Consultant Says Thailand Needs Clearer Laws to Encourage Foreign Investors.

Byline: Natalie Suwanprakorn

Nov. 6--While Japanese investors are scrupulously reviewing their portfolios with an eye to cut costs and gauge profitability, Thailand needs to clear up cloudy industry regulations and tax laws, warned an executive for consultancy Andersen, Thailand, an affiliate of Arthur Andersen.

A worldwide recession and fierce competition was forcing Japanese companies to be selective in overseas investment as they examined and compared the advantages or disadvantages for operating in Asean, said Yasuhide Fujii, audit partner and head of a Japanese Business Organisation (JBO) team.

"The investment rush to Asean is over. Japanese investors are selecting manufacturing bases according to their strategies," Mr Fujii said.

Thailand remained Japan's largest business base in Asean because of its strategic location as a hub for Asia, but China's growing popularity as a low-cost manufacturing base was pulling attention away from Southeast Asia.

"Thailand is not one of the most advantaged countries in Asia any longer -- people are moving to China," said the global firm's audit partner.

Accounting and taxation difficulties continued to pose problems with Japanese businesses based in Thailand, causing late account closures. There was also the issue of long outstanding tax refunds.