News & Legal Articles - Juslaws & Consult Co., Ltd


Pharmaceutical company recommends Juslaws

24 Mar Pharmaceutical company recommends Juslaws

We have just received the following reference from one of our clients, a leading pharmaceutical multinational company: “We really appreciate your kind assistance during our first corporate steps in Thailand. It is good to know that we can rely on Juslaws”.

Airplane and Airport

27 Oct Juslaws & Consult official consultant for Thailand’s Public Private Partnerships

During the Asia Cooperation Dialogue (ACD) Summit 2016 which took place from 8 to 10 October 2016 in Bangkok the importance of public private partnerships (PPP) as a guarantor for growth in Asia was stressed once again.

Thailand is launching huge funds over the next years for infrastructure projects. It has been acknowledged that Thailand is in need of huge infrastructure constructions and various other forms of public services. Private participation in these original duties of the state can help to finance, implement and operate the necessary projects in various forms. This can be highly profitable for both sides: the private party and the public.

Thailand’s new Investment in State Undertakings Act (PISU) and the PPP Strategic Plan 2015-2019 (2558-2562 B.E.) ensure that virtually all major infrastructure project are developed as a public private partnership. According to the PISU each PPP-project has to be appraised by a qualified consultant. Juslaws & Consult holds the required consulting license for PPP-projects. After approval of a certain project as PPP-project the competent state agency will prepare an invitation to tender for private investment, draft terms of reference and draft the PPP-contract. The competent agency may hire a qualified consultant. Juslaws & Consult is one of the few law firms which hold the required consulting license required to assist state agencies with this complex task.

The PISU applies in all cases in which an entity of the private law (e.g. Thai or foreign companies) “invests” in an undertaking which either the state has an obligation to perform, or which requires the utilization of resources of the state or natural resources of the country. However, it does not apply to PPP-projects in sectors which are governed by other laws pertaining to petroleum and mining concessions or as excluded in a Royal Decree.

There are certain activities of the state prescribed by the law which might not be suitable for private engagement, such as police work or the judiciary.

How can a private party precisely participate in the various projects? The PISU talks of “investing”. But what does the PISU mean when referring to “investing” activities of the private entity? Section 4 of the PISU contains a legal definition which is rather tautological: “investment” means a public-private joint investment by any means, or designation of a unilateral private investment by way of a license or concession or grant of right of any kind.

This definition does not say what “investing” means in the first place. However, it differentiates between two different kinds of investment: one which is done as a public-private joint investment and the other as a private investment which requires a state license or concession etc. From this one can infer that “investing” is not to be construed in a narrow sense of committing money or capital but also covers the whole range of activities of planning, construction and operation of a project.

Therefore, in practice, PPP-projects are conducted in the form of various contractual models as set forth in the so called “Investment Contract” between the public authorities (the state) and the private “investor”. Juslaws & Consult specializes in drafting these “Investment Contracts”. We will post more in-depth article on this topic in the near future.

The Minister of Finance is empowered by the PISU to issue Ministerial regulations for the implementation of the PISU.

Juslaws & Consult has published an article about the huge potential of these projects for foreign investors, construction companies and consultancy companies in the last issue of the UPDATE magazine of the German Thai Chamber of Commerce:

However, PPP-projects in Thailand are an extremely complex legal topic, involving various government authorities with shared different competencies, i.e. ministries, provincial administrative organizations, municipalities, tambon administrative organizations, the Bangkok Metropolitan Administration, Pattaya City or other local administrative organizations. Basically, projects with a value of over one million Baht require approval by the central government.

Currently there are many projects at various stages in the areas of

  • Transportation/Logistics: toll roads, mass transit trains, ports, depots and cargos
  • Utilities: power plants, pipelines and public water
  • Telecommunication: fixed lines, mobile and TV networks
  • Property Development: convention center, hotels and department stores

The PISU provides a relatively streamlined procedure, precise time frame for project consideration and bidding process and project development fund. It even contains rules which are aiming to provide more transparency in the entire process, – a sensitive issues for this topic. The PISU prescribes a pool of experts for selection and monitoring committees, prohibitions for related persons to serve private counterparts and disqualification criteria for advisors and bidders.

The rules of the PISU are given shape by the Thai government’s PPP Strategic Plan 2015-2019 (2558-2562 B.E.) which comprises a project pipeline of 66 projects in transportation, education, telecommunication and other sector and estimated investment costs of 1.41 trillion Baht.

The PPP Strategic Plan divides sectors into two groups. Group 1 applies a so called “opt-out” model which means private sector investment is generally required (urban mass transit system, toll roads in urban areas, logistic ports, high speed rail systems, telecommunication networks and broadband internet). Group 2 is called “opt-in”, so participation and investment from the private sector is encouraged (intercity toll roads, logistics depots, common ticketing system, airport serving, water treatment management, irrigation system, waste management among others).

The Ministry of Finance establishes a “Private Investment in State Undertaking Promotion Fund” which serves to support the preparation of a Strategic Plan and support a state agency in making a project proposal, preparing the project appraisal report and hiring the PPP-consultant.

Although PPPs in Thailand have a huge potential for investors and foreign companies, PPPs pose a considerable challenge to foreign companies and require a trustworthy, well-connected and experienced local partner. Juslaws & Consult lawyers are Thailand’s experts for public private partnerships. Our team comprises legal PPP experts, project finance experts and engineers. Juslaws & Consult is one of few law firms with the required license for PPP-consulting. Please contact our Bangkok office for further information.

Mr. Yuthana Promsin, Managing Partner at Juslaws & Consult

Mr. Christian Moser, Senior Associate at Juslaws & Consult

Accounting in Thailand

20 Oct Accounting in Thailand

Accounting looks at the heart of each and every business. Financial Statements serve as a crucial source of information for business owners, managers, directors, business partners, investors, creditors and the Revenue Department for calculating the income tax. A modern regulatory framework for accounting is important for foreign investors. According to the World Bank’s report on the Observance of Standards and Codes, Thailand has made great progress in this field. The Thai Accounting standards closely follow international standards (IFRS). This article outlines the regulatory framework for accounting in Thailand.

The following business entities have to keep accounts according to the Thai Accounting Act, B.E. 2543 (here called the Act):

  • Registered partnerships registered under Thai law,
  • Limited Companies registered under Thai law,
  • Public Limited Companies registered under Thai law,
  • Juristic Persons registered under a foreign law if carrying on business in Thailand,
  • Joint Ventures under the Thai Revenue Code, and
  • Natural Persons or Unregistered Partnerships engaging in any kind of business in Thailand as prescribed.

According to Section 20 of the Act the above business entities must have a qualified bookkeeper (see below) who keeps accounts which must show results of the operations, financial status or changes in financial status in accordance with the facts and accounting standards. According to Section 21 of the Act particulars must be entered in Thai language or accompanied by a translation into Thai language.

According to Sections 9, 10 and 11 of the Act a business must prepare and submit financial statements to the Accounts Office within five months from the day the accounts are closed, but in the case of a limited company or a public limited company registered under Thai law within one month from the day of the general meeting approving such financial statements. The books are closed (end of accounting period) twelve months after the commencement of the accounting period which begins either with the registration date (Thai company or Registered Partnerships) or the date of start of business operations (Joint Ventures and foreign companies).

Additionally, a tax return must be filed together with a balance sheet, operating account and profit and loss account, revenue and expense account on gross revenue within 150 days from the last day of the accounting period according to Section 69 of the Thai Revenue Code, B.E. 2481. These financial statements are the basis for the calculation of the Corporate Income Tax according to Section 65 of the Revenue Code. The financial statement for the Revenue Department might differ from the financial statements under the Accounting Act where prescribed by the law.

The accounting professions in Thailand and their code of ethics are governed by the Accounting Professions Act B.E. 2547 and self-regulated by the Federation of the Accounting Professions (FAP) which also issues the license for the Certified Public Accountants (CPA). The FAP is a member of the International Federation of Accountants. The Department of Business Development (DBD) of the Ministry of Commerce and the Securities Exchange Commissions (SEC) are the competent regulators for accounting and the accounting professions.

When speaking about accountants in Thailand these can be either simple book keepers or (if fulfilling additional qualifications) auditors. Accountants in Thailand must hold a bachelor’s degree in accountancy. Auditors must hold a license as Certified Public Accountants. Both types of accountants, book keepers and auditors, must be members in the FAP. Juristic Persons who offer accounting and auditing services must be registered with the FAP as well. Juristic Persons must even provide a collateral for malpractice liability.

The FAP also issues the Thai Accounting Standards which are closely based on the International Accounting Standards. The ASEAN member states are currently in the process of mutually recognizing and liberalizing the accounting professions in the wake of the ASEAN Economic Community (AEC).

Juslaws & Consult is a competent partner for all questions regarding accounting in Thailand and the whole ASEAN region. We can also effectively communicate with company headquarters and mother companies abroad as our international team speaks their language when it comes to accounting question.

Please contact our Bangkok office for further information at


Christian Moser, Senior Associate at Juslaws & Consult

Legal comments on the Land and Building Tax Act in Thailand

11 Oct Legal comments on the Land and Building Tax Act in Thailand

Last 7th of June 2016, the draft of the Land and Building Tax Act was approved by the Thai government. This Act will become effective in January 2017 and will be replace the existing and old Building and Land Tax Act B.E. 2475 (1932) and the Local Development Tax B.E. 2508 (1965).

The new tax regulation emerge in a political context of fast implementation of very ambitious infrastructure projects such as the 20 megaprojects announced by the Cabinet including transportations hubs, new BTS lines, upgrade of existing airports and implementation of railway systems. Under the new regulation it is considered that the price of the land will increase due to the proximity of some of these infrastructure projects.

The Taxpayer will be Individual or juristic person who own land or building or Individual or juristic person who are in possession or pedal possession on land or building which belongs to the state. The taxable Property will be Land, Building and Condominium

The Tax base is assessed on the total value of land and building by calculating from the appraised value of land, building and condominium as well as the depreciation rate which specified by the Treasury Department.

Tax rate

The purpose of use Rate
For agriculture  
 – Value ≤ 50 M
 – Value › 50-100 M 0.05%
 – Value › 100 M 0.10%
For residential  
 – The first residence which the value ≤ 50 M
 – The first residence which the value › 50 -100 M 0.05%
 – The first residence which the value › 100 M 0.10%
 – The second residence which the value ≤ 5 M 0.03%
 – The second residence which the value › 5 -10 M 0.05%
 – The second residence which the value › 10 -20 M 0.10%
 – The second residence which the value › 30 -50 M 0.20%
 – The second residence which the value › 50 -100 M 0.25%
 – The second residence which the value › 100 M 0.30%
For commercial or industry  
 – Value ≤ 20 M 0.3%
 – Value › 20-50 M 0.5%
 – Value › 50-100 M 0.7%
 – Value › 100-1,000 M 0.9%
 – Value › 1,000-3,000 M 1.2%
 – Value › 3,000 M 1.5%
Unused properties  
 1st – 3rd year 1%
 4th – 6th year 2%
 ≥ 7th year 3%


According to the Thai Government the law is targeting land speculators and the Finance Minister has confirmed that the new law will help to generate THB 64,3 billion in the first fiscal year. In the private sector the opinions are quite different, on one hand some well know developers such as SET-listed developer Pruksa have confirmed that the new regulation will implement the sale of many land plots and in contrast on the other hand international real estate consultants such as Knight Frank denied that the tax will affect at all the price of the land in Bangkok’s prime locations.

We do not believe that the REITS with assets on retail, office or factories will perceive much the effects of the new regulation but perhaps the Hotel Property Funds will suffer the consequences of this new tax in a difficult context of oversupply of rooms due to AirBnB business model implementation in cities such as Bangkok or Phuket.

Phorn Patimon, Senior Associate at Juslaws & Consult

Jose Herrera, Partner at Juslaws & Consult

Class Action Proceeding in Thailand

11 Oct Class Action Proceeding in Thailand

On 8th April 2015 the amendment of the Civil Procedure Code B.E. 2558 (2015) was promulgated in the Royal Thai Government Gazette. This amendment to the Civil Procedure Code introduced class actions, a type of lawsuit which is new to the Thai legal system.

Originating from Anglo-Saxon law the class action is a kind of lawsuit in cases with several injured parties who do not all have to start their own legal actions in order to receive a court reward out of the class action case. Therefore, the class action can provide efficiency and facilitate justice in certain cases with a large number of parties. It can bring justice for injured persons who would otherwise not seek compensation. Even small claims of numerous people can add up to a considerable or even huge value of the aggregated claims. The typical model case would be a consumer protection case with many injured individuals against the responsible corporation. In theory class actions strengthen the procedural rights of less privileged social groups. Can the practice of class action in Thailand keep this promise? We will monitor class action cases.

The initial concept of draft law on Class Action Act was mainly adopted from the United States Federal Rules of Civil Procedure. It might be worth to carefully study the application of the US class action law in Thailand as class actions until now foreign to the Thai legal system are well-established in the United States. This even more as the new Thai class action is surprisingly vague regarding central issues, e.g. regarding the group of people who shall be bound and entitled by the class action called “class members” under the new law (the new law contains a provision for the opting-out of class members, but is not clear as to whether a person will be a class member eo ipso by fulfilling the statutory requirements or whether a constitutional act is required).

On the other hand the new class action amendment contains provisions for the procedure during and in preparation of court hearings, e.g. regarding evidence owned by the counterparty, the testimony and questioning of parties, matters in dispute etc. which in such detail are not even regulated in the Thai Civil Procedure Code for all other types of procedures which involve no class action.

There are limitations as to what extent US interpretations and precedents can be used to interpret the new Thai class action law, as the common law system of the US is based on different principles and a different legal culture than the Thai system which follows the continental-European civil law.

The introduction of the class action into the Thai Civil Procedure Code amounts to an exception to the fundamental principle that the right to sue lies only with the party who is affected in their own rights. This principle which is comparable to the Anglo-Saxon “locus standi” governs the Thai civil procedure as prescribed in Section 55 of the Thai Civil Procedure Code: only the persons whose rights are involved is entitled to submit a lawsuit to a civil court. By contrast, under the new class action law a plaintiff and the plaintiff’s attorney will have an extraordinary leading role and submit a lawsuit for all “class members” who will be bound by the decisions of the court in the class action case. This also means that the class members will automatically forfeit their rights to bring a new lawsuit as Section 144 of the Civil Procedure Code prescribes that an adjudicated case may generally not tried again. If a person regarded as a class member wishes to avoid being bound by the class action case, they would need to formally opt-out.

The class action lawsuits which may be filed must involve wrongful acts or breach of contracts or other forms of losses arising from specific laws; environment law, consumer protection law, security and exchange law, competition law and labor law as well.

The plaintiff of class members can file a lawsuit together with a request to commence a class action to the Court. Thereafter, the Judge will consider and send the copy of those to the defendant. If the request is approved, the Judge will send the notice to class members and publish on the well-known newspaper 3 days continually so in case any member would exclude from this class (opt-out), shall send a correspondence to the Court within the prescribed period. The notice shall include the important information i.e. the rights of the class member, binding of final judgment, detail of Court and case.



1.  What is the class action?

Class action is a special kind of lawsuit which allows to bring claims of many people who will not all become plaintiffs themselves to a civil court, typically in cases with many injured people or consumer cases.


2. What is the definition of “Class” under this law?

A group of persons (more than 2 persons) having identical rights arising from common issues of fact and law and possessing identical characteristics that are specific to the class even if there are variations in the type of damages suffered by each person.


3. Which is the Court jurisdiction for this class action?

All Courts of Justice (except District Court) e.g. Civil Court, Provincial Court, Tax Court, Labor Court, Central Intellectual Property and International Trade Court etc. but not includes Administrative Court and Constitutional Court.


4. What is prescription period under this law?

The prescription period depends on the kind of claim as regulated in the Civil and Commercial Code. Once the Court allows to proceed in class action, a prescription of each class member will stop running when the class action suit was filed.


5. How to opt-out of the class?

– Giving a notice of opting-out of the class to the Court within the prescribed period which specified in the notice which sent by the Court to each member;

– If failure to give notice to opt-out of the class after the expiration of the period prescribed by the Court, he/she shall request the leave to the Court and be allowed.


6. What is the effect after opting-out of the class?

If he/she opted-out of the class, he/she has the right to file a separate individual lawsuit on own behalf, but not in the form of class action. Moreover, he/she cannot file a motion to intervene or join as a plaintiff in the class action.


7. Will the defendant notice about the class action proceeding?

Yes, the Court will send the lawsuit together with a request of class action to the defendant. Thereafter, the Court will question both parties before approving the class action proceeding.


8. What is the condition for class action proceeding?

The Court will allow to proceed as a class action if found that:

1. The case and allegations on which its bases its case are clear and are equally applicable to both the plaintiff and the class members;

2. The plaintiff can demonstrate specific and sufficient identical characteristics apply to the Class;

3. The number of class members is numerous and it would be burdensome and inconvenient if proceeding under non-class action;

4. Proceeding under class action would provide justice more efficiently than proceeding under the non-Class Action; and

5. The plaintiff can sufficiently demonstrate that he/she is one of the class members and meets the qualifications of the law; and that the plaintiff and the plaintiff’s attorney will represent the class effectively and fairly.

9. Who is the class representative and what’s her/his role?

A class representative will be appointed by the class members to be a plaintiff. The class representative must share a common cause of action and have common arguments with the class member.

He/she would exercise due diligence in guarding the interests of the class since the interests of the class representative coincide with those of the class, and in guarding those interests, the claims and arguments raised by the class representative would also be beneficial to the class.

10. What’s the role of plaintiff’s attorney?

The plaintiff’s attorney is the person who prepares the list of injured person who suffered damages from the same facts and laws. The plaintiff’s attorney also files evidence and advance all expenses pertaining to the costs of proceedings, which includes the cost of seeking evidence and costs of publicizing and sending notices of the class action to class members.

11. What’s the enforcement procedure in class action?

The judgment will bind plaintiff and all class members, however, each member cannot enforce it by him/herself because the Director General of the Department of Legal Execution would make arrangements with respect to enforcement of the class action judgment whereby a class member can submit an application for repayment of the judgment debt from a legal execution officer within the time period prescribed by the Court.

However, a class member has the right to file an objection to another class member’s application for repayment of judgment debt. If an objection is filed against a class member’s application, the legal execution officer should conduct an inquiry hearing and make one of the following orders:

1. Dismiss the application for repayment of judgment debt

2. Grant full repayment

3. Grant partial repayment

Tax Incentive for New Start Up business in Thailand

14 Sep Tax Incentive for New Start Up business in Thailand

On 21st April 2016, Royal Decree (No. 602), by the Government’s resolution, was promulgated in order to support and promote the Small and Medium Enterprises (“SMEs”) which uses technology and innovation in the target activities for driving an economy, building a strength and increasing the competitive ability of Thailand.

Thus, a corporate income tax exemption on profit derived from target activities for the five accounting periods will be provided to the company or juristic partnership which established between 1st October 2015 and 31st December 2016 with the registered paid-up capital on the last day of the accounting period of not more than THB 5 million and its income for the sale of goods and service must not exceed THB 30 million, moreover, not less than 80% of its total income must derive from the sales of goods and/or service in “New Engine of Growth” business or from the connected business thereof.

To be eligible for this exemption, the operator must register to be “New Start Up” with Revenue Department within 31st December 2017.

What is New Engine of Growth business?

New Engine of Growth business is the industrial business which technological base will be used for producing and providing service and those business shall be certified by National Science and Technology Development Agency (“NSTDA”). The following are the industrial businesses which are entitled to obtain the tax incentives.

  1. Food and Agriculture
  2. Saving energy, Producing of alternative and clean energies
  3. Biotechnology Base
  4. Medical and Public Health
  5. Tourism, Service and Creative Economy
  6. Advanced Materials
  7. Textile, Garment and Decorations
  8. Automotive and Parts
  9. Electronic, Computer, Software and Information Service
  10. Research, Development and Innovation or New Industrial

Below is the example of “technologies” which are based for producing and providing service in the target activities.

No. Technology Type of business which can be applied
1 3D Printing Technology/ Rapid Prototyoing

– Medical and Public Health

– Tourism, Service and Creative Economy

– Advanced Materials

– Automotive and Parts

– Research, Development and Innovation or New Industrial

2 Adsorption Technology

– Saving energy, Producing of alternative and clean energies

– Automotive and Parts

3 Advanced Bioprocessing Technology

– Food and Agriculture

– Saving energy, Producing of alternative and clean energies

– Biotechnology Base

– Medical and Public Health

4 Advanced Catalyst Technology

– Saving energy, Producing of alternative and clean energies

– Advanced Materials

5 Advanced Materials Forming Process

– Advanced Materials

– Electronic, Computer, Software and Information Service

– Automotive and Parts

6 Artificial Intelligence Technology

– Tourism, Service and Creative Economy

– Electronic, Computer, Software and Information Service

7 Automation Technology

– Medical and Public Health

– Automotive and Parts

– Food and Agriculture

– Electronic, Computer, Software and Information Service

8 Big Data Analytics Technology

– Biotechnology Base

– Electronic, Computer, Software and Information Service

9 Bio-Analytical

– Medical and Public Health

– Biotechnology Base

10 Biodegradable Materials Technology

– Advanced Materials

– Medical and Public Health

11 Bioinformatics

– Food and Agriculture

– Biotechnology Base

12 Biomaterial Production Technology

– Medical and Public Health

– Biotechnology Base

13 Cell Culture and Tissue Engineering Technology

– Medical and Public Health

– Biotechnology Base

14 Cleaner Technology

– Saving energy, Producing of alternative and clean energies

15 Composite Materials Technology

– Advanced Materials

– Automotive and Parts

16 Decentralized Sequential Transaction Database

– Tourism, Service and Creative Economy

– Electronic, Computer, Software and Information Service

17 Digital Engineering and Manufacturing Technology – Advanced Materials

– Automotive and Parts

– Research, Development and Innovation or New Industrial

18 Drug Delivery System

– Medical and Public Health

– Food and Agriculture

19 Electric Vehicle Technology

– Automotive and Parts

– Saving energy, Producing of alternative and clean energies

20 Embedded Technology

– Electronic, Computer, Software and Information Service

21 Energy Storage

– Saving energy, Producing of alternative and clean energies

22 Functional Materials Technology

– Textile, Garment and Decorations

– Automotive and Parts

– Electronic, Computer, Software and Information Service

– Food and Agriculture

23 Gene and Molecular Technology

– Food and Agriculture

– Medical and Public Health

– Biotechnology Base

24 Genetic Engineering Technology

– Food and Agriculture

– Biotechnology Base

25 Human Computer Interaction Technology/ Brian Computer Interface

– Electronic, Computer, Software and Information Service

– Medical and Public Health

– Tourism, Service and Creative Economy

26 Internet of things Technology

– Food and Agriculture

– Saving energy, Producing of alternative and clean energies

27 Material Characterization Technology

– Medical and Public Health

– Food and Agriculture

– Research, Development and Innovation or New Industrial

28 Membrane Technology

– Saving energy, Producing of alternative and clean energies

– Medical and Public Health

– Food and Agriculture

29 Metrology, Standardization, Testing Quality Assurance (MSTQ) related Technology

– Research, Development and Innovation or New Industrial

30 Nano-Characterization and Testing

– Medical and Public Health

– Food and Agriculture

– Research, Development and Innovation or New Industrial

– Electronic, Computer, Software and Information Service

31 Nano-encapsulation

– Medical and Public Health

– Food and Agriculture

32 Nanofiber Technology

– Textile, Garment and Decorations

– Advanced Materials

33 Nanomaterials Syntheses – Saving energy, Producing of alternative and clean energies

– Medical and Public Health

– Food and Agriculture

34 Nanostructure Fabrication (Top down, Bottom up)

– Advanced Materials

– Electronic, Computer, Software and Information Service

– Saving energy, Producing of alternative and clean energies

– Research, Development and Innovation or New Industrial

35 Natural Language Processing Technology

– Electronic, Computer, Software and Information Service

36 Omics Technology

– Medical and Public Health

– Food and Agriculture

– Biotechnology Base

37 Photonics & Optical Technology

– Electronic, Computer, Software and Information Service

38 Pre-Clinical & Clinical Testing Technology

– Medical and Public Health

– Research, Development and Innovation or New Industrial

39 Photovoltic Technology

– Saving energy, Producing of alternative and clean energies

40 Printed Electronics and Organic Electronics

– Medical and Public Health

– Food and Agriculture

– Electronic, Computer, Software and Information Service

– Textile, Garment and Decorations

41 Robotics Technology

– Medical and Public Health

– Food and Agriculture

– Electronic, Computer, Software and Information Service

– Automotive and Parts

42 Sensor Technology

– Medical and Public Health

– Food and Agriculture

– Electronic, Computer, Software and Information Service

– Automotive and Parts

– Saving energy, Producing of alternative and clean energies

43 Smart Grid

– Electronic, Computer, Software and Information Service

– Automotive and Parts

– Saving energy, Producing of alternative and clean energies

44 Software Testing Technology

– Electronic, Computer, Software and Information Service

– Tourism, Service and Creative Economy

45 Surface Coating/ Surface Engineering Technology

– Food and Agriculture

– Electronic, Computer, Software and Information Service

– Automotive and Parts

– Textile, Garment and Decorations

46 Thermal Solar Technology

– Saving energy, Producing of alternative and clean energies

47 Virtual & Augmented Reality Technology

– Electronic, Computer, Software and Information Service

– Tourism, Service and Creative Economy

48 Waste Treatment Technology

– Saving energy, Producing of alternative and clean energies

49 Werable Technology

– Medical and Public Health

– Electronic, Computer, Software and Information Service

50 Wind Energy Technology

– Saving energy, Producing of alternative and clean energies


Please contact Juslaws & Consult at for further information and details.

New Surrogacy Law in Thailand

12 Sep New Surrogacy Law in Thailand

Thailand has now a law pertaining directly to surrogacy, i.e. the practice that a woman who is not necessarily the genetic mother of an unborn carries the pregnancy for intended parents. The Act Providing Protection for Children Born through Assisted Reproductive Technologies (ART) was enacted in 2015 (B.E. 2558). Surrogacy is prohibited in some jurisdictions and allows in others and in others it is only allowed for altruistic purposes. It is criticized over ethical concerns and concerns regarding the child. In Thailand in particular this practice has been problematic as it was connected to human trafficking. Another question is who will be the mother of the child: the surrogate mother or the genetic mother.The new Thai surrogacy law seems to put Thailand into the group of countries where surrogacy is permitted only for altruistic purposes as Section 24 prescribes that surrogacy shall not be performed for commercial purposes. Furthermore, a committee comprising experts in various medical fields has to approve each case of surrogacy.The Thai Civil and Commercial Code contains many rules concerning paternity but does not say much about who is the legal mother of a child except in Section 1546 CCC which states that the child born of the woman being not married to a man shall be deemed to be the legitimate child of that woman unless otherwise prescribed by the law. In the old days it was in most cases clear who would be the legal mother of a child (the woman who has given birth to the child) as opposed to the question of paternity which has always been uncertain.With the new reproductive technologies legal maternity must be determined by the law as one child might have three different “mothers”: the genetic mother, the mother who has given birth and a social mother. In jurisdictions where surrogacy is prohibited such as in Germany the woman who has given birth to a child is regarded the mother of that child even if it is not the genetic mother. The new Thai law determines this question differently: According to Section 29 of the Act Providing Protection for Children Born through Assisted Reproductive Technologies (ART) a child will be the legal child of the intended parents who must be a married couple. Under Section 33 it is even prohibited to the applicant parents to deny their parentage.

What will be the legal relationship between the surrogate mother and the child she has given birth to? The law says relatively little about this except for the case where both intended parents die before birth. It stipulates in Section 29 paragraph 2 that the genetic parents shall have no rights and obligations with regard to the child. This is confusing because at least one of the genetic parents is at the same time the applicant parent according to Section 22 who then will be the legal parent.

Juslaws & Consult offers a free translation of the Act Providing Protection for Children Born through Assisted Reproductive Technologies (ART) as an unofficial translation. Please note that only the Thai version of the law is authoritative and we take no responsibility for the correctness of the translation.

 Money Transfer: Regulations, Tax and Fees

02 Sep Money Transfer: Regulations, Tax and Fees

Part 1:  Exchange Control Regulations in Thailand

a. Rules and Regulations

The legal basis for exchange control in Thailand is derived from the Exchange Control Act (B.E. 2485) and Ministerial Regulation No. 13 (B.E. 2497) issued under the Exchange Control Act. These laws set out the principles of controls under which Notifications of the Ministry of Finance and Notices of the Competent Officer are issued.

b. Administration

The Bank of Thailand has been entrusted by the Ministry of Finance with the responsibility of administering foreign exchange. The governor of the Bank of Thailand shall appoint the officials of the Bank of Thailand as the Competent Officers under the Exchange Control Act (B.E. 2485).

c. Currency Regulations

Foreign currencies can be transferred or brought into Thailand without limit.  Any person receiving foreign currencies from abroad is required to repatriate such funds immediately and sell to an authorized bank or deposit them in a foreign currency account with an authorized bank within 360 days of receipt, except for foreigners temporarily staying in Thailand for not more than three months, foreign embassies, international organizations including their staff with diplomatic privileges and immunities, and Thai emigrants who are permanent residents abroad or working abroad.

Purchase of foreign currency from authorized banks is generally allowed upon submission of documents indicating international trade and investment. Companies in Thailand can engage in derivatives transactions with authorized banks to hedge against foreign exchange risk provided that supporting documents indicating future foreign currency receipts or obligations are submitted.

d. Bank deposit

Regarding Bank Deposit regulation, Bank of Thailand distinguishes the Foreign Currency Account of Thai Residents, the Foreign Currency Account of Nonresidents, and the Nonresident Baht Account.

1.       Foreign Currency Account of Thai Residents

Thai residents are allowed to maintain foreign currency accounts with authorized banks, and deposit or withdraw funds from such accounts under the following conditions:


Foreign currencies originating from abroad (foreign-source) can be deposited into foreign currency accounts without limit. Foreign currencies purchased or borrowed from authorized banks (domestic-source) can be deposited into 2 types of foreign currency accounts:

–  Foreign currency accounts with future obligations: deposits can be made in an amount not exceeding future obligations to pay in foreign currencies to entities abroad.  Such obligations include loan repayment to authorized banks.

–  Foreign currency accounts without future obligations: the total outstanding balance shall not exceed USD 5 million for both a natural person and a juristic person.

–  Deposit of foreign currency notes and coins must not exceed USD 10,000 per person per day.


–  For payment to entities abroad of the account holder’s own obligations or its subsidiaries’ obligations.

–  For payment to authorized banks of the account holder’s own foreign currency liabilities or its subsidiaries’ foreign currency liabilities.

–  For deposit into another foreign currency account of the same account holder.

–  For conversion into another foreign currency, prior to depositing into another foreign currency account of the same account holder or for payment to an entity abroad or for payment of liabilities to an authorized bank.

–  For conversion into baht.

Thai companies having export proceeds in foreign currency from overseas are allowed to transfer funds from their foreign-source foreign currency accounts to deposit into foreign currency accounts of their counterparties in Thailand for payment of goods or services.

2.       Foreign Currency Account of Nonresidents

Nonresidents may maintain foreign currency accounts with authorized banks in Thailand without limit.  The accounts can be freely credited with funds originating from abroad. Payments from Thai residents or borrowing from authorized banks can be deposited subject to supporting evidences.  Balances on such accounts may be freely withdrawn.

3.       Nonresident Baht Account

Nonresidents may open Thai Baht accounts with authorized banks in Thailand as follows:

–  Non-resident Baht Account for Securities (NRBS): The account may be debited or credited for the purpose of investment in securities and other financial instruments such as equity instruments, debt instruments, unit trusts, derivatives transactions traded on the Thailand Futures Exchange and the Agricultural Futures Exchange of Thailand.

–  Non-resident Baht Account (NRBA): The account may be debited or credited for general purposes (i.e. other than investment in securities) such as trade, services, foreign direct investment, investment in immovable assets, and loans.

–  The total daily outstanding balances for each type of account shall not exceed THB 300 million per nonresident.  Transfers between different types of accounts are not allowed.


a. Bank transfer fees

If you need to transfer large amounts of money at once, or need bank records of your transfers (like a TT3 for buying property) then transferring money from a foreign bank account may be the best answer.  You can move money from a foreign bank account to a Thai one via 3 different methods: wire transfer, cheque, or bank draft.

1 Transfer bank to bank

When transferring funds into a Thai Bank account from abroad via SWIFT, remember to have the below information on hand:

–  The account number

–  The account name

– The address of the bank branch (if required by the remitting bank abroad)

– Bangkok Bank’s SWIFT

Depending on the amount and the banks involved the transfer could cost anywhere from a minimum of THB 200 to THB 2,400 for very large transfers, and it may take several days. If the amount involved is greater than USD 50,000, the Thai bank will require the recipient to complete a Foreign Exchange Transaction Form when the funds arrive. There are fees taken from both the receiving and sending banks.

2 Cheque

Some Thai banks will accept foreign cheque, so though you can send a cheque to cash in a Thai account, you need to be sure that the receiving bank will take the cheque. Processing cheque can take between 4-6 weeks and accrue charges up to 2,000 THB.

Bank drafts can be prepared by your home bank and sent to a Thai bank account.  The processing takes only 3-7 days and fees for any amount tend not to exceed 1200 THB.  An international money order, which is different only in that the certificate is pre-paid, can also be used but again may not be accepted by all banks.

3 Wire transfer services

Western Union, MoneyGram and transfer wise are three wire transfer services that are extremely quick, handling transfers from abroad to Thailand in a matter of minutes.

Western Union is the fastest way to send money but is the most expensive way with even 20% on small amounts. MoneyGram works just like Western Union but you get a better exchange rate with MoneyGram and lower fees, compared to Western Union. Transfer wise remain cheaper than the two others mentioned above.

b. Currency conversion charge

Additionally, your bank will make more money by adding a margin on the exchange rate.

The exchange rate is the rate at which banks and brokers buy and sell money to each other. Private individuals and small-to-medium-sized businesses cannot access these rates. Remember exchange rates often change by the minute, so to compare providers properly you need to do it one after the other.

The rate you are offered will be dependent upon a number of factors including:

–  The amount of money you are transferring

–  The time-frames you are working to (i.e. whether you are looking to lock into an exchange rate for up to 12 months)

–  The currencies you are buying and selling and the volatility of those currencies

–  The exchange rate levels at the time of purchase

c. Transfer fund in order to purchase a condominium

As mentioned in our previous Newsletter: Buying a condominium in Thailand, there are no restrictions on nationality and every foreigner (there are no visa-class requirements) can buy and own a condo unit within the foreign ownership quota of the condominium but only two conditions to acquire 100% :

1)      The ratio of foreign ownership must not exceed 49% of the total floor area of all units combined. The law looks at the whole condominium building or condominium project.

2)      Additionally, the foreign individual or foreign company who wishes to acquire 100% must personally qualify for ownership under section 19 of the Condominium Act.

Usually this means that the purchase price for the condo must have been transferred into Thailand as foreign currency and exchanged into Thai baht by a licensed financial institution inside Thailand.

Under the 1991 Condominium Act, non-residents who purchase condominium units must transfer the funds to pay for the unit from overseas, with the money entering Thailand as foreign currency. Purchasers need to obtain a “Foreign Exchange Transaction Form” certificate for each payment from the beneficiary bank, and all these certificates must be shown to the Land Department in order to register the condominium.


For foreigners to be eligible to purchase a condominium unit in Thailand, they must present proof to the Department of Lands that the funds have been remitted from overseas in foreign currency. Without such proof, the Department of Lands will not register the transfer of ownership to the foreign buyer.

In this process, 4 conditions must be respected:

1.       Remittance must be sent in exactly (to the letter) the same name as appearing on the purchase contract. If the buyers are two individuals, then two names should appear on the contract and two separate remittances should be made by such two persons, in equal amounts

2.       Transfer of funds must be made in foreign currency only and not in Thai baht

3.       The purpose of the remittance must be stated on the remittance advice. This should be: For the purchase of buying a condominium, unit…… In tower……. In the project”

4.       Money transfer :There are 2 options to transfer money to the developer as describe bellow:

–  Transfer the funds into la local bank account of the buyer in Thailand in the prescribed format as outlined above, and execute a domestic transfer of this amount onwards to the Developer. In this case, the buyer must request the local bank of the buyer to issue the Foreign Exchange Transaction Form. The amounts transferred should be at or greater than USD 50.000 in order to automatically qualify for a Foreign Exchange Form. The buyer must request this document directly to a Thai Bank. If the amount is less than USD 50.000, the buyer must send a letter to the bank who will in turn send you a letter confirming the purpose of the remittance is for purchasing a condominium unit. Please note that without providing either the foreign Exchange Transaction Form or the letter from the bank, the lands Department will not register the transfer of the condominium unit into your name.

–  Transfer the funds directly to the developer’s bank account in the prescribed format, and the Developer will arrange for the foreign exchange transaction form to be issued by the Developer’s Bank.



Taxation is another factor that needs to be taken into account when making your purchase. Those considering investing in property in Thailand are often unaware of the taxes that may arise when buying and selling property.

a. Transfer Fee

The transfer Fee applies to purchases of freehold properties. It is equivalent to 2% of the official appraised value of the property. Whether the buyer or the seller pays the Transfer fee depends on the terms agreed to both parties in the sale and purchase agreement. At the date of the ownership transfer, the transfer fee is paid to the District Land Office where the property is located.

b. Specific Business Tax (SBT)

SBT is payable by companies and individuals who wish to sell a property that has been held for less than a period of 5 years. The tax rate is calculated at 3.3% (including municipal tax) of either the sale price or the official appraised value of the property.

c. Stamp duty

Stamp duty is imposed at varying rates on certain legal instruments Stamps duty only applicable in cases where SBT is not applied. Stamp duty does not have to be paid if specific business tax is applicable. The stamp duty in Thailand for the transaction is 0, 5% of the sale price of the property.

d. Withholding tax (WHT)

Where the seller is a company, the WHT is calculated at 1% of either the Land Department’s official appraised value or the contracted sale price (whichever is greater).

If the seller is a company withholding tax is fixed at 1% over the registered sale value or appraised value (whichever is higher). If the seller is a private person withholding tax is calculated at a progressive rate based on the appraised value of the property.

An individual who earns income from selling a property, which includes condominium units, is subject to WHT under the Revenue Code of Thailand. The WHT is calculated at progressive rate based on the official appraised value of the property.

f. The specific business tax

The specific business tax does not need to be paid if the seller is a person and not a company under the following conditions:

– The property is being transferred (gifted) to a church, temple or mosque;

– The property is transferred (gifted) to a government agency;

– The property is transferred to a legitimate child not an adopted child;

– The property is transferred to a legal heir or heir in a will in an estate;

– The seller has had the property for more than 5 years and it was the seller’s principle place of residence and the sellers name is in the house papers for at least 1 year before the sale.


Transfer fees rate= 2% the buyer’s duty or shared
Specific Business Tax rate= 3.3 % the seller’s duty
Stamp duty rate= 0,5%* the seller’s duty
Withholding tax (income) rate= 1% or progressive rate the seller’ duty (as this relate to the seller’s personal or corporate income tax)


Mr. Laurent Benoit, Of Counsel at Juslaws & Consult

Provident Fund Act in Thailand

24 Aug Provident Fund Act in Thailand

One of the most common problems once a middle size company or large company have already started to conduct business in Thailand is how to keep the human assets within the company and avoid the negative effects of “job hopping” among their employees.

Before starting to approach the topic of Provident Fund we have to understand the “sui generis” situation of the labor market in this country where the unemployment Rate in Thailand is normally 1.48 % and have even decreased to 1.01 % in June 2016. Obviously this lead many employees moving from one company to another what implies a tremendous damage for companies that have invested in their employees in terms of high quality trainings, trips and share of know-how.

According to the local statistics, 35% of the Thai employees of any Thai company is actively looking for a new employer and 81% say that the experience with multiple employers is an asset in their career development. This positive impression is totally opposite of the negative perception in other labor markets such as Japan or Europe. The reasons behind this situation are multiple such as low salaries, lack of career path or promotional incentives.

According to my professional experience advising foreign companies to set up subsidiaries in Thailand, one of the main legal element to mitigate the negative effects of job hopping in Thailand is the provident fund. The Provident fund in Thailand is voluntarily established by both, the employer and the employees, consisting of the contributions from both parties call “Employer’s contribution & Employees contribution”. Provident Fund is on a voluntary basis which jointly set up by employees and employer. The purpose of the fund is to encourage savings and provide benefits for employees and their families in case of deaths in the event of the employees’ retirements, disabilities, or resignation from the company.

The Provident Fund is stablished as a juristic person and registered. After the appointment of the fund management company, the fund must be registered to the Securities and Exchange Commission (SEC).

In terms of compliance, generally the checklist of documents required for Fund registration are usually:

– Provident Fund Registration Requested Form

– Pay Day Form

– Regulations of the Fund

– Lists of Authorized Fund Committee Members and Signature Specimen

– Agreement of Appointment of Fund Management Company

– Memorandum of Associates

– Minutes of Company’s Board of Directors to appoint and elected the Fund Committee Members

– Delivering the reports and document form

The fund committee which comprises of representative elected by employees and representative appointed by the employer is responsible for supervising the management of the fund such as appoint fund management company, custodian, auditor and coordinate with other parties regarding to the fund.

The process of setting up a registered Provident Fund follows these steps:

A) Fund Management company selection process

B) Draft and send a confirmation letter to the Fund Management Company that is chosen

C) Drafting own regulations of the fund and prepare registration documents

D) Documents and regulations are submitted to the Register office.

E) The Register Office will study the documents and will register the fund

F) Deposit of first monthly contributions

The main two objectives are: 1) to promote the saving of employees 2) to provide the members and their families the guarantee of future security in case of resignation, retirement, disability or death. The involved parties are: the company or employer, Staff or employee, Fund Committee (representatives of both employer and employee that administrate the fund affair) and the Asset Management Company. Normally the employee’s contribution goes from 2 to 15% of the salary.

Finally note that that the articles of association can estipulate the benefits of the provident fund using a vesting scale based on years of service or years of membership with a scale of % in case of finalizing the work relationship before retirement. In case of termination of the work relationship with the employer before the stipulated time to get 100%, the portion of % that the employee will not receive will come back to the fund or to the employer (if the second option happens it will be declared as an income for tax reasons).

The philosophy of the Provident Fund is based on risk diversification, instead of deposit money in a bank the fund invest in various financial instruments generating high returns. The fund is managed by a qualified fund manager using the below mentioned financial instruments:

-Equity Instruments

-Fix Income Instruments

-Deposit, Treasury bills

-Convertible financial instruments


-Other types of securities or asset which are allowed to invest by SEC

On the regulation, when the employer and the employer’s employees agree to establish the Provident Fund, the employer has to set up terms and conditions for the fund, for example, the eligibility, termination of membership, payment condition of the company’s portion and employees’ and employer’s contribution rate.

According to Thai Law, the management of the fund shall be carried out by “Fund Management Company”, who is not the employer itself and has qualifications as specified by pertinent regulator. Therefore the fund will become a juristic person and completely separated from the employer. In other words the registered provident fund will have its own legal entity separated from the employer but also from the fund management company.

The Provident Fund Act stipulates the following documents in order to register the fund:

-Minutes of the Board of Directors for the fund registration

-Minutes of the Fund Committees

-Signature of the fund committee and authorized signatory committee

-Fund Regulation

-Application of fund registration

-Company Certification from Ministry of Commerce

-Affirmation of the fund registration

-Other documents that is required by the fund registrar

These are key benefits for the employer by having a Provident Fund in Thailand:

-Encourage the employee loyalty to the employer, which results in work effectiveness and efficiency. The Provident Fund incentive the employees to work with the employer for a longer period and stop the harmful the high rate of “job-hop” in Thailand and protect the data and human assets to remain with the employer in Thailand.

-Generally speaking, the Provident Fund will establish in its articles of association a vesting scale in order to keep the employees in the employer based in years of service. Usually if the employee leaves the company before 3 years the employee will get 0% from the fund and if he/she works 10 years onwards the employee will receive 100%.

-Human resources and recruiting departments of companies in Thailand spend a big amount of money hiring new staff when an employee decides to leave. In this case a provident fund can reduce the expenses of the employer on this field.

-Unlike pension fund which may cause difficulties in preparing the cash budget for resigned or retired employees, under PVD, an employer’s monthly contribution is defined as the benefits that a company provides for employees; and when the employees resign or retire, they will receive the payment directly from the fund not from the employer. Consequently, the company’s cash flow will be smoothening.

-The employer’s contribution is tax deductible. It is treated as an expense item of the company. The limit is a 15% of annual company’s wage expenditure. The employer contribution to the fund is classified as an expense which is taxable expenditure in the same accounting period that company remits the contribution into the fund.

-Reduce company works and maximize the benefit from the investment. It will clearly contribute to Thailand development and growth.

On the other hand the benefits of Provident Fund for the employees:

-The employee receives an extra income from the employer.

-Encourage retirement savings among employees.

-Future security of the employees and their families in case of resignation, retirement, disability or death.

-Tax benefits.

-Provident Funds are managed by professionals

There are 3 tax benefits. First on monthly contributions. Second on return from investment. Third on amount received upon resignation.

a)  On monthly contribution. The total amount of employee’s contribution paid to the fund is tax deductible for up to 500,000 THB per year. First, the employee’s contribution can be used for tax allowance up to 10,000 THB. Second, the remaining amount in excess of 10,000 THB but less than 490,000 THB is subjected to tax exemption.

b)  On return from investment. Interests and dividends received from investment are tax exempted.

c)  On the amount received upon resignation. The lump sum amount received from the fund that are taxable includes: 1) The employer contribution 2) Benefit of employer’s contribution 3) Benefit of employee’s contribution. The employee’s contribution (2-15% of salary) is tax free. The benefit of employee’s contribution, the employer’s contribution and the benefits of employer’s contribution is considered taxable income with tax reduction. When employees have at least 5 years of service the lumps sum amount received from the fund is subjected to special tax deduction, using this formula: Step 1, Deductible = 7,000 x years of service. Step 2, 50% of the remaining.

The lump sum amount received from the Provident Fund has this tax benefits:

If there are less than 5 years of service, it is not tax deductible. The amount received must be taxed as usual.

If there is no retirement and the year of service are 5 or more than 5, it is tax deductible.

If there is employment termination (55 years old or more) and 5 or more years of membership, then it is tax free and therefore there is no tax calculation.

Last 11th of August the new Provident Fund Act (No. 4) 2558 B.E. (2015) was published and modified certain aspects from the previous law such as the employee can make higher contributions than the employer, the Finance Minister can allow employees and employers to stop or postpone submitting contributions for no more than 1 year in case of crisis, an employee who is 55 years old who is going to retire can receive payments that will be tax exempted if the employee has been member of the fund for more than 5 years.

Mr. Jose Herrera, Partner at Juslaws & Consult

Ms. Phorn Patimon, Senior Associate at Juslaws & Consult

Legal Aspects on renting out a condominium unit on AirBnB in Thailand

18 Aug Legal Aspects on renting out a condominium unit on AirBnB in Thailand

State agencies in Phuket recently warned condominium owners that renting out a condominium unit on daily basis using AirBnB might violate the Hotel Act. Furthermore, Land and House Tax and Personal Income Tax is rarely paid on such rental income (if not on any rental income). As if that wasn’t bad enough, renting out on a daily basis might in some cases be regarded as conducting a commercial business and consequently violate the Condominium Act, which forbids commercial activities, and in the case of foreigners the Foreign Business Act.

From a political perspective AirBnB has been criticized for various reasons in many jurisdictions worldwide: short-term renting to tourists is regarded as a misuse of limited rental space and takes away affordable apartments from the locals, it is regarded as unfair competition for hotel operators who have to comply with many requirements and pay taxes, and amounts to bypassing consumer protection regulations.

AirBnB tenants might not enjoy the standard of safety which they can expect in a hotel in case of accidents or disputes with the landlord. For example, under Sections 674 to 679 of the Thai Civil and Commercial Code (CCC) a hotel is liable for any loss or damage suffered by its guests, even if such loss or damage was caused by strangers, and it is not clear whether the Thai courts would apply these sections in the case where a condominium unit is rented out.

Finally, other co-owners often feel that frequent arrivals of new AirBnB tenants negatively affect the quality of life in the condominium in many regards.

The advocates of AirBnB reply that AirBnB is a success story. It was called one of the highest valued start-ups worldwide with a value of 30 billion USD. It offers affordable accommodation to budget-travelers and contributes to the growth of local economies, and is even increasingly popular with business travelers who wish to go local. It plays an increasingly important role also in Thailand’s hospitality sector, especially in Bangkok and in Phuket, and even though regarded as illegal by some, the law is rarely enforced by state authorities. However, all these are factual arguments and say nothing about the legality of AirBnB’s success in Thailand. Are there legal arguments which can be cited in defense of the short-term rental which became so popular thanks to AirBnB? And in what cases exactly is renting out a condominium illegal in Thailand?

The most fundamental legal provision in this context is Section 1336 of the CCC which provides that within the limits of the law, the owner of property has the right to use the property and is entitled to its fruits. And for co-ownership Section 1360 of the CCC sets forth 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.

What are the “limits of the law” and the limits deriving from the rights of other co-owners when it comes to daily rentals in condominiums? Please note that we could not find any precedent court decision which would clarify the issues as discussed below. So we can only point out the statutory framework.

1.      Limitations under the Condominium Act

Unfortunately the Condominium Act provides relatively little clarification as to what this means for the rights and obligations of co-owners in a condominium regarding their relationships towards each other. Still, it contains provisions regarding the management, the Condominium Regulations, juristic condominium, co-owners’ general meetings and resolutions.

And according to Section 17/7 no commercial trading shall be conducted in a condominium building except in the commercial area specified in paragraph one. According to Section 65 whoever violates Section 17/1 shall be penalized with a fine of not more than fifty thousand baht and the offender shall be further penalized with a daily fine of not more than five thousand baht throughout the period of violation or not complying with such provisions.

2.      Limitations under the Hotel Act

The Hotel Act requires that a special Hotel License must be obtained before operating a hotel. For operating a hotel without license the Hotel Act imposes imprisonment of not more than one year or a fine of not more than 20,000 Baht or both and a fine of not more than 10,000 Baht for each day of violation.

The Hotel Act defines hotel as a the place established for business purposes providing temporary residence against remuneration, but according to Section 4 (b) excludes places which are rented out on a monthly basis.

This is good news for all condominium owners as it means that they can rent out their place on a monthly basis without worrying about a Hotel License. The Hotel Act might still apply to condominium owners who rent out on a daily basis, typically using AirBnB which has facilitated short-term rental for everyone, enabling any condo owner to operate his own small “hotel”.

The Ministerial Regulation to the Hotel Act of 2005 contains an exemption for certain places which has given rise to a passionate discussion whether these exemptions from the Hotel Act also apply to condominium owners renting out their places on short – term basis:

“Any residential premises open to the public for rental with no more than 4 rooms on all floors in aggregate whether in a single building or in 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 Hotel Act. The owners of such premises are also required to report to the Hotel Registrar but do not require a Hotel License and do not have to comply with all requirements for hotels.

The controversial issue is: does “residential premises” refer to each condominium unit or to the whole condominium meaning the entire building? This legal issue has not yet been clarified in a court decision as far as we can see.

3.      Can a condominium apply for a Hotel License

If a condominium is to be rented out on a daily basis as on AirBnB, one might consider applying for a Hotel License in order to legalize such “condotel”.

This is possible in theory, but the requirements for obtaining a Hotel License are considerable. In order to be eligible, the hotel would not only have to have a qualified hotel manager but also to comply with the Building Control Act and have a Building Permit and Use Certificate which need to state that the building can be used as a hotel. If the Building Certificate and the Use Certificate do not cover such use, these permits can be changed, if the existing building fulfils the fire and other safety requirements for hotels which are higher than for condominiums.

4.      What taxes are levied on rental income

By Thai tax law rental income is subject to the current House and Land Tax with a rate of 12.5% and to Personal Income Tax with progressive rates (withholding tax rate 5% at source or 15% if the rent is transferred abroad unless a double taxation agreement provides otherwise). The House and Land Tax can normally be deducted from the assessable income of the Personal Income Tax.

5.      Legal recourse against co-owners renting out on a daily basis?

This question has been brought up by some co-owners who find that the renting out on a daily basis interferes with their enjoyment of the common areas in a condominium for various reasons.

The Thai Civil and Commercial Code contains provisions which protect the co-owner against excessive disturbance and damage. The affected co-owner can sue his renting out neighbor in a civil lawsuit seeking damages or an injunction order.

But what if the disturbance does not reach the threshold of disturbance and damage caused by the renting out which must be proven and must be substantial enough? Has the co-owner who is unhappy about the coming and going of AirBnB tenants any rights?

Supposed renting out on AirBnB actually violates the Hotel Act, can the co-owner invoke the Hotel Act and derive individual rights from it? He can surely bring a violation to the attention of the competent authorities and hope that they enforce the Hotel Act; but a complaint on grounds that the Hotel Act is violated filed by an annoyed co-owner would most likely not be found admissible by a court. But a complaint might be admissible on grounds that contractual obligations are breached or the Condominium Regulations are violated.

Therefore, our recommendation to co-owners and juristic condominiums who dislike AirBnB would be to draft and approve regulations which forbid renting out of units on a daily basis, or to seek a reconciliation of interest between the interest of renting out a property and the interest of the neighbors who disapprove of such renting out. Condominium regulations, sales and purchase agreements and hire of property agreements can be drafted to such an effect and will be binding on all parties.

Finally, based on a resolution of the co-owners the juristic condominium can take measures to enforce such resolution, and according to Section 39 of the Condominium Act the juristic condominium may exercise the right of joint-owner covering all the common property in defending it against outside persons or demanding the return of property for the benefit of all joint-owners. Appropriate measures would not violate ownership rights of the co-owners who have subjected themselves to the Condominium Regulations. What measures precisely the juristic condominium can take to enforce Condominium Regulations is to be decided by the courts on a by-case basis.

Phorn Patimon, Senior Associate at Juslaws & Consult

Christian Moser, Senior Associate at Juslaws & Consult

Fine Arts, Art Collectors & Law in Thailand and Asean

05 Aug Fine Arts, Art Collectors & Law in Thailand and Asean

The 21st century is a golden period for the flourishment and expansion of the fine arts not only in Thailand but in South East Asia as a whole. Even though the artistic element of Thai architecture as seen in Buddhist temples and pagodas is widely known (Unesco has added 3 Thai locations to the World Heritage List: Ban Chiang Archaeological Site, Ayutthaya and Sukhothai), Thailand is still a few steps behind other countries in Asia in terms of the art business.

For example, leading positions in the continent are headed almost exclusively by renowned Hong Kong collectors such as William Lim, Adrian Cheng, Joseph Lau and Alan Lau. There are, however, indications of change, as collectors in other regions are emerging such as the Indonesian Budi Tek or the Japanese Shoichiro Fukutake among others.

Despite negative forecast for 2016, since 2010 China has become the world’s leading art marketplace, with other regional hubs growing rapidly in Indonesia (+39%) and Singapore (+22%). There is a growing awareness and interest focused on traditional Chinese, Japanese and Korean ceramic pieces and antiques, as well as an expanding amount of Asian collectors targeting more contemporary art such as Jean-Michel Basquiat art pieces. In China new regulations are being implemented since March 2016 and the necessity of a basic global legal framework for the art business look a must for the professionals of the art world.

According to the Unesco Declaration of 17 October 2003, the international community recognizes the importance of the protection of cultural heritage and reaffirms its commitment to fight to ensure that such cultural heritage may be transmitted to the succeeding generations. Indeed, in my opinion it is impressive that the artistic heritage found in South East Asia has survived the phenomenon of colonialism and decades of cruel war in the continent, and nowadays is one of the most valuable assets for countries in Indochina (For example: Cambodia), reflecting the necessity of cultural diversity for humankind just as biodiversity is for nature.

On a business related note, it is indeed astonishing how the art market is maturing in the Asean region. We can notice how ‘the big two’ auction houses, being Sotheby’s and Christie’s, are maneuvering fiercely with the goal of gaining a strategic foothold in the promising Asian Art market by setting up different business models of legal entities such as Education centers, representative offices, art institutes, salesrooms and art consultants in key cities such as Manila, Jakarta, Kuala Lumpur and Bangkok.

Asean market is the one of the best performing markets for fine arts as the modern and contemporary art market experienced a growth of 28% in sales during 2015. Indeed, it is not a secret that private collectors are maintaining discourse with curators and art merchants, such as the Thai collector Mr. Tira Vanichtheeranont in Bangkok, with the goal of setting up small museums and art institutes across the region. Recently, the Tourism Authority of Thailand openly asserted that main Thai cities need to promote the establishment of museums in order to attract less low budget tourists and catch the attention of more sophisticated or high end tourists.

Evidently, not everything is glamorous in the world of fine arts. The lack of professionalism and credentials are two main weak points for the art sector in the emerging South East Asian market. Evidence of this is the relative abundance of low profile agents and “dealers” with small knowledge or no knowledge of fine arts, often found fighting for commissions that they do not really control or have direct access to.

Many transactions in the art business collapse due to the presence of “middle men” that sell master pieces as they might also sell yachts, luxury villas, diamonds or gold bars. Pablo Picasso said “Art is a lie that makes us realize truth”, which is proving increasingly relevant in a market saturated with unprofessional practices causing falsifications and problems related to the authenticity of pieces.

This is why it is vital to work with professional lawyers and qualified curators with expertise in fine art. Specialized lawyers and curators must work together in conducting comprehensive due diligences prior to the acquisition of pieces by art collectors or museums. It is with this in mind that I would argue that the know-how and know who are as essential as legal expertise and art knowledge in completing such a job.

For example, the curator can draft a price analysis of a piece that is relevant for the collector in order to avoid speculative transactions, even if prices in art differ substantially from other assets, the purchase of collections of art also involves an emotional element that can affect the prospect of the transaction.

As the signature of an artist can change during his or her life, technical analysis by microscope may not be binding and the Certificate of Authenticity (COA) is not necessarily decisive. In my professional experience as a lawyer and art collector I would argue that the main document to take into consideration is the Provenance (from the French word “provenir” that means “to come from”), that is the most important document to assess the genuineness of a piece as it represents the entire life and existence of the piece by including detailed information (dimensions, medium and title) related to the piece, the different owners who possessed the piece, the different museums or art galleries where the piece was exhibited, lot number in catalogs, specific mentions to the piece in books, films and art literature, Catalogues raisonnés, sales or customs receipts acknowledging the piece or appraisals from experts (real experts on the particular artist) or well-known authorities known to have possessed the piece.

Obviously all these documentation comprising the provenance must be original, not a photocopy, and the details have to be confirmed by consultants, both a curator and lawyer, double checking every single detail related to veracity of the referred name, surname and auction house or art gallery.

In order to protect the interests of the collector, lawyers who conduct due diligences on the piece must minimize the risk of litigation, potential disputes or purchase on doubtful pieces. On the scope of work of this due diligence, it is necessary to secure compliance by not giving any chance to trade with stolen art (For example: Protocol to the Convention for the Protection of Cultural Property in the Event of Armed Conflict. The Hague, 14 May 1954 and the Second Protocol to the Hague Convention of 1954 for the Protection of Cultural Property in the Event of Armed Conflict. The Hague, 26 March 1999) or any misconduct or criminal and fraudulent behavior by knowing the client (For Example: Money laundering through art).

In fact I can see that, even if nowadays the big law firms in Thailand have no remote idea about this business, in the future lawyers will involve more on litigation and court proceedings related to art forgery and restitution and recovery of art pieces, sculptures and heritage representing a big variety of institutions such as museums, governments, embassies, insurance companies, art investment funds, patronage, foundations and families. We already have witness this outside of Asia with legal proceedings involved art pieces of Leonardo Da Vinci, Botticelli or Chagall and many other international court cases after the end of the Second World War.

In addition to this, hereby the art lawyer must take in account: jurisdiction and international taxation. For example: a piece purchased from an art gallery in Paris by an Asian collector will carry with it duties and import tariffs that are not present if the same piece was bought in a free trade port, such as Singapore.

The legal work does not finish at this, and it is advisable to work with a legal professional or law firm on issues such as those following:

-Purchase agreement

-Intellectual Property issues

-Insurance (theft or natural disaster)

-Transportation (Export-import)

-Heritage and wills

-Tax planning

To conclude, I would like to point out that the forecast for art business in the South East Asian region is overall very positive and is full of opportunities in the public and private sector for those willing to look. In my opinion, the current trend shows that over time the public sector will increasingly become involved in private sector projects involving art. As a result, legal professionals will have to acquire more familiarity with documentation related to art, and long term private collectors will set up and manage their own highly profitable boutique museums.

At the same time I believe that many new players will burst into the Asian art scene, as fine art can be a more profitable investment than banking and financial service (volatility of art is much lower than US and international equities and commodities). In fact recent statistics show that 72% of the art collectors acquired art guided with an investment perspective. This has to be dully assimilated by the wealth management firms and the investment banks in Asia. The outlook is very promising and I have no doubt that lawyers will play an important role on the future of art business in South East Asia.

Jose Herrera

Partner at Jus Laws & Consult in Bangkok

Offshore Companies

05 Aug Offshore Companies

1) Definition of an Offshore Company

To understand the definition of an offshore company, we should first understand what a “company” is and what is meant by “offshore”. We can then better focus on comprehending an offshore company in detail and how it relates to the financial industry.

We can define a company as any legal entity engaging in legal business activities, such as a proprietorship, partnership, or corporation (either public or private). Companies have various rights under the law. Offshore is a term that means outside of your own jurisdiction. Being across water is not necessary to provide individuals with the benefits of security that come with managing money in this manner. Generally, offshore companies are situated in countries with low or non-existent tax.

An offshore company is a legal entity established in a tax haven or offshore financial center being protected by specific legislation which guarantees a status of full tax exemption, except for a small yearly license fee, and generally a high level of privacy. It is an entity specifically designed to be used by non-residents only.


2) Legal restrictions to set up an Offshore Company

The legal restrictions that offshore companies are subjected to generally prevent them having a fixed establishment in the country in which they were incorporated. For this reason, they are mostly used for activities which are not tied to a specific geographic location. They are also often used as holding companies or as asset protection or investment vehicles for their owners, mainly because of their simplicity of administration, as in the vast majority of jurisdictions it is not required to file annual reports or accounts.

An offshore company may be a company which is incorporated outside the jurisdiction of its primary operations regardless of whether that is an offshore financial center or a non-resident company. It is also any company, resident or non-resident, incorporated in an offshore financial center. For any of these companies, Offshore Company law may apply. Most offshore companies are incorporated to take advantage of: tax planning purpose, confidentiality, cost, legal protection. Most of legitimate uses are: international trading, asset protection, captive insurance, yacht registration, and legal tax avoidance, protection of intellectual property, succession planning or confidentiality.


3) Benefits of an Offshore company

By utilizing an offshore company, it may be possible to secure a number of advantages. There are different criteria to determine how and where a jurisdiction is acceptable for the incorporation of a legal entity, which are summarized briefly in the following:

1.      Favorable Fiscal Regime: An offshore jurisdiction should not have a repressive tax collecting authority and its main contributor to the income of the country should not be the collection of income tax or companies’ profits taxes. The following taxes are not subject to imposition in most Tax Havens:

–      Income tax on foreign income source

–      Capital Gains tax

–      Capital Tax

–      Tax on interest banking income

2.      Strict Anonymity Policies: it is widely considered that at an acceptable offshore jurisdiction the disclosure of the financial or corporate secrets of the company that is incorporated, should result in the wrongdoer being punished or fined.

3.      Stable Government Policies: An offshore company should be in a stable place of business. It should be completely democratic and its rules on corporations must be stable. Also, there should be established protectionist policy relating to foreign investors.

4.      Modern Communication Structure: A country that intends to attract offshore business or operations should have an attractive internet, financial and governmental communication structure. This is to ensure that a person abroad should have full access to their operations.

5.      Easy to Incorporate: The corporations or foundations found in an offshore jurisdiction should conform in less than four business days.



There exist many jurisdictions that are deemed suitable to carry out offshore business, nevertheless, based on our criterion, we will mention only the ones we consider the most important and the most widely used.

1. Panama: The Panama Corporation is governed by the Panama Corporation Statute Law 32 of the 1927 Commercial Code.

Panama enjoys favorable tax laws, operating a territorial tax system under which residents and non-residents are taxed based on income sourced in Panama. The taxable income includes all income derived from business activities in Panama, and there are less expenses incurred wholly and exclusively in the production of assessable income or the conservation of its source. Regarding the company structures, the liability of the shareholders of a Panama Corporation is limited up to the unpaid amount of the shares they hold. The minimum number of shareholders of a Panama Corporation is 2 and the maximum is unlimited. There is no restriction on the residence of the shareholders of a Panama Corporation. Panama Corporation’ shareholders can be individuals and/or legal persons.


2. Seychelles: The International Business Companies Act, 1994, governs the operations of offshore companies.

Seychelles International Business Company (IBC) is the most popular and versatile type of offshore corporation available in Seychelles. Similar to other classic offshore companies, Seychelles IBC is designed to engage in international business. Being an IBC, it is subject to minimum red-tape. While being obliged to keep internal records and registries in good order, a Seychelles IBC does not nave to submit any financial reports to public file. There is also no mandatory audit requirement. A Seychelles IBC, by the definition of the law, is not subject to any tax or duty on income or profits. A shareholder of a Seychelles IBC is also not subject to any tax on his income derived from the IBC. In order to qualify as an IBC, a Seychelles company must satisfy the following criteria:

  1. It may not carry on business in Seychelles.
  2. It may not own real estate in Seychelles.
  3. It may not conduct banking, insurance and registered agent business without a special license.


3. Cayman Islands: Cayman Islands Exempted Companies are governed by the Cayman Islands Companies Law

The Caymans offer a number of tax-free incentives and little financial regulation and oversight. The Cayman Islands do not levy corporation tax, capital gains tax or any other direct tax on companies. The most common type of Cayman Company used for offshore activities is the Exempted Company. The service(s) it provides is to be carried on outside of the Islands. It cannot trade in the Islands with any firm, corporation or person unless furthering its business offshore.


4. British Virgin Island: British Virgin Islands Business Company (BVI BC) is governed by the BVI Business Companies Act 1984 (as amended).

A British Virgin Islands Business Company is exempt from the BVI income tax, the same exemption applies to all dividends, interest, rents, royalties, compensations and other amounts paid by a company, and all capital gains realized with respect to any shares, debt obligations or other securities of the company. No estate, inheritance, succession or gift tax is payable with respect to any shares, debt obligations or other securities of a BVI BC. All transactions and instruments relating to transfers of any type of property of assets, shares, debt obligations or securities to or by a BVI BC are exempt from the stamp duty, with a sole exception for land-ownership transactions in the British Virgin Islands, in which case stamp duty remains payable.


5. Hong Kong: The Hong Kong Private and public Limited Liability Company is governed by the Hong Kong New Companies Ordinance which came into effect on 3 March 2014.

Setting up an offshore company in Hong Kong is an excellent way to house a company’s global corporate profits while minimizing taxes. If there is no trade conducted within Hong Kong, companies will be legally tax exempt if their activities are outside of Hong Kong. Generally, only Hong Kong Source income is subject to Hong Kong profits tax. Incorporation requires only 1 director and 1 shareholder and both can be of any nationality.


6. Singapore: The Singapore Private, Private exempted and Public Limited Liability Company are governed by the Singapore Companies Act.

Holding companies in Singapore are typically registered as private limited companies. Individuals and business entities seeking to establish a holding company as a private limited company must meet the following basic requirements:

–  At least one shareholder and one director that is a Singaporean resident.

–  A company secretary who is a Singaporean Resident

–  The minimum paid-up capital (share capital) for the registration of a Singaporean company is S$1.

–  A physical local address must be provided as the registered address of the company. The address may not be a Post Office Box, and must be approved by the Urban Redevelopment Authority. Residential properties can only be used under the Home Office Scheme.

A company is considered to be tax resident in Singapore if its management and control is exercised in Singapore. Singapore tax resident companies are taxed on all income generated or remitted in Singapore whereas non-Singapore tax resident companies are taxed only on income generated or accrued in Singapore.


7. Bahamas: The Bahamas International Business Company (BIBC) is governed by the International Business Act 2000 and the International Business Companies (Amendment) Act 2004.

The Bahamas are one of the most popular of the Caribbean tax havens. Bahamas International Business Company is the most popular versatile type of offshore corporation available in Bahamas. BIBC can conduct business with Bahamians and may also own Bahamian real estate, but local exchange controls and stamp duty will apply in these cases. The Bahamas does not levy corporation tax. Indeed, A Bahamas International Business Company is exempt from the Bahamas income tax, the same exemption applies to all dividends, interest, rents, royalties, compensations and other amounts paid by a company, and all capital gains realized with respect to any shares, debt obligations or other securities of the company.


8. Isle of Man: The Isle of Man Limited Company is governed by the Companies Act 2006.

Offshore companies in the Isle of Man could be holding investment, e.g. portfolios, commercial property and other companies ‘shares; a Holding intellectual property since the Isle of Man is a signatory to the Paris Convention on Patents and Trademarks. Isle of Man tax resident companies are taxed on their worldwide income whereas non-Isle of Man tax resident companies are taxed only on income generated in the Isle of Man. Tax Advantages of the Isle of Man are as follows:

  • 0% corporate income tax dependent on certain circumstances
  • Dividends made to non-residents are taxed at 0%
  • No capital gains tax
  • No stamp duty
  • No inheritance tax
  • Double tax relief is available for foreign tax paid


9. Bermuda: The Bermuda Exempted Company is governed by the Companies Act 1981, as amended 2006.

The Bermuda Exempted Company (BEC) is the most popular type of offshore corporation available in Bermuda. A Bermuda Exempted Company is prohibited from:

  • Trading within Bermuda.
  • Owning real estate in Bermuda.
  • Undertaking the business of banking, insurance, assurance, reinsurance, fund management, collective investment schemes, rendering investment advice or any other activity.

Bermuda does not levy any taxes on profits, income or dividends, nor is there any capital gains tax, estate duty or wealth tax. In addition, under the Exempt Undertakings Act of 1976, an Exempted Company in Bermuda can obtain protection from any newly enacted taxes on income or capital gains until 2035.


10. Switzerland: Corporation (AG), limited liability company (GmbH) and branch of foreign company are governed by the Swiss Code of Obligations.

Officially Switzerland is not an offshore jurisdiction, but due to its taxation system it obtains the features of the offshore zone and becomes very attractive for the offshore companies’ formation. Switzerland has agreements with more than 100 other states for the double taxation avoidance. Tax system in Switzerland is different for every canton, so it is possible to register a company at the canton which offers the lowest taxation. At the moment Schwyz and Zug are the most attractive cantons for the offshore company formation.

Switzerland tax resident companies are taxed on their worldwide income (except profits from foreign branches and foreign immovable property) whereas non-Switzerland tax resident companies are taxed only on income generated in Switzerland.