Income Tax for Foreign Business in Thailand

 

As a foreign investor or company in Thailand, it is essential for you to know about the income tax obligations in the kingdom. We all know that the Royal Thai government offers various tax and non-tax incentives to foreign investors. Therefore, unless you do your tax planning, you will never be able to assess whether you are eligible for the tax benefits or not. This article will serve as your comprehensive guide by highlighting all you must know about Income Tax for Foreign Business in Thailand.

Overview

The tax obligations on foreign business in Thailand depend significantly on the type of business it is doing here in the kingdom. The reason behind this is the following:

1. There are certain Board of Investment tax incentives that are applicable only to eligible businesses and activities. Check out the list of activities eligible for tax incentives under BOI Thailand. Therefore, if your business falls on this list, you may release yourself from various types of bills and taxes.
2. If you are into manufacturing business, then there are certain tax benefits from the Industrial Estate Authority of Thailand. Although you have to satisfy certain conditions, yet, on qualifying you can enjoy VAT exemptions and export-import tax exemptions. Check out the eligibility and tax benefits under IEAT Thailand.
3. There are double tax treaties between Thailand and 61 countries. These tax treaties remove the mandates of paying tax to foreign companies for the same income in both Thailand and the native nation. Therefore, it is always wise to check whether you are liable to pay double tax or not. These privileges of tax deduction also sometimes depend on the type of business you are planning to do in Thailand.

Note that, to ascertain the tax liability of your business in Thailand, you must check through the above three points. It might be somewhat tricky for you to review and consider all the aspects associated with the same. Therefore, you must go on consultation with a professional Thai tax law firm to clear your mind on this.

Types of Income Tax for Foreign Business in Thailand

Foreign companies operating in Thailand may be subject to various types of taxes. Here are some of the main taxes that foreign companies may be required to pay in Thailand:

Corporate Income Tax (CIT)

Foreign companies that generate income in Thailand are generally subject to CIT at a standard rate of 20%. However, specific tax incentives may apply based on the type of business and industry. Check out the Corporate Income Tax rates of Thailand below:

Value Added Tax (VAT)

VAT is applicable to the sale of goods and services in Thailand. The standard rate is 7%, but certain goods and services may be subject to a reduced rate or exemption. However, the general rate of VAT applicable to various products and services in Thailand is as follows:

Withholding Tax

Foreign companies making payments to individuals or other entities in Thailand may be required to withhold tax on certain types of income, such as interest, dividends, royalties, and payments for services. The withholding tax rates vary depending on the payment type and the recipient’s tax status. Following are the updated rates of withholding Tax in Thailand:

Specific Business Tax (SBT)

Certain types of businesses, such as financial institutions, may be subject to SBT in addition to CIT. SBT rates vary depending on the type of business.

Property Tax

If a foreign company owns property in Thailand, it may be subject to property taxes. These taxes can include land and building taxes. Check out here to know all about Property Tax Regulations and Rates in Thailand.

Stamp Duty

Stamp duty may apply to various documents, contracts, and transactions, such as property transfers and certain legal agreements.

Excise Tax and Custom Duties

Certain products, such as alcohol, tobacco, and petroleum, may be subject to excise tax. Foreign companies involved in producing or importing such products may need to pay excise tax.

Moreover, if a foreign company engages in international trade with Thailand, customs duties may apply to the import and export of goods.

Transfer Pricing Regulations

Thailand has transfer pricing regulations to ensure that transactions between related entities are conducted at arm’s length prices for tax purposes. Foreign companies must comply with these regulations when dealing with Thai affiliates. Go through our article to learn more about transfer pricing in Thailand.

Income Tax Payment Deadlines for Foreign Business in Thailand

In Thailand, tax deadlines can vary depending on the type of tax and the taxpayer’s circumstances. Here are some general guidelines for tax payment deadlines in Thailand:

The Bottomline

This article has covered a majority of the nooks and corners of income tax applicable to foreign businesses or companies in Thailand. We hope that it will help you in your understanding of the tax regime of Thailand for your business.

However, it is always wise to have a professional Thai tax consultant by your side. In addition to tax payments, we also specialize in helping Thai and foreign businesses with bookkeeping, accounting, and payroll management support. To get all the services under one roof, email us at officer@konradlegal.com for expert support.

Do Foreigners have to Pay Income Tax in Thailand?

 

Yes, foreigners do have to pay income tax in Thailand if they gain the status of being tax residents here in the kingdom. Read through this article to learn about your eligibility to pay tax and the types of tax you may have to pay in Thailand.

Types of Income that Make Foreigners Tax-liable in Thailand

Before you check your tax eligibility, it is essential to check whether your income supports tax compliance or not. In many cases of double tax treaties between your nation and Thailand, you may have to pay tax in your home country but not in Thailand. In general, the following types of income in Thailand make you tax-liable:

Salary and Employment Income

Foreigners working in Thailand are typically subject to income tax on their salaries and employment income they earn here. The tax rates may vary based on income levels. 

Check out the Income Tax slab for foreigners in Thailand.

Rental Income

If you own property in Thailand and earn rental income from it, this income is generally subject to taxation.

Business and Self-Employment Income

If you operate a business or engage in self-employment activities in Thailand, the income from these sources is typically taxable.

Interest and Dividends

Income earned from bank interest, dividends from Thai companies, or other investment income may also be subject to taxation.

Capital Gains

Depending on the circumstances, capital gains from the sale of certain assets in Thailand. Note that, it can be real estate or securities that are taxable in your case.

Pensions and Annuities

Foreigners receiving pensions or annuities from sources in Thailand may have tax obligations.

Royalties

If you receive royalties from intellectual property or other sources in Thailand, this income may be taxable.

Other Sources of Income

Any other income earned in Thailand, including prizes, awards, or other windfalls, may also be subject to taxation.

As stated earlier, if your country holds any type of tax treaty or bilateral trade agreement with Thailand, your income may be subject to tax deductions or exemptions. Therefore, it is recommended that you should consult with a reliable tax firm in Thailand to get this eligibility checked.

Income Tax Eligibility for Foreigners in Thailand 

Income tax for foreigners in Thailand varies depending on several factors, including your residency status and the type of income you earn in the country. Here’s a general overview:

Residency Status

Thailand distinguishes between resident and non-resident foreigners for tax purposes. Your residency status is determined by how many days you spend in the country within a tax year.

• Resident: If you stay in Thailand for 180 days or more in a tax year, you are considered a tax resident.
• Non-Resident: If you stay in Thailand for at least 180 days in a tax year, you are considered a non-resident.

Taxable Income

Tax residents are generally taxed on their worldwide income, while non-residents are taxed only on income earned in Thailand.

Tax Rates

Thailand uses a progressive tax rate system for personal income tax, which ranges from 0% to 35%. Please note that tax rates and brackets may change over time, so it’s essential to check the latest tax rates from the Thai Revenue Department or consult a tax professional in Thailand.

Tax Deductions and Exemptions

Thailand offers certain deductions and exemptions for both residents and non-residents. These may include deductions for specific expenses, allowances, and exemptions for certain types of income.

Filing and Payment

Tax residents must file a personal income tax return by the end of March each year. Non-residents must file a return within seven days of departing Thailand if their income is subject to withholding tax.

Double Taxation Agreements (DTAs)

Thailand has entered into Double Taxation Agreements with many countries to prevent double taxation. If you’re a foreigner, check whether your home country has a DTA with Thailand, as it can affect your tax liability.

Tax Identification Number (TIN)

Foreigners who work or earn income in Thailand should obtain a Tax Identification Number, which is used for tax-related purposes.

Types of Income Tax Payable by Foreigners in Thailand

Foreigners in Thailand may be subject to various types of income tax depending on their specific circumstances. Here are the main types of income tax that foreigners may be liable for in Thailand:

Personal Income Tax (PIT)

Foreign individuals who earn income in Thailand are generally subject to PIT. The tax rates vary based on the amount of income earned, with progressive rates ranging from 0% to 35%. Deductions and exemptions may apply depending on the nature of income and personal circumstances. Know about the recent updates on Personal Income Tax in Thailand.

Corporate Income Tax (CIT)

Foreigners who own or invest in Thai companies may be subject to CIT on their corporate income. The standard CIT rate is 20%, but certain incentives and exemptions may apply to specific industries or activities. Click to file your corporate income tax in Thailand today!

Withholding Tax

Foreigners who receive certain types of income from Thai sources may have withholding tax obligations in Thailand. This can include dividends, interest, royalties, and payments for services. The rates vary depending on the type of income and the tax treaty, if any, between Thailand and the foreign individual’s home country.

Value Added Tax (VAT)

While not an income tax per se, VAT is an indirect tax that can impact foreigners doing business in Thailand. It applies to the sale of goods and services and is typically collected by businesses. Foreigners who engage in business activities in Thailand may need to register for VAT and comply with its regulations.

Specific Business Tax (SBT)

SBT is a tax that applies to specific types of businesses and activities, such as liquor, tobacco, and entertainment establishments. Foreigners involved in such businesses may be subject to SBT.

Property Tax

Foreigners who own property in Thailand may be subject to property taxes, including the land and buildings tax and the local development tax.

Check out whether you have to pay property tax in Thailand or not!

Stamp Duty

Stamp duty may apply to certain legal documents and financial transactions in Thailand, and foreigners could be subject to it depending on their activities.

The Bottomline

Income tax, be it personal, corporate, withholding, or of any type in Thailand is guided by some country-specific protocols. Thailand typically follows Thailand Financial Reporting Standards (TFRS) as the governing guidelines in the process of reconciliation, filing, and payment of income taxes. However, if you need to show the same in your country, that may need International Financial Reporting Standards (IFRS).

Therefore, it is crucial that you consult a reputed tax firm in Thailand to get things properly aligned. For a complete solution, email us at officer@konradlegal.com and get to know all about your eligibility to pay tax. Our professionally qualified Thai tax professionals will surely ensure a smooth tax filing and payment process in Thailand.

Work Permit in Thailand from Board of Investment (BOI)

 

The Board of Investment (BOI) is a government agency in Thailand that promotes and facilitates investment in the country. If you are looking to obtain a work permit in Thailand through BOI, it is typically related to employment with a company that has received BOI privileges and incentives. Through a Board of Investment (BOI) approved company, you can apply for a business visa in Thailand along with a work permit to start a business and relocate to Thailand. This article will guide you through the process of applying for and obtaining a BOI Thailand Work Permit.

Why Apply for BOI Thailand Work Permit?

A firm approved by Thailand’s BOI may have 100% foreign ownership and do physical business in Thailand. Whereas, conventional Thai companies have foreign ownership restrictions to a maximum of 49%. In addition, depending on location and type, a BOI firm may qualify for a 0% corporate tax rate for the first 8 years of operation as well as an exemption from V.A.T. for importing machinery.

Unlike conventional Thai companies, BOI companies are not constrained to a 4:1 ratio. Therefore, this makes it easier for BOI-promoted companies to bring in foreign employees. Owing to this reason, the process of obtaining a work permit becomes easier.

In the process of obtaining a BOI Thailand Work Permit, your pre-requisite is holding a Non-immigrant B Visa. You can apply for the same from Royal Thai Embassies or Royal Thai Consulates located in your country.

Without this, obtaining a BOI work permit in Thailand as a foreigner is not possible. Note that, the exact requirements may vary depending on your specific situation and the policies in place at the time of your application. 

Steps to obtain a BOI Thailand Work Permit: 

Find Employment

You need to secure a job with a company that has received BOI privileges. BOI privileges are often granted to companies operating in certain industries, such as manufacturing, technology, and services. Make sure your potential employer is eligible for these privileges.

Apply for a Non-Immigrant Visa

Once you have a job offer from a BOI-promoted company, you’ll need to apply for a Non-Immigrant Visa (Type B) at a Thai embassy or consulate in your home country. You will need various documents, including an employment contract and a letter from the BOI-promoted company confirming your employment.

Arrive in Thailand

After receiving your Non-Immigrant Visa, you can enter Thailand. You must do this within a certain timeframe after obtaining the visa.

Submit Work Permit Application

Your employer will need to submit a work permit application on your behalf to the Department of Employment within the Ministry of Labor in Thailand. This application will include various documents such as your employment contract, educational qualifications, and medical certificate.

Medical Checkup

You may be required to undergo a medical checkup at an approved hospital or clinic in Thailand. This is to ensure you are in good health and not carrying any infectious diseases.

Police Clearance Certificate

You may also need to provide a police clearance certificate from your home country or the country where you have lived in the past.

Work Permit Approval

Once your work permit application is approved, you will receive a work permit book.

Notification of Stay

You will need to report your place of residence to the local immigration office within 24 hours of your arrival in Thailand and whenever you change your address.

Renewal and Reporting

Work permits typically need to be renewed annually. You and your employer will need to ensure that all reporting requirements are met throughout your employment in Thailand.

Please note that immigration and work permit requirements in Thailand can change, and it’s essential to check with the Thai Embassy or Consulate in your home country or consult with a legal advisor who specializes in Thai immigration and labor laws for the most up-to-date information and guidance regarding the BOI work permit process.

The process can be complex and time-consuming, so it’s advisable to seek professional assistance to navigate the application successfully. Therefore, once you receive a job offer from a prospective BOI company in Thailand, you can contact us for the rest of the procedure. Email us at officer@konradlegal.com to steadfast your process of obtaining a BOI Thailand work permit.

Business in Thailand for Indians

 

As an Indian citizen, if you are planning to start your business in Thailand, there are plentiful options. For instance, the digital economy of Thailand is growing rapidly. This single section holds a multitude of business options for Indian business owners, entrepreneurs, or startups. Apart from this, the manufacturing and tourism industry also extends loads of opportunities for business aspirants from the Indian subcontinent. In this article, we will discuss primarily the best business options in Thailand for Indians who are interested in penetrating the digital and/or production or manufacturing industry of Thailand.

Business for Indians in the Thai Digital Economy

E-commerce Business

Digital Marketing Agencies

Digital Platforms

Business for Indians in the Thai Industrial Sector

Automobile Industry

Food Industry

Other Production or Manufacturing Businesses

The Bottomline

Best Business in the Thai Digital Economy for Indians

According to the Bangkok Post, Thailand’s gross domestic product (GDP) benefited 2.1 billion baht from the digital economy in 2022, a rise of 1.9% from 2.04 billion baht the year before. The true expansion rate of the Thai digital economy in the last two years is around 12.1%. The Royal Thai Government expects that the digital economy is going to contribute 30% to the GDP by 2027.

Therefore, to boost this growth, the Board of Investment of Thailand in association with the government and other pinnacle agencies is bringing forth various policies. These policies are the schemes and privileges that foreign investors in Thailand receive as support for their business in the kingdom. Normally, these schemes involve tax and non-tax benefits.

Go through our article to know all about the BOI benefits for Diigital Agency Startups in Thailand.

With a growing digital economy backed up by a robust digital infrastructure and facilities, Thailand has the following business options for Indians:

E-commerce Business (preferably Grocery, Food and Jewelry)

Starting an e-commerce business in Thailand is a great option to penetrate the digital economy of Thailand. Ever since the announcement of the COVID-19 lockdowns, Thai citizens have started to rely on digital platforms for shopping for their daily essentials. Many times, they also order luxury goods like gems and jewelry via online shopping platforms.

As this is the beginning of the expansion period of the Thai digital economy, there is a lot of space for the co-existence of multiple similar businesses in the kingdom. The kingdom has a population of approx. 72 million till January 2023, out of which 53% of the population are familiar with online shopping. Isn’t that a huge market to tap into?

Digital Marketing Agencies

Digital marketing agencies in Thailand are one of the most sought-after businesses. It is because of the rapid adaptation of Thai citizens to digital platforms. To meet this requirement, Thai companies are in need of digitalization of their marketing and communication processes. 

Although digitalization in Thailand started in 2016, yet, it became a practice in India much earlier than that. Therefore, the understanding of the concept is much clearer to Indian citizens which can facilitate their process of identifying the proper digital requirements and providing the necessary solutions.

Digital Platforms

This business section comprises various types of fintech, online teaching and learning, and travel booking services. Although the avenue and scope are not restricted to this much. Investors can come up with new ideas to develop digital platforms in Thailand that can add value to the Thai digital economy.

Any type of project holding innovation, uniqueness, and inclusiveness in their idea can be eligible for tax and non-tax incentives from BOI Thailand. Such benefits often comprise tax holidays, ease in obtaining work permits, no restrictions on recruitment of foreign employers, and chances to hold 100% foreign ownership of the Thai business.

Best Business in the Thai Industrial Sector for Indians

Growing at the rate of 4% CAGR, the industrial or manufacturing sector of Thailand holds a lot of potential for Indian investors. Spread across different verticals of the automotive industry, food processing, textile industry, chemicals, and petroleum, Thailand has a vast expanse for Indian investors to explore. Following are the brief insights of some of the preferred or best business verticals in Thailand for Indians:

Automobile Industry

The vehicle production rate in Thailand is projected to grow by 2.1% YoY. This is a good volume to explore and this growth is evident for the following reasons:

1. Thailand is one of the top 10 nations in the world in terms of automobile manufacturing.
2. The kingdom is the 4th largest auto assembly and export hub in Asia.
3. The volume of vehicle exports in July 2023 went up by 30% YoY.

Competing with global giants like Japan, China, and Germany, Thailand has a great impact on the global automobile industry. Additionally, many automobile production giants like Toyota, Nissan, Honda, and Mitsubishi have shifted their production units to Thailand from other SE Asian nations.

Food Industry

For your information, the agriculture industry of Thailand contributes greatly to the Thai GDP. Being rich in agricultural resources, the kingdom can give you a wide range of opportunities in the food industry. This industry is especially beneficial for Indians because of the following reasons:

1. Being an agro-centric economy, Indians have a better understanding related to agricultural products and their processing.
2. The Thai food industry has not reached stagnation and is growing year after year due to the increase in the influx of foreigners in the kingdom with different food tastes and preferences.

Apart from food processing, this industry also offers foreign investors the option of starting eateries and restaurants in Thailand. If this interests you, read our article to start a restaurant in Thailand.

Other Production or Manufacturing Businesses

Thailand is rapidly developing itself as the manufacturing hub of Southeast Asia. This is due to its growth in terms of industrial infrastructure and the various government schemes that are promoting manufacturing as one of the target activities for the development of the Thai economy. This is one of the reasons that production or manufacturing is the best business option in Thailand for Indians.

In one of the recent announcements, BOI Thailand declared biotechnology, nanotechnology, and clinical technology as activities of interest for the growth of the Thai economy. Therefore, if your production or manufacturing business focuses on any of these activities, in addition to the government benefits, you will receive great business exposure as well. Let us help you with the ideas of some similar businesses.

• Production of eco-friendly chemicals or polymers
• Manufacture products from eco-friendly chemicals or polymers
• Manufacture of raw materials and/or essential materials for molecular biological research
• Production of fuels from agricultural products, scraps, wastes, or garbage
• Manufacturing of modern agricultural products like fertilizers, irrigation systems, or tracking devices

Any of the above-mentioned business activities will readily attract benefits of up to 13 years of tax holiday along with various other benefits from BOI Thailand.

The Bottomline

Have you read till here? Then, by now you must have got the idea of the type of business that is going to be suitable for you. After deciding the type of business you will do in Thailand, it is essential to have local Thai support by your side. It is because of the mandate of having a Thai partner for foreign investors and decoding the complex Thai regulations.

As an Indian investor, it is very likely that you will have your legal and accounting professionals on board. But, contrarily, it is very unlikely that they will have a competent understanding of Thai legal norms and regulations. For that, you will need a competent and reliable Thai corporate law and accounting firm.

However, in addition to educating you on the Thai business landscape, we can help you incorporate your business in Thailand with our elegant corporate law and accounting services. Email us your business idea at officer@konradlegal.com and our team of professionals will get back to you within one business day.

What is the Fees for Food License in Thailand?

 

In addition to being a tourism hotspot, Thailand is also popular as a foodie’s paradise. Every year the kingdom witnesses a great footfall of tourists and business owners. Apart from these visitors, Thai citizens are also food fanatics and love to taste different cuisines of different ethnicities. These facts have inspired many business owners to start their food business in Thailand. If similar is your plan, along with the process, this article will also guide you on the food license fees in Thailand.

Basic Guidelines on Food License in Thailand

In Thailand, a food license, often referred to as a “food establishment license” or “food business license,” is a legal permit. It allows individuals or businesses to prepare, sell, or distribute food products to the public. This license is essential to ensure that food businesses meet certain hygiene and safety standards, protecting the health of consumers.

Types of Food Licenses

The specific type of food license you need can vary depending on the nature of your food business. Common categories include a restaurant license, street food vendor license, food production license, and more.

Regulatory Authority

The Food and Drug Administration (FDA) in Thailand is responsible for regulating food licenses and ensuring that food businesses comply with food safety regulations.

Application Process

To obtain a food license in Thailand, you typically need to submit an application to the local FDA office or the relevant authority in your area. The application process may require you to provide information about your business, food safety measures, and the location of your establishment.

After submitting your application, your food establishment will likely undergo inspections by health officials to ensure compliance with food safety standards. This may include checks on cleanliness, food storage, handling practices, and more.

Penalties for Non-Compliance

Operating a food business without the necessary license or violating food safety regulations can lead to penalties, fines, or even closure of the establishment.

Food Safety Standards

The Food Act B.E. 2522(1979) is the primary law governing all foods in Thailand. It gives the government and officials the power to regulate domestic food production, as well as the imports and exports of food goods for retail sale. It also specifies the requirements and penalties for food businesses in Thailand.

Food License Fees in Thailand

The government fees for food license depends primarily on the area of your business premises that you will use to cook and serve/sell food to customers. On the basis of the area of your business, the food license fee slab is as follows:

• Up to 10 square meters: 100 THB
  • Additional 5 THB per square meter for more than 10 square meters
• Between 200 and 300 square meters: 2,000 THB
  • Additional 5 THB per square meter for more than 300 square meters

However, the government fee is limited to 3,000 THB. This limit is likely a regulatory decision made by the Thai government to promote small and medium-sized businesses and to make it more affordable for them to obtain the necessary licenses to operate in the food industry.

So are you planning to start your restaurant in Thailand? If yes, then you must check whether you have the following documents.

Documents Necessary to Obtain Food License in Thailand

• The company’s affidavit (not older than six months)
• House registration of the building.
• Original consent letter or a copy of the lease agreement (affixed with a duty stamp)
• The copy of the ID card and house registration of the director of the company.
• The copy of the ID card and house registration of the owner of the business.
• Power of Attorney
• Signed and completed application form (SorAor1)
• Map of the location of the business (restaurant)
• Printed photos of the front and inside of the business (restaurant)
• Interior plan (layout) of the restaurant marking a sitting place, kitchen space, and other sections.
• Measurement of the whole restaurant in square meters including tables, kitchen, counter, etc.
• Documents to prove the ownership, such as the sale and purchase agreement, a title deed, or construction permit.

From the document requirement, you can understand that before getting your food license, you have to register your business in Thailand. Documents like the affidavit, power of attorney, and proof of business ownership mandate you to have a registered business in Thailand. 

Be it registering your company or obtaining your food license in Thailand, feel free to email us at officer@konradlegal.com. We will start with a free email consultation and, henceforth, we will assist you throughout the process with our elegant services till you achieve success.

How can foreigners go for Mergers & Acquisitions in Thailand?

 

Mergers and Acquisitions in Thailand for Foreigners can be a great way to expand existing business to the Thai market. Using this option, foreign investors gain the possibility to acquire shares of Thai companies and work collaboratively toward a common goal mutually decided. The process is very open for Thai investors but holds some challenges for foreign investors.

The reasons that make the process cumbersome for foreign investors are the restrictions of the Foreign Business Act. However, there are possibilities of busting these challenges and proceeding in the process. But before that, you should understand the restrictions on foreign investors for M&A in Thailand.

Restrictions on Mergers and Acquisitions in Thailand for Foreigners

Foreign investors expecting cross-border M&A agreements in Thailand may face significant difficulties due to Thailand’s law restrictions on foreign ownership. These restrictions may affect the M&A structure chosen as well as a foreign investor’s degree of influence over a target company.

The primary law governing foreign ownership of firms in Thailand is the Foreign Business Act of 1999. Companies registered overseas or domestically with 50% or more of the shares held by non-Thais are considered foreign under the Foreign Business Act of Thailand. The Foreign Business Act contains three categories that restrict the kind of businesses that foreign corporations may do. 

This means that without a foreign business license or any conditional exemption in accordance with the provisions of the act, ministerial regulations, investment promotion laws, industrial estate laws, or treaties between Thailand and certain countries, foreign investment in companies operating a restricted business is limited to less than 50% of the shares.

Furthermore, foreign ownership is not possible for various types of businesses and activities. This is because special Thai legislation reserves these business structures for Thai citizens. For example, the Land Transportation Act of 1979, after amendment states that only limited companies with at least 51% Thai-owned shares may operate in the land transportation business. In addition, the Land Code Act of 1954 forbids foreign nationals from owning land in Thailand unless specifically approved by legislation governing industrial estates or investment promotion.

Key Takeaway with Solutions

The major reason that makes the M&A structure formation challenging for foreign investors is the restrictions of the Thai Foreign Business Act. However, for this single challenge, there are various solutions as well. Generally, these solutions relate to the methods by which foreigners can register a Thai business in Thailand and proceed to register the M&A structure. Some of these methods are as follows:

• Registration of Limited Companies with 51% Thai Shareholding
• Obtain Board of Investment Thailand Promotions and Certification
• Receive Industrial Estate Authority of Thailand Privileges

Apart from these, there are certain other processes to achieve the eligibility to form an M&A structure in Thailand. For that, you need to contact a leading corporate law firm in Thailand and seek their legal due diligence services. Legal due diligence entails a careful examination of a target company’s corporate structure, operational procedures, regulatory compliance, licenses, labor, property, and other pertinent aspects. This will reveal whether there are any foreign ownership restrictions pertaining to the target company or the proposed investment.

Stages of Forming Mergers & Acquisitions in Thailand

Stage 1:

A Memorandum of Understanding (MoU) or Letter of Intent (LoI) is signed by the parties. At this stage, an MOU should specify the binding provisions and confidentiality terms.

Stage 2:

By conducting due diligence on the business, real estate, legality, and finances, among other things, the buyer examines various issues within the target organization.

Stage 3:

The parties begin the buy-sell negotiation after the due diligence procedure and resolve issues raised by the due diligence.

Stage 4:

The parties prepare the Sales and Buy Agreements and relevant documents to make them ready for signature and the business seal. The Thai Civil and Commercial Law confirms the signed agreements.

To make yourself eligible to form a Mergers and Acquisitions in Thailand, there are various parameters that you must abide by. It starts with an understanding of the Thai corporate structure and compliances properly. Additionally, you must have a proper knowledge of the Thai tax and regulatory landscape.

However, if you hire a reliable corporate law firm in Thailand, it will make the process easier for you. All you need to do for this is to email us at officer@konradlegal.com and go for an email consultation.

NGO Registration in Thailand for Foreigners

 

For NGO Registration in Thailand, foreigners will have to go for either Thai Registered Foundations or Foreign Private Organizations. Sounds confusing?

As a leading corporate law firm in Thailand, allow us to make your plan of registering an NGO (Non-Government Organization) in Thailand a success!

We all know that a private organization engaging in charitable or social welfare activities is an “NGO”. Such organizations never conduct operations to earn profit. Thailand has become a sought-after destination for NGOs due to its advantageous location at the heart of South East Asia. Additionally, it is one of the host countries of the United Nations. 

The registration of NGOs, however, is not specifically covered by Thai law. Instead, NGOs fall under one of two categories, i.e., foreign private organizations or Thai registered foundations. Let us take a quick glance at the difference between these two types of business structures.

Foreign Private Organizations Registered as NGOs in Thailand

Without creating a local entity, foreign NGOs are allowed to register their presence and apply for work authorization in Thailand. NGOs are categorized as Foreign Private Organizations in this case. However, it is typically advisable for foreign Organizations looking to operate in Thailand to create a foundation. This is due to administrative challenges associated with running a foreign NGO in Thailand without a local entity registration.

The Committee on Consideration of the Entry of Foreign Private Organizations must grant permission for foreign NGOs to function in Thailand. A foreign NGO will be given a limited license by the Committee to work in Thailand. For international workers and volunteers, obtaining work permits and visas to remain in Thailand are two different processes.

Yet, NGOs functioning as FPOs frequently face financial and legal challenges when it comes to day-to-day problems. Thus, it is often more appropriate to register a local Foundation under Thai law. It becomes mandatory when the NGO involves in any major work or financial activity in Thailand.

Thailand Registered Foundation as an NGO

To pursue their goals and carry out operations in Thailand, NGOs may create a local legal organization called a Foundation.

Thailand Foundations are non-profit organizations with authorization from the Thai Ministry of Interior. Such organizations can carry out charitable, religious, artistic, scientific, literary, educational, and other public interest endeavors.

The process needs a minimum of three board members to supervise either Thai or international volunteers. They must do so on a voluntary basis. Additionally, they must be able to show a minimum donation of 200,000 Baht to form a foundation in Thailand. To prove this, a supporting bank account statement is necessary.

Although not mandatory, yet, one of the board members should be a Thai native. It is because the NGO will undoubtedly benefit from having a member who speaks Thai well and is familiar with local practices. Officers of the Foundation must also get a police clearance from the national police force of their home country.

Regulations for NGO Registration in Thailand for Foreigners

For a developing nation, foreign NGOs offer a possible source of material and technological support. Yet, a complex bureaucratic structure necessitates foreign NGOs to apply for authorization. They must do so before opening a local office in Thailand. The Ministry of Labor and Social Welfare oversees the operation of foreign NGOs in Thailand, and two main regulations govern this process:

• The Ministry of Labor and Social Welfare’s B.E. 2541 (1998) regulations on the entry of foreign private organizations that operate in Thailand.
• Governing principles for consideration and guidelines on the entry of foreign private organizations to operate in Thailand and the building of regional offices in Thailand, according to the Committee on Consideration of the Entry of Foreign Private Organization Regulation B.E. 2543 (2000).

The Committee on Consideration of the Entry of Foreign Private Organizations authorizes foreign NGOs to operate in the nation. It grants permission to foreign NGOs on the basis of the following criteria:

• The country’s strategy for societal advancement, economic growth, and national security
• Preserving positive ties between Thailand and other nations
• The foreign NGO’s objectives and methods of operation while requesting authorization to operate
• Relevant government department’s opinions and recommendations
• The advantages of permitting the foreign NGOs to operate in Thailand

It is significant to remember that Thai law defines the following terms:

• An “institution, organization, society, foundation or group of foreign persons who are in the private sector or who are receiving support from a foreign government” is a foreign non-governmental organization (NGO).
• The definition of “operation” as it relates to the running of a foreign non-governmental organization (NGO) is “an application to establish an office or to operate an activity in order to help or support regardless of whether the form of support is financial support, organizing seminars or exhibitions, donations, support in terms of materials or equipment or durable goods, offering knowledge and technological or other forms of support.”

If a foreign NGO has been given authorization to operate in one of the aforementioned ways, the Committee will provide them a license that is only valid for two years. The foreign NGO must abide by the particular requirements of the license, which include submitting a semi-annual report to the Committee outlining the outcomes of the NGO’s activity.

Foreign NGOs must seek legal advice before starting operations in Thailand due to the complexity of the laws and regulations in that nation. For complete assistance in the process, email us at officer@konradlegal.com and our team will get back to you within 1 Thai working day.