Thailand continues to be one of the central hubs in the Association of Southeast Asian Nation (ASEAN) for attracting foreign direct investment (FDI), due to its advantages for foreign investors seeking to do business in Asia. It provides an attractive business and economic environment and government incentives, which have greatly contributed to the development of private sectors in creating and maintaining Thailand's economic growth and prosperity along with its technological development.

The Government of Thailand has taken a supportive and positive position in promoting and welcoming foreign investment. Thailand's Board of Investment (BOI) offers both tax and non-tax incentives, which aim to promote the development of certain target industries, and most key business sectors of the economy are open to foreign investors.

Thailand therefore continues to improve its attractiveness for FDI through many government initiatives which seek to make the country more accessible to those seeking to expand their presence in Asia while at the same time reducing the amount of red tape required for beginning or expanding business activities.

Manufacturing represents a significant portion of Thailand's GDP, with electronics, cars and automotive components, and agricultural commodities and food products representing some of the largest industries. The service sector and agricultural sector are also important employers in Thailand.

As of 2021, the population of Thailand is just under 70 million, which includes a wide range of people from many ethnicities such as Chinese, Malays, Cambodians, Vietnamese, Indians and others. The official language in Thailand is Thai while English is also a common language and is widely used in business, particularly in Bangkok, Chonburi, Phuket and other major cities.

The Thailand 4.0 initiative has been making significant headway. Thailand 4.0 is a policy aimed at transforming the economy of Thailand into a "Value-Based Economy' by emphasising research and development (R&D), creative thinking, and innovation. The Eastern Economic Corridor (EEC) Project, regulated under the Eastern Economic Corridor Act (EEC Act), is one of the initial projects driving the new policy. The EEC Act is designed to attract both foreign and domestic investments, initially in three Eastern provinces of Thailand: Chachoengsao, Chon Buri and Rayong. Its purpose is to turn Thailand's Eastern region into a leading ASEAN economic zone. The EEC Project is targeting the following industries in the Eastern region:

In addition to the above industries, the EEC Project also focuses on the development of infrastructure, technology and transportation. It plans to implement various transportation projects in the Eastern areas. Various projects are already in the works, including the:

Politics in the past year has been dominated by the COVID-19 pandemic and the government's response to it.

The business climate in Thailand continues to be positive and welcoming to foreign investment. Currently, deregulation and trade liberalisation are taking place on many fronts, largely driven by Thailand's participation in the ASEAN Economic Community (AEC). In 2015, the AEC Blueprint 2025 was adopted, providing the AEC with a broad economic direction which resulted in more autonomous movement of goods, services, capital and labour. Certain changes have already come into effect, such as:

The BOI has launched new investment promotion schemes, making it easier for foreign nationals to conduct business in Thailand. Many temporary COVID-19 relief measures have also been put in place over the past year. Some are still in effect and future measures are possible.

Thailand has a codified legal system, where all rules and regulations are enacted in writing. In accordance with that system, Thailand also has a civil law and dual court system. Although court decisions do not generate binding precedent, rulings are significantly influenced by decisions of higher courts and other past rulings or legal interpretations.

The codified legal system in Thailand operates in a hierarchy of laws that are divided mainly between:

Foreign ownership restrictions in reserved business activities are regulated under the FBA and it is essential to first be aware of the scope of reserved business activities before forming a company formation or undertaking FDI to acquire shares in Thai companies. Under the FBA, certain types of business activities are reserved for Thai nationals only. Foreign investment in those businesses must comprise less than 50% of share capital, unless specially permitted by the Ministry of Commerce or otherwise exempt by a binding bilateral agreement between Thailand and the foreign investor's country, or if the company is being promoted by the BOI.

Potential investors should review the three lists of restricted businesses set out in the FBA to determine whether their proposed business falls under any of the reserved business activities:

Under the FBA, foreign individuals and corporations and foreign-majority-owned companies established under Thai laws are prohibited from conducting any reserved business activities stipulated under the FBA, unless prior approval has been granted. Any Thai company that is majority-owned by Thai nationals, whether directly or indirectly, is not regulated by the FBA, and can therefore engage in any business. Only the shareholding percentage, and not voting rights or dividend rights, is used to determine ownership of a company under the FBA. The restrictions imposed under the FBA are triggered when a company that is foreign-majority-owned starts to conduct business activities in Thailand.

Business activities stipulated under List 1 of the FBA are strictly prohibited to foreigners by special reasons, while business activities under Lists 2 and 3 can be engaged in by foreign parties provided that certain conditions stipulated under the FBA are met and that approval has been obtained from the Foreign Business Administration Division of the Ministry of Commerce. Apart from the FBA, there are other specific laws and regulations that restrict foreign ownership, with details varying depending on the regulations of each business sector.

Trade sanctions are determined through Cabinet resolution, but only apply after proper notification by the relevant regulator. For example, the Department of Foreign Trade announces new sanctions relevant to the import and/or export of goods. Similarly, banks in Thailand are obligated to comply with monetary sanctions as announced by the Bank of Thailand. The import or export of armaments always requires approval from the Ministry of Defence, which may prohibit imports and/or exports from/to certain countries.

In addition, the international organisations to which Thailand is bound as a member state (UN, World Trade Organization (WTO) and ASEAN) must take into account whether it requires a member state to level any sanction to comply with its obligations.

Thailand has a set of specific trade sanctions in place, which can be checked with the relevant regulator for the industry in question. For example, the Department of Foreign Trade (DFT) announced that certain products/goods are prohibited from being traded with select countries, including North Korea, Iran, Liberia and Sudan.

Foreign exchange transactions are regulated by the Exchange Control Act BE 2485 1942 (as amended) and Ministerial Regulation No 13 BE 2497 1954 issued under the Exchange Control Act, which states detailed restrictions for all circumstances will be issued via notification from a competent office at the Ministry of Finance.

Commercial banks are authorised by the Bank of Thailand to approve the following foreign exchange transactions in its name:

Sums that exceed the limitations, or are for purposes other than those permitted by the Bank of Thailand, require the Bank of Thailand's approval. In practice, various commercial banks require copies of supporting documents for certain transactions, including both inbound and outbound transactions. For example:

In addition, with the implementation of the US Foreign Account Tax Compliance Act (FATCA) in 2014 for commercial banks, there will be some changes for customer accounts regarding foreign financial institutions. According to the Anti-Money Laundering Act B.E. 2542 (1999), when a transaction is made with a financial institution, the financial institution must report it to the Anti-Money Laundering Office if the transaction appears to be a:

To comply with the anti-money laundering laws in Thailand, financial institutions must require their customers to provide a detailed scope of transactions, including relevant supporting documents (which may include entity's beneficial ownership), which are left to the practical discretion of the financial institution in accordance with their internal policies.

There are no government's grants or incentives that are exclusively available to foreign investors. The Investment Promotion Act B.E. 2520 (1977) sets out key provisions and regulatory framework for investment incentives granted by the BOI. The BOI has the authority to grant both tax and non-tax incentives to qualifying investment projects in Thailand, and these are available equally to both Thai and foreign investors. The incentives include a corporate income tax holiday, which has been classified into two groups:

Other incentives also include:

Merit-based incentives are available for the following types of investments/expenditures:

The BOI specifically considers certain activities to be of special importance and benefit to the country, for example: electronic design, software, energy services, cloud services, digital technology, R&D, biotechnology, medical, engineering design, and smart farming.

Additional area-based incentives for corporate income tax exemptions are provided to qualified investors in the specific areas that fall under the following categories:

On top of the incentives offered by the BOI, privileges granted by the Industrial Estate Authority of Thailand (IEAT) could benefit foreign investors in terms of both tax and non-tax incentives. This includes exemption from import duty for machinery and permission to own land for business operations.

Investors in the designated areas of the EEC will be eligible to receive various incentives, including:

It should be noted that some of the incentives will only be granted if the investors meet the requirements and conditions prescribed under the EEC Act and/or other related regulations. Under the EEC scheme, certain personnel working in the ten targeted industries (see Question 2) could be eligible for a Smart Visa, which offers extensive rights and benefits in connection with visas and work permits.

Several types of business entities are available in Thailand, including:

Trusts created by any legal act will have no effect unless they are created through a provision of law that permits the creation of a trust (that is, the Trust for Transactions in Capital Market Act BE 2550 (2007)).

The most common form of business vehicle used by foreign companies is the private limited company, as it limits shareholders' liability to the remaining amount of unpaid (if any), registered capital due on the shares respectively held by them. In addition, if Thai nationals own more than 50% of its share capital, a private limited company is not regarded as foreign under the FBA and therefore is not restricted from engaging in reserved business activity (see Question 4).

Thailand has recently considered a single shareholder company law where only one natural person or juristic person can incorporate a limited company and can act as the meeting itself and pass resolutions without the need to call for a shareholders' meeting.

At least three natural persons (promoters) are required to establish a private limited company. The incorporation of a limited company must be registered with the Department of Business Development (DBD) of the Ministry of Commerce. The process involves reserving a company name, filing and registering a Memorandum of Association (MOA) and the incorporation documents, which must be signed by all promoters and directors. If all incorporation documents are signed and ready, the filing and registration with the DBD can be completed within one business day. Since 2018, the government fees are fixed at THB5,500 for the registration of an incorporation of a limited company and MOA, regardless of the amount of capital the company wishes to register.

All limited companies must file audited financial statements of each fiscal year (12-month accounting period) with the Ministry of Commerce and Revenue Department within five months of the end of the fiscal year. The audited financial statement must be approved by a general meeting of shareholders within four months of the end of the fiscal year, and submitted electronically within one month from the date of the general meeting. There are no government fees charged for submitting audited financial statements.

In general, there are no minimum or maximum share capital requirements for companies (provided that the minimum par value per share is THB5). The DBD, however, retains discretion to raise objections if it appears that the registered capital is too low for the purposes of conducting the proposed business in Thailand. Foreign majority-owned companies are subject to the FBA rule stating that the minimum share capital for these companies is THB2 million. If the intended activity is reserved under the FBA (see Question 4), the minimum share capital is increased to THB3 million, for each reserved business. The par value of each share must be at least THB5. The registered capital must be initially paid up at the minimum of 25% of the total amount. Additionally, if the company has foreign employees, the company must have at least THB2 million of registered capital, 100% paid-up, per work permit.

Shares can be issued for non-cash consideration. In principle, non-cash capital contributions (payments in kind), such as assets or services, are acceptable if approved by the statutory shareholders' meeting or by a special resolution.

Restrictions on rights attaching to shares. The following restrictions apply:

Other rights or restrictions may be given by the company's MOA, articles of association (articles), or the general meeting of shareholders.

Automatic rights attaching to shares. Automatic rights attached to shares include the rights to:

A private limited company is managed by a board of directors consisting of at least one director, who is elected by the shareholders in a general meeting and under the control of the shareholders and according to the company's articles. The board of directors can appoint one or several directors or other persons to perform any act on its behalf, unless expressly stipulated otherwise in the company's articles.

Generally, there are no nationality requirements or restrictions for directors, except in certain businesses which have a quota for foreign directors. For example, inland transportation businesses, and other foreign companies permitted to engage in business under List 2 of the FBA, must have Thai nationals comprise at least half of all directors.

The directors are obliged to comply with all laws and objectives of the company, follow the company's articles, adhere to resolutions of the general meeting of the shareholders in good faith, and preserve the interests of the company. In general, directors are not personally liable to a third party for their actions on behalf of the company, unless they are in breach of their authority as stipulated in the MOA and articles of the company or a shareholders' resolution. Directors can be criminally liable if the company commits a criminal offence under certain statutes, if the offence was from the director's instructions or actions (or their failure to give instruction or take action) resulting in the company committing an offence.

Under the Civil and Commercial Code, any shareholder in a limited liability company can file a petition against the director of the company for compensation if they can prove that the director caused any damage to the company (provided that the company fails to do so itself). However, the director can relieve themselves from liability to the company or shareholder who claims compensation from them if they can prove to the court that they exercised the decision with faith that their action would benefit the company (complied with duty of care, fiduciary and loyalty) and that such action was approved by the shareholder who claimed for such compensation.

The law in another country where a parent company is located may require the parent company/officer to be liable for the action of the subsidiary. However, under Thai law, a parent company is only regarded as a shareholder, and is only liable for the debts and losses of its subsidiary (which is considered as a limited company in Thailand) up to the amount unpaid on its shares.

There are numerous acts and regulatory notifications, involving various government bodies, that address environmental regulatory matters in Thailand, including the:

One of the primary laws governing environmental issues is the Enhancement and Conservation of National Environmental Quality Act B.E. 2535 (1992) (NEQA). The NEQA provides a framework for protecting the environment by apportioning environmental responsibilities among various government agencies and establishing committees to deal with environmental issues. Among the requirements imposed under the NEQA are environmental impact assessments.

On July 18, 2018, the amended NEQA 2018 came into effect. The amended NEQA mainly improves the criteria for environmental impact assessment reporting and the system for environmental impact analysis, to be consistent with the provisions in Thailand's constitution.

The laws listed above are also still in effect and apply to various public and private entities in Thailand. This means that many business will have to comply with one or more of these laws, such as legislation governing factory operation and building construction.

A factory is defined in Thai law as a "building, premises, or a vehicle using a machine, or machines, with total power or an equivalent of fifty horsepower or more, or which employs fifty workers or more, with or without machinery, to manufacture, produce, assemble, pack, repair, maintain, test, improve, process, convey, keep, or destroy anything in accordance with the type or kind of factory as prescribed in the Ministerial Regulations" (Factory Act B.E. 2535 (1992), as amended by Factory Act (No. 2) B.E. 2562 (2019) and Factory Act (No. 3) B.E. 2562 (2019)).

In other words, the "factory" designation applies to a building, premises, or vehicle that either

Businesses whose activities fall under this definition must notify the competent official, before the commencement of its operation, or obtain a factory licence from the competent official, according to its category as specified under the Factory Act. These operators must also comply with zoning laws issued specifically for the location (district or provincial), as each zone may or may not permit certain types and sizes of factory operations.

The application for the factory permit must contain details on the waste or pollution that may result from the production process, as well as its disposal management.

Generally, no buildings can be constructed, altered, or removed without obtaining a permit from or notifying the government authority (typically the local district or municipality administrative office).

Before issuance of a construction permit, several environmental factors will be considered, for example, the size and height of the building and the zoning classification of the land.

The Ministry of Natural Resources and Environment requires an environmental impact assessment (EIA) reports from parties responsible for constructing certain building types (including offices) with a height of 23 metres or more, or a total floor area of 10,000 square metres, as well as certain other projects specified in the following:

Civil liability for environmental damage can be incurred under the Civil and Commercial Code and under various other laws, such as the:

Business operators should also observe local regulations to assess whether their business is considered hazardous in that area, as certain activities could trigger additional local licensing requirements.

Criminal penalties for environmental damage can include fines, imprisonment, or both. Liability for oil spills, for example, can accrue under multiple laws. Regardless of industry, those subject to Thai jurisdiction should take the necessary steps to ensure compliance with the applicable environmental statutes. The number of laws can make this task appear daunting, but the reality is that, aside from EIAs, HIAs, and public consultations, many of the laws' provisions relevant to environmental matters impose environmental obligations as part of existing licensing or permitting obligations.

Thai labour laws apply to all employees working in Thailand, regardless of their nationality or tenure.

Choice of law provisions are generally valid under Thai law, and the parties to an employment agreement can agree to have the agreement governed by a foreign law. However, Thai courts can refuse to apply a chosen foreign law if it is contrary to public order or the good morals of Thailand.

However, when a provision of a foreign law is more favourable for the employee than the provisions prescribed under Thai labour laws, the court can consider the choice of law provision as a clear intention of the parties to be bound by the additional requirements, and will apply that foreign law provision accordingly.

The employment of non-Thai nationals working in Thailand is specifically regulated by the:

Subject to certain exceptions, none of the Thai labour laws listed below are relevant to employment of Thai employees outside of Thailand or to employees (regardless of nationality) of Thai companies working outside of Thailand.

The main laws regulating employment relationships in Thailand are the:

In addition, most laws provide for the promulgation of ministerial regulations, which offer additional clarity and rules.

Employment contracts do not need to be in writing. An employment relationship can be proven by an employer's payroll documents or other reports/filings submitted to the Social Security Office or the Revenue Department.

In addition, the terms of an employment relationship can be defined by the parties' conduct (implied terms).

A collective bargaining agreement can also apply.

Thai labour and immigration laws require that foreign persons wishing to work or physically operate a business in Thailand must obtain a work permit from the Ministry of Labour and maintain a valid non-immigrant visa while residing in Thailand. A foreign person intending to work in Thailand must obtain:

The work permit application must be sponsored by an entity or sponsor that is registered as a business in Thailand. Processing the application normally takes between ten and 14 days. The processing time can be reduced to one day for companies that:

Government fees for a work permit are in the range of THB850 to THB6,100 (plus minimum stamp duty) depending on the validity period granted, which could be up to two years.

The requirement for a work permit can be relaxed for certain professional occupations for expatriates from member states of the ASEAN Framework Agreement on Mutual Recognition Arrangements, provided the requisite criteria are met.

While staying in Thailand, a foreign national must comply with the period of stay that is initially granted (90 days from arrival (stamped in the passport)). A one-year visa extension can be applied for within Thailand after a work permit is obtained, subject to renewal before the expiration date. Foreign nationals must leave Thailand before the visa expiration date or apply for an extension of stay in Thailand, otherwise, a fine of THB500 per day for overstaying can be imposed.

Foreign employees are not required to apply for permanent residence (PR) permits. Non-nationals with non-immigrant visas who have resided in Thailand consecutively for at least three years are eligible, but not required, to apply for a PR permit. There are several categories under which the PR application can be submitted, such as: business or employment purposes, experts/academics, or to support family (spouse and/or children) who are Thai citizens. In addition to conditions relating to national security, the following factors in relation to each applicant are considered when reviewing a PR application:

To be considered for a PR application under the category of employment, the applicant must:

Each nationality is allowed an annual quota of 100 PR permits, and the entire process takes at least one year from the date of submission. A non-refundable PR application fee of THB7,600 is charged on the submission date, and the PR permit fee of THB191,400 is charged after approval is granted. RPs for spouses and children (under 20 years of age) of Thai citizens or foreigners who have already applied for and received an RP cost THB95,700.

Employees are not entitled by law to management representation or to consultation in relation to corporate transactions. However, employees are protected in situations of termination of employment without cause, whether in relation to redundancy or other circumstances. In addition, employee consent is required in situations of transfer of employment from one legal entity to another.

Employment can be terminated, regardless of the reason, provided the termination is conducted in accordance with Thai labour law. Termination is defined as any action taken by the employer that prevents the employee from working and being paid.

There is a difference between termination with cause and without cause, and termination that is fair and unfair.

Fair and unfair terminations are undefined in Thai labour law, so their meanings are interpreted by the courts based on the facts and evidence presented for each individual case.

Termination with cause. Termination with cause is only permissible in certain specific situations. Reasons which justify termination with cause include:

(section 119, Labour Protection Act.)

In circumstances justifying termination with cause, the employer can terminate employment immediately, without paying severance.

Statutory minimum notice. None.

Severance payment. None.

Termination without cause. If the employer terminates employment without cause (which is most frequently the case), the employer must:

In addition to the above, there is also a risk that the employee will claim for unfair termination. If a terminated employee considers their termination unfair, they can pursue the case in the labour courts, seeking reinstatement or compensation/damages for unfair dismissal. The court can award compensation beyond mere severance, payment of wages in lieu of notice, and other amounts due on termination, at its own discretion.

In making its determination, the court must consider the:

If the court finds a termination unfair, it can order reinstatement, if the employee requests this, or damages. To avoid claims for unfair termination, employers should negotiate with outgoing employees to reach an amicable end to the employment relationship.

Grounds for unfair dismissal. This depends on courts' interpretation based on the fact and evidence on case-by-case basis.

Remedies. The court can order reinstatement of the employee if the employee requests it. If the employer and the employee cannot continue working together, the court will order the employer to pay compensation/damages to the employee.

The above principles apply to all employees, regardless of a class or group of individuals.

In general, redundancies and mass layoffs are regulated in the same manner as other circumstances in which termination occurs. However, when employment is terminated due to restructuring related to deployment of new technology or machinery, employers must follow the procedures set out below.

Employers must:

For this type of termination, normal severance pay is required (see Question 16), and the employer must also pay special severance to all employees who have at least six years' tenure.

Any person, regardless of their tax residence status, who derives employment income from working for a Thai employer in Thailand, is subject to personal income tax, regardless of whether this income is paid within or outside Thailand.

Under local tax law, an individual who stays in Thailand for a total of at least 180 days in a tax (calendar) year is regarded as Thai tax resident. Ownership of property, nationality, or legality to stay in Thailand are not factors to be considered for tax resident status.

Tax resident employees are subject to PIT at progressive rates of 5% to 35%. The tax year runs from 1 January to 31 December every year.

Employers and employees must each contribute to the Social Security Fund an amount equal to 5% of the employee's gross wages, up to a maximum of THB750 per month. The rate of social security contribution can be temporarily reduced under circumstances (such as COVID-19).

In the context of employment in Thailand, non-tax resident employees working for Thai employers are also subject to PIT at progressive rates ranging from 5% to 35%.

Employers must withhold income tax at the applicable progressive rates and remit the amount to the Thai tax authority no later than the seventh day of the month following the month of payment.

Employers must contribute between 0.2% and 1% (depending on the classification of the employer) of an employee's annual earnings (up to a maximum of THB240,000) to the Workmen's Compensation Fund each year, depending on the classification of the employer.

Companies incorporated in Thailand are considered to be tax residents of Thailand.

Non-tax resident business entities not carrying out business in Thailand must pay income tax on the gross amount of their Thai-sourced income (such as service fees, royalties, interest, and rental income) at a flat rate of 15% (or 10% for dividends), unless otherwise exempt or reduced under tax treaties. Income tax is paid through tax withheld at the source, by the payer of income, at the time of the payment.

Non-tax resident business entities that carry out business in Thailand (for example through a branch or office) are subject to corporate income tax in Thailand. The corporate income tax can be exempted if the non-tax resident business entity does not have a permanent establishment under an applicable tax treaty.

Tax resident business vehicles are subject to corporate income tax in Thailand on worldwide income.

The standard rate of corporate income tax is 20% and is payable on its net taxable profit earned during any given accounting period. Reduced rates at the progressive rates of 15% to 20%, with an exemption for the first THB300,000 of net profit, are granted to qualified small and medium-sized enterprises.

Corporate income tax must be filed twice an accounting period (half-year tax return and annual tax return).

Half-year tax return must be filed within two months from the end of the first six-month of an accounting period.

Annual tax returns must be filed within 150 days after the end of accounting period. Tax returns can be filed in hardcopy at an area revenue office or in softcopy through the website of the Thai Revenue Department.

Currently, VAT is payable at a rate of 7% (or 0% for export of goods and services) on the following categories of business transactions:

Some business activities are exempt from VAT, such as the sale of agricultural products.

Certain business activities are subject to SBT, instead of VAT, at a payable rate varying between 0.1% and 3% of gross monthly receipts. Such businesses include:

Municipal tax applies to business subject to SBT and is charged at a rate of 10% of the SBT payable. Municipal tax is already included in the 7% VAT rate.

There are 28 instruments/documents subject to stamp duty (Stamp Duty Schedule, Revenue Code). The rate of the stamp duty payable and persons liable to stamp duty depend on the instrument/document executed. If the instrument/document is executed in Thailand, stamp duty must be paid within 15 days from the date of execution. Stamp duty on an instrument/document executed outside Thailand must be paid within 30 days from the date of bringing the item into Thailand.

Dividends are subject to a withholding tax of 10%.

Dividends are taxed as the ordinary income of the Thai company. Tax exemptions are granted under certain conditions.

Interest is subject to a withholding tax of 15%, which can be exempted or reduced to 3% or 10% under certain tax treaties.

Royalties paid to foreign corporate shareholders are subject to a withholding tax of 15%, which can be exempted or reduced to 5%, 8% or 10% under certain tax treaties.

Thailand does not have any thin capitalisation rules.

There are no controlled foreign corporation rules in Thailand. A Thai parent company is only subject to tax on actual dividends paid to it by a foreign subsidiary.

Thailand has transfer pricing rules, which are generally follow the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.

In addition to the transfer pricing rules, the Thai Revenue Department also has the power to make assessments on unrelated party transactions regarding the:

Additionally, it can make assessments, without justification, of other activities with compensation, service charges, or interest in an amount considered to be lower than the market value.

Customs duty is imposed mainly on imported good and on various selected exported goods. Customs duty is levied in accordance with the Harmonised Commodity Description and Coding System.

As a signatory to the General Agreement on Tariffs and Trade and a member of the WTO, Thailand complies with all relevant standards and codes when determining customs duty.

Imports and exports are also subject to VAT (see Question 21).

Thailand has signed 61 double tax treaties with 61 jurisdictions, covering Australia, China, Great Britain and Northern Ireland, Hong Kong, Singapore and the US.

In 2017, Thailand enacted the Trade Competition Act BE 2560 2017 (2017 TCA), the cornerstone of the competition law regime in Thailand, and repealed the previous Trade Competition Act BE 2542 1999 (1999 TCA). Along with the enactment of the 2017 TCA came the establishment of the Trade Competition Commission (TCC), which has promulgated a number of notices and regulations addressing competition law matters, and the Office of Trade Competition Commission (OTCC), to handle administrative work.

In principle, the 2017 TCA applies to all business operators in the industrial, commercial, financial, insurance, and service sectors all fall within the scope of the law. The law is silent on the extraterritorial reach of its provisions, but the 2017 TCA can be interpreted as applicable to foreign entities if they commit any offence under the law and the offence has any anti-competitive effect in Thailand.

The key concepts are fundamentally the same as those set out in the 1999 TCA. The rules related to restrictive agreements and practices are primarily governed by the text of the new TCA as follows:

Penalties. The penalties for certain violations of the TCA are as follows:

Under the 2017 TCA, mergers, acquisitions, amalgamations, entire and partial business transfers, joint ventures, acquisition of assets, and direct or indirect share acquisitions can fall within the definition of a "business merger." In general, the 2017 TCA establishes a dual merger control system, which involves:

Exemptions are granted for internal restructuring and mergers between businesses which have a relationship in terms of policy and command, under the economic concept of the single economic entity.

The TCC and OTCC have suggested that the merger control regulations under the TCA could apply to foreign-to-foreign mergers if either party conducts any business activities in Thailand, or has a turnover and market share from the sale of goods or services in Thailand. Such business activities could be carried out by the business operator itself or through other Thailand-based entities such as local subsidiaries in the same corporate group (single economic unit), affiliates, branches or representative offices, agents, dealers or distributors.

Generally, the merger control regime under the 2017 TCA applies to all business operators in the industrial, commercial, and service sectors, or other businesses prescribed by the TCC. Despite this, certain sectors have their own merger control regulations, and thus do not fall within the scope of the TCA's merger control regime, including:

The public limited companies listed in the SET fall within the ambit of the merger control rules under the TCA, unless sector-specific regulations include merger control provision. In addition to being subject to the TCA, the listed companies are subject to the tender offer and take-over rules stipulated in the Securities Exchange Act (SEA) and its subordinate legislation adopted by the SEC.

Sanctions for committing bribery in Thailand are as follows.

Any person accepting a bribe is subject to a prison term of up to five years and/or a fine of up to THB10,000.

Any person who bribes or offers a bribe is subject to a prison term of up to five years and/or a fine of up to THB10,000.

(sections 143 and 144, Thai Penal Code.)

Sanctions for committing a corrupt act in Thailand are.

Any person who holds themselves out as an official or exercises the functions of an official without the authority to do so is subject to a prison term of up to one year and/or a fine of up to THB1,000. Additionally, anyone who continues to exercise such functions after being ordered to discontinue is subject to the same punishment.

Anyone who illegally wears an official uniform, symbol or insignia or uses an official title, rank, decoration is subject to a prison term of up to one year and/or a fine of up to THB2,000.

(sections 145 and 146, Thai Penal Code.)

These can be found at the Office of Public Sector Anti-Corruption Commission (PACC).

The Executive Measures in Anti-Corruptive Act B.E. 2551 (Anti-Corruption Act) established the Public Sector Anti-Corruption Commission (PACC), which is responsible for:

(section 17, Anti-Corruption Act.)

Section 40 addresses the procedure to be applied when the PACC finds that any public official has committed a corrupt act in the public sector and finds a prima facie disciplinary case.

Section 45 provides necessary steps to be taken when the offence committed is also a criminal offence.

This can be accessed on the NACC website.

Section 3 repeals various legislation, including many of the past amendments to the Organic Act on Counter Corruption (Counter Corruption Act).

Section 28 empowers the NACC to:

The NACC can also propose measures, opinions, and recommendations to the Cabinet, Parliament, Courts of Justice, independent agencies, or the public prosecutor regarding:

(section 32, Counter Corruption Act.)

The NACC has additional powers to:

(section 34, Counter Corruption Act.)

Section 35 requires the NACC to investigate any allegation or suspect behaviour promptly. The NACC must reach a resolution with at least a two-thirds vote to issue a letter notifying the state agency and the Cabinet with recommendations for solutions.

Section 173 and 174 set out offences for an official that violates the Counter Corruption Act.

Section 175 and 176 set out offences for an individual that violates the Counter Corruption Act.

Section 176 also sets out offences for a legal entity that fails to prevent bribery committed by an associated person with the intention to obtain a benefit for the entity.

This can be found on the NACC website.

A state official can receive property or any other benefit on an ethical basis as follows:

(section 5, 2000 Notification.)

Under section 8 the following are prohibited:

Any person that commits this offence is subject to a:

Thailand, like most UN member countries, is a party to the UNCAC. Article 12 of the convention requires each state party to take the following measures to prevent corruption in the private sector:

Article 21 provides legislative and other measures that state parties should consider adoptingto make such activities a criminal offence:

Article 39 provides measures needed to encourage the cooperation between national authorities and the private sector.

Article 43 targets international co-operation in the operation of the convention.

Thai companies may also fall under the jurisdiction of the US Foreign Corrupt Practices Act (FCPA), the UK Bribery Act, and the OECD Convention Against the Bribery of Foreign Government Officials.

Definition and legal requirements. To qualify for an invention patent, an invention must be all of the following:

An invention that lacks an inventive step (a utility model) can be protected by a petty patent. A patent owner enjoys exclusive rights to produce, import, use or sell the protected product or process.

Registration. To obtain protection, an application for a patent must be submitted to the Department of Intellectual Property (DIP). The DIP's website provides guidance on the application procedure.

Enforcement and remedies. A patent owner can bring:

Length of protection. An invention patent is protected for a non-renewable period of 20 years. A petty patent is protected for six years, which is renewable for a further two years on two occasions (up to a maximum of ten years in total).

Definition and legal requirements. The Trademark Act 1991 (as amended by the Trademark Act (No. 2) BE 2543 and Trademark Act (No. 3) BE 2559) (Trademark Act) provides a framework for the registration and protection of trade marks, service marks, certification marks and collective marks. A "mark" means a photograph, drawing, device, brand, name, word, text, letter, numeral, signature, combination of colours, figure or shape of an object, sound, or any combination thereof.

To be capable of registration, a mark must be all of the following:

Protection. Applications for trade mark registration must be submitted to the DIP or filed as an Application for International Registration through the World Intellectual Property Organization (WIPO) with a designation of Thailand. The DIP's website provides guidance on the application procedure.

The owner of a registered mark has the exclusive right to use the registered mark for the goods and/or services in respect of which registration has been granted. While the owner of the unregistered mark cannot prevent or demand compensation for infringement of an unregistered trade mark, they can file a lawsuit against any person who passes off goods as those of the owner of said trade mark.

Enforcement and remedies. A registered trade mark owner can bring a:

Definition. Registered designs are protected by the Thai Patent Act 1979, as amended. To qualify, a product design must be all of the following:

Registration. Applications for a design patent must be submitted to the DIP. The DIP's website provides guidance on the application procedure.

Enforcement and remedies. The owner of a registered design patent is entitled to enforce its exclusive rights. The enforcement procedure is the same as for patents (see above, Patents).

Length of protection and renewability. Protection is for a non-renewable ten-year period.

There is no specific protection for unregistered designs. However, a design can be protected under section 4(7) of the Copyright Act 1994, as a work of applied art (see below, Copyright).

Definition and legal requirements. Copyright can subsist in the following original works (Copyright Act 1994):

A copyright owner has the exclusive right to:

Protection. Copyright protection arises automatically on creation or publication of the work. Alternatively, the copyright owner can record his ownership with the DIP, in order to create proof of ownership. The DIP's website provides guidance on the application procedure.

Enforcement and remedies. Copyright owners are entitled to enforce their exclusive rights. The enforcement options are the same as for patents. The penalties for a criminal action include fines from THB20,000 to THB800,000 and/or imprisonment of six months to four years. Repeat offenders (within five years) can be liable to double punishment.

Length of protection and renewability. Protection for most works lasts for the lifetime of the creator plus 50 years, except works of applied art which are protected for 25 years from the date of the work was created or, if published, 25 years from first publication. In addition, copyright in a photographic work, audiovisual work, cinematographic work, sound recording or audio and video broadcasting work lasts for 50 years from the date of the work was created or, if published, 50 years from first publication. This protection timeframe cannot be renewed.

Amendments to the Copyright Act. The amendments to the Copyright Act (Copyright Act (No. 2) (2015)) promulgated on 31 January 2015 were designed to update the Copyright Act for the digital age. The amendments introduced sections concerning:

These latest amendments can be summarised as follows:

In addition to the Copyright Act (No. 2) BE 2558 (2015), there was the Copyright Act (No. 3) BE 2558 (2015), amending the Copyright Act BE 2537 (1994). The amended Act introduces the prohibition of, and penalties for, recording movies in cinemas, and exceptions to copyright infringement for the benefit of disabled persons, as follows:

The draft is pending consideration by the government and is expected to be enacted soon.

Marketing, distribution and franchise agreements innominate contracts and are subject to the general laws governing contracts and obligations, although there are no specific laws or regulations relating to such agreements.

The general principles of law can be used to regulate these types of agreements. There are no specific requirements on the notarisation and/or registration of marketing agreements.

Agency agreements are governed by specific provisions in the Civil and Commercial Code. Whether an agency relationship exists depends on the relationship between the parties. Contractual parties can include a "no agency" or "no partnership" provision in their agreements, but the court ultimately determines whether such a relationship exists or not.

Businesses (particularly those without a Thai registered company) must be aware that commercial agreements with Thai distributors/franchisees/marketers can be subject to the provisions of the Unfair Contract Terms Act BE 2540 1997. This is particularly significant when the agreement signed by the Thai partner is a contract of adhesion.

In addition, foreign businesses must be mindful of whether or not their contractual arrangements with Thai business partners constitute a permanent establishment from a tax law perspective, which could potentially and inadvertently expose their commercial operations to the Thai taxation regime.

Generally, e-commerce transactions are regulated by the provisions of the Civil and Commercial Code pertaining to contract law, specifically to contracts which are made at a distance.

The general rule under is that a contract comes into existence when a notice of acceptance is received by the offeror.

The Electronic Transaction Act BE 2544 (2001) (as amended) specifically provides for the formation of contracts electronically, electronic signatures, electronic payments, e-commerce service providers and the implementation of security measures.

Various regulations have been promulgated under this act by both the Electronic Transactions Commission and the Bank of Thailand.

In addition, the Act on Computer-Related Offenses BE 2550 (2007) (as amended) sets out various criminal offences relating to computers. Tt establishes extensive data retention requirements and obligations for service providers to co-operate with and assist law enforcement.

Those who wish to carry out e-commerce businesses in Thailand may be required to apply for commercial registration with the Department of Business Development (DBD) and direct marketing registration with the Office of Consumer Protection Board (OCPB).

Online platforms that allow users to offer or sell their products or services by electronic means, must register with the Department of Business Development (DBD).

Businesses that market goods or services for sale online fall under the definition of "direct marketing" in the Direct Sales and Direct Marketing Act B.E. 2545 (2002), and registration with the Office of Consumer Protection Board (OCPB) is therefore required.

The following online businesses have been excluded from the term "direct marketing" by ministerial regulation:

In Thailand, advertising is regulated directly or indirectly by several statutes. Some of this legislation applies generally, such as the Consumer Protection Act 1979 (as amended in 1998, No. 2; 2013, No. 3; and 2019, No. 4) (CPA), while others target specific categories of advertising, for example, the:

The CPA sets out the basic principles of advertising laws that aim to ensure truth in advertising and full disclosure of labelling. The CPA applies to all types of advertising except for matters that are specifically controlled by other laws, in which case the CPA is applicable only to the extent that it is not in repetition or inconsistent with the relevant specific legislation.

While most advertisements are not subject to prior government approval, advertisements of certain products must be reviewed and approved by the responsible authority before their launch, particularly when advertising food, drugs, and medical devices.

The government supervises advertising in Thailand through the:

There are no specific rules regarding digital advertising, online behavioural advertising or influencer marketing.

However, if a partial or entire online advertisement is considered distorted, forged, or false, in a manner that is likely to cause damage to another person or the public, the advertiser could be liable for a criminal offence under the Computer-Related Crime Act B.E. 2550 (2007) as amended by the Computer-Related Crime Act (No. 2) B.E. 2560 (2017).

Direct marketing is regulated by the Direct Sales and Direct Marketing Act B.E. 2560 (2017) and the Ministerial Regulation on Collateral Requirements for Direct Sales and Direct Marketing Business B.E. 2561 (2018), which together impose rules and regulations to protect consumers from business operators engaging in direct sales and direct marketing. However, there are no specific regulations on advertising under these and advertising is generally subject to the CPA.

Like advertising, sales promotions are regulated directly or indirectly by several statutes, such as the:

Sales promotions are generally allowed for most products, except for some regulated products such as alcoholic beverages, for which the law prohibits giving out free samples or conducting other similar sales promotions to induce individuals to consume alcoholic beverages.

The Personal Data Protection Act B.E. 2562 (2019) (PDPA) was published in the Government Gazette on 27 May 2019. While the provisions on the establishment of the Personal Data Protection Commission (PDPC) and the Office of Personal Data Protection Commission (Office of PDPC) have been in force since 28 May 2019, the remaining provisions of the PDPA, including provisions relating to the collection, use, and disclosure of personal data, are due to come into force on 1 June 2022.

The law applies to data controllers and data processors regardless of their location if their processing activities fall within the extraterritorial scope.

Personal data in the context of the PDPA is an extremely broad term covering any data from which a living individual can be identified, whether directly or indirectly. The most significant restrictions on the collection, use and disclosure of such data under the PDPA are:

Collection, use or disclosure of personal data is generally prohibited unless consent from the data subject has been obtained or unless it falls within an exemption prescribed under the PDPA. If consent is required, the request must:

Personal data can only be used for the purposes for which the consent has been granted. Therefore, if the purpose of use changes, fresh consent must be obtained.

Before or at the time of collecting personal data, the data controller must inform data subjects of the purposes for processing the data, the period for which their personal data will be retained, and so on. In addition, the PDPA grants data subjects various rights over data held by others that relates to them which are the rights to:

Data controllers must ensure that they honour and guarantee these rights as part of their operations.

The penalties for non-compliance are severe and can include:

Thailand does not have general consumer privacy laws in place.

The laws which address product liability and product safety issues are the:

In addition, on 8 December 2015, amendments to the Thai Civil Procedure Code took effect, implementing, for the first time, class action procedures for civil claims, including those relating to product liability and safety.

The PL Act is designed to protect consumers who incur damage from a defective or dangerous product by imposing strict liability on business operators involved in the manufacture and/or sale of the product. The operator can be found liable regardless of whether it was negligent in making or selling the defective or dangerous product. The PL Act addresses three specific types of product defects:

Under the PL Act, product liability cannot be waived or limited by way of contract or by any waiver or limitation of liability statement given by an operator. The PL Act does not have retroactive application and, therefore, products sold to consumers before enactment are not subject to this specific product liability legislation.

The Consumer Case Procedure Act 2008 (CCP Act) is intended to make it easier for consumers to pursue product liability and general consumer claims against business operators. The CCP Act simplifies and expedites the legal process for an injured party to seek redress. For example, consumers can file complaints orally, and court fees are waived for consumers who wish to file an action. In addition, the court is given considerable discretion under the CCP Act to conduct the proceedings and to ensure that consumers receive fair treatment.

With the introduction of class action law when the Civil and Procedural Code was amended in 2015, a framework now exists in Thailand for a representative claimant to file claims on behalf of a large group of similarly situated persons, with judgments binding on the entire class. This is a landmark change in procedure and has the prospect of significantly improving consumer rights, but also increasing business operator liabilities.

The President of the Supreme Court has recently issued supporting regulations on certain aspects of the class action process. However, as few cases have been filed to date, many questions remain unanswered as to the true impact of class actions.

Based on the experiences of other countries that have enacted similar class action legislation, it is expected that a developing entrepreneurial class of claimant attorneys is likely to promote class action filings in Thailand, particularly in disputes over product liability and safety.

There remain a relatively small number of high court rulings to provide any useful guidance on the interpretation of the PL Act and CCP Act. This is due to the historical reluctance to pursue matters through the Supreme Court, particularly since the review process can take a substantial amount of time and recoveries are considered to be conservative by western standards. However, Thailand has already seen a steady increase in consumer and product liability claims and filings are expected to continue to increase. With the emergence of class action as a viable mechanism for mass tort claims, there should be robust long-term development of product liability and safety claims in Thailand.

The CPA is the main law in Thailand governing unfair practices related to product safety and regulates various matters including the:

The CPA also established the Consumer Protection Committee, along with other sub-committees to oversee and regulate specific matters under the Act.

Other laws govern safety issues around specific types of products, including the:

The key regulatory authorities relevant to doing business in Thailand are set out below.

Trade Competition Commission (TCC). The TCC was established under the 2017 TCA as an independent state agency that was attached to neither the government nor the state enterprise. The TCC is a juristic person which is autonomous in matters of personnel, budget and administration. Currently, the TCC comprises seven members working full-time in four-year terms.

Office of Trade Competition Commission (OTCC). The OTCC was established under the 2017 TCA to handle administrative work and monitor practices that might lead to violation of the 2017 TCA.

Ministry of Natural Resources and Environment (MNRE). The MNRE's responsibilities include the preservation, conservation and rehabilitation of natural resources and environment, along with managing and overseeing the sustainable use of resources.

Office of Natural Resources and Environmental Policy and Planning (ONEP). The ONEP is an agency under the MNRE that formulates policies and plans for the conservation and management of Thailand's natural resources and environment. This includes monitoring environmental impact.

Ministry of Finance (MOF). The MOF is empowered to oversee various matters concerning public finance, taxation, treasury, government property, operations of government monopolies and revenue-generating enterprises, and organisations to which the government has contractual obligations.

Revenue Department. The Revenue Department is in charge of:

Bank of Thailand (BOT). The BOT's responsibilities include the following:

There are no noteworthy considerations other than the issues covered in the other questions in this Q&A.