It is our great pleasure to announce that FRANK Legal & Tax has been selected as a member of the Nextlaw Referral Network. The Nextlaw Referral Network is a cutting-edge technology platform that brings together hundreds of the world’s best law firms to provide clients with the right lawyer, in any geography, in any practice, and any sector in the world.
FRANK Legal & Tax is honored to become a member of the Nextlaw Referral Network. We will continue to strive for excellence and offer the best legal and tax services to all our clients. We want to thank the Nextlaw Referral Network for awarding us this membership and would also like to thank our valued clients and the legal community for continually supporting us.
*** Invitation Only ***
FRANK LEGAL & TAX is pleased to announce that our upcoming event, themed “BOI Promotion for Tech Startups”, will be held on 22nd October 2020 at 6.30 pm at The Great Room, Gaysorn Tower.
To restart activities after the COVID-19 restrictions, our company would like to provide an opportunity to explore the BOI promotions related to the tech industry in Thailand. Our experienced lawyers will be starting with a big-picture view of foreign business licensing in Thailand, which will be followed by insights into the various BOI categories that are relevant to IT, software development and tech business.
Fabian Doppler – Managing Partner
is the founder and Managing Partner of FRANK Legal & Tax. He is a licensed attorney from Germany where he actively practiced law before coming to Thailand in 2005.
Rangsarit Suwanarat – Partner (Corporate Law)
is Thai attorney and Partner at the firm. He focuses his practice on corporate and commercial law, as well as foreign direct investment.
The admission fee will include:
Event data and Information:
Date/Time: Thurday 22nd October 2020, 18:30 – 20:00
Location: The Great Room Gaysorn Tower, Floor 25th (see Google Maps: https://g.page/thegreatroomthailand-gaysorn?share)
Entry fee: 800 Baht net / pers. including snacks and non-alcoholic beverage
**Spots are limited to 20 persons for this event, the event is held on “invitation only” basis.
Visa amnesty for foreigners in Thailand, which has been extended since April of 2020, was further extended to September 26th, 2020. This extension was described as “final” by the Cabinet and another extension seems highly unlikely.
The visa amnesty, which was originally due to expire on July 31st was further extended until September 26th, 2020, allows foreigners to stay in Thailand without having to extend visas at an Immigration office. This applies to all foreigners whose visas did not expire before March 26th.
The automatic visa extension was published in the Royal Gazette and came into force from August 1st, 2020.
However, after September 26th, if the immigration does not extend the visa amnesty. Overstay fines and the 90-day report requirements will resume. Foreigners planning to continue staying in Thailand are advised to renew their visas and 90-day reports before September 26th.
Foreigners who are unable to extend their visas or are unable to leave due to flight restrictions, may ask their respective embassies for an official letter permitting them to continue staying in Thailand. If they are unable to obtain a formal letter from their embassy, they would be asked to leave the country.
Before the visa amnesty was granted, immigration officials often required foreigners to present as many as nine separate documents to extend their stay for up to 30 days. These included land title deeds, rental agreements, and even photographs of foreigners with their accommodations.
If you have any questions, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2.
On June 23rd, 2020, the Thai Cabinet approved a Draft Act which will amend the Civil and Commercial Code, with regards to the establishment of limited companies.
The Act aims to make it easier for individuals to set up limited companies and facilitate the establishment of new businesses, SMEs, and start-up enterprises to stimulate the Thai economy.
The Act will amend section 1097 of the Civil and Commercial Code so that a number of two promoters will be sufficient to establish a private limited company. Currently, three or more promoters are required for this. The required minimum number of shareholders after the incorporation process will accordingly be reduced to two.
In line with the above, the Act will also amend the requirements of holding a general meeting, so that at least two shareholders (or their proxies) must attend the meeting instead of at least three , and a court may order the dissolution of a limited company on the grounds that there is only one shareholder (or any other reason causing that company to be unable to continue existing).
Although the Draft Act was recently approved by the Thai Cabinet, the date the Act will come into force and the name of the Act have yet to be announced.
All goods that are imported into Thailand must be reported to the Thai Customs Department. The steps required to import products into Thailand legally are outlined below.
Step 1 – E-Customs system registration
As of January 1st, 2007, the procedures for importing goods into Thailand have been centralized into the online e-Customs system. In order to register for the e-Customs system, the importer must first obtain a “digital certificate” prior to registration. A digital certificate is an electronic signature file used to confirm the identity of the sender of electronic documents and the authenticity of said documents.
Once a digital certificate is obtained, the importer may then proceed to register for the e-Customs system. Companies can either register with the system directly (i.e. at their own office) or through an agent. If a company decides to register through an agent, the agent will handle all aspects of the registration process. If a company decides to register to use the e-Customs system directly, the following steps must be taken:
e-Customs software must be installed on the company’s IT system, and digital certificates must be verified;
Step 2 – Review of controlled goods
Two separate checks must be made before goods are imported: first, products that require an import permit (if any) must be identified. A range of goods requires import permits issued by different agencies before the date of arrival. Second, it must be ascertained if products are considered ‘red line’ goods (as opposed to green line). Red line goods are goods found to be at high risk or requiring additional certification and verification upon arrival. When importing red line goods, it is necessary to provide the following supporting documents:
There is no definitive list of red line goods. However, the e-Customs system will inform the importer once the Import Declaration has been submitted (see Step 3) whether the goods are considered red line or green line. As such, it is crucial to ensure the correct paperwork is prepared for all imports in order to be prepared for a shipment being flagged as being red line.
Step 3 – Submission and verification of the declaration
Once all correct documentation is prepared, an Import Declaration can be submitted to the e-Customs system together with an arrival report with the information of the vessel carrying the shipment of goods. The e-Customs system will then check and verify the submission, identify any discrepancies, and specify whether the shipment is considered green line or red line.
Step 4 – Payment of taxes and duties
Thai Customs Tariff Decree B.E. 2530 (1987) stipulates that “goods imported or brought into, exported, or taken out of the Kingdom shall be chargeable with and liable to duty”. Some items are exempt from import duties.
For goods that are subject to import duties, payment can be made at either the Customs Department of the port of entry or via the e-Customs system’s e-Payment section.
Step 5 – Inspection and release
The final step before the imported cargo is released is the inspection of the goods. For green line goods, this is a simple online screening and will take only a few minutes. For red line goods, all the supporting documents will have to be presented, and the cargo must be physically examined by customs officials.
If you have any question regarding the Thailand’s Import Procedures, Feel free to contact us at [email protected] or +66 (02) 117 9131 – 2.
All goods exported from Thailand are required to be reported to the Customs Department and are subject to customs controls.
The steps for exporting goods from Thailand are as follows:
Step 1 – E-Customs system registration
Since 2007, Thailand’s export procedures have been centralized into the online E-Customs system. To register for the E-Customs system, the exporter must first obtain a “digital certificate”. A digital certificate is an electronic signature file used to confirm the identity of the sender of and the authenticity of electronic documents.
Once a digital certificate is obtained, the exporter may then register for the E-Customs system. A Company may choose to either register with the system directly (i.e. at their own office) or by using an agent. For the latter option, the agent will handle the entire registration process.
When registering to use the E-Customs system directly, the following steps are required:
Step 2 – Review controlled goods
As with imports, checks must be made for goods requiring an export permit and potential red line shipments.
Currently, around 50 categories of goods require an export permit.
For red line goods, extra documentation is required before the shipment is permitted to leave Thailand. The E-Customs system will flag red line goods in Step 3. The exporter should prepare the following:
Step 3 – Declaration Submission and verification
The exporter must submit an Export Declaration, along with an invoice and cargo data to the E-Customs system. Provided no errors arise, the system will issue declaration and payment numbers and define whether the shipment is considered green line or red line.
Step 4 – Payment of duties and taxes
There are three ways export duties may be paid: payment at the Customs Department of the port of exit; E-Payment via the E-Customs system; and payment made from banks.
Step 5 – Inspection and release of cargo
The freight forwarder must send a cargo control report to the E-Customs system. The system will then automatically generate a report and alert the customs officials whether the goods are a green or red line. Green line goods are clear to proceed without a physical inspection, while redline goods, as with imports, require physical inspections and extra document checks before they can be cleared.
Finally, once the shipment arrives, it is the shipping company or agent’s responsibility to submit the manifest information to the E-Customs system.
If you have any question regarding the Thailand’s Export Procedures, Feel free to contact us at [email protected] or +66 (02) 117 9131 – 2.
The Thai Revenue Department has raised its standard of tax auditing by joining the Tax Inspectors Without Borders (“TIWB”) program and requesting experts to share their know-how and exchange auditing experiences with Thai Revenue Officers. The purpose of joining this project is to close tax loopholes regarding multinational e-commerce businesses and newly established businesses, and to create fairness in paying taxes.
Mrs. Sommai Siriudomset, Spokeswoman of the Revenue Department, stated that “currently, every country is facing the problem of taxing foreign streaming or e-commerce businesses that have no permanent establishments in Thailand but are receiving income from Thailand. The Thai Revenue Department therefore applied to be part of the TIWB project, which is a project established under the cooperation between 2 international organizations, namely the Organization for Economic Co-operation and Development (“OECD”) and the United Nations Development Program (“UNDP”). The TIWB has the purpose of providing support, knowledge, and techniques to help improve the efficiency of tax auditing for developing countries and to strengthen international tax cooperation. There is a coordination of agencies in countries that are ready to send experts to share experiences or give advice to officers of the Thai Revenue Department through joint operations.”
The Spokeswoman of the Revenue Department added that “in addition to enhancing the ability of Thai tax authorities to track taxes from e-commerce businesses and new online businesses, joining the TIWB International Tax Auditor Program is also helping create fairness in tax collection between domestic operators and foreign operators providing services in Thailand.”
In early June of 2020, the TIWB appointed Dr. Ekniti Nitithanpraphas, Director-General of the Thai Revenue Department, as a member of the Governing Board of TIWB as a result of his active participation in many international meetings, he was the first Asian to be appointed to this position.
If you have any questions regarding this matter, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2.
It is our great pleasure to announce that FRANK Legal & Tax has been named a “Rising Star” law firm by Asia Business Law Journal. This prestigious award is based on extensive research conducted by Asia Business Law Journal, in which thousands of in-house counsel were invited to identify the Thai law firms that showed the most future promise and deserved to be recognized as Rising Stars of the country’s legal profession.
FRANK Legal & Tax is honored to receive this award and will continue to strive for excellence and offer the best legal and tax services to all our clients. We would like to thank Asia Business Law Journal for awarding us this prestigious award and would also like to thank our valued clients and the legal community for continually supporting us.
The report is currently live on Website https://www.vantageasia.com/thai-law-firms-rising-stars/
Airbnb is a popular online platform that allows property owners (landlords) to rent out their property (partially or wholly) on a short-term (daily/weekly) basis. The online platform is present in over 100,000 cities across 191 countries and has effectively transformed itself into the world’s largest hotel. With the price of renting a property via the Airbnb platform often being cheaper than staying in a regular licensed hotel, the platform creates a viable option for travelers travelling on a budget.
In Thailand, this practice is regarded by many as illegal, but there are conflicting opinions of legal scholars on this matter. On one hand, Airbnb is seen by many as an illegal way for landlords to rent out their properties on a short-term basis as it is without acquiring a hotel license. Section 15 of the Hotel Act, B.E. 2547 (2004), states that renting out a property on a weekly or daily basis without a hotel license is illegal. However, the Ministerial Regulation to the Hotel Act B.E. 2548 (2005) contains an exemption for certain properties which has given rise to a passionate discussion whether these exemptions from the Hotel Act also apply to condominium owners renting out their homes on short–term basis:
The Hotel Act states that “any residential premises open to the public for rent with no more than four rooms on all floors in aggregate whether in a single building or several buildings and with a total service capacity of 20 guests, operating as a small business which provides an additional source of income for the owners” is exempt from the requirement of obtaining a Hotel License. The owners of such premises are required to report to the Hotel Registrar but do not need a Hotel License and do not have to comply with the requirements for hotels. The issue with this regulation is whether the term “residential purpose” refers to the condominium unit or the whole condominium (entire building).
The Condominium Act states that commercial activities may only be conducted in designated commercial spaces within the condominium building (if any). This may be e.g. a retail area in the ground floor of a condominium.
This regulation exists to ensure the peaceful cohabitation of residents. Hosting guests could disrupt the condominium’s community and lifestyle. However, landlords are quick to point out that section 1336 of the Thai Civil and Commercial Code (CCC) states that property owners are entitled to the benefits and fruits of property ownership, provided that their commercial activities, do not disrupt co-owners and residents. As for co-ownership, section 1360 of the CCC states that each co-owner is entitled to use the property in so far as such use is not incompatible with the rights of the other co-owners.
As you can see, there are those who are against Airbnb and those who are pro Airbnb. To further complicate things, in May of 2018, a court in Hua Hin charged two condominium owners with renting out their condos on a daily and weekly basis and violating the Hotel Act.
The offenders were both made to pay a fine of 10,000-15,000 THB for their infringements.
With the court ruling in Hua Hin, many say that it is now clear that renting out your property on a short-term basis on the Airbnb platform (Airbnb hosting) is illegal. However, in Thailand, court rulings set a clear guideline for future cases, but judges are free to make their own decisions. This means that the case in Hua Hin is not binding on other judges, but Thai judges tend to follow court rulings set by previous judges. Additionally, there are still many property owners renting out their property on a short-term basis on the Airbnb platform who are confident that they are not violating any laws and thus will continue renting out their properties on the Airbnb platform.
In addition to renting out condominium units, renting out houses or villas on a short-term (daily/weekly basis) without a hotel license is also illegal. However, home and villa owners argue that A Hotel Act Ministerial Regulation states that houses or villas with less than 4 rooms, and a capacity of 20 people or less are exempt from the Hotel Act and are not considered a “hotel”. Therefore, they can rent out their house or villa on a short-term basis. In our opinion, renting out a house or a villa on a short-term basis is safer than renting out a condominium unit due to the fact that unlike the short-term rental of condominium units, there is no court decision prohibiting such short-term rents for houses or villas.
The popularity of Airbnb services among tourists has generated abundant incomes from tourism in many parts of the world. Since the short-term rental of unregistered or unlicensed is still illegal in Thailand, we recommend property owners to rent out their properties on a monthly basis, and tourists to stay in licensed hotels in order to avoid any legal consequences.
If you have any questions regarding this matter, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2.
The Thai Immigration Bureau recently announced that starting from 30th June 2020, landlords will no longer need to file reports on their foreign guests every time they arrive at their properties. Landlords refer to Thai and foreign nationals who own property in Thailand, hotel managers and other accommodation operators.
Previously, landlords needed to comply with section 38 of the Immigration Act, which states that property or hotel owners who take in foreign guests must notify officials within 24 hours. This is known as the TM30 rule.
To end the requirement to file the reports again if they leave the premises temporarily only to return, or when they have multiple-entry visas or re-entry permits, the Immigration Bureau has now changed the reporting requirement to only when they arrive. The Immigration Bureau called the change “a move to end duplication”.
The change followed intense complaints from landlords needing to file reports on their foreign guests every time they arrive at their properties, and foreigners unable to receive services at immigration offices without being able to prove that TM30s had been filed.
Even though the Bureau has eased the TM30 reporting rule on foreigners, landlords must still report the arrivals of tenants within 24 hours or face a fine of up to 10,000 THB. The reports can be filed online at www.immigration.go.th or submitted in person or by mail to the immigration offices in their provinces, or the Immigration Division 1 Office at Government Complex on Chaengwattana Road in the case of Bangkok.
If you have any question regarding the TM.30, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2.