FB Pixel Foreign Investment In Thailand | Juslaws & Consult Co., Ltd
OTHER NEWS & LEGAL ARTICLES
Pharmaceutical Company Recommends Juslaws & Consult

24 Mar Pharmaceutical Company Recommends Juslaws and Consults

We have just received the following reference from one of our clients, a leading multinational pharmaceutical 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 & Consults”.

 Tax Incentive for New Startup Businesses

24 Mar Tax Incentive for New Startup Businesses

Another generous tax incentive for investors in Thailand is now launching. On 18th April 2016, Royal Decree (No. 603) was promulgated to support and promote Small and Medium Enterprises (“SMEs”) by exempting a broad range of SME activities from Corporate Income Taxes for 5 fiscal periods.  The purpose for the incentive is to strengthen the country’s competitive capabilities by encouraging investments in SMEs which use technology and innovation in a list of targeted businesses.

Who is entitled for this incentive?

A company or juristic partnership newly formed under the laws of Thailand satisfying the following conditions:

1. Set up and registered between 1st of October 2015 to 31st of December 2016;

2. Paid-up registered capital is not more than THB 5 million in the fiscal period;

3. Income derived from the sales of goods and service is not more than THB 30 million in the fiscal period, and

4. Not less than 80% of its total income must be derived from the sales of goods and/or services in a “New Engine of Growth” business or from a connected business thereof.

What is a New Engine of Growth business?

A New Engine of Growth business is an industrial business whose technological base will be used for producing goods and providing services, and those business shall be certified by the 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, Production 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

If the SMEs’ operators meet the specified conditions above, they can apply for inclusion in the incentive program via www.rd.go.th within 31st December 2017. The Revenue Department will notify the applicant of approval or rejection within 15 working days.

Smart Visa Making Long Stay In Thailand Easier

09 Mar Smart Visa Making Long Stay In Thailand Easier

For the purpose of further promoting the Eastern Economic Corridor and a value-based, innovative, and technology-driven economy under the Thailand 4.0 policy, the Board of Investment (BOI) has launched the SMART Visa program as of February 1, 2018. The program is designed to attract more science and technology experts, senior executives, investors and startup entrepreneurs to work or invest in Thailand in relation to the targeted industries. This article is to make a summary of the program and provide our preliminary observation

 

Targeted Industries

The SMART Visa is designed for the targeted industries as announced by BOI under the Thailand 4.0 policy, namely:

  • Next-Generation Automotive
  • Smart Electronics
  • Affluent, Medical and Wellness Tourism
  • Agriculture and Biotechnology
  • Food for the Future
  • Automation and Robotics
  • Aviation and Logistics
  • Biofuels and Biochemicals
  • Digital
  • Medical Hub

 

Eligible People

There are 5 types of SMART Visa, applicable to different categories of persons respectively:

  • SMART “T”: Highly skilled technical professionals
  • SMART “I”: Investors
  • SMART “E”: Senior executives
  • SMART “S”: Foreign startup entrepreneurs
  • SMART “O”: Spouse and children of holders of the other types of SMART Visa

 

Privileges

A SMART Visa offers the following privileges (compared with the non-immigrant visa) to the holder:

  • Longer term of stay: maximum 4 years for types T, I and E, and renewable for unlimited times, but not exceeding the remaining employment/service contract term; for type S, 1 year for the first term, and renewable for maximum 2 years for unlimited times
  • No work permit is required
  • Frequency for reporting to the Immigration Bureau is extended from every 90 days to every 1 year
  • No re-entry permit is required
  • Spouses and children are allowed to stay and work in Thailand without the work permit

 

Qualifications

SMART T

  1. Science and technology experts
  2. Salary ≥ 200,000 baht/month
  3. Employment contract or service contract in Thailand with remaining validity term ≥ 1 year
  4. Employing companies being in the targeted industries

SMART E

  1. High-level executives such as Chairman or Managing Director
  2. Holder of Bachelor’s degrees or higher with work experience ≥ 10 years
  3. Salary ≥ 200,000 baht/month
  4. Employment contract or service contract in Thailand with remaining validity term ≥ 1 year
  5. Working for companies using technology in manufacturing or delivering services and being in the targeted industries

SMART I

  1. Minimum direct investment of 20 million baht
  2. Investing in companies using technology in manufacturing or delivering services and being in the targeted industries

SMART S

  1.  Fixed deposit of ≥ 600,000 baht with the remaining maturity term ≥ 1 year
  2. Health insurance
  3. Participating in an endorsed incubation, accelerator program or a similar program/or obtaining joint venture with or being endorsed by a relevant Thai government agency
  4. Must set up a company in the targeted industries in Thailand within 1 year with at least 25% ownership or being a board member


Application Procedures

The procedures will take four steps:

  1. The applicant may submit application documents to the One Stop Service Center for Visa and Work Permit (OSS) in Bangkok or the local Royal Thai Embassy/Consulate General
  2. OSS coordinates with other competent Thai government agencies to verify the qualifications; 
  3. Once verification is passed, BOI will issue an endorsement letter;
  4. The applicant can use the endorsement letter to apply for the SMART Visa from OSS or the local Royal Thai Embassy/Consulate General. 

The entire process for the qualification endorsement will take 30 working days from OSS’s receipt of complete documents. 

The applicant may convert a non-immigrant visa to a SMART Visa or renew a SMART Visa at OSS.  The conversion and renewal will follow the same requirements and procedures as those for the first-time application. 

 

Deficiencies

The SMART Visa program is newly introduced to the market and there remain some deficiencies.  First, some qualifications are not clearly defined (e.g. who are “experts” and who are “high-level executives”), leaving broad discretion to the officials, which will cause uncertainty to the applicants when planning their stay in Thailand.  Second, some conditions are too burdensome. For example, the requirement for fixed saving of 600,000 baht for at least 1 year may be unrealistic for startup entrepreneurs who are often short of cash.  Third, the relatively long list of documents for the applications and the lengthy timeframe for processing make deter attempts for application. 

 

Conclusion

The SMART Visa offers a new option for high-quality foreigners to stay and work in Thailand more stably.  Having said that, there is still room for improvement.  In response to our consultation, OSS officials admitted that since the launch of the program in February 2018, no any application has been submitted yet, and that they are considering modifications in order to incentivize applications.  Juslaws will keep close follow-up on the modifications if any and post updates accordingly.

Foreign Investment In Thailand

Significant Consideration For Foreign Investment In Thailand 
Thailand remains an attractive destination for foreign investors wanting to open a new business or a branch office, in seeking out new markets.  Foreigners firms or individuals wishing to wholly own their business need to be aware of Thailand’s laws and regulations regarding foreign investment and the list of activities that are reserved only for Thai citizens.
According to Thailand’s Foreign Business Act B.E. 2542 (FBA), the businesses operations reserved for Thais are divided and listed under 3 categories as follows:

List 1: Foreign Investment In Thailand – Business Activities Not Permitted to Foreigners

(A) Newspaper publishing, radio or television broadcasting stations.

(B) Rice farming, plantation or crop growing.

(C) Livestock farming.

(D) Forestry and timber processing from a natural forest.

(E) Fishery, only in respect of the catchment of aquatic animals in Thai waters and specific economic zones of Thailand.

(F) Extraction of Thai medicinal herbs.

(G) Trading and auction sale of antique objects of Thailand or objects of historical value of the country.

(H) Making or casting Buddha images and monk alms bowls.

(I) Land trading.

List 2: Foreign Investment In Thailand – Business Permitted to Foreigners under Conditions**
Any business related to National Safety or Security; affecting Arts and Culture, Traditions, Folk Handicraft; or Natural Resources and the Environment, as follows:

Group 1 – Business related to National Safety or Security:  Production, Selling and Maintenance of firearms, ammunition, gun powder, explosives, and Domestic Transportation byland, water or air.

Group 2 – Business affecting Arts and Culture, Traditions, Folk Handicraft:  Trading Thai art, art objects, handicrafts or production of carved wood, etc.

Group 3: Business affecting Natural Resources and the Environment:  Manufacturing sugar from sugar cane, salt farming or rock salt mining, etc.

List 3: Foreign Investment In Thailand – Other Business Permitted to Foreigners under Conditions**
These activities are classified as businesses in which Thai nationals may not yet be ready to compete alongside foreigners, like rice milling and flour production from rice, farm produce, fisheries, specifically marine animal culture and forestry from a grown (i.e. not natural) forest, accounting, legal, engineering, and architectural services, etc.
Note that Foreigners are strictly prohibited from engaging in business activities on List 1 of the FBA, while foreigners wishing to engage in activities on List 2 and List 3 of the FBA must obtain a Foreign Business License (FBL), which requires approval by the Ministry of Commerce or the Foreign Business Committee respectively.

** Lists 2 & 3 as shown are only partial representations.  Please contact your legal representative for a comprehensive list of prohibited and permissible business activities under the Foreign Business Act.

Icon - Back to top