foreign business act thailandforeign business act thailand

foreign business act thailand28 May foreign business act thailand

This Act is called the Foreign Business Act, B.E. A minimum of 51% of shares must be of the citizens of the United States; At least half of the directors must be citizens of the United States. The Center for International Private Enterprise equipped the Thai Institute of Directors and its coalition partners with an array of tools for training and collective action. Property rights are guaranteed by the Constitution. For additional information, contact the Eastern Economic Corridor Office at 25th floor, CAT Tower, 72 Soi Wat Maungkhae, Charoenkrung Road, Bangrak, Bangkok 10500, telephone at +662-033-8000 and website at https://eng.eeco.or.th/en. The Thai government in 2019 passed new laws and regulations on cybersecurity and personal data protection that have raised concerns about Thai authorities broad power to potentially demand confidential and sensitive information, introducing new uncertainties in the technology sector. 1. Thailands Central Intellectual Property and International Trade Court (CIPIT) is the first instance of a court having jurisdiction over both civil and criminal intellectual property cases and civil international trade cases for all of Thailand. The U.S. Commercial Service, U.S. Embassy Bangkok is responsible for issuing a certification letter to confirm that a U.S. company is qualified to apply for benefits under the Treaty of Amity. Production of crockery or porcelains representing Thai arts and culture, 2. Thailand to open more businesses to foreign participation. These predominantly concern the degree of severity on foreign ownership and operation of these businesses. The Thai government maintains a regulatory framework that broadly encourages investment. . Internal trade related to traditional agricultural products or produce not yet prohibited by law, 14. Withdrawals are freely permitted. to address in writing enquiries or summons requiring any person to give explanations on any facts and furnish documents or evidence necessary for factual examination; to enter premises where foreigners operate businesses during office hours for examining and ensuring the compliance with this Act, provided that written consent of the Director-General shall first be obtained, save in the case of utmost emergency; in the performance of such duties, the Registrar and competent officials shall have the power to inquire into any facts or summon any document or evidence particularly essential for factual examination from persons staying at such premises. Thailand protects GIs, which identify goods by their specific geographical origins. There are several local NGOs that promote and monitor responsible business conduct. Construction of other types as prescribed in the Ministerial Regulation. However, being a minority shareholder in a Thai Limited company does have some advantages over a 100% foreign-owned company. The Expropriation of Immovable Property Act (EIP), most recently amended in 2019, applies to all property owners, whether foreign or domestic nationals. The Investment Policy Review of Togo analyzes the policy, legal and institutional barriers that impede, The Evolution of FDI screening mechanisms, IPM Issue No. The following foreigners may not operate any business within the Kingdom: The following foreigners may operate businesses upon obtaining a licence from the Director-General and may operate only such businesses, and in such localities, as prescribed in the Notification issued by the Minister with the approval of the Council of Ministers and published in the Government Gazette, provided that in such Notification the Minister may prescribe any conditions as the Minister deems appropriate: The application for a licence, issuance of a licence and a term of a licence shall be in accordance with rules and procedures as prescribed in the Ministerial Regulation. Generally, SOE senior management reports directly to a line minister and to SEPO. The minimum capital to be used by a foreigner for the commencement of the operation of a business in Thailand shall not be less than that prescribed in the Ministerial Regulation, provided that it shall not be less than two million Baht. The U.S.-Thai Treaty of Amity and Economic Relations allows approved businesses to engage in FBA restricted businesses detailed above in Lists 1, 2, and 3. The Board of Investment (BOI) assists Thai and foreign investors to establish and conduct businesses in targeted economic sectors by offering both tax and non-tax incentives. The Act broadens the definition of a business operator to include affiliates and group companies, and broadens the liability of directors and management, subjecting them to criminal and administrative sanctions if their actions (or omissions) resulted in violations. Foreigners under section 10 who intend to operate businesses specified in the Lists annexed hereto shall notify the Director-General in accordance with the rules and procedures prescribed in the Ministerial Regulation in order to obtain certificates, and the Director-General shall issue certificates to such foreigners without delay but no later than thirty days as from the date of receipt of their written notification, unless the Director-General considers that the notification is not in accordance with the rules and procedures prescribed in the Ministerial Regulation or that it is not in accordance with section 10, in which case the Director-General shall notify such foreigners thereof without delay but no later than thirty days as from the date of receipt of their written notification. If an examination confirms allegations or suspicions of collusion among bidders, the names of those applicants must be removed from the list of competitors. Thailand has an independent judiciary and government authorities are generally not permitted to interfere in the court system once a case is in process. The Office of Trade Competition Commission (OTCC) is an independent agency and the main enforcer of the Trade Competition Act B.E. You can add more than one country or area. Additional business to support capital market development, such as debt and equity instruments, is allowed. specifically described in the FBA as exempt from a foreign business licence requirement; promoted under the Investment Promotion Act B.E. not being in direct competition with Thai owned businesses. Despite provision of 15 years of free universal education, Thailand continues to suffer from a skills mismatch that impedes innovation and economic growth. In the case where there exist other laws which govern shareholding, partnership or investment of foreigners, permission or prohibition of the operation of certain businesses vis--vis foreigners or which prescribe rules in connection with the operation of businesses of foreigners, such laws shall prevail and the provisions of this Act shall not apply to matters insofar as they are specifically provided by other laws. These SEZs support Thai government goals for closer economic ties with neighboring countries and allow investors to tap into abundant migrant labor; however, these SEZs have proven less attractive to overseas investors due to their remote locations far from Bangkok and other major cities. Foreigners operating businesses specified in the Lists annexed hereto by virtue of a treaty to which Thailand becomes a party or by which Thailand is bound in consequence of obligations therefrom shall be exempt from the application of the provisions of the sections specified in paragraph one and shall be governed by the provisions of and conditions set forth in such treaty, which may, inter alia, confer upon Thai nationals or Thai enterprises the right to operate businesses in the countries of nationality of such foreigners as a matter of reciprocity. Violations (Sections 39-43) Foreign Business Act. The main legislation that governs and imposes restrictions on foreign investment in Thailand is the Foreign Business Act B.E. Foreign Business xxx. The 1966 U.S.-Thai Treaty of Amity and Economic Relations allows U.S. citizens and U.S. majority-owned businesses to engage in business on the same basis as Thai companies (national treatment). Thailands Arbitration Act of 2002, modeled in part after the UNCITRAL Model Law, governs domestic and international arbitration proceedings. The following organizations provide arbitration services in Thailand: the Thai Arbitration Institute of the Alternative Dispute Resolution Office; Office of the Judiciary; and the Office of the Arbitration Tribunal of the Board of Trade of Thailand. Disclaimer These have included intellectual property rights, customs, market-access barriers, and other areas of mutual concern. What Is A Foreign Business License | FBL in Thailand - Juslaws With approval, a foreign national can acquire up to 49 percent of the voting shares. Foreigners who, on the date of the entry into force of this Act, have operated businesses specified in the Lists annexed hereto but not specified in the Lists annexed to the Notification of the National Executive Council No. PDF Services Between Related Foreign Companies No Longer Require a Foreign In the case where the Council of Ministers refuses to give approval to a foreigner for the operation of businesses in List Two, the Minister shall, in writing and within thirty days, notify such foreigner of the refusal to give approval and shall also make a clear indication of the reason for such refusal to give approval. Other service businesses, with the exception of service businesses as prescribed in the Ministerial Regulation. The FBA contains three schedules listing types of business activity and their level of restriction. Thailand has implemented a requirement that all debit transactions processed by a domestic debit card network must use a proprietary chip. being of not less than twenty years of age; having a residence in the Kingdom or having been permitted to enter the Kingdom temporarily under the law on immigration; not being an incompetent or a quasi-incompetent person; not having been punished by a court judgment or ordered to pay a fine in settlement of any offence under this Act or under the Notification of the National Executive Council No. Foreigners who have acquired the right or have been permitted to operate businesses under the Notification of the National Executive Council No. For more information about the database or our advisory services, please contact us via our online contact form. Digital-only banks can operate at a lower cost and offer different services than traditional banks. Registration documentation must be submitted in the Thai language. The following businesses are not available to foreigners, unless special permission has been granted: List 2: Business Permitted to Foreigners under certain conditions. The database of national investment laws is maintained by UNCTADs Investment Policy Research Section. Cultivation, propagation or development of plant varieties, 21. Coordinator for the Arctic Region, Deputy Secretary of State for Management and Resources, Office of Small and Disadvantaged Business Utilization, Under Secretary for Arms Control and International Security, Bureau of Arms Control, Verification and Compliance, Bureau of International Security and Nonproliferation, Under Secretary for Civilian Security, Democracy, and Human Rights, Bureau of Conflict and Stabilization Operations, Bureau of Democracy, Human Rights, and Labor, Bureau of International Narcotics and Law Enforcement Affairs, Bureau of Population, Refugees, and Migration, Office of International Religious Freedom, Office of the Special Envoy To Monitor and Combat Antisemitism, Office to Monitor and Combat Trafficking in Persons, Under Secretary for Economic Growth, Energy, and the Environment, Bureau of Oceans and International Environmental and Scientific Affairs, Office of the Science and Technology Adviser, Bureau of the Comptroller and Global Financial Services, Bureau of Information Resource Management, Office of Management Strategy and Solutions, Bureau of International Organization Affairs, Bureau of South and Central Asian Affairs, Under Secretary for Public Diplomacy and Public Affairs, U.S. In the case where the business of the foreigner under paragraph one is the business requiring permission as specified in the Lists annexed hereto, the minimum capital as prescribed in the Ministerial Regulation for each business shall not be less than three million Baht. Types of Businesses (List 1 and 2) | Thailand Law Library In 2017, the Thai government launched a regulatory guillotine initiative to cut down on red tape, licenses, and permits. Although the number of deaths and violent incidents has decreased year-over-year, efforts to end the insurgency have so far been unsuccessful. Many planned infrastructure projects, including a high-speed train linking three airports, U-Tapao Airport commercialization, and Laem Chabang Port expansion, could provide opportunities for investments and sales of U.S. goods and services. 100% foreign business ownership in Thailand To upgrade the countrys technological capacity, the BOI presently gives more weight to applications in high-tech, innovative, and sustainable industries. These licenses are approved by the Council of Ministers (Cabinet) and/or Director-General of the MOCs Department of Business Development, depending on the business category. It contains the full text of the laws and offers user-friendly tools for searching and filtering for selected provisions that are specifically relevant to foreign investors. The Commission shall consider and review categories of businesses in the Lists annexed hereto at least once every duration of one year as from the date of the entry into force of this Act and shall prepare an opinion for submission to the Minister. ASEAN also has a comprehensive economic partnership with Japan and is pursuing FTA discussions with the EU, Pakistan, and Canada. General (Sections 1-4) | Thailand Law Library While the government provides fair compensation in instances of expropriation, Thai policy generally does not permit foreigners to own land. Additionally, foreign companies may have no more than 20% foreign employees on staff. List 1. In support of its Thailand 4.0 strategy, the government offers incentives for investments in twelve targeted industries: next-generation automotive; intelligent electronics; advanced agriculture and biotechnology; food processing; tourism; advanced robotics and automation; digital technology; integrated aviation; medical hub and total healthcare services; biofuels/biochemical; defense manufacturing; and human resource development. In 2019, Thai Customs implemented three measures to improve trade and customs processing efficiency: Pre-Arrival Processing (PAP); an e-Bill Payment electronic payment system; and an e-Customs system that waives the use of paper customs declaration copies. The Foreign Business Act Thailand (FBA) defines the laws which governs businesses in Thailand by foreigners. In Thailand, the Foreign Business Act served as the primary law that administers foreign owned businesses in Thailand. This Act shall come into force immediately after the lapse of the 90 day period that commences on the date of its publication in the Government Gazette. In casting votes, each member shall have one vote. Well over half the labor force (54.3 percent) earns income in the informal sector, including through self-employment and family labor, which limits their access to social welfare programs. Additional information on migrant workers issues and rights can be found in the U.S. There are three levels to the judicial system in Thailand: The Court of First Instance, which handles most matters at inception; the Court of Appeals; and the Supreme Court. The baht depreciated over 10% against the dollar through Q1 2020. In October 2015, the country ratified the WTO Trade Facilitation Agreement, which came into effect in February 2017. Thailand has one physical market, Patpong Market in Bangkok, listed in the USTRs 2019Review of Notorious Markets. The Ministry of Industrys Department of Industrial Works encourages the private sector to implement its Corporate Social Responsibility (CSR-DIW) standards to achieve ISO 26000 standards (an international standard on CSR). Please note that this #Ebook does not constitute legal advice and should only be used for informative purposes only. The Thai government has committed to implement the UN Guiding Principles on Business and Human Rights (UNGP). 11. To operate restricted businesses as defined by the FBAs List 2 and 3, non-Thai entities must obtain a foreign business license. The FBA's restriction on "services" is the most . As of 2020, Thailand is pursuing FTA discussions with the European Union, Turkey, Pakistan, and the United Kingdom. There are no time limitations on remittances. Lists of restricted activities under the Foreign Business Act, B.E. Based on UNCITRAL model laws and the WTO Agreement on Government Procurement, the law applies to all government agencies, local authorities, and state-owned enterprises, and aims to improve transparency. The Thai government generally defines SOEs as special agencies established by law for a particular purpose that are 100 percent owned by the government (through the Ministry of Finance as a primary shareholder). Most major foreign manufacturing investors, including U.S. manufacturers, are located in these two companies industrial estates and in the eastern seaboard region. The government has authority to control the price of specific products and services under the Price of Goods and Services Act. Closing (Sections 44-46) Foreign Business Act. Americans planning to invest in Thailand are advised to obtain qualified legal advice. Thailands flagship investment zone, the Eastern Economic Corridor (EEC), spans the provinces of Chachoengsao, Chonburi, and Rayong (5,129 square miles). This Act shall be called the "Foreign Business Act 1999". BOI offers a one-stop service to expedite multiple business processes for investors. Doing Business in Thailand: Overview | Practical Law The issuance of the certificate under paragraph one shall be in accordance with the rules and procedures as prescribed by the Director-General. Act governing Foreign Business in Thailand | Konrad Legal A foreign company can engage in List 3 activities if a majority of the limited companys shares are held by Thai nationals. The main points of contention are: The foreign business community have objected to the draft on the following bases. BOI and the MOCs Department of International Trade Promotion (DITP) share responsibility for promoting outward investment. Being a juristic person at least one-half of capital shares of which are held by persons under (1) and (2) or a juristic person in which investment has been placed by the persons under (1) or (2) in the amount at least equivalent to one half of the total capital thereof; and. Section 2. By regulation, at least one-third of SOE boards must be comprised of independent directors. On the other hand, some Members pointed out that Thailand's Foreign Business Act is still restrictive, and that applying for a foreign business license can be a bureaucratic and lengthy process. In theory, the private sector has access to a wide variety of credit instruments, ranging from fixed term lending to overdraft protection to bills of exchange and bonds. The Thai government also established Special Economic Zones (SEZs) in ten provinces bordering neighboring countries: Tak, Nong Khai, Mukdahan, Sa Kaeo, Trad, Narathiwat, Chiang Rai, Nakhon Phanom, Songkhla, and Kanchanaburi. Foreign investors are not required to use domestic content in goods or technology, but the Thai government has encouraged such an approach through domestic preferences in government procurement proceedings. However, the Treaty does not exempt U.S. investments from restrictions applicable to: owning land; fiduciary functions; banking involving depository functions; inland communications & transportation; exploitation of land and other natural resources; and domestic trade in agricultural products. Consistent and predictable enforcement of government regulations remains problematic. Section 1. Parties intend to complete legal review of a draft text by July 2020. Low birth rates, an aging population, and a skills mismatch, are exacerbating labor shortages in many sectors. BOI offers corporate income tax exemptions of up to 13 years for strategic projects in the EEC area. Any person who brings Thai baht currency or foreign currency in or out of Thailand in an aggregate amount exceeding USD 15,000 or the equivalent must declare the currency at a Customs checkpoint. The measures comply with the World Trade Organizations (WTO) Trade Facilitation Agreement (TFA), adopted in February 2016, which requires WTO members to adopt procedures for pre-arrival processing for imports and to authorize electronic submission of customs documents, where appropriate. Thailands alternative financial services include cooperatives, micro-saving groups, the state village funds, and informal money lenders. Businesses may import raw materials into, and export finished products from, these zones free of duty (including value added tax). More than 46,000 trademark applications were pending examination at the end of 2019. The decision of the Minister shall become final. For a full list of the restricted business activities, please see below. Brokerage or agency businesses, with the exception of: being a broker or an agent in the sale or purchase of securities or in services related to futures trading of agricultural commodities or financing instruments or securities; being a broker or an agent in the sale, purchase or procurement of goods or services necessary for the production or the provision of services amongst affiliated enterprises; being a broker or an agent in the sale or purchase, procurement, distribution or acquisition of domestic and foreign markets for the distribution of domestically manufactured or imported goods, which is in character the operation of international trade, with the minimum capital of one hundred million baht or upwards from foreigners, being a broker or an agent of other types as prescribed in the Ministerial Regulation. Unemployment among youth (15-24 years old) is around 5.2 percent, while the rate is only 0.5 percent for adults over 25 years old. The Commission has the power to appoint a sub-committee for considering or performing any particular act entrusted by the Commission, and section 27 shall apply to a meeting of a sub-committee mutatis mutandis. 12. the advantages and disadvantages to the nations safety and security, protecting and promoting Thai interests and. Any foreign national wishing to hold more than 10 percent of the voting shares in an insurance company must seek OIC approval. Application processing takes approximately one week. The law criminalized nominees, any Thai who held shares on behalf of a foreigner. In relation to the 50 restricted business activities established under the FBA, foreign ownership of a limited company is capped at a maximum of 49.99% (unless an FBL or a BOI promotion has been obtained).

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