presented by picharn sukparangsee...south east asia investment conference thailand has main...

SOUTH EAST ASIA INVESTMENT CONFERENCE ,TAIPEI

On

Thailand- Boarding the High-Speed Development Train 4.0

and Investment Opportunities.

Presented by

PICHARN SUKPARANGSEE On

November 6, 2019

South East Asia Investment Conference

Thailand has main businesses including the following:❖ Petroleum❖ Petrochemical❖ Automotive ❖ Electronic❖ Tourism❖ Hospital and health care

Thailand has increased its ranking from 27th raking to 21st ranking in term of Doing Business 2020 as prepared by the World Bank and the IFC

Source: https://www.boi.go.th/

Company


❖ A company can be incorporatedwithin 1 day if an application forincorporation of a new companyand supporting documents are dulycompleted.

❖ A Thai company must have at least 3shareholders.

❖ A director of the Thai company canbe a Thai or a foreigner.

Source: https://thaiindia.net


Foreign Business Act (“FBA”)

Any foreigner cannot hold more

than 49% of the total shares of a

Thai company unless the foreigner

is allowed by law of Thailand to

have an investment promotion by

the BOI or a foreign business

license or certificate.


Board of Investment (“BOI”)

Investment privileges provided by the BOIExemption of corporate income tax up to 13 years from the date on which income arise);50% reduction of corporate income tax for 5 years after the end of the period of exemption of corporate income taxExemption of import duty on machinery , equipment and raw materials



Land Code

A Thai company with more than 49% foreign shareholding cannot own land in Thailand unless the Thai company obtains an investment promotion from the BOI.

Condominium Act

❖ Foreigners can own upto 49% of the totalcondominium units.

❖ A foreign currency must be brought in by a foreigner into Thailand for purchase of a condominium unit.

Work Permit

A Thai company can apply fora work permit for a foreignerprovided that the Thaicompany must satisfy• share capital of Baht 2

million for 1 work permitfor a foreigner

• the employment ratio of 1foreigner to 4 Thais;

• a minimum monthly salaryof a Taiwanese must be atleast Baht 35,000.

Source: https://thaiindia.net


East Economic Corridor (“EEC”)


Source: Kinghtfrank.co.th


The EEC Act has its main objectives as follows:• Developing modern and eco-friendly economic

activities to encourage the country’s competitiveness;

• Providing a one stop service to eliminate any obstacle and operational cost;

• Procuring efficient infrastructure and public utility systems for entire continuity and coherence;

• Stipulating a proper land use to condition and potential of each area in conformity with a principle of sustainable development; and

• Improving each province at international modernity for suitable residence and business operation in good quality.


The EEC is in the East of Thailand and covers main industries including petroleum , petrochemical , and automotive industries



The EEC Act has the Policy Committee

The Policy Committee may determine a special economic zone

(“SEZ”) to promote any special targeted industry which must consist

of at least one of the following targeted industries:

1) Next-generation automotive;2) Smart electronics;3) Affluent and wellness tourism;4) Agriculture and biochemical technology;5) Food processing;

6) Robotics;7) Aviation and logistics;8) Biofuels and biochemical;9) Digital; and10) Medical hub



The investors or residents in the SEZ shall beentitled to enjoy one or more privileges asspecified by the Policy Committee as follows:1) To own land or immovable property offoreigner;2) To bring in foreigners to reside in thecountry;3) To obtain tax exemption or reduction;4) To conduct financial transaction; and5) Other privileges.

Source: Foreign Office, Royal Thai Government.


http://thailand.prd.go.th/1700/ewt/thailand/ewt_news.php?nid=6168

Labour Laws


1. Labour Protection Act 2. Labour Relation Act 3. Act on Establishment

of Labour Court and Labour Procedure

4. Social Security Act 5. Provident Fund Act



1 employee – social security fund

Social Security Fund

• An employee is deducted with 5% of the wage of the

employee which shall be made to the Social Security

Fund. Calculation is based on 5% of wage of

employee;

• An employer or a company must make a monthly

contribution of 5% of the wage of the employee;

• The government shall make a contribution at the

rate of 2.5% of the wage of the employee

Number of employees and legal requirements

10 employees

• work rules must be in Thai language

50 employees

• welfare committee

100 employees

• employ at least 1 disabled person or

make payment in lieu of 1 disable person



Termination of employment of anemployee

• payment in lieu of an advance notice oftermination of the employment to an employee

• severance pay to an employee dismissed unlessthe employee intentionally or gross negligentlycauses damage to a company;

• make payment for unfair dismissal;

• pay special compensation for relocation of afactory causing grave difficulty to anyemployee.

Labour LawProvident fundA provident fund is made by an employee and the employer from the range of 3% to 15% of a monthly salary of an employee.Unlike a social security contribution on a compulsory basis, a provident fund is voluntary for a private company but a public company listed on the Stock Exchange of Thailand must have a provident fund.



Taxation law of Thailand is based upon the worldwide income basis.

Corporate income tax is the flat rate of 20% of the net profit.

Progressive rates of personal income tax range from 5% to 35% of the net income.

A standard rate of VAT is reduced from 10% to 7% on payment for goods, provisionsof services and importation of goods or services. Export of goods or services is 0%VAT.

Specific business tax at the rate of 3.3% of revenue is applicable to interest on loanand proceeds from sale of real estate.

Previous income tax rule exempts income of year earned in a foreign country inyear 1 but is brought into Thailand in year by a resident of Thailand.



DTA and Taxes

❑ Dividend

❑ Interest

❑ Royalties

❑ Capital again

Dividend paid by a Thai company to a Taiwanese company is subject to 5%

withholding tax (reduced from 10% WT) provided that a Taiwanese must be a

beneficial owner and directly holds at least 25% of the share capital of a Thai

company.

Interest paid by a Thai company to a Taiwanese company is subject to 15%

withholding tax on interest but only 10% withholding tax is levied on interest

paid by a Thai company to a financial institution in Taiwan.

Royalties paid by a Thai company to a

Taiwanese company is subject to 15%

withholding tax on an amount of

royalties.Capital Gain from sale of shares in a Thai

company and received by a resident to

Taiwan is exempted from tax in Thailand.



Transfer Pricing lawFrom 1 January 2020, a Thai company mustprepare and file a transfer pricing report onany transaction with associated enterprises tothe Revenue Department of Thailand.

Customs Duty

Import duty is charged not only on an amountof tangible goods imported but also on anamount of royalties paid by a Thai subsidiaryto a foreign parent company.Exemption of import duty on goods from amember of the ASEAN is provided.

Source: https://www.aseanbriefing.com


https://www.aseanbriefing.com/


• Digital assets means cryptocurrency and digital token• Digital asset business means digital asset exchange, digital broker and

digital dealer and other digital asset business to be notified by theMinister of Finance

• Securities under law on securities and exchange are not deemed to becrypto currency and digital token under Digital Asset Act

• Digital asset business operators and digital token system providers aredeemed to be financial institutions under law on anti-money laundering

• A digital asset business operator must obtain a license from theMinister of Finance with recommendation of the Office of the SEC

• The Office of the Securities and Exchange of Thailand (“SEC”) has thepower to issue rules and regulation on issuance and offering of digitaltoken and digital assert business operation

• Digital assets are regarded as virtual securities in Thailand• Cryptocurrencies including bitcoins are legal under law of Thailand.

Digital assets Act


PDTA is published in the government gazette on 27May 2019 and data protection provisions will beapplicable on 27 May 2020.

PDTA is similar to General Data Protection Regulation(“GDPR”) of the EU.

A consent from a data owner must be obtained.A data owner has

• right to access his or her own personal data;

• right to withdraw his or her consent;

• right to data portability;

• right to delete a personal data to an unidentified person;

• right to rectification; and

• right to complaint

Personal Data Protection Act (“PDTA”)

A data controller is required to obtain a clearlyexplicit consent of a data owner for collection ,usage and disclosure of such personal data.Collection of personal data is not required :• for prevention of suspension of danger to a

personal life, body, or health;• for compliance with laws;Obligations of Data controller include:• providing appropriate security measure to the

personal data from unlawful access;• arranging an inspection system for deletion or

destruction of personal data after expiry ofpersonal data; and

• procure a data protection official in case anycompany has any main activity relating tosensitive information.



Liabilities

• civil liability – compensation for any damage to

the owner of the personal data

• criminal liability – imprisonment of not

exceeding six months or a fine of not exceeding

Baht 500,00 or both;

• administrative sanction – administrative fine

from not exceeding Baht 1 million to Baht 5

millions

Personal Data Protection Act (“PDTA”)Source: https://www.boi.go.th/


Litigation

• Litigation at the Court of First Instancenormally takes within 1 year from the dateof filing a plaint

• An appeal against the judgment of the Courtof the First Instance can be made to anAppeal Court

• An appeal against the judgment of theappeal court can be made on legal issues tothe Supreme Court

Legal disputes

Arbitration

Thailand is an signatory to the NewWork Convention on enforcement of anarbitration award.A foreign arbitration award can beenforcement in the Intellectual Propertyand International Trade Court unlessthe arbitration award is contrary to apublic order of Thailand


Chart on a Real Estate Business,Thai operating Co. and ThaiHolding Co.

Foreign Co. Thai Individual

Thai Holding Co.

Thai Operating Co.

Real Estate Business

35 % 65 %

100 %

100 %

Chart on Foreign Arbitration and Local Litigation

local Co

foreign Co foreign

arbitration

local

litigation

Thank you very much For your kind attention

BANGKOK GLOBAL LAW OFFICES LIMITED

Mercury Tower, 17 Floor, Ploenchit Road, Pathumwan District, Bangkok 10330 Thailand

E-mail: [email protected]

Tel: +66 (0) 2 252-5895-6 Fax: +66 (0) 2 252-5897

presented by picharn sukparangsee...south east asia investment conference thailand has main...

Documents