. This is aimed to provide employers with more flexibility and to protect employers’ and employees’ rights and benefits.
 
The secretary-general of the Office of the Public Sector Development Commission, Tossaporn Sirisamphan, expects Thailand's ranking in the World Bank’s “Ease of Doing Business” index to raise at least seven spots (to 39th) also due to ongoing improvements. Thailand's ranking in the index, which surveys 190 countries, climbed to 46th from 49th in 2016. Thailand is ranked ninth in Asia, following Singapore and Malaysia in ASEAN.
 

updated 26 September 2017

   

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