The Board of Investment of Thailand (BOI) approved investment promotion criteria for the steel-dust recycling business.

The major factors that the BOI would consider for promotion are as follow:

1. Technology and environmental management including freight, stocking operations and proper waste disposal
2. Proposal for incentives and corporate social responsibility activities such as scholarships and community development fund establishment
3. Raw materials and marketing

However, only two most appropriate steel-dust recycling projects would be promoted by the BOI in order to match with the current local supply of steel dust which currently there are only 100,000 tons generated every year. Thus, if the amount of steel dust increases in the future, the BOI may consider approving more steel-dust recycling plants.

Interested investors shall submit project proposals to the BOI within 30 November 2012. The project proposals should include details related to the criteria and must accept the condition requiring that the raw materials used in their projects must be locally sourced only.

For investors who have already submitted applications, they have to amend their projects in order to comply with the new conditions. Amended proposals must be resubmitted within 30 November 2012.

Contact MSNA, English speaking BOI experts for Thailand BOI promotion, company registration and related business services.

In Thailand, Trade and Investment Support Offices or TISO is one of the few ways on how foreigners can operate their service and trading companies and achieve 100% foreign ownership.

The Board of Investment can grant TISO incentive to foreign companies engaged with different types of services and trading in the country to help facilitate their business operations without the requirement of a Foreign Business License (FBL). Hence, a foreign company granted a TISO must still obtain a foreign business certificate which is less complicated than obtaining a FBL.

Some eligible activities allowed under the TISO incentive are as follows:

1. consulting services to affiliates

2. engineering services

3. export trading

4. Wholesaling, installation, maintenance, repairs of machinery & equipment, etc.

Some non-tax incentives are as follows:

1. 100% foreign ownership
2. Rights to own land for an office
3. Visa & work permit support for foreign experts

Contact ThaiLawyers.com, experts in company registration, BOI promotion, Foreign Business License and visa & work permit in Thailand.

A tax incentive to encourage use of trusts for transactions in Thailand’s capital
market has recently been approved by Thailand cabinet. The measure exempts
trust settlers, trustees and trust beneficiaries from income tax, VAT, specific
business tax and stamp duty in income, receipts or instruments executed derived
from transactions performed in relation to an agreement establishing a trust in
accordance with the laws on using trusts for transactions in the capital market
(“in some cases”),

Further details on rules/regulations relevant to the measure have yet to be announced
by the Thai government.

For Thailand accounting and taxation, contact MSNA, Thailand accountant.

Today, THAI ACCOUNTANT got an inquiry about Thailand VAT on reimbursement for toll fees .

I own an agency for travel & tours around Thailand. We hire the vans and
driving services from another company. It is specified in our transport rental
agreement that we are responsible to pay for toll fees but in practice, their
drivers pay for the toll fees first whenever we have tours and we reimburse those
fees to them later. Should this reimbursement of toll fees be included in their
service fee and we have to pay VAT on it?

Answer:

As long as there is an evidence or proof that you are reimbursing the toll fees to
the vendor company based on the toll fees receipts, the toll fees are not
considered as part of the service fees and thus, not subject to VAT.

Contact MSNA for your Thailand accounting and tax questions.

To set up a business in Thailand, what are the fees you can expect to pay if you hire a full service professional firm?

Professional Fees:

1. Setting up a new company in Thailand, including getting a tax ID and VAT registration

– Professional fee: Baht 40,000 – 100,000

2. Getting a foreign business license (or certificate to operate business) for your newly set up company. (You can skip this part if you have a Thai partner who will hold more than 50% of the shares in the new company since it will be considered a Thai owned company.)

– Professional fee: Baht 50,000 – 100,000

Government fees:

Government fees are related to the amount of registered capital of the company. And to know how much registered capital the company should have, we need to consider a few things:

1. If a company has Thai majority shareholders and it will not hire any foreigner, then the registered capital can be as little as Baht 5 per share and because a company needs at least 3 shareholders, the registered capital can be as low as Baht 15. However, the government fee to register a company in Thailand is the same for Baht 15 capital or Baht 1M capital. Thus the government fee to set up a Thai company is about 7,000 for Baht 1 M registered capital.
2. If a company has Thai majority shareholders and will hire a foreigner to work for it, then the registered capital has to be at least Baht 2M (or Baht 1M if the foreign employee is married to a Thai national). Basically for each work permit the company sponsors, it needs Baht 2M in registered capital. Thus the government fee to set up a Thai company is about 12,000 for Baht 2M registered capital plus about Baht 6,000 for each additional million.
3. If your new company has foreign majority shareholders, you need to have at least Baht 3M registered capital for each kind of business you want to operate in Thailand. And with each Baht 3M capital, you can sponsor one work permit. So if you want to operate just one business, your new company needs to have Baht 3M registered capital and it can sponsor one work permit. In this case the government fee to set up the company is about Baht 18,000. And the government fee for getting a license to operate a foreign business in Thailand is about Baht 35,000.

For more information on doing business in Thailand, visit www.msnagroup.com.

Thai Business Expert is asked very often about the minimum capital to register a Thai company and whether it needs to actually be paid or not. We need to take into consideration a few factors.

If you are a foreigner, we assume that you will need a work permit to run the day-to-day operation of the Thai company, you will need at least THB 2M as the registered capital for each work permit your company will sponsor. However, if you have a Thai partner who will be the authorized director who signs to bind the company, and you will not want a work permit for any foreigner, then the capital can be as little as THB 5 per share and because a company needs at least 3 shareholders, the registered capital can be as low as THB 15. However, the fee to register a company in Thailand is the same for THB 15 capital or THB 1M.

The capital has to be at least 25% paid up. However, if you need a work permit, it has to be paid up at least THB 2M for each work permit. In case the foreigner who requires a work permit is married to a Thai national, the capital can be THB 1 M for the work permit of that foreigner.

Regarding the question about whether or not you have to actually pay up the capital, you will have to in the beginning and later the company can lend the money that it has left to its directors or shareholders or any third parties.

Contact MSNA for Thai company registration or work permit services.

When your company in Thailand buys software for use in the company’s operation, THAI ACCOUNTANT would like to point out that there is some tax implication you need to know.

If you buy it from a vendor in Thailand, you need to withhold 3% from the price (before 7% VAT).

If you buy it from overseas and hand carry it without going through customs, or you buy it online, in order for you to book the cost of the software as the company’s asset, you need to deal with withholding tax and submitting VAT on behalf of the overseas vendor.

How much tax to withhold on software purchase? You need to consult with the double taxation treaty between Thailand and the country you buy it from. Software is considered royalty. You need to withhold 5% – 15% and submit the tax with form PND 54 within the 7^th of the following month.

When you pay an overseas vendor for their service (in this case, it is royalty), you also need to submit 7% VAT on their behalf (with form PP 36) and the VAT becomes your input VAT of same the month you submit the PP 36. The reason behind this is that if all the vendors in Thailand charge you VAT and if you can buy goods or services from overseas and you don’t have to pay VAT, then who will want to buy from the Thai vendors. So the law has to make everyone submit VAT on behalf of the overseas vendors. (When you buy goods in Thailand you have to pay VAT to the vendors and when you import goods, you pay VAT at the Customs.)

Questions about tax or accounting, please contact MSNA for answers.

A few weeks ago, the Thai cabinet approved certain tax privileges on International Procurement Center as follows.

1. IPC’s Corporate income tax is reduced to 15% (on taxable profits) for 5 consecutive accounting periods from the following revenues.

a. Revenue from purchase and sale of goods to overseas affiliates and such goods is not imported to Thailand

b. Revenue from sale of raw materials and parts to overseas affiliates’ manufacturing plants

2. Personal income tax for expatriates (maximum 3 persons) in management levels is reduced to 15% for 5 consecutive years. In order for an IPC to be qualified under this privilege, it must have a qualified revenue of at least 50% of the total of qualified revenue and revenue from sale of raw materials and parts to affiliates for manufacturing in Thailand.

This tax privilege is granted for the purpose of promoting an investment in manufacturing business and promoting Thailand as a center of both manufacturing business (under IPC scheme) and service business (under Regional Operating Headquarters scheme).

If you have any questions about Thailand taxation, please contact MSNA, an English Speaking Thai Accounting firm servicing SME’s in Bangkok Thailand.