Newly issued Notification

Minimum Wage Rates

Effective from June 1, 2008

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Board of Investment for the Year 2008-2009

The government has designated 2008-2009 as “Thailand Investment Year 2008-2009” to restore the investor's confidence, to promote investment in target industries. The Thailand Board of Investment (BOI) sets up new investment competitiveness enhancement policies to stimulate the economy in various sectors as follows:

1. Strengthen already competitive sectors

- To stimulate continuous investment to strengthen already competitive sectors such as automotive and parts, hard disk drive, electronic and electrical products.

2. Promote industries for the future

- To promote investment in and hi-tech industries such as biotechnology, LCD panels, etc.

- To promote investment in alternative energy such as ethanol and bio-fuels, etc.

3. Promote the country's infrastructure to accommodate the future industrial expansion

- To coordinate with the Office of National Economic and Social Development Board (NESDB), Ministry of Industry and other related government to develop suitable locations such as Southern Seaboard to accommodate the expansion of fundamental industries such as petrochemicals, steels and tourism.

- To push forward the high-quality upstream steel industry to accommodate the rising demand of automotive, electronics and other related industries.

4. Promote industrial competitiveness

- To offer tax incentives to induce companies to change or upgrade their machinery and to develop technology and IT systems.

- To promote R&D activities among local industry.

5. Promote Thai overseas investment

- To promote Thai overseas investment in highly potential sectors such as food, automotive and parts, etc.

- To establish Investment Support Center in target countries to coordinate business linkages and provide information.

- To support the development of Thai investors in terms of knowledge.

- To support the conduct of feasibility studies for Thai investors.

6. Conduct proactive investment marketing activities to build Thailand's image and enhance investors' confidence

- To systematically and continually promote Thailand's image as an investment location through domestic and foreign media.

- To closely cooperate with public and private sectors in the form of Public-Private Partnership (PPP) through regular meeting.

7. Improve investment-related services and measures

- To propose the amendment of the Investment Promotion Act to respond to changing situations, to increase flexibility and to add new investment promotion tools.

- To swiftly and efficiently solve problems and obstacles to investment by setting up meetings with related agencies.

8. Set up “Competitiveness and Investment Enhancement Fund”

- To set up a fund that supports the implementation of the following:

• Replacement by more modern machinery and IT systems to increase efficiency and productivity, save energy and reduce environmental impacts.
• The R&D and human resources development in the industrial sector by collaborating with other agencies such as National Science and Technology Development Agency (NSTDA) to support private investment projects in target industries, research centers and independent institutions in R&D activities.
• The establishment of “incubation center” for product and process development as well as research and development.
• The investment in target countries by collaborating related agencies such as financial institutions to develop Thai investors' potential for investment and support the feasibility study conduct in target countries.

For more detail, please enter to www.boi.go.th

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The Act Amending Civil and Commercial Code (No.18) B.E. 2551 (2008)

This Act is promulgated to amend the provisions of Book 3 Title 22 which do not correspond with the present situation.

Several points relating to Partnerships and Companies have been amended such as:

1. A numbers of minimum promoters for establishment of a limited company and shareholders shall be reduced from 7 to 3;

2. Section 1111/1 allows for a setting up of a limited company to be complete within one day;

3. A special resolution requires a limited company to hold only one meeting instead of two meetings as was required before this Act;

4. A registered partnership and limited partnership can be transformed to a limited company;

- etc. -

This Act shall come into effect as from July 1, 2008.

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Aliens' Working Act B.E. 2551 (A.D. 2008)

This Act has come into effect since the date after the day of its promulgation in the Government Gazette Vol. 125, Part 37 Kor., Page 24 – 43, dated 22 nd February 2008 .

This Act is promulgated because the provisions relating to the working of Aliens under the Aliens' Working Act B.E. 2521 (A.D. 1978) do not correspond with the present nature of a move of labour in the current global economic system, as alien labour is one of the most important factor to mobilize the economic system of the country, and it is necessary to improve the Aliens' Work system to be suitable for the changed circumstances.

In this Act, there are newly issued chapters, namely, the “Fund for deportation of aliens out of the Kingdom of Thailand ”, “Committee for Consideration of Aliens' Work”, “Committee for Consideration of Appeals to Aliens' Work, “Supervision of Aliens”, “Punishment”, etc.

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Notification of Ministry of Finance

Re Restricted Amount of Foreign Currencies That Must be Declared by a

Person who Takes or Brings Foreign Currency out of or into the Country

By virtue of Clause 10 of the Ministerial Regulations No. 13 [B.E. 2497 (1954)] Issued under Exchange Control Act B.E. 2485 (1942), amended by the Ministerial Regulations No. 25 [B.E. 2550 (2007)] Issued under Exchange Control Act B.E. 2485 (1942), the Minister of Finance hereby issues a notification as follows:

Clause 1. Any person who takes or brings foreign currencies which are bank notes or coins of an aggregate value exceeding twenty thousand United States Dollars or equivalent out of or into the country must declare the particulars concerning such foreign currencies to the Customs Officer at the time of passing all customs check points, as per the Form attached herewith.

Clause 2. This Notification shall take effect upon the lapse of thirty days from the date of its publication in the Government Gazette.

Notified this 6 th day of December [B.E. 2550 (2007)]

Chalongpob Susangkarn

Minister of Finance

Ref.: Government Gazette, Volume 125, Special Issue, Part 18 Ngor., Page 20, dated 25 th January [B.E. 2551 (2008)]

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Ministerial Regulations

No. 264 [B.E.2550 (2007)]

Issued under Revenue Code Governing Exemption of Taxes and Duties

Rationale:

To relieve the burdens of income earners and to stimulate the economic system, the Minister of Finance issued the above Ministerial Regulations in order to increase an exempt amount of assessable income which is used in computation for payment of income tax. In this regard, an income paid as interest on a loan for buying, hire-purchase or construction of a dwelling place shall only be the interest on loan paid as from January 1, 2007 onwards.

These Ministerial Regulations amended the provisions of (52), (53) and (59) of Article 2 of the Ministerial Regulations No. 126 [B.E.2509 (1966)] as follows:

(52) Income as equivalent to an amount paid as interest on a loan for buying, hire-purchase, or construction of a dwelling place, by mortgaging the dwelling place bought or built as a security against the said loan, in accordance with the actual amount paid but not to exceed Baht one hundred thousand, which is paid to:

(a) Immovable Property Mutual Fund for Solving Problems in the System of Financial Institutions established under the law governing securities and exchange.

(b) Mutual Fund for Solving Problems in the System of Financial Institutions established under the law governing securities and exchange.

(c) Ad hoc juristic persons established to conduct securitization under the law governing ad hoc juristic persons for securitization, only in the case where the said ad hoc juristic persons have taken over the right vested to them as the loan creditors in lieu of the mutual fund under (a) or (b), banks, or other financial institutions, life assurance companies, cooperatives, or employers.

(53) Income as equivalent to an amount paid as interest on a loan to a bank or other financial institutions, life assurance companies, cooperatives, or employers, for buying, hire-purchase or construction of a dwelling place, by mortgaging the dwelling place bought or built as a security against the said loan, in accordance with the actual amount paid, in the part which exceeds Baht ten thousand but not to exceed Baht ninety thousand .

(59) Income as equivalent to an amount paid as interest on a loan to the Government Servants Pension Fund under the law governing government servants pension fund, for buying, hire-purchase, or construction of a dwelling place, in accordance with the actual amount paid but not to exceed Baht one hundred thousand .

In the case where the income earner has deducted an allowance under Section 47 (1) (h) of the Revenue Code, or is exempt from computation of income under (52), (53) or (59) for payment of income tax, the income exempt under the previous paragraph together with the allowance under Section 47 (1) (h) of the Revenue Code, or the income under (52), (53) or (59) as the case may be, shall not exceed Baht one hundred thousand .

Its promulgation was made in the Government Gazette dated December 28, 2007.

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According to the Land Code Amendment Act (No. 10) dated 18 th September B.E. 2550 (2007): the provisions of Paragraph two of Sections 57 & 71 of the Land Code, amended by the Land Code Amendment Act (No. 4) B.E. 2528 (1985), shall be repealed and replaced by the following:

Section 3. The title deed or the land-use certificate shall be made in duplicate, one copy to be held by the person with title to the land and the other to be in safe custody at the Land Office. In case of the duplicate copy for safe-keeping at the Land Office, it may be made into a photocopy or stored by means of information technology and communications system and it shall be regarded as if it were the original.

Section 4. In the case where the Provincial Land Office or the Land Branch Office has introduced information technology and communications system into use for registration of rights and juristic acts, the Land Officers shall be competent for registration of rights and juristic acts by the information technology and communications system for the immovable property under the Civil and Commercial Code both within its locality of Provincial Land Office and other Land Branch Offices, except for the registration that must be publicized or surveyed. In this regard, it shall be done in accordance with the rules and procedures prescribed by the Director-General as published in the Government Gazette.

Note: This Act is promulgated because of the introduction of the information technology and communications system into use for the registration of rights and juristic acts. In order to support the said method, it is deemed suitable to amend the procedures regarding the safe-keeping of land title deeds and land-use certificates by the said information technology and communications system, and to also empower the Land Officers to effect the registration of rights and juristic acts by the information technology and communications system for the immovable property both within its locality of Provincial Land Office and other Land Branch Offices in the interests of convenience and speed to provide services to the general public. Therefore, this Act must be enacted.

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Admission to filing an application for a residential permit in the Kingdom of Thailand

for the year 2007

On September 11, 2007, the Immigration Bureau issued its notification on the above subject in which foreigners who are qualified and would like to apply for a residential permit in the Kingdom of Thailand can submit the application and required documents to the Immigration Bureau from the following period ONLY:

November 1, 2007 until December 28, 2007

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Chamber of Commerce Act (No. 2) B.E. 2550 (A.D. 2007)

This Act was issued pursuant to the Chamber of Commerce Act B.E. 2509 (A.D. 1966). It has come into effect since the date after its promulgation in the Government Gazette Vol. 124, Part 51 Kor., Page 1 – 8, dated 5 th September 2007 .

This Act is promulgated because the Chamber of Commerce Act B.E. 2509 (A.D. 1966) has been enforced for a long time, and, hence, some provisions are not in line with the present economic and social situations. It is then deemed suitable to revise the criteria concerning the establishment, membership and operation of chambers of the commerce, thus enabling the chambers of commerce to be strong and versatile in their management.

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BOI Encourages Investment in High Standard Environmental Conservation Projects

The Board of Investment (the “BOI”) has revised the conditions for the promotion of investment in environmental conservation in order to effectively encourage companies to invest in environmental protection facilities. The BOI approved the extension of the deadline for application submission and relaxed the conditions on start-up time frames. Existing promoted projects that are still enjoying corporate income tax exemption can also apply for the new package. The Map Ta Put area will most likely lead the environmental investment projects with at least 16 Billion Baht in anticipated investments.  

Relaxation Promotion Rules for bleaching and dyeing activities

The Board also relaxed promotion conditions for bleaching and dyeing activities. The two main revised conditions are as follows:

1. The deadline for applications for investment promotion has been extended from the end of 2008 to the end of 2009 with projects required to operate by the end of March 2011; and

2. Existing BOI-promoted entities with corporate income tax privileges are also eligible to apply for the new incentives under this new scheme.

Privileges under the environmental protection scheme include exemption of import duties on machinery and equipment, and a maximum corporate income tax deduction of 3 years valued at not over 70% of the capital expenditures on environmental protection.

Since the bleaching, dyeing and finishing activities generally have an adverse impact on the environment, BOI measures previously required that plants be located in textile industrial zones for better monitoring. However, there are only 2 textiles industrial zones, in Ratchaburi and Samutsakorn. As the activities have been considered highly crucial for building up a competitive textile industry, the BOI has allowed investments to be located in other industrial estates or any BOI-promoted industrial parks which meet environmental protection standards as specified by the law. These industrial estates must have in place been approved for waste water treatment facilities to efficiently accommodate the bleaching and dyeing activities and the Environment Impact Assessment (EIA) must also have been approved.

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Limit of foreigners who will be allowed to have permanent residence

in the Kingdom of Thailand for the year 2007

On May 9, 2007, the Ministry of Interior issued its notification on the above subject as follows:

1. One hundred foreigners with nationalities for each country

Colonies in the aggregate of one country or each empire which has its own sovereignty shall be deemed one country;

2. Fifty foreigners without nationalities.

Remark: Normally, an application for a permanent residence should be allowed to be filed with the Immigration Bureau every year in December.

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New requirement for visa extension

Effective from May 15, 2007, the following documents must be certified by the relevant authority:

1. The Affidavit and a list of shareholder of the company must be certified by the Ministry of Commerce.

2. The company's balance-sheet and income statement must be certified as true copies by the auditor or the Ministry of Commerce.

3. The employing company's monthly personal income tax return (Por. Ngor. Dor. 1) for the previous month for all employees including and its respective receipt, must be certified as true copies by Revenue Department.

4. The applicant's most resent annual personal income tax return (Por. Ngor. Dor. 91) and its respective receipt, must be certified as true copies by Revenue Department.

5. The previous month's Social Security Fund return for all employees (Sor. Por. Sor. 1 – 10) and its respective receipt, must be certified as true copies by the Social Security Office; and

6. The evidence of the family relationship such as marriage certificate or Birth Certificate must be certified by the applicant's embassy and Thai Ministry of Foreign Affairs

The above documents in items No. 3, 4 and 5 must be certified true copies by the authorized director (with the company's seal) and the applicant (in case of item No. 4).

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TAX INCENTIVE FOR REGIONAL OPERATING HEADQUARTERS (ROH)

Tax benefits under this incentive scheme include reduction/exemption of the corporate income tax, special depreciation allowance rate, and special treatment concerning the personal income tax of expatriates working for the ROH.

1. Qualifying Criteria

1.1 an ROH must be a juristic company or partnership incorporated under the law of Thailand by providing services to its associated companies i.e., management and administrative services, technical services and supporting services such as research and development, procurement of raw materials and components, training and personal management, etc.;

1.2 the paid up capital of the company on the last day of accounting period should be a minimum of 10 million Baht;

1.3 the company should serve associated company or branches situated in at least 3 other countries excluding Thailand ;

1.4 income received from rendering services to its associated companies outside Thailand must not be less that 50% of total income (except during the first 3 years, 1/3 of total income is allowed as the minimum income received from its associated companies outside Thailand);

1.5 the company must submit the notification to the Revenue Department; and

1.6 other criteria as prescribed by the Revenue Department.

2. Incentives for ROH

2.1 Reduced and exempt corporate income tax

• Business income: ROH will be taxed at the reduced corporate rate of 10% on income derived from the provision of qualifying services to the ROH's associated companies.

• Royalties: Royalties received from associated companies arising from R & D work carried out in Thailand will be subject to tax at a reduced corporate rate of 10%. Such royalties received from non-related companies can also enjoy the benefits.

• Interest: Interest income derived from associated companies or branches on loans made by ROH and extended to its associated companies will be subject to tax at a reduced corporate rate of 10%.

• Dividends: Dividends received by ROH from associated companies will be exempt from tax. Dividends paid to companies incorporated outside Thailand which do not carry on business in Thailand will be exempt form tax.

2.2 Accelerated depreciation allowances

25% of asset value is allowed as initial allowances and the remaining can be deducted for over 20 years for the purchase or acquisition of building used in carrying out the operation of ROH.

Remark: Associated companies mean two or more companies related to one another in any of the following manners:

• Shareholding basis:

- ROH holds at least 25% of that company's issued capital; or

- The company holds at least 25% of ROH's issued capital; or

• Control basis:

- ROH has control over that company in accordance with Accounting Standard; or

- The company has control over ROH; or

- The company has control ever ROH and the other company.

In this case, ROH and the other company are regarded as associated companies.

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Bases and procedures respecting filing financial statements

As from January 1, 2007, in filing financial statements by the following persons with duty to prepare accounts shall also file 1 set of the financial statements filing form concerning international investment (Form Sor.BorChor.3/1):

(a) A limited company and a public limited company established under Thai law with ordinary persons who are not Thai nationals and are not domiciled in the Kingdom, or juristic persons not registered in Thailand , holding shares from one percent of the value of shares with the right to vote.

(b) A registered partnership established under Thai law and a joint venture under the Revenue Code with joint investors being ordinary persons who are not Thai nationals and are not domiciled in the Kingdom, or juristic persons not registered in Thailand .

(c) A juristic person established under foreign law and business operation in Thailand .

(d) A registered partnership, a limited company, a public limited company established under Thai law and a joint venture under the Revenue Code with investments in businesses abroad, namely establishment of businesses, branch offices or agents abroad, or joint investment with persons or juristic persons abroad, with the ratio of investment or shareholding from one percent of the total capital of the business or of the value of shares with the right to vote, as the case may be.

In filing financial statements concerning international investment (Form Sor.BorChor.3/1), the person with duty to prepare accounts may file the same together with the financial statements, or by any other methods as follows:

1. Filing the form directly with the Bank of Thailand at the International Investment Status Team, Section of Statistic of Balance of Payment, Division of Information Administration;

2. Sending the form via fax to no. 0-2283-6299 or 0-2283-5308;

3. Sending the form via email to form45@bot.or.th; or

4. Sending the form via internet at http://www.www.bot.or.th/

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Thai BOI Investment Policy Remains Unchanged

The Board of Investment of Thailand (BOI) is pleased to inform the international investment community that the political transition has not affected investment policies, incentives and services. Thailand 's investment policy remains the same; the BOI will continue to promote investments by both Thais and foreigners.

With the peaceful transition to a new Thai government remains on a steady course to expand exports and advance the prospects for sustainable development. The Thai government with a clear vision of economic and political stability and a culture tolerance and harmony provide the foundation for a secure investment.

The BOI would like to reiterate that its policies remain unchanged and that investors can be confident in the country's continued enabling investment environment.

For more detail, please enter to http://www.boi.go.th/

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  Re: Rules and conditions in foreigners' applications for temporary stay in the Kingdom of Thailand

In accordance with the Order of the Royal Thai Police Headquarters No. 606/2549, in case of business purposes such as employment with a company or partnership, a foreigner must have an income in consistent with that set out in the Income Table effective since October 1, 2006, as follows:

Income Table

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Traveling in Thailand without Visa

The Immigration Bureau has revised its policy regarding the passport holders of foreign countries entitled to enter Thailand without visa for traveling and announced that they are permitted to stay in Thailand for a 30-day period per each visit. However, the total duration of stay shall not exceed 90 days within a six-month period from the date of their first entry. This policy has been effective as from October 1, 2006.

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Regulation of Commercial Registration Department No. 102/2549

Re: Documents Required for Partnership and Limited Company Registration

As from August 15, 2006, a person who would like to set up a partnership or a limited company which has partner(s) or shareholder(s) being foreigner(s) investing in or holding more than 40% of its shares but not over 50% and/or has a foreign authorized director, that partnership or limited company must provide the Registrar with supporting documents of all Thai partner(s) or shareholder(s) at the time of registration as follows:

1. A copy of a bank book or bank statement showing evidence in the last 6 months; or

2. A document issued by the Bank certifying the financial status of the partner(s) or shareholder(s); or

All of the above evidence must show an amount of money in correspondence with capital investment in such a partnership or a limited company.

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The Act amending the Civil and Commercial Code (No. 15) B.E. 2549 (A.D. 2006) Effective from February 23, 2006

This Act amending Title 22: Partnership and Companies of Book 3 of the Civil and Commercial Code (“CCC”) regarding the resignation of the managing partners of the registered partnerships and the limited partnerships has been in effect since February 23, 2006. Any change of managing partners of partnerships must be registered within 14 days from the changing date according to Sections 1064/2 and 1078/2 of the CCC. Failing to do so, the partnerships shall be liable to a fine not exceeding 20,000 Baht according to Section 4/1 of the Act governing Liability of Registered Partnerships, Limited Partnerships, Limited Companies, Associations and Foundations B.E. 2499 (A.D. 1956).

Moreover, a limited company is required to register a change of a director within 14 days from the changing date according to Section 1157 but at present there is no law to specify the liability for failing to register the change thereof.

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** Change of a Fine Rate when a Permission is Expired **

According to the Memorandum of the Fine Committee in compliance with the Immigration Act B.E. 2522 (No. 6) B.E. 2549, if a foreigner stays in Thailand while a permission is expired or revoked, that foreigner shall be punished with a fine of Baht 500 per day but not exceeding Baht 20,000 in total.

This fine rate shall be effective on March 15, 2006.

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The Act amending the Civil and Commercial Code (No. 14) B.E. 2548 (A.D.2005) Effective from November 24, 2005

The important Sections of the Civil and Commercial Code, which were amended, are as follows:

“Section 456 A sale of immovable property is void unless it is made in writing and registered by the competent official. The same rule applies to vessels of five tons and over, to floating houses and to beasts of burden.

An agreement to sell or to buy or a promise to sale of such property in the first paragraph is not enforceable by action unless there is some written evidence signed by the party liable or unless earnest is given, or there is part performance.

The provisions of the foregoing paragraph shall apply to a contract of sale of movable property where the agreed price is twenty thousand baht or upward.”

“Section 653 (1st paragraph) A loan of money for a sum exceeding two thousand baht in capital is not enforceable by action unless there is some written evidence of the loan signed by the borrowers.”

“Section 1324 (1st paragraph) A finder of lost property may claim from the person entitled to receive it a reward of ten per cent on the value of the property up to thirty thousand baht, and five per cent on the additional value. However, if he delivers the property to the police or other competent official, two and a half per cent of the value of the property shall, in addition to the reward, be paid as a fee to the Government service concerned, but, in no case, shall such a fee exceeds one thousand baht.”

Remark: The reasons for the promulgation of this Act are as follows:

It is considered appropriate to revise the provisions in the Civil and Commercial Code regarding a contract of sale of immovable property and movable property, types of movable property which must be registered by the competent official, the amount of money of the loan which must have some written evidence of the loan, the amount of money which the innkeeper is liable for loss or damage to the property of the traveler or guest, fees rate and payment for any photocopy according to the provisions regarding Limited Companies and the amount of reward money or the fee which the person entitled to receive lost property shall pay to the finder or the concerned government in order to be more in accord with the present economic condition.

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DETAILED INFORMATION NEEDED FOR A RESIDENCE PERMIT APPLICATION (BY YEARLY QUOTA PER NATIONALITY)

An applicant's qualifications

1. A foreign national may be qualified to apply for a residence permit if he/she holds a passport of his/her current nationality, to whom a NON-IMMIGRANT VISA is granted to stay in the Kingdom of Thailand on the basis of one year visa extension for the total of at least 3 consecutive years up to the application submission date.

2. Personal qualifications must fit one of the following categories:

2.1  Investment category

2.2 Working/Business category

2.3 Humanity Reasons category: he/she must have relationship with a Thai citizen or an alien who already possessed residence permit as follows:

- A legal husband or wife.

- A legal father or mother.

- A child who is under 20 years of age up to the submission date of application and must be single.

2.4 Expert category

Submission period for a residence permit application (the “application”)

An applicant can submit the application once a year. Normally, the opening date for the application is in December. Once the date is announced, the application can be submitted until the last working day of that year. The applicant has to bring all documents required for each category together with his/her original passport to be checked by immigration officers on the date the application submission.

Procedures after the application is accepted

1. The immigration officers will grant an applicant a 180-day extension of stay on the date of the application submission and the next extension will be granted for 90 days until the result of the application from the Immigration Commission is obtained.

2. An applicant and related persons with the application will get an appointment card to come for an interview with the immigration officers. The interview includes a test of understanding of the Thai language: speaking and listening (the applicant must come for the interview on the date of appointment; otherwise, if without an appropriate reason, it will be automatically taken into consideration that leads to cancellation of the application.)

3. A criminal record of an applicant who is over 14 years of age must be checked as the followings:

3.1 His/her fingerprint sheet is sent to the Criminal Records Division for the criminal record's check in Thailand .

3.2 His/her passport is checked as to whether he/she is in the official black list system as “an illicit person” according to the Immigration Law.

3.3 He/she has to be checked as to whether he/she is wanted by an arrest warrant of the Foreign Affairs Division of his/her origin country.

Application Consideration

1.  To grant approval of a residence permit application, the Immigration Commission will take into its consideration an applicant's qualifications in terms of income, assets, knowledge, professional expertise, relationship with a Thai citizen, national security, personality, health, understanding of the Thai language, and other appropriate conditions due to current economic and social surroundings, and government policy.

2. Timing of the consideration process varies each year, depending on the policy of the Immigration Commission and the Interior Ministry.

Government Fees

A non-refundable fee for each application is Baht 7,600. If an application is approved, the fee for a residence permit is Baht 191,400. However, the residence permit fee for a spouse or a child (under 20 years of age) of a person holding Thai citizenship or of an alien who has been granted a residence permit is Baht 95,700.

Note: Fees are subject to change and remain effective under Thai law.

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Passport holders of the following countries can enter Thailand without visa for 30 days' period.

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New regulation for Business Operation Certificates

The Department of Business Development of the Ministry of Commerce (MOC) has recently issued a regulation concerning applications for Business Operation Certificates pursuant to Section 10 of the Foreign Business Act B.E. 2542 (1999) (FBA) by following the leniency resulting from the Thailand-Australia Free Trade Agreement (TAFTA) (Regulation) which gives more benefits to Australia investors. "The Regulation came into force on 1 January 2005 ." www.thairegistration.com

The Regulation for an Australian Investor to apply for a Business Operation Certificate as follows:

1. The Regulation provides that the same general practice and procedures required for ordinary applications for a Business Operation Certificate under Section 10 of the FBA shall be deemed as applications for benefits under TAFTA ( a TAFTA Certificate ).

2. Consideration on the issuance of a FTA Certificate must not exceed 30 business days from the date on which the MOC received a notification letter from an applicant.

3. A person who is eligible ( an Eligible Applicant ) to apply for a TAFTA Certificate with the MOC must meet the following criteria:

•  Being a juristic entity incorporated under Thai law in the form of an ordinary partnership, a limited partnership or a limited company.

•  In case of a limited company, its authorized director(s) who can sign and bind the company must be an Australian or Thai national. As for an ordinary partnership or a limited partnership, its manager or managing partner must be a Thai national.

•  Shareholders of a limited company must be:

•  Australians or a mixture of Australians and Thais; or

•  Juristic entities incorporated under Australian law and the Australian shareholders must hold shares at a ratio of more than 50% of the total shares.
Provided, however, that the shareholding ratio of the company shall be in accordance with business categories under the requirements specified by TAFTA.

•  The applicant under TAFTA must have its debt-to-equity ratio not exceeding 3:1.

4. An eligible applicant may apply for a TAFTA Certificate in any of 12 categories of business set out under TAFTA. These businesses include:

•  Annex 2, Chapter 3 (4): Mining - mining on land and mining in the sea;

•  Annex 3 (10): Construction - construction with respect to infrastructure which requires special tools, machinery, technology or skills,

•  Annex 3 (19): Sale of food or beverages - full restaurant; and

•  Annex 3 (21): Service businesses including:

•  General consulting service to Regional Operation Headquarters (ROH), branch or enterprises associated with ROH;

•  Convention halls;

•  International exhibition centers;

•  Businesses of wholesale and retail with respect to distribution and installation of goods manufactured by an Australian juristic entity incorporated in Thailand ;

•   Education and higher institutes specializing in sciences and technology including life sciences, biotechnology and nano technology;

•   Hotels and luxury resorts;

•  Amusement parks and open zoos;

•  Aquariums; and

•  Parking service for touring ships.

5. An eligible applicant may not apply for a TAFTA Certificate in the following 6 categories of business set out under TAFTA in which only Thai nationals are allowed to conduct such businesses in Thailand :

•  Annex 3 (14): Retail business - retail sale of telecommunication equipment;

•  Annex 3 (15): Wholesale business - wholesale sale of telecommunications equipment; and

•  Annex 3 (21): Service businesses including;

•  Telecommunications consulting;

•  Leasing of telecommunications equipment stations;

•  Provision of database access services; and

•  Provision of domestic satellite communications via a very small aperture terminal (VSAT).

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Offences against foreign employees, employers and related persons