In line with the ASEAN Economic Community (AEC) which will take effect in 2015, the Thai government aims to become center for Regional Operating Headquarter (ROH) for multinational companies who would like to setup their ROH to expand their operation within the ASEAN region or to prepare itself for the upcoming AEC. Being strategically located within the Southeast Asia region with networks of modern infrastructures, quality skilled labor, easy access to raw materials and attractive tax incentives significantly represent as a cost-effective investment for any companies who want to save costs and at the same time, still remain competitive. Government policies also contribute to Thailand’s apparent strengths in its position as a strategically located business hub and center for production and regional outsourcing.

The Thailand Board of Investment (BOI) act as a focal point for the investors in dealing with different government agencies by bringing together under one roof the representatives from different relevant ministries. The Thailand BOI offers assistance on applications for business licenses, factory certification, environmental impact assessments and many other matters. Besides Regional Operating Headquarter, the Board of Investment of Thailand is also promoting the following related activities with tax and non-tax incentives vary depending on the activities.

• International Procurement Offices, involving sourcing, quality control and packaging
• Trade and Investment Support Offices
• International Distribution Centers
• Distribution Centers
• Research and Development

For investors who are interested in establishing the Regional Operating Headquarter in Thailand, please visit the BOI’s website www.boi.go.th for more details on incentives and conditions in setting up a ROH. Need further assistance in setting up Regional Operating Headquarters and other business forms in Thailand, contact English speaking ThaiLawyers for business registration, license application, visa and work permit services.

The ASEAN Disclosure Standards Scheme is one of the capital market initiatives undertaken by the ASEAN Capital Markets Forum (ACMF) under its regional capital market integration plan (Implementation Plan) endorsed by the ASEAN Finance Ministers in April 2009 in Pattaya, Thailand. The Implementation Plan was developed to promote the development of an integrated market to achieve the goals of the ASEAN Economic Community (AEC) Blueprint 2015 to form an integrated ASEAN market by 2015.

This Scheme aims to facilitate cross-border offerings of securities within the ASEAN region by harmonizing disclosure requirements and support fund-raising activity. It will also benefit ASEAN and non-ASEAN issuers who make multi-jurisdiction offerings of equity and plain debt securities within ASEAN by increasing efficiency and reducing costs. Under this Scheme, when an issuer wishes to make a multi-jurisdiction offer of securities, the issuer needs to provide only a single set of disclosure documents that comply with the ASEAN Disclosure Standards to investors in each jurisdiction.

The Scheme also bring ease and cost savings to all issuers who make multi-jurisdiction offerings of plain equity and debt securities that require the registration of prospectuses or registration statements within ASEAN. Under the framework, issuers will be required to comply with a set of common disclosure standards, known as the ASEAN Disclosure Standards which are based on standards on cross-border offerings set by the International Organization of Securities Commissions (IOSCO).

Further details of the ASEAN Disclosure Standards Scheme and Implementation Plan are available on the ACMF website at www.theacmf.org. Interested to invest in Thailand, contact MSNA for your business needs.

The exporter who wants to become a Registered Exporter and receive certain privileges should submit the Registered Exporter Application Form (SorTor.1) along with the required documents to the following offices:

1. For a company under supervision of Bureau of Large Business Tax Administration can submit the application at Planning and Evaluation Division of the Bureau of Large Business Tax Administration.
2. Other companies can submit the application at Area Revenue Branch Office

2.1 For a VAT registered company located in the jurisdiction of Area Revenue Office within Bangkok area, the application must be submitted at Withholding Tax and Refunds Sub-division.

2.2 For a VAT registered company located in the jurisdiction of Area Revenue Office outside Bangkok area, the application must be submitted at Tax Processing and Refunds Sub-division.

Once the application documents are submitted, the following approval process will take place:

• The Bureau of Large Business Tax Administration or Area Revenue Office (depending on the case), will verify the credibility of the exporter who submitted the Registered Exporter Application Form.
• Then, the opinion will be sent to the Registered Exporter Classification Committee to review and send to the Director of Bureau of Large Business Tax Administration or the Director of Area Revenue Office for approval.
• The Bureau of Large Business Tax Administration or Area Revenue Office (depending on the case) will then notify the result to the exporter.

Interested in setting up an exporting company and become a Registered Exporter in Thailand? ThaiLawyers can help you for company registration, visa and work permit application. MSNA’s Thai Tax Advisors can help you coordinate with the Thai Revenue Department for Registered Exporter application.

As a way to support exporters in Thailand, the Thai Revenue Department (TRD) makes every effort to help increase the international competitiveness for local businesses. Hence, the TRD categorize exporters into ordinary exporters, good exporters and registered exporters.

Today, we summarize the criteria set by the TRD for Registered Exporters in Thailand. This is in accordance with the Departmental Instruction No. Tor.597/2545 dated 19 December B.E. 2545.

Qualifications of a Registered Exporter

For exporters who would like to be considered as Registered Exporters, they must have the following qualifications:

1. The exporter must be a juristic company or partnership or an individual who is a VAT registered.
2. The exporter must have carried on business of not less than 12 months and have ratio of goods exported abroad not less than 50% of total sales in the last 12 months prior to submitting the Registered Exporter Application form and have proof of bringing foreign currency into Thailand or a proof that shows the transaction has been set-off.
3. The exporter must have stability and continuity in operations and have ownership rights in immovable property e.g. land, building, factory and etc.
4. The exporter must have net assets exceed net debt for the last accounting period prior to submitting the Registered Exporter Application Form for a limited company or partnership.
5. The exporter must have good tax history, have paid taxes according to the real business situation, and have never avoided paying taxes.
6. The exporter must be a member of commercial association(s) or private organization(s) e.g. Thai Chamber of Commerce, Provincial Chamber of Commerce etc. and such association(s) or organization(s) can verify the credibility and reliability of the company’s financial status.

Conditions

Exporter who will be approved as Registered Exporter must meet the following conditions:

1. The exporter has VAT refund directly deposited into the bank account.
2. If possessing branch office(s), the exporter must be authorized to file tax return and pay VAT in consolidation.
3. In case an exporter is a juristic company or partnership, the Certified Public Accountant or Tax Auditor who will verify and certify financial statement for the accounting period in which the company submits the Registered Exporter Application Form, must be appointed by consent of the shareholders meeting and must follow the conditions in Section 3 septem of the Thai Revenue Code. The exporter must submit CPA’s name and registration number, CPA office’s name, an accountant’s name and accounting office’s name.

The above information outlines the general conditions and qualifications for a Registered Exporter applicant and is subject to any changes without prior notice. Interested to become a Registered Exporter in Thailand, contact MSNA for Registered Exporter application.

Today, we got an interesting question from one of our inquiring clients:

Question: We want to set up a trading company in Thailand. We will import products from overseas but we are not sure if we will be allowed. What are the products that we cannot bring to Thailand and which government agencies should we contact to get the proper permission?

Answer:

The Thai Customs Department is charged to stop the importation and exportation of prohibited goods in Thailand. It is also designated to intercept the importation and exportation of restricted goods, ensuring that all relevant laws and regulations are followed properly. Moreover, the comprehensive list of prohibited and restricted goods as well as information about the control and in the case of restricted goods to the permission to import/export may be obtained from the Department of Foreign Trade, Ministry of Commerce.

The following information from the Thai Customs generally outlines the prohibited or restricted goods in Thailand. This will give you the idea where you can obtain more information about the control and, in the case of restricted goods, to apply for permission to import/export.

Prohibited Goods

Prohibited goods are goods for which either the import into or export out of Thailand are prohibited. Any person imports or exports prohibited goods is considered as committing offences and subject to penalties indicated in the relevant national legislation. In addition, such activity is also considered as an offence under Articles 27 and 27 bis of the Customs Act B.E. 2469. It is prohibited by law to bring the following items into our out of Thailand.

• Narcotics e.g., marijuana, hemp, opium, cocaine, morphine, heroin
• Goods with Thai national flag
• Fake Royal Seals/official seals
• Fake currency, bonds or coins
• Pirated copyright goods e.g. musical tape, CD, VDO, computer software, etc.
• Obscene objects/literature/pictures
• Pornographic materials
• Counterfeit trademark goods

Restricted Goods

Restricted Goods are goods of which the import and export are restricted by law and therefore require a permit from the related government agencies. Any person imports or exports restricted goods is considered as committing offences and subject to penalties indicated in the relevant national legislation. In addition, such activity is also subjected to the offence under Articles 27 and 27 bis of the Customs Act B.E. 2469.

Although the Thai Customs is charged to stop the trading of prohibited goods and intercept the flow of restricted goods, the Ministry of Commerce in Thailand designates classes of goods that are subject to import controls, which usually take the form of permission and licensing. Although these controls are being liberalized, at present more than 50 classes of goods require import licenses from the Ministry of Commerce. These categories are frequently changed through notifications of the Ministry of Commerce. A license to import any of the restricted items must be obtained from the Ministry of Commerce prior to importation. Application for the license must be accompanied by a supplier’s order, confirmation, invoice, and other pertinent documents.

In addition to the Act imposing the above controls, a number of goods are also subject to import controls under or other relevant agencies. These include:

• The import of drugs, food and supplementary products requires prior licensing from the Food and Drug Administration, the Ministry of Health.
• The imports of weapons and ammunition, explosives, fireworks and real and replica firearms requires appropriate license from the Ministry of Interior. Other weapons such as electric shock devices must also be declared. Some of these items may require a permit, before importation.
• The Cosmetic Act stipulates that for the purpose of protection of public health, any importer of controlled cosmetics must provide the name and location of the office and the place of manufacture or storage of cosmetics, the category or kind of cosmetics to be imported and the major components of the cosmetics.
• The import or export of antiques or objects of art, whether registered or not, requires permission from the Fine Arts Department.
• The import of wild fauna, flora, fish and other aquatic fauna requires permission from the National Park, Wildlife and Plant Conservation Department, the Department of Agriculture or the Department of Fishery as the case may be.

The above information serves as a general guideline only and subject to changes without prior notice from the respective government authorities. It does not in any way replace the Thai Customs and related laws or regulations. We highly recommend that you should verify the accuracy, relevance, and completeness of the information with the concerned authorities. Hence, contact ThaiLawyers for company registration, business licenses, work permit & visa application services.

Thailand is working out a new investment promotion strategy which will focus on industrial restructuring toward knowledge-based or high-technology industries.

Five seminars have been prepared to offer opportunities for business operators across the country to express their opinions. Suggestions and recommendations offered at the seminars will be included in the proposal on the new investment promotion strategy to be presented to the Board of Investment’s board meeting. The new investment promotion policy under this new strategy is likely to be implemented in June 2013 and is believed to push for the development of Thailand as a leading production base I the world.

It is expected that BOI would place more emphasis on investment which promoted a good balance between economic growth and social and environmental development, as well as a balance between agricultural, industrial and service sectors. This includes the industries in which Thailand has good potential, such as those involved with food processing, rubber products, health care and creative industries. Other industries to receive greater attention are those related to future global trends, such as alternative energy, biotechnology and high-value-added services.

While basic incentives will be minimized, BOI will offer additional incentives for companies that have more investment in research and development, human resource training and environmental protection. It will also adjust investment rules and regulations on non-tax benefits and services to improve the business environment while encouraging Thai investors to invest more in other countries.

Interested in doing business in Thailand? ThaiLawyers can help you in business set up, work permit application and Thai visa extension. Contact now for further consultation.

In view of the increase in the minimum daily wage which took effect on January 1, 2013 nationwide, the Thai government has recently approved tax relief measures for the affected small-and-medium enterprises (SMEs). These measures are expected to help SMEs with annual income not exceeding Baht 50 million a year.

Under these measures, the income tax exemption limit for SMEs will be raised from Baht 150,000 to Baht 300,000 a year. SMEs declaring income between Baht 300,000 and Baht 1 million will be taxed at 15% and those with over Baht 1 million profit will pay tax at 20% on the difference.

The withholding tax rates for SMEs will also be cut from 3% to 2% and they will be allowed to claim 100% depreciation on machinery for the first year of purchase until the end of 2013, an extension of one year from the year end of 2012.

Contact MSNA for your accounting, tax and other business needs.

Opening a bank account may not be easy for some foreigners who want to open an account with a local bank in Thailand. Most of the time, foreigners are required to present their passport with valid Thai visa and work permit before they can open a personal bank account. The same condition applies to those foreigners who are authorized directors, branch managers or representative office managers of their entities in Thailand whereas copies of company registration papers and other additional supporting documents are also needed before they can open a business bank account.

However, regardless of any type of business entity, foreign business owners or managers can open a business bank account since there are no restrictions on foreign firms opening a business bank account in Thailand.

Aside from major local banks, international banks such as Citibank, HSBC, Standard Chartered and UOB provide business banking services in Thailand. All of these banks are able to provide full online banking facilities and support as well. Both local and foreign currency accounts are available under similar terms and conditions.

In opening a Thailand business bank account, there is a minimum initial deposit required but usually, it is a relatively low amount. Normally, the international banks require Baht 50,000 or more (or the equivalent in foreign currency) as the initial deposit. For major Thai banks such as Bangkok Bank, Kasikorn Bank, Siam Commercial Bank, etc, the minimum initial deposit for a Thai Baht account is usually Baht 10,000 for a current bank account and Baht 500 for a savings account. However, it is advisable to know the terms and conditions of these banks before deciding to open a bank account.

MSNA can assist you in opening a business bank account in Thailand. We can help you coordinate with the respective bank officers and prepare the necessary requirements. Consult now for further information.

The Thai BOI has decided to extend a flood relief measure on machinery replacement until 31 December 2012 allowing more than 150 companies in Pathum Thani and Ayutthaya to have access to this incentive and to help entrepreneurs who need assistance to renovate their facilities.

The Board considered that many BOI-promoted companies that had been seriously affected by the massive flood were preparing to make or were making decisions to apply for the investment incentives both for replacement of damaged equipment or as new investments.

As of 30 June 2012, the Board has found that the total number of projects receiving approval for import duty exemption for machinery replacement is 490 projects with the total imported machinery value of Baht 108.65 billion.

Further details of this extended flood relief measure have yet to be announced. Contact MSNA for expert advice on BOI promotion and Thai taxation.

As a move to prepare Thailand for ASEAN Community (AC), which is set to be formed in 2015, the Thai Ministry of Labour proposes Office of the National Economic and Social Development Board (NESB) 10 projects, hoping that the country will have labour protection standard that is recognized at international level, and will be prototype of human resource development for other countries.

The Thai government has resolved to have the NESDB, the Secretariat of the Cabinet, and concerned agencies mapped out a master plan to help prepare Thailand for the AC and to have these agencies work together to help push the AC into existence by 2015.

The Ministry of Labour has been tasked to arrange a three-year government operational plan (2013-2015) as well as other plans and projects to help Thailand prepare for the AC. They must be in line with the building of the AC, which consists of three main pillars namely ASEAN Security Community, ASEAN Economic Community (AEC), and ASEAN Socio-Cultural Community. The Ministry has also instructed concerned agencies to map out 10 projects to help Thailand prepare for the AC and rank them in order of importance, from the least important project to the flagship project.

So far, three projects were designed by Department of Employment such as:

– Information system development project to support free flow of labour,

– Laws/rules/regulation improvement project, and

– Awareness building project on decent work.

The Department of Skill Development has designed two projects:

– Skill development project for the preparation of the AEC, and;

– Occupational skill development projects for women, youth, old-age people, people with disability, and informal workers.

Meanwhile, the Department of Labour Protection and Welfare has designed two projects: a project to create workplace prototype and a project to improve labour management.

The Office of Social Security has also designed 2 projects, which are:

– A project to transform the workers rehabilitation center into the South East Asian workers rehabilitation training center with comprehensive training curriculum for workers with disability, and

– A project for the protection of ASEAN social security rights.

Moreover, Office of the Permanent Secretary has also designed one project, which is a study of capability of Thai workers in trade, service, and investment sectors.

Implementation of these projects has yet to be announced.

Contact MSNA for your inquiries and business needs.