How to get license for e-commerce business in Thailand?

 

If your business in Thailand involves selling goods online or via e-commerce platforms, this situation necessitates your requirement to apply for an e-commerce license in Thailand. In the digital age, many businesses harness the internet’s potential to expand their reach and boost sales. E-commerce offers a global marketplace, enabling enterprises to engage with a vast network of customers worldwide.

Moreover, this business model often requires lower investment levels compared to traditional brick-and-mortar establishments. However, it’s important to note that online businesses operating in Thailand must obtain an e-commerce license to ensure their legal compliance.

The Thai Electronics Transaction Act governs the application process for e-commerce licenses in Thailand. Leading corporate law firms in Thailand with licensing capabilities are well aware of this act, but, you should also have an idea of it. Let us share the same with you!

Thai Electronics Transaction Act: Comprehensive Overview

The Electronic Transactions Act (ETA) governs civil and commercial electronic transactions in Thailand. It aims to encourage the use of electronic technology by minimizing uncertainty about the legal validity of electronic information. It also emphasizes that certain legal requirements through physical paperwork should meet the electronic process as well.

The ETA is based on the premise that data messages when specific conditions are met, have the same legal standing as other written documents. To clarify, data messages encompass all electronically generated, sent, received, stored, or processed information. Examples of data messages include e-mails, telegrams, telexes, and faxes.

In addition to the aforementioned, the Electronic Transactions Act (ETA) sets licensing and registration requirements for electronic transactions and provides a general framework for such transactions involving the public sector. The Electronic Transactions Commission promotes and develops electronic transactions and monitors the operations of businesses providing services related to electronic transactions. These services require prior notification and registration to obtain the necessary license.

Entrepreneurs selling products online should also be aware of the provisions of the ETA, as Thailand’s e-commerce industry is growing rapidly and Thai consumers are increasingly purchasing products online.

Documents Required to Obtain E-commerce Business in Thailand

To acquire an e-commerce license in Thailand, the applicant must provide the following documents at the District Office of the province of the main office (if outside of Bangkok) or at the Bangkok Metropolitan Administration:

1. Application for e-commerce registration (Tor. Por. form with the attachment), including details of your website.
2. ID card or passport of the applicant:
   • For an individual: ID card or passport
   • For a juristic person: ID card or passport of the authorized director and the company affidavit
3. Power of attorney (if applicable)
4. Clarification letter (in the event of late registration)

Information Required to Obtain E-commerce License in Thailand

To apply for an e-commerce license in Thailand, the website must be operational, and the website owner must provide the following details:

• Website name.
• Nature of goods or services sold.
• Start date of website operation (application must be made within 30 days).
• Payment methods accepted.
• Domain name registration or certification document from the service provider.
• Map showing the business location.

In case the commercial operator doesn’t have a landlord, the following additional documents are required:

• Letter of consent to use the premises or a rental contract.
• Copy of the location owner’s ID card and house registration or documents showing ownership of the property.

When and how to apply for an e-commerce license in Thailand?

Online business owners must obtain an e-commerce license within 30 days of starting operations. To do so, an application form must be submitted either to the District Office where the head office is situated or to the Bangkok Metropolitan Administration.

If your head office is outside Bangkok, you have to apply to the Provincial Administration Organization. 

In case the process seems daunting and you are unable to pave through the correct path or channels, let us help you out. Our team of experienced Thai corporate law professionals and licensing experts will surely take you out of the dilemma. Email us at officer@konradlegal.com.

BOI Thailand Promotions for IT Companies - Annoucement 2024

 

This article is for both business owners and aspirants planning to register their business in Thailand, particularly in the Information Technology industry. Board of Investment (BOI) Thailand has made certain replacements in benefit schemes in the existing eligible service categories to boost the Information Technology industry.

On March 15, 2024, Thailand's Board of Investment (BOI) implemented a new set of investment incentives for software development and data centers. This regulation replaces the previous categories of software or platforms for digital services or content (category 8.1) and data centers (category 8.2.1).

Software and Platform Development

The BOI's new promotion policy distinguishes between "development" and "improvement" of software or platforms by creating separate subcategories with unique incentives for each. The forthcoming announcement from the BOI is expected to provide further clarification regarding the specifics of these two activities. Notably, qualifying development efforts are eligible for a corporate income tax (CIT) exemption for a limited duration of eight years, whereas improvement activities do not qualify for any CIT exemption.

Several changes have been made to the eligibility requirements for creating digital services or content platforms and software. Specifically, these include:

• Effective immediately, salary expenditures for Thai IT personnel hired temporarily after applying for investment promotion can be included when calculating the total salary expenditures for Thai IT personnel hired after applying for investment promotion.
• For calculating actual expenditures, the project can include salary expenses related to the temporary hiring of Thai IT personnel in the year it intends to avail of the CIT exemption.
• The promotion certificate's issuance starts a 12-month clock for projects to begin operations. Extensions are not an option.
• The period of machinery importation has now been discontinued for projects.

The eligibility requirements for the development of software, platforms, and content for digital services remain consistent.

Projects related to the enhancement of software and platforms for digital services or content within the new BOI subcategory are not entitled to CIT exemption. However, they are eligible for alternative incentives. To qualify for these incentives, projects must adhere to specific criteria.

• Expenditures on salaries for Thai IT personnel hired (including temporarily) after applying for investment promotion must be at least THB 1.5 million per year.
• Projects must propose a plan for improvement of the software, digital platform, or digital content to be sold or provided, as stipulated by the BOI.
• Projects may not amend the category in which they benefit from investment promotion.
• Projects must commence operations within 12 months of the promotion certificate being issued. No extensions are allowed.
• Projects may not extend the machinery importation period.
• Projects may not own land.

Furthermore, projects within this subcategory are uniquely permitted to utilize previously owned machinery or leverage existing machinery associated with the project, deviating from the typical BOI prohibition against such practices.

Data Centers

Qualifying data centers are still eligible for CIT exemption (no cap) for eight years, but there are minor updates to the eligibility criteria:

• Projects must install an electrical system of at least two megawatts to support the power consumption of computer equipment.
• Projects no longer require an area of at least 3,000 square meters.
• Projects must still obtain ISO/IEC 27001 certification before they can receive CIT exemption. Still, there is no longer an explicit requirement that they get the certification before the full operation deadline.

In addition, projects in the data center category are exempt from the general BOI requirement that projects benefiting from investment promotion obtain ISO 9000, ISO 14000, or other equivalent international certifications.

If you are already running a software development company or data center in Thailand, in addition, to being eligible for the general BOI Benefits, the ones mentioned in this article also add to the list. If you still haven’t applied for the Board of Investment of Thailand promotions for your existing company in Thailand, we can help. Furthermore, we can also help you in the process of starting a BOI company in Thailand.

Email us at officer@konradlegal.com to get in touch with our team specializing in supporting companies to avail of the Board of Investment privileges in Thailand.

Process of Changing Director of a Company in Thailand

 

The leadership structure of companies can evolve as they grow and scale their operations. The addition or removal of a director may become essential during this process. There can be various other reasons that may seek this change. There is a specific procedure to change or remove a company director in Thailand.

This article provides a detailed explanation of this process and the necessary steps to be taken.

General Conditions to Change the Director of a Company

Several factors necessitate the change of directors in a Thai Limited Company, including:

• Resignation or departure of a director
• Death of a director
• Bankruptcy or mental incompetence of a director
• Appointment of a new director
• Removal of a director from their position
• Retirement of a director
• Rotation of a director during the Annual General Meeting

Eligibility to be a Company Director in Thailand

Before you change or remove a company director, you should have someone who can take his/her responsibility as a successor. To execute this process, the first information that you must have is the candidature eligibility. To serve as a director in Thailand, individuals must meet specific qualifications:

• They must be at least twenty-one years old so that they can sign the application and its supporting documentation.
• They must possess mental competence and not be declared bankrupt.
• Residency status is not a requirement; both residents and non-residents are eligible.

What to do before Changing Company Director in Thailand?

Once you have checked and verified that your candidate to be the new director of the company matches the eligibility pointers, you will have to proceed with the following steps. 

In case of a Director’s departure, the company must convene either a Board of Directors meeting or a Shareholders’ meeting. The agenda depends on the company’s circumstances and any stipulations outlined in the Thai Commercial Code or the Articles of Association.

According to the Thai Commercial Code, during each annual general meeting of shareholders, one-third of the directors are required to resign rotationally. However, directors who resign can be re-appointed to their positions. Additionally, new replacement directors can be appointed during this shareholders’ meeting.

During a shareholders’ meeting, the shareholders have the authority to remove a director from their position before the conclusion of their term. Only a resolution approved at the shareholders’ meeting can result in the director’s removal from their position.

In the absence of specific mention in the Articles of Association, granting the Board of Directors the authority to resolve changes in a director’s authority, a resolution must be passed during a Shareholders’ meeting. This resolution requires the approval of a majority of the shareholders’ votes to be deemed valid and effective.

Process to Change Company Director in Thailand

Convene A Board of Directors Meeting

The Board of Directors is responsible for convening a shareholders’ meeting to pass a resolution to alter the company’s director or the director’s authority.

If the company’s Articles of Association state that the Board of Directors has the authority to modify the director’s authority, no shareholder meeting resolution is required for such a change.

The notice to convene a Board of Directors meeting shall adhere to the company’s Articles of Association rather than any specific legal requirements.

Organize A Shareholders’ Meeting

Under the corporate guidelines, companies must provide adequate notice for shareholders’ meetings. This notice must be published in a local newspaper no more than seven days before the scheduled meeting date.

Additionally, registered mail is required to notify shareholders listed in the shareholder registry. The notice will be deemed received upon sending the registered post to the shareholder’s listed address. This process must be completed seven days before the meeting.

Shareholders’ meetings can only be held if at least one-quarter of the company’s shareholders are present.

Unless otherwise specified in the company’s Articles of Association, notice to call for the shareholders’ meeting shall be sent to the shareholders at least seven days before the meeting.

Complete Legalities with the Departing Director

Upon approval of the director change by the shareholders and/or the Board of Directors meeting, the necessary forms will be prepared. The departing director and the authorized director(s) of the company must sign these documents. It’s important to note that the director must be physically present in Thailand during the signing process.

Update the change at the Department of Business Development

Upon completing and signing the forms, they need to be filed at the Department of Business Development. Within 24 hours of submission, the company must update its company affidavit to reflect personnel changes.

Within 14 days of the change, the authorized ‘former’ director must submit the following documents to the Department of Business Development:

• A copy of the resolution that was passed
• Application forms for changing the director and/or the authority of the director
• Signed copies of the ID cards/passports of both the old and new directors

Documents for Changing a Company Director in Thailand

To change a director in a Thai Limited Company, the following documents are needed:

• Copies of the new and old directors’ passports and addresses
• Approval letters from government agencies for strictly regulated businesses
• A death certificate in case of a deceased director
• A court order in case of company rehabilitation

Additional Information:

In Thailand, according to the law, directors who intend to resign from their positions must submit a formal resignation letter to their company. The resignation takes effect on the date that the company receives the letter. Resigning directors have the additional option to notify the Registrar of their resignation within 14 days of stepping down.

The written resignation letter must include a declaration by the director expressing their intent to end their directorship and be signed by the director.

Through a resolution passed at a shareholders meeting, a director can be removed from their position. If the director refuses to voluntarily resign, a shareholders resolution will be necessary to remove them from their position.

The Bottom Line

A Director is one of the crucial pillars of a company. Various core and ancillary responsibilities depend solely on the decision of the departmental or managing director. Therefore, while changing a Director, you should be very cautious about maintaining the legalities properly.
In the case of a resignation, the process is smooth, but, otherwise, there can be issues to resolve which you will need the assistance of a corporate law firm in Thailand. To discuss with us about your company today, email us your concern to change company director in Thailand at officer@konradlegal.com.

Personal Income Tax on Foreign-Sourced Income in Thailand

 

Is foreign-sourced income getting credited to your Thai bank Account? Then you need to check whether it is taxable or not. Effective January 1, 2024, the Revenue Department of Thailand has implemented substantial revisions to the taxation of income derived abroad and imported into the country. These tax adjustments hold noteworthy consequences for individuals residing in Thailand. Read this article as it will help you reassess your tax on foreign income in Thailand.

Declaration of Foreign-sourced Income for Taxation

The Revenue Department’s recent directive, Notification 161/2566, specifically targets individual taxpayers who spend at least 180 days in Thailand during a calendar year (tax year). If you meet this criterion and bring foreign income into Thailand, you must declare it for taxation purposes. Whether the foreign income was earned in the same tax year or a different one, it’s considered income subject to taxation when brought into the country.

This new criterion replaces the previous directive, No. 0802/696, on May 1, 1987, which exempted foreign income brought into Thailand from being re-declared.

Sources of Income that will be "Taxable"

As per the newly implemented taxation regulation, income generated from sources outside Thailand is subject to taxation. This includes earnings from duties performed overseas, businesses operating abroad, or assets held outside the country.

Specific examples of such income sources include wages earned from work performed in foreign countries, profits obtained from the sale of assets overseas, dividends received from foreign stocks, interest earned from foreign sources, and royalties originating from abroad.

Order of Revenue Department of Thailand

On November 20, 2023, the Thai Tax Authority clarified the provisions of Revenue Department Order No. 161/2566.  Specifically, Revenue Department Order No. 162/2566 states that the changes made by Order 161/2566 do not apply to income received before January 1, 2024. In other words, the pre-existing rules continue to apply to income earned before this date.

Effective from January 1, 2024, this order governs foreign-source income assessment at the domicile of the income earner. The change applies starting from the 2024 tax year onwards. The previous principle continues to apply to income earned from foreign sources before the 2024 tax year. According to the Revenue Code, such income must be repatriated to Thailand in the same tax year it is earned. Furthermore, individuals are not liable for personal income tax on this income.

From January 1, 2024, individuals will be liable to pay tax on income earned before 2024. They should be able to demonstrate that it was transferred to Thailand after the effective date. This modification results from a new clarification regarding the taxation of foreign income.

Relief for Tax Treaties

The significance of tax treaties established between Thailand and other nations must be considered. These treaties may provide exemptions or reduced tax rates applicable to foreign income. Businesses and individuals should thoroughly examine the relevance of such treaties within the context of their unique circumstances.

Key Considerations for Foreign Businesses

In light of the newly implemented tax regulations, businesses need to take into account the following critical considerations:

• Increased compliance burden: To comply with tax regulations, businesses must maintain accurate records and prepare thorough tax reports for employees earning income overseas upon their transfer to Thailand.
• Tax implications for expats: Individuals living in Thailand for over 180 days must take notice of this recently enacted regulation and incorporate it into their financial plans accordingly.
• Review global mobility programs: In light of the recent changes in Thailand’s tax laws regarding foreign income, companies with global mobility programs that include tax equalization for assignees should consider revising their policies accordingly.

The Bottom line

Thailand’s new taxation criteria for foreign-sourced income bring about a significant change for individuals residing in the country for more than 180 days a year. Previously exempt, foreign income brought into Thailand is now subject to taxation regardless of the timing of its acquisition. This development necessitates diligent tax planning and meticulous bookkeeping for foreign individuals and businesses in Thailand.

This change may impose additional compliance burdens. However, it is crucial to consider that tax treaties with other countries may offer exemptions or reduced tax rates. It is advisable for businesses with employees earning income abroad and for expatriates living in Thailand to explore these possibilities to mitigate their tax liabilities. Companies with global mobility programs may also need to review and adjust their policies in light of the new tax treatment.
To assess and pay tax on your foreign income in Thailand, seek guidance from a qualified Thai tax advisor. Please email us at officer@konradlegal.com to connect with our team of qualified Thai Corporate and Personal Tax Accountants in Thailand.