Coming into force in January 2005, the Thailand-Australia Free Trade Agreement (TAFTA) was designed to stimulate increased two-way trade between Australia and Thailand, as well as improve business mobility, increase transparency, fuel investments and promote cooperation in several arenas. The areas of cooperation targeted in this agreement include competition policies, customs procedures, government procurement and intellectual property protection.
The guidelines for requesting a business operations certificate under TAFTA are set out in Section 10 of the Foreign Business Act of B.E.2542 (1999).
Besides the elimination of the tarrifs, there are a number of other key benefits to businesses under the terms of the agreement. The agreement provides for more open access to the services market in Thailand by Australian companies, as well as a commitment to the future liberalization of two-way services trade. Australian investors now have greater access to opportunities in Thailand, with majority Australian shareholding permitted in certain business sectors, such as construction services, maritime cargo services, mining operations, restaurants and hotels and others listed in the agreement.
Rights of Australian direct investors are protected, such as the right to transfer their funds out of Thailand when they wish, as well as the right to seek the impartial resolution of any dispute that may arise with Thai authorities, in relation to their investments.
Visas and other requirements for the temporary entry of Australian business persons into Thailand are facilitated under the terms of the agreement. The application process is streamlined, including access to one-stop visa and work permit processes. A longer term of stay is permitted for business visa holders as well.
Certain criteria regarding the qualifications of persons having the right to request a business operations certificate under TAFTA have also been set out.
The person applying for the certificate must be a juristic person established under the laws of Thailand in the form of a registered ordinary partnership, limited partnership or limited company. The authorized directors must be of Australian or Thai nationality. If the juristic person is a registered ordinary partnership or limited partnership then the manager or managing partner must be a Thai national. All of the juristic person's shareholders must be either Australian nationals or a combination of Australian and Thai nationals. If the entity was established under Australian law then the shareholding must be more than 50 per cent Australian. Shareholding percentages must be in compliance with the conditions set for the type of business under TAFTA for which the person is applying for.
The applicant's company must also show a debt-to-equity ratio no greater than 3:1.
There are 18 types of businesses covered by TAFTA, ranging from land and marine mining to telecommunications consulting services. Share ownership percentages for Australian and Thai nationals vary by the type of business involved.
For more information on the benefits and opportunities available under the TAFTA Certificate for your company feel free to contact us for a FREE first consultation.