Tourism operators in Chiang Mai are calling for the revision of laws and regulations to maintain fair competition and protect local businesses from Chinese merchants using Thai nominees.
Such worries are growing after the Mae Sai-Tachileik border checkpoint in Chiang Rai reopened on Monday.
Punlop Saejew, president of the Tourism Council of Chiang Mai, said local business operators face stiff competition, with some enterprises suspected of acting as nominees for foreigners.
Mr Punlop said this problem is hard to tackle as these suspected enterprises are often legally registered, with 51% Thai ownership, even though in practice the whole investment has been allocated by foreign investors.
He said without commercial laws that regulate foreign businesses and nominees during registration, the business environment in Thailand would be perceived as unfavourable, particularly with crackdowns against only a few cases in the public spotlight.
"Cracking down on nominees one by one doesn't help improve the situation as it does not show the owners behind the grey businesses will be wiped out," said Mr Punlop.
"Instead, piecemeal action destroys confidence in Thailand and discourages foreign investors who want to do business legally here."
He urged the government to discuss the issue, calling for a law that allows 100% foreign shareholders for small- and medium-sized businesses in the tourism sector.
Strictly enforcing regulations, such as setting a fixed tax rate or mandating local employment, with regular inspections to prove transparency, will help create fair competition between locals and foreign businesses, not only in Chiang Mai, but also in other cities that face a similar problem, said Mr Punlop.
La-iad Bungsrithong, board adviser for the Thai Hotels Association, said the government should revise the business regulations that enable related authorities to regulate hotels invested in by foreigners, introduce proper tax collection and prevent the hotels from hiring only foreign workers.
She said the association is not opposed to foreigners who want to open new hotels, but they should do business under the same rules as locals. Mrs La-iad said the government should also offer a one-stop service to register for a hotel licence.
