Thailand BOI has recently approved the seven-year draft investment promotion strategy which will commence from 2015 to 2021. The new investment strategy will shift from broad-based to focused and prioritized investment promotion that will lead to the restructuring of the Thai economy. It will also move the country forward to become a higher-income economy with sustainable growth in the long run.

The new strategy will still offer promotional privileges to seven groups of industries: agro-industry and agricultural products; mining, ceramics and basic metals; light industry, metal products, machinery and transport equipment, electronics industry and electrical appliances; chemicals, paper and plastic; and services and public utilities although greater emphasis will be placed on high technology, high added value, research and development or design and environmentally friendly activities.

There are two types of incentives to be offered: (1) activity-based incentives and; (2) merit-based incentives. For instance, basic incentives will be offered in accordance with the types of activities. Additional incentives will also be provided for projects that will benefit the country, such as research and development, high-skill development, and the distribution of wealth to regional areas.

Meanwhile, the previous zoning policy, whereby Thailand was divided into three zones for investment purposes, will be revoked. It will be replaced by the promotion of new regional clusters in order to create new investment concentration in each region and stronger value chains.

Moreover, the new strategy will attach importance to both inbound and outbound investment promotion. This will help ease constraints in terms of domestic resources. It will also enable the country to seek new business opportunities for the Thai private sector, especially when the ASEAN Economic Community (AEC) goes into full effect and Thailand plays a greater role in the international arena.

In this regard, the first target countries include Indonesia, Myanmar, Vietnam, Cambodia and Laos. The second ones are China, India and other ASEAN nations, while the third group includes Central Asia, South Asia and Africa.

Contact MSNA for company setup, BOI promotion, Foreign Business License, factory license, visa and work permit application in Thailand.

In the case where Thailand Board of Investment grants promotion to any applicant, the BOI may set conditions in the promotion certificate for the compliance by the promoted person in one or more areas as follows:

(1) Amount and source of capital;

(2) Nationality and number of shareholders;

(3) Size of activity including the types of products, commodities or services and the production or assembly processes and capacity thereof;

(4) Amount of local raw materials to be used;

(5) Nationality and number of workers, technicians and experts;

(6) Training and employment of manpower;

(7) Prevention and control of damaging elements to the quality of the environment;

(8) Period of time to commence the implementation of the promoted project;

(9) Period of time to place orders for the purchase of machinery;

(10)Period of time to import machinery into the Kingdom;

(11)Period of time to re-export the imported machinery after the termination of their use;

(12)Extension of time limits under (8), (9) or (11);

(13)Date of commencement of operation;

(14)Report on implementation of the project and operation;

(15)Report on the performance of the training provided by the foreign technicians and experts to the Thai personnel;

(16)Requirements that the products or commodities produced, assembled or exported conform to the standards prescribed either by the Board or other government agencies;

(17)Distribution of products or commodities produced or assembled or services rendered;

(18)Export of products or commodities produced or assembled;

(19)Requirements that the cash, bank guarantee, the Thai government securities or other securities deemed appropriate by the Board, be deposited with the Office for the purpose of guaranteeing the compliance with the conditions stipulated by the Board;

(20)Other matters relating to the provision of facilities to the competent official, granting, exercising or controlling of the rights and benefits under this Act.

Application for Thailand BOI promotion would be easier if you have a partner to guide you in the application process. Contact ThaiLawyers for BOI promotion, company registration, visa & work permit and further Thailand BOI questions.

When applying for a factory license in Thailand, the Ministry of Industry has the power to issue regulations for all of the categories regarding:

1. Description, category, or type of machinery and equipment to be used in the operation of the factory business
2. Location, environment, interior and description of the factory;
3. Requirements for workers who have specific knowledge to carry out any duties in the factory;
4. Process of manufacture and provision of equipment to prevent, stop or alleviate danger, damage or disturbances that may occur to the public or property in the factory or nearby premises;
5. Standards and procedures for the control or release of waste, pollution or anything else arising from factory operations which may affect the environment;
6. Provision of necessary data and documents by the factory operators to ensure compliance with the law
7. Provision of anything that may affect the safety of work operations.

If there is an inspection of a factory or machinery to ensure compliance with the Act, a private body may carry out the inspection and report in place of government officials, provided the private persons follow the regulations concerning the Act as per the Government Gazette.

Licenses granted are valid until the end of the fifth calendar year from the year in which the business starts operations, except in the case of the relocation of the factory or of the dissolution of the operation in the factory business (which also refers to the event that the factory is transferred, leased or subjected to hire purchase). In these cases, the license is regarded as having expired on the date of issuance of a license to the factory’s new operators, or on the date of dissolution of factory business.

Applications for renewal of license must be submitted prior to the date of expiration, along with a fee of 100,000 Baht. Following submission, renewal is considered to have been extended unless there is a specific order otherwise. If the application is submitted within 60 days of the expiration date, it will be processed normally, but an additional fine of 20,000 Baht will be levied. Once the expiry date is reached, an application for a renewal must be made within 60 days. Upon expiration of the sixty-day period, the application will be treated as if it were a new application.

Contact MSNA for getting factory license for your business in Thailand.

Today, we talk about the first step of the company registration process, the corporate name reservation.

To reserve a name, the company can either submit a signed Name Reservation Form (one of the promoters is required to sign in such form) to the Department of Business Development of the MOC or fill in a Name Reservation Form and submit it through the Department of Business Development’s website.

The promoter is required to provide the requested company name together with two alternative names. The registrar will then examine the application in order to ensure that:

(a) No similar company name have previously been reserved; and

(b) The names do not violate any ministerial rules

If the applicant’s preferred name is in conflict with either of the above, that name will be rejected and the registrar will consider the two alternative names submitted. This process can normally be completed within 2 to 3 working days. If all three names submitted are rejected, the applicant will be required to re submit the form with 3 new names.

The registrar has considerable discretion with regard to the matter of company names. Oftentimes, the first name or even the first two names are rejected due to the violation of one of the two rules stated above. Once the name is approved, the corporate name reservation is valid for 30 days, with no extensions. However, after the name has expired, the promoter can still re apply for Name Reservation again and again if the name is still available.

We will talk about the next steps of the company registration process in the succeeding articles. Contact ThaiLawyers for company registration in Thailand.

Under Section 3 of the Permitted Activities of the Board of Investment, activities for Light Industry are as follows:

3.1 Manufacture of textile products or parts

3.1.1 Manufacture of natural or synthetic fibers

3.1.2 Yarn spinning

3.1.3 Manufacture of fabrics

3.1.4 Bleaching, dyeing and finishing

3.1.5 Printing and finishing

3.1.6 Manufacture of garments

3.1.7 Manufacture of parts or accessories for garments

3.1.8 Manufacture of household textiles

3.1.9 Manufacture of carpets

3.1.10 Manufacture of trawling nets

Conditions

1. Bleaching, dyeing and finishing project must be

1.1 Located in an industrial estate specified by the Industrial Estate Authority of Thailand or promoted industrial zones which have waste elimination systems and environmental conservation according to legal standards

1.2 Only the promoted companies that plan to expand the project in the existing location must obtain ISO 14000 certification within 2 years from the start-up date.

Rights and benefits

1. Shall be according to the Board of Investment Announcement No. 1/2543 dated August 1, 2000
2. Projects located in industrial estates for integrated production of the textile (except Bleaching, dyeing and finishing) shall be granted:

2.1 Exemption of import duty on machinery, regardless of zone

2.2 Exemption of corporate income tax for:

(1) Five years if located in Zone 1

(2) Seven years if located in Zone 2

(3) Eight years if located in Zone 3

2.3 Other rights and benefits shall be granted according to the BOI Announcement No. 1/2543 dated August 1, 2000

1. Only the manufacture of functional fiber and functional yarn shall be classified as a priority activity.
2. Bleaching, dyeing and finishing projects that are located in an industrial estate specified by the Industrial Estate Authority of Thailand and industrial estates for integrated production of the textile shall be granted:

4.1 Exemption of import duty on machinery

4.2 Eight-year corporate income tax exemption

4.3 Other rights and benefits shall be granted according to the BOI Announcement No. 1/2543 dated August 1, 2000.

Contact ThaiLawyers for BOI application, Thai company registration and visa and work permit application.

Why do we have to maintain our accounting even though our company is in dormant status?

Answer:

Even though your Thai company looks inactive, you have to pay rent and service fees to vendors, like MSNA or the contractors. You will have to withhold taxes and submit them within 7^th of the following month. Also once you are in the VAT system, you will have to file the VAT return every month. And when you have any transactions at all, you will need to talk to MSNA experts to give you guidance and advice. It is in your best interest to deal with a professional accounting firm who can communicate with you very well, like the English speaking accountants of MSNA.

Contact MSNA for your Thai accounting and taxation needs.

One of the topics of training that we provide for our accounting clients’ staff is the invoice, receipt and tax invoices. Today, we talk about when to issue a tax invoice if you are a company engage in service business.

Normally when you invoice your clients for your services or deposits, you give them only an invoice. Because you are a service business, you do not need to issue a Tax Invoice until you are paid. So some companies combine their receipt and tax invoice into one document.

Some of your clients may be demanding, especially the bigger ones. They may ask that you submit a Tax Invoice at the same time as invoicing them. This is normally the case that they want to force their service providers to give them the Tax Invoice before they pay because sometimes when they pay, the vendors may give them a receipt but not a tax invoice, or the tax invoice may not be 100% correct and the clients find it too hard to follow up with the vendors to reissue the tax invoice. If some of your clients demand that you also send them the Tax Invoice at the time you invoice them, we think you want to comply with them even though the Thai tax law does not say so. However, you will have to submit the VAT to the Revenue Department within the 7^th of the following month after you issued the tax invoice.

Contact MSNA for your Thailand accounting, tax and business needs. Our Thai accounting and Thai payroll services include consultation with our English speaking accountants in terms of Thai accounting and tax laws, labor issues and other related matters.

When you want to change your official company address, you have to submit the forms together with the required documents to the respective government offices. Today, we talk about the required documents from the company and the landlord when changing the official company address with the Department of Business Development and the Revenue Department.

Aside from company registration papers, the following will be required from the authorized director of the company:

1. 2 sets of passport copy, duly signed (in case of a Thai national, 2 sets of signed Thai ID card copy)
2. 2 sets of location map of the new office address
3. 2 sets of photos of office showing the:

– Company name and house number

– Outside photo of the whole office or building

– Inside photo of the office

The following will be also required from the landlord:

1. Signed copy of House Registration of the place, 2 sets
2. Signed copy of letter of consent from the real owner of the place that says he gives permission to the company to use it as the official address, 2 sets
3. Signed copy of the documents showing the ownership of the place by the real owner, i.e. copy of the ownership paper issued by the Land Department (same with the sale agreement stating the name of the owner as the buyer of that place which is the document issued by the Land Department when he bought the place), 2 sets
4. Signed copy of the owner’s ID card and his house registration, 2 sets

If you are moving to a new office and would like to change the official address accordingly, MSNA can assist you in preparing the required documentation and submit the application with the respective government offices. And since most of the above mentioned documents from the landlord are in Thai language, we normally request for the contact information of the landlord so we can coordinate with them directly. Contact us now for further discussion.

Today, we got a question from one of our accounting clients regarding audit.

Question:

We are not familiar with what procedures are needed to be done to finalize audited accounts. Could you kindly advise us?

Answer:

Our sister company, MSN Audit Ltd., can provide you their audit service. It includes preparing the audited financials in Thai for filing with the authorities and in English for the management.

You need to hold an Annual General Meeting (AGM) to approve the audited financial statements within 4 month from the accounting year-end. And you need to file the audited financial statements with the Ministry of Commerce within 1 month after that. Also, the annual corporate income tax must be filed with the Revenue Department within 150 days from the accounting year-end. Because you hired Libra Accounting Ltd., as your accountant for the whole year, we will prepare the tax return and file those things for you complimentary.

MSNA Ltd., can help you prepare an AGM with the Minutes of Meeting, publishing the AGM notice in a local newspaper and also sending it by return registered mail to all the company shareholders.

Contact MSNA group for your Thai accounting, Thai tax, Thai audit and related business needs.

To help improve the performance of small and medium enterprises (SMEs), which are defined as entities with no more than Baht 5 million of paid-up capital and sales revenues of no more than Baht 30 million per annum, the Thai government has approved the following tax measures:

– Corporate income tax exemption on income derived between 1 January 2012 and 31 December 2012 from the sale of machinery used in the manufacturing process or for manufacturing services, in order to purchase replacement machinery.

– The Revenue Department will provide special conditions and rates relating to amortization and depreciation of machinery used in the manufacturing process or for manufacturing services, for the period 1 January 2012 to 31 December 2012.

– A corporate tax exemption equal to 50% of the difference between wage expenses under the previous minimum wage rate and those under the current minimum wage rate (i.e. Baht 300) for the period from 1 April 2012 to 31 December 2012.

Further details on the implementation of these measures and associated regulations have yet to be announced. Contact MSNA for more updates.