The Thai government has recently implemented Royal Decree No. 289 (B.E. 2012) which grants a 5-year personal income tax exemption for foreign film actors who earn income from foreign movies shot in Thailand and approved by the National Committee for Movie and Video. This exemption is applicable to income derived from 1 January 2011 to 31 December 2015.

It can be recalled that a draft ministerial regulation related to this exemption has been already approved by the government earlier this year in a bid to attract foreign movie producers and promote tourism in Thailand. Hence, a foreign film actor which is considered as a foreign tax resident during the exemption period shall be exempted from personal income tax only if:

1. Such income was derived from performance in a foreign film produced by a company or partnership incorporated under a foreign law; and
2. A filming permit has been granted in accordance with the laws relating to film and video.

Need help in filing your Thai taxes? Contact MSNA, English speaking tax experts for professional advice.

American citizens can be permitted to enter Thailand through different types of visas as follows:

1. Visa Exempt Entry

U.S. citizens carrying a tourist passport and having a return airline ticket do not require a visa to enter Thailand. The passport must still be valid for at least six months to be allowed entry. Upon entry, Thai immigration officials will place an immigration stamp in the passport giving a 30-day permit of stay in Thailand if arriving by air or a 15-day stay if arriving by land. This permit of stay may be subsequently extended for an additional 7 days by paying a Baht 1,900 fee to the Thai Immigration Bureau office.

For those Americans who are carrying a diplomatic or official passport, it is advisable to obtain a visa before arriving in Thailand. In some situations, it is possible for diplomatic or official passport holders to enter without a visa, but it is up to the precautions of the airline and/or immigration personnel whether or not you will be granted an entry.

2. Tourist Visas

If an American wants to stay in Thailand for more than 30 days, he or she may consider obtaining a tourist visa at the Royal Thai Embassy or Consulate in theUnited States, before arriving in Thailand. This tourist visa will allow an initial stay of 60 days and must be used within 90 days from the date of issue. After arrival in Thailand, a tourist visa may be extended twice, each time for an additional 15 days. There is a fee of Baht 1,900 for each extension.

Americans who wants to stay in Thailand for more than 90 days during any six-month period will be required to obtain a valid Thai visa from a Thai Embassy or Consulate that is authorized to issue visas. The U.S. Embassy advises all Americans who wish to obtain a Thai visa to contact the Thai Immigration Bureau for complete visa requirements and regulations. Individuals who do not comply with Thai visa regulations may be possibly denied entry to Thailand at the border.

3. Work Visa

All foreigners (regardless their nationalities) who are interested in working in Thailand must obtain a valid Thai work visa and Thai work permit. In order to be granted a work permit, an application must be filed by a company, foreign government, or other organization in Thailand on behalf of the work visa applicant. Once granted, the work visa can be extended to one year.

4. Retirement Visa

Thai retirement visas are available to foreigners aged 50 years and above. These visas are valid for only one year and any kind of employment is strictly prohibited. According to Thai Immigration, applicants must have the following qualifications in order to be eligible for retirement visa:

– Applicant must be able to provide evidence of a pension or other regular income from a source outside ofThailand;

– Applicant’s pension or other regular income must be no less than the equivalent of Baht 65,000 per month;

– Alternatively, the applicant may meet the financial requirement by maintaining a Thai bank account with a minimum balance of Baht 800,000. Thus, applicants will need to show that they have Baht 800,000 in savings each year when they renew their visa.

– Any applicant married to a Thai citizen may be able to receive a visa on that basis rather than retirement.

5. Visa Overstays

If a person does not leave Thailand upon the expiration of his or her permit of stay or visa, this person is already considered staying in Thailand illegally. And, in order for him or her to leave the country after his visa or permit expires, it will be necessary to pay a fine for overstaying of Baht 500 per day up to a maximum of Baht 20,000. The fine is payable to the Immigration Bureau, at the Suvarnabhumi Airport Immigration office or other departure points.

Thailand visa rules regulations are subject to change without prior notice. For further assistance, contact MSNA lawyers for visa and work permit services.

Just recently, an extension of VAT reduction period has been approved by the Thai cabinet as a way to promote economic growth due to 2011 and 2012 floods. With this measure, VAT rates will be reduced according to the following:

1. The VAT rate will again be reduced to 6.3%, effective from 1 October 2012 to 30 September 2014. Thus, the collectible VAT rate after adding municipal tax at one-ninth of the 6.3% will be 7%.
2. After the above period, the VAT rate will then be returned to 9% and therefore, the collectible VAT rate after adding municipal tax at one-ninth of the 9% will total 10%.

However, one should note that this normal VAT rate of 10% has always been reduced to 7% (by way of Thai cabinet’s approval) from the time VAT was introduced into the Thai tax system decades ago as a way to boost the Thai economy.

Contact MSNA, Thailand English speaking accountants, for expert advice and guidance on Thailand accounting and 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.

Why should you hire an English speaking accounting firm? We have some reasons for you:

1. Thai accountants who speak a few words of English want a very high salary, higher than a monthly fee you will pay an outsourced accounting firm who can communicate fluently with you in English.

2. With the kind of money you pay to a high quality English speaking accounting firm, which is pretty low, you cannot hire an in-house accountant who has a lot of experience and is knowledgeable enough in the Thai tax law.

3. Thai accountants move between companies easily. A lot of times they do not give you enough time in advance to find a replacement. They just leave a mess behind for the next accountant to clean up after them. With English speaking accounting firms like MSNA, your accounts will be done on time and smoothly. Accounting firms have staff turnover too, but they make sure that the clients’ accounts are uninterrupted.

Now, when you consider hiring an English speaking accounting firm, make sure you do not choose the ones that are very cheap. You know how much experience accountants cost? There is no way accounting firms can keep their good staff if they charge very low fees. The less fee you pay, the cheaper quality you get. (However, this does not mean you should pick the most expensive ones either.) Accounting firms have very high costs like your firms do too. If you are happy with the very low fee they charge you, you will be as unhappy with the quality of work they deliver. Each of their employees is responsible for tens of accounts. They make lots of mistakes and their supervisors do not have time to check their work. You will end up paying much more for tax fines and penalty than the amount you think you save from hiring very cheap Thai accounting firms. So choose wisely.

Contact MSNA for your accounting, audit and tax needs.

Thai Business Expert got a interesting question from a foreigner who wants to set up a Thai limited company, but cannot come to Thailand at the moment.

Question:

Hi, I am busy with my business outside Thailand and cannot come to sign the application form to register my Thai company any time soon. However, i need to set up this new Thai limited company very quickly, what should I do?

Answer:

We can send the forms to register a Thai limited company to you where you are. However if the forms to register a Thai limited company are signed outside Thailand, the registrar only accepts the signed forms that were certified by the Thai embassy or consul in the country where the documents were signed. And the Thai embassy will only certify the documents that have been notarized by the notary public of that country.

Here is the Ministerial Regulations regarding Establishing the Partnership and Company Register Office, Appointing the Registrars and Prescribing Rules and Procedures for Partnership and Limited Company Registration B.E. 2549 (2006). Clause 6 specifies clearly how the forms to register a Thai company should be signed as follows:

Clause 6. In signing an application for registration, the registrant shall sign in person before the Registrar.

Where it is not possible to sign before the Registrar for any reason, the signature on an application for registration shall be deemed proper when the registrant signs in person before any of the following persons:

(1) In case of signing within the Kingdom:

(a) Administrative official or senior police officer stationed in the locality of the registrant’s domicile;

(b) Ordinary member or extraordinary member of the Thai Bar Association; or

(c) Other persons as prescribed and announced by the Central Registrar.

(2) In case of signing abroad:

(a) Authorized officer of the Thai embassy or Thai consul or chief of an office attached to the Ministry of Commerce who is in charge in that country, or an official authorized to act on behalf of that person;

(b) A person who can provide valid certification in the form of the laws of that country; or

(c) Two reliable persons who sign as certification before the Registrar that it is the true signature of that person.

Note that in practice the only way that is acceptable to the registrar is the forms that were certified by the Thai embassy or consul in the country where the documents were signed. And the Thai embassy will only certify the documents that have been notarized by the notary public of that country.

Contact MSNA for Thai company registration services.

Nominee shareholders for Thai limited companies is an issue that clients ask MSNA very often.

If a foreigner wants to set up a Thai limited company with 100% shares held by foreigners, he needs to consider Thailand foreign business law. Most likely, he will need to apply for a foreign business license, which is very difficult to get. Some foreigners may opt to have a Thai partner hold the majority of the shares for them. Many of such cases are that the Thai shareholders are nominee shareholders, who just hold the shares on behalf of the real investors – the foreigners.

Whether your Thai shareholders are nominee shareholders or not, they have to show that they have the money to invest in the company. Since August 2006, the Central Registrar specified the rules and procedures for registration of a limited partnership and a limited company in the case of registration to establish a limited partnership or a limited company as follows:

1. where the number of shares held by foreign partners or shareholders in a limited partnership or a limited company are at least 40% but less than 50% of the registered capital, or
2. where a foreigner who holds less than 40% of the registered capital in a limited partnership or a limited company is a person authorized to act on behalf of the limited partnership or limited company

the Thai partner or shareholder must submit the evidence below showing the source of capital as an attachment to the application form to register the company, and those documents must show the amount of money corresponding to the amount of money put in their shares or shareholding:

1. Copy of bank deposit book or bank statements for the last 6 months, or

2. Document issued by a bank to certify or to show the financial status of the partner or the shareholder, or

3. Copy of the evidence showing the source of the money put in the shares or shareholding.

In short, the Thai shareholders need to present the evidence that they really have the money to invest in the new Thai limited company during the registration process.

ThaiLawyers.com provides consultation on the matter of nominee shareholders for Thai limited companies.

What are the steps and fees to form a Treaty of Amity Company in Thailand?

1. As an American, you can set up a new company in Thailand, with all 3 American shareholders (or 2 American and one Thai) with a registered capital of THB 3 M (USD 10,000). This is because the foreign business law dictates the minimum capital to be THB 3 M for a company with majority foreign shareholders. One of the authorized directors will have to be in Thailand at the time of signing the registration application papers. Once the papers are signed, the company will be born the next day. In case you cannot be in Thailand at the time, you will need to have your signatures notarized in the country where you are and have the Thai embassy certify the notarization. – The government fee to register a Thai limited company with Baht 3 Million is about USD 660.
2. You will apply with the US Commercial Service for a letter certifying that the shareholders of the company are American and so the company is entitled to the right and protection of Thailand – USA Treaty of Amity and can operate the business in Thailand. It can take 1 – 3 weeks. – The fee to pay the US Commercial Service to issue the certification letter is within USD 100.
3. Apply for the Foreign Business Certificate with the Foreign Business Committee, Ministry of Commerce. this usually takes 3-4 weeks for the certificate to be issued. Please note that the director who will be responsible for Thailand operation has to have a non-immigrant business visa to enter Thailand and we will need the copy of his visa. – The government fee for this step is around USD 750.
4. Register the new company into the Thai VAT system. This may need only one day or more if you cannot get the papers from your landlord easily. – There is no government fee for this.
5. Register the company and its employees into the social security system. It takes one day for the registration and a few days to gather the employees’ information. There is no government fee.
6. Get a work permit for an authorized American director so that he can be authorized signatory for the bank accounts and he can sign any papers to bind the company. – This usually takes 10 days. – The government fee for a work permit for one year is about USD 100.

Things you should know:

You do not need to set up a new company to do business in Thailand if you own an American company. (That means its majority shareholders and directors are American.) You will skip step 1 mentioned above and save on the related fees. Just start from Step 2 with your US company’s documents.

Contact MSNA for setting up your Treaty of Amity company in Thailand.

According to a recent news article that I have read, the Foreign Ministry of Thailand has agreed to allow tourists from some countries to submit their visa applications online.

This proposal by the Tourism Council of Thailand (TCT) has been considered, as the ministry wants to help soothe the crowds and long lines of tourists wanting a visa on arrival at Suvarnabhumi airport.

Foreign travelers from big countries such as China and India like to do visa on arrival, as they find it inconvenient to arrange back home as the size of their countries make it difficult to travel to the nearest Thai embassy or consulate.

Moreover, people in many emerging countries are required to seek a visa at the embassy or consulate in a third country. For instance, tourists from Algeria are required to go to France to process their Thai visa.

According to TCT, this inconvenience is blocking tourism opportunities for Thailand so online visa application will afford greater convenience to tourists, increase the number of tourists from emerging markets and ease congestion at Suvarnabhumi airport.

The ministry will also work out the details of the online visa application and inform the Tourism and Sports Ministry. It will then coordinate with the immigration police so they can prepare before the high season starts in October.

The TCT is confident that applying online will not affect national security, as the authorities can screen potential visitors from the information submitted.

Further development on the implementation of this proposal will be released by the Tourism Council of Thailand and Ministry of Foreign Affairs.

For your questions on Thailand visa and work permit, contact ThaiLawyers for assistance.

The Thai Revenue Department (TRD) has been implementing certain measures to promote investments and support to both local and foreign investors. In his recent statement, Director-General Dr. Sathit Rungkasiri has stated that the TRD has policies to support international investment by establishing a double tax agreement network, reducing corporate tax rates as well as implementing various tax policies to boost competitive capabilities for Thailand. However, TRD still ensures that the country’s benefits with regards to tax collection will be highly prioritized.

Once Thailand enters into ASEAN Economic Community (AEC) in 2015, the business operation from multinational enterprises will definitely increase. These business organizations will normally plan to reduce their tax burden to the least therefore, TRD is preparing to propose on international tax restructuring in order to strengthen Thai economy as well as to protect against improper tax avoidance such as a measurement on either of the following:

– Transfer pricing

– Thin Capitalization

– Controlled Foreign Company, and;

– General Anti Avoidance Rule

In spite of these measures, such policies must not cause too many obstacles in international investment.

Contact MSNA for your Thai accounting and tax questions.