Thailand Investment Guide


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How to cleverly invest in Thailand as a foreigner. A rough guide for foreign investors, foreign law firms

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Thailand Investment Guide

  1. 1. Thailand as a foreigner: A rough guide for theexecutive management, legal department and foreign law firms. A rough guide for theexecutive management, legal department and foreign law firms. 1
  2. 2. In a nutshell • Thailand offers exciting busi- ness opportunities to internati- onal investors prepared to take a serious interest in this dyna- mic market. • Thailand is strategically located at the heart of Asia and well placed to offer a gateway to both the ASEAN and Asia- Pacific markets. • Thailand is the economic leader of the ASEAN - similar to Germany in the European Union.3
  3. 3. Population • Population: 70 Million • Ethnic groups ✓ Thai (75%) ✓ Chinese (14%) ✓ Malay (3%) ✓ Other (8%) • The countrys official language is Thai. • The primary religion is Buddhism, which is practiced by around 95% of the population. • There are approximately 5.2 million legal and illegal migrants in Thailand.4
  4. 4. Investing in Thailand as a foreigner• The laws of Thailand restrict certain types of foreign direct investments. Depending on the type and structure of the investment, several activities are prohibited. In general, the manufacturing of goods is not subject to these restrictions.• These investment limitations are not applicable, if the project is promoted by the Thai government ("Board of Investment"). Such promotion requires ✓privileged business activities (depending on type, scope, location, etc) ✓fulfillment of specific requirements (know-how transfer, etc.) ✓a successful application process - which might take six months or more• A promotion by the BOI includes - depending on the specific case - tax holidays, work permit easements and other benefits.• If an investment project is subject to the limitations of the Foreign Business Act and a promotion by the BOI is not possible, it can in many cases be restructured in a way that it does not qualify as "foreign investment". 5
  5. 5. Activities eligible for BOI promotion • Agriculture and agro-industries • Metal-working and minerals • Light industries • Chemicals and petrochemicals • Electrical and electronics • Services and public utilities • PLEASE SEE OUR UPDATE ON BOI INVESTMENT PROMOTION 2013 - 2016
  6. 6. BOI approval criteria for project• Value added at least 20% (except electronic products, agriculture and argo processing). Exceptions possible.• Registered capital at least 25% of total investment (debt/equity 3:1)• Modern production machinery and process• Adequate environmental protection• Minimum investment of THB 1+ million excluding land costs and working capital• Projects with investment of THB 500+ million are required to submit a feasibility study• Several incentive schemes ✓Decentralization, according to location ✓Priority activity schemes (software development, alternative energy, biotechnology, manufacture of hi-tech products, waste recycling, etc.) ✓Sector specific policies ✓Optional incentive schemes (Skills Technology Innovation STI)) 7
  7. 7. The legal structure of the project in Thailand• In nearly all cases a "Company Limited" under the laws of Thailand is the only appropriate investment vehicle. It can be set-up within a few days and needs three or more shareholders and one or more directors. There are generally no minimum capital requirements in Thailand.• Even if the overall structure requires a majority Thai partner, a clever structuring provides for a great flexibility to give the foreign party a predominant and entrepreneurial influence. In practice the investor has the choice between ✓a one tier structure combined with a shareholders‘ agreement and other internal measures and ✓a two tier structure in which a Thai holding company legally separates the Thai partner from the day-to-day business, management and profits.• Thai contract law is reliable and transparent. The parties are free to agree on foreign law contracts and to foreign arbitration. Political risks are remote and various bilateral investment treaties provide additional comfort that 8
  8. 8. The up-to-date and complete presentation isavailable for you as a free download at ✓ ✓
  9. 9. PUGNATORIUS Sophisticated solutions in a complex legalenvironment. Serious legal and tax advice in the land of smile• Rechtsanwalt Steuerberater Anwaltskanzlei Anwälte Rechtsanwälte Steueranwalt Steuerrecht Wirtschaftskanzlei Steuerkanzlei Steueranwälte,• Lawyer Attorney Solicitor Attorney-at-law law firm lawfirm Abogado Abogada Avogado tax lawyer, advogado, consultor fiscal, impuesto consultor• Thailand Bangkok Phuket Pattaya Hua Hin Koh Samui Koh Chang, Nonthaburi Pak Kret Tha Khlong, Pathum Thani, Tha Ruea Phra Thaen, Kanchanaburi, Thanya Buri, Pathum Thani, Thung Song, Nakhon Si Thammarat, Trat, Uthai Thani, Uttaradit, Warin Chamrap, Ubon Ratchathani, Yasothon
  10. 10. mMore Thailand Legal and Tax Guides at 11 11