The JTEPA, the Japan–Thailand Economic Partnership Agreement is a free-trade agreement that the two countries signed in April of 2007. One of its intended benefits was to eventually eliminate the tariffs on over 90 per cent of bilateral trade. According to the terms of the agreement, persons engaging in business under Thailand’s Foreign Business Act of B.E. 2542 (1999) and meeting the conditions stipulated by the JTEPA can request a business operations certificate from Thailand’s Department of Business Development.
The guidelines for requesting a business operations certificate are found in Section 10 of the Foreign Business Act. There are three qualifications that an applicant for a business certificate under JTEPA agreement must meet. The first is that the applicant must be a limited company registered in Thailand. There are some exceptions to this requirement in that for some types of businesses, registered ordinary partnerships and limited partnerships are eligible to apply for a business operations certificate.
The second qualification is that a limited company must have a level of less than 50 per cent foreign shareholding. Again, there is an exception to this for certain types of businesses. The third is that the company’s shareholders must be either ordinary persons of Japanese nationality or juristic persons established according to the laws of Japan.
In the latter case, more than 50 per cent of the capital must be held by Japanese nationals. In addition, the majority of the company’s directors must be Japanese nationals and all authorized directors must be Japanese nationals. The proportion of shareholding and number of shares of persons who request a certificate must follow the conditions established for the particular type of businesses under JTEPA. Businesses types include 15 categories, such as computer services businesses, maintenance and repair services, and retail and wholesale operations.
Juslaws and Consult assists foreign clients in choosing the best form for its Thai business. Our attorneys not only possess the technical know-how required, but also have extensive practical knowledge in helping clients choose a structure that will meet their specific goals. We provide advisory services to clients through the periods of formation, development, operations and corporate governance. We work closely with our clients to help them realize benefits from the opportunities associated with this foreign trade agreement as well. Many foreign clients first contact us when they are in the process of determining the most appropriate form for their business in Thailand.
We provide advice to clients and assist them in making this important decision. Once the most suitable form of company organization has been selected, our professionals also assist in the preparation of documentation to ensure that all government requirements are satisfied.