International Head Quarter- Juslaws & Consult Co., Ltd
PRACTICE AREAS
Company Registration

What is the International Head Quarter in Thailand?


Since the May 2015, Thailand has introduced scheme to boost the Thailand’s competitiveness regarding to developing International Headquarters in Thailand (IHQ). The IHQ program has replaced the Regional Operation Headquarters scheme which has expired on 15th of May 2015.

International Headquarters (IHQ) is defined as a company incorporated under Thai laws that provide any of the following activities to it’s branches or “associate enterprises”, whether located in Thailand or overseas.

1.
Managerial services or technical services
2.
Supporting services engaged in:
1.
General management, business planning, and business coordination
2.
Procurement of raw materials and parts2.3 Research and development of products
3.
Technical support
4.
Marketing and sales promotion
5.
Human resource management and training
6.
Financial advisory services
7.
Economic and investment analysis and research
8.
General management, business planning, and business coordination
9.
Any other supporting services stipulated by the Director General of the Revenue Department
3.
Financial management, including:
1.
Financial management by corporate treasury centers approved under the Exchange Control Law
2.
Borrowing and lending in Thai Baht for following cases:
1.
Financial management by corporate treasury centers approved under the Exchange Control Law.

What are the tax and non-tax incentives for IHQ in Thailand?


Incentives offered by the Board of Investment (BOI)

Permission to bring in skilled personal and experts into the Kingdom of Thailand.
Permission to own land.
Exemption of import duty on machinery (only machinery for R&D and training activities)
Exemption of import duty on raw materials and parts used in the production for export.

Incentives offered by the Revenue Department for IHQ Thailand

Corporate Income Tax (CIT) for 15 accounting periods from the date of approval. Revenue entitled to corporate income tax exemption:

Income from the managerial services, technical services, supporting services, Royalties and dividends received from associated enterprises incorporated under the foreign laws.
Capital gains received from the sales of share in associated enterprises.
Income derived from the purchase and sales of goods overseas on the condition that such goods must not be imported into Thailand (except for transit or transshipment).
Trading related services to juristic persons incorporated under foreign laws on the condition that such income must be received from or in foreign country.

Personal Income Tax

The personal income tax rate for the expatriates working in an IHQ is reduced to 15% on gross income and benefits derived from employment

Final Tax

Exemption for the following revenue:

Dividends paid by the IHQ to a company or juristic partnership incorporated under foreign laws and has no operation in Thailand.
Interest paid by the IHQ to a company or juristic partnership incorporated under foreign laws and has no operation in Thailand.

Business applying for the privileges offered by the Revenue Department must meet specific conditions within the accounting period, otherwise privileges will not be granted.

An associated enterprise is defined as follows:

1.
A company or juristic partnership that is a direct or indirect shareholder in the International Headquarters with not less than 25% of total capital
2.
A company or juristic partnership in which the International Headquarters is directly or indirectly a shareholder or partner with not less than 25% of total capital
3.
A company or juristic partnership in which the company or juristic partnership specified in number 1 is a direct or indirect shareholder or partner with not less than 25% of total capital
4.
A company or juristic partnership which has power to control or supervise the operation and management of the International Headquarters
5.
A company or juristic partnership in which the International Headquarters has power to control or supervise the operation and management
6.
A company or juristic partnership in which the company or juristic partnership under number 4 has the power to control or supervise the operation and management

Why setup a IHQ with Juslaws?


At Juslaws & Consult we advise and assist on other foreign entities for business that have overseas headquarters. Our experienced lawyers would be happy to meet you in person or speak by phone and advice the most appropriate structure for your business.

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CHRISTIAN MOSER

Partner

christian.moser@juslaws.com

+66 2254 4117

KORAVEE BURANAYOUGHKUL

Senior Associate

koravee@juslaws.com

+66 2254 4117

SUTHIDA TANPHETTHONGKUL

Associate

suthida@juslaws.com

+66 2254 4117