Thailand became a party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC), making Thailand the 137th state to become a party to the agreement. The MAC was established jointly by the Organization for Economic Co-operation and Development (“OECD”) and the Council of Europe in 1988 to promote tax transparency, fairness in tax administration, and to prevent evasion and avoidance of transnational taxes, which is in accordance with the international cooperation framework that Thailand is a party to.
Dr. Ekniti Nitithanpraphas, Director-General of the Revenue Department, stated that the MAC is an essential tool in helping tax authorities around the world cooperate in accordance with the framework of the OECD, the G20 group regarding Inclusive Framework on Base Erosion and Profit Shifting, which aims to prevent the migration of tax bases of multinational corporations, and the Global Forum on Transparency and Exchange of Information for Tax Purposes, which sets standards for the exchange of tax information between countries to allow the utilization of information that is exchanged under the MAC agreement by tax authorities. Thailand’s participation in the MAC agreement expands its network of parties in the exchange of tax information, from the previous 60 parties under the Double Tax Agreement (DTA) to more than 130 countries under the MAC, demonstrating Thailand’s commitment to international cooperation regarding tax matters.
The Director-General of the Revenue Department also added that the Revenue Department is in the process of bringing the signed MAC agreement to Parliament for consideration and ratification. Exchanging information under the MAC will help the Revenue Department obtain data to analyze the tax behavior and risk of multinational entrepreneurs and help promote tax fairness, such as through e-Service laws, which will lead to the increased competitiveness of domestic entrepreneurs and an expanded tax base, which will undoubtedly be beneficial for the country.
If you have any questions or require additional information, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2.
Thailand is a country with many business opportunities for foreign investors; this includes the incorporation of partnerships and companies. There are two types of companies in Thailand, private limited companies and public limited companies. The main differences between the two is the governing law and the sale of shares. Private limited companies are governed by the Thai Civil and Commercial Code and sell shares privately. Whereas, public limited companies are governed by the Public Limited Companies Act B.E. 2535 (1992), and shares are traded on the Thai stock market.
For small businesses, setting up a private limited company is the most common way to start. There are specific requirements that should be met:
At least three founders holding at least one share each,
Value of a share should not be less than five THB, and
At least one appointed director.
The process for the registration for the company can be completed within one day. It must be noted that all information with regards to the directors, shareholders, and any changes in the company structure will be accessible to the public.
With regards to accounting, all juristic persons, including private limited companies, must submit financial statements every year, regardless of the company’s operation status. This means that if a company ceases to operate but has yet to go through the liquidation process, it must still comply with these legal requirements. All companies have the duty to start the accounting period from the date of the company registration.
A “Thai company” means that more than 50% of the total shares are owned by Thai nationals. Therefore, for the company to maintain its status as a Thai company, the amount of shares that foreigners can own must not reach 50%. If the amount reaches 50%, then the foreign company may – if no exemption is applicable – require a foreign business license (‘’FBL’’) to operate in Thailand. Due to restrictions imposed under the Foreign Business Act B.E. 2542,
the government official will consider various criteria before granting an FBL, such as the advantages and disadvantages to the nation’s safety and security, economic and social development, size of the enterprise, local employment, etc. The approval of the license depends on the profits that will be generated for Thailand, and if it promotes Thai interests. The entire process is rather time-consuming and often unpredictable.
Besides the FBL, Thailand also offers other incentives for foreign investors, such as through the Thailand Board of Investment (‘’BOI’’). The BOI was established pursuant to the Investment Promotion Act B.E. 2520 for the purposes of promoting certain foreign and domestic investments that are regarded as welcomed in Thailand. The BOI has discretionary authority to grant specific trade, taxation, employment, financial and other benefits. BOI incentives are divided into two categories, tax incentives and non-tax incentives. Tax incentives depend on many factors such as geographic location, nature of the business, and whether the output is intended for export or domestic sale, whereas non-tax incentives are available for all businesses
Company Registration Process:
The first step of the company registration process is name reservation. To reserve a name, a promoter is required to submit an Online Name Reservation Form to the Department of Business Development of the MOC.
After the name reservation has been approved, the company must then submit the application to register its Memorandum of Association (MOA) and to register the company formation which can be done at the same time.
The MOA must include the name of the company, the province where the company will be located, the scope of the company’s business, the capital to be registered, and the names of the promoters. The capital information must include the number of shares and their par value. At the formation step, the Articles of Association (AOA) (also called bylaws of the company), the director(s) and director(s)’ authority, company’s auditor and the authorized capital, although partly paid, must all be issued.
Although there are no minimum capital requirements for companies registered as Thai companies, the amount of capital should be reasonable and adequate for the intended business operation. Please note that if the company is to employ foreigners, certain minimum paid-up capital requirements for the visa and work permits may apply.
The official fees and stamp duty regarding company registration are as follows:
ฺMOA registration
500 THB
Company registration
5,000 THB
Certificate of registration
100 THB
Stamp duty for MOA
200 THB
Stamp duty for AOA
200 THB
Total amount is 6,000 THB.
An additional 50-baht document examination fee may also be charged.
A company that have one or more employee shall register for Social Security with the Social Security Office within 30 days after the first employment. A company that has a turnover in excess of 1.8 Million THB must also register for VAT with the Revenue Department within 30 days of the date the annual turnover exceeded that threshold.
If you have any questions regarding the business operation in Thailand, feel free to contact us [email protected] or call us at +66 (0)2 117 9131-2.
The Thailand Personal Data Protection Act (PDPA) is the latest piece of legislation which offers data protection regulations against the misuse of personal data that has been collected from individuals in Thailand. The PDPA was greatly influenced by the European Union’s General Data Protection Regulation (GDPR) which set a new standard for data protection regulations around the world.
Objectives of the PDPA
The objective of the PDPA is to protect all personal data, such as people’s educational background, financial status, health records, criminal records, work records and other personal data such as fingerprints, voice, identification card number or numerical data of other documents. The law prevents people from using this data for any kind of benefit without express consent from the data subject.
The PDPA imposes penalties for non-compliance with administrative fines (up to THB 5 million), criminal penalties (imprisonment up to one year and/or fines up to THB 1 million), and punitive damages up to twice the amount of the actual damages.
Could you or your business be subjected to the PDPA?
If the answer to any of the following questions is yes, then your business is subjected to the rules set out in the PDPA.
Do you or your business process personal data?
Do you or your business monitor the behavior off individuals located in Thailand?
Do you or your business offer goods and services to people located in Thailand?
A business falls under the scope of the PDPA if it collects personal data and offers and promotes its services to individuals located within Thailand.
Notethat according to the PDPA, the data collectors and processors do not need to be located within the kingdom of Thailand.
Exemptions under PDPA
Data collected for private purposes
Data collected by government agencies related to national security, money laundering and cybersecurity
Medias subject to ethical standards and public interest purposes
Data collected by Members of Parliament and Judiciary
Data collected by credit bureaus
The PDPA excludes 2 types of personal data namely, personal data of a deceased person, and business data such as contact details, and title or address of the business.
Like the GDPR, the PDPA has an extraterritorial reach which means that even without having offices in the kingdom, companies offering goods and services to Thai data subjects or monitoring any behavior that takes place within Thailand will need to comply with the PDPA and appoint a representative within the kingdom. The representative is responsible for all acts done by the data collector and processors which they represent.
Consent from the data owner
The PDPA states that data owners’ consent only be sought honestly, and in good faith. The PDPA also empowers data subjects to revoke their consent at any time, subject to the requirements of applicable laws and other agreements, but such revocation cannot affect the previous collection, usage, or disclosure of personal data that had been legally consented.
Data controllers have the obligation to ensure that proper security measures are implemented to protect personal data against loss, alteration, or modification. Data collectors would also be obligated to ensure that the data used or disclosed (when permissible) is correct, complete, and current.
If a data controller wishes to use or disclose personal data, it is necessary to seek the data owner’s consent in writing.
Subject to certain exceptions, it would also be necessary to seek consent in writing to transfer personal data overseas, and a process would be established for consideration of whether the intended recipient country’s personal data protection laws provide sufficient protection against the misuse of personal data.
Deemed consent (implied consent) is also applicable according to the PDPA. In situations where the data subjects have voluntarily submitted their information to the data controller. For example, if a person would like to subscribe to receive newsletters or updates via email, that person can opt-in by providing his or her email to data controller. By giving his or her email, it is deemed that that person would like to receive such newsletters or updates via email. If person no longer wishes to receive such updates, it is the duty of the data controller to provide a measure for unsubscribing (opt-out measure)
In conclusion, the PDPA offers protection against the misuse of collected personal data from individuals in Thailand. It has an extraterritorial reach due to the fact that of data collectors and processors are outside the kingdom of Thailand, they have to appoint representatives within the kingdom, and those appointed representatives will be wholly responsible for the acts committed by the data collectors and processors. It also states that the data collectors and processors must receive consent from the data subject for them to use their personal data in any way. However, there are certain exceptions of some operations that do not require consent in the collecting and processing of personal data which are stipulated in Article 4 of the PDPA and are mentioned above.
If you have any questions regarding the Thai Personal Data Protection Act, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2.
The Thai Board of Investment (BOI) has introduced its new policy for incentives for qualified investment projects.
Under the new policy, following tax and non-tax incentives may be granted to successful applicants:
Exemption of corporate income tax for up to 15 years
Exemption of import duties:
on machinery
raw or essential materials imported for use in production for export
goods for R&D
Matching grants for:
investment
R&D
Innovation
Human Resources Development
For targeted industries:
Permission to own land for BOI promoted projects
Right to state’s land lease for 50 years and, upon approval, renewal for a further 49 years.
15% personal income tax rate, the lowest rate in ASEAN, for foreign executives working for regional headquarters or international trading companies, treasury centres, along with regional R&D centres.
One stop service center to facilitate foreign investors (Providing useful information, and issuing permits for trading, export and import – all in one location)
Up to five year work visa issuance
These major changes are intended to show strong determination of the royal Thai government in reinforcing the existing foundation and create sustainable business growth with the best mutual benefits for investors, Thailand and all Thai people.
