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Thailand Investment Guide
 

Thailand Investment Guide

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How to cleverly invest in Thailand as a foreigner - a rough guide.

How to cleverly invest in Thailand as a foreigner - a rough guide.

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    Thailand Investment Guide Thailand Investment Guide Presentation Transcript

    • #UPDATE 2014 How to cleverly invest in Thailand as a foreigner: A rough guide for the executive management, legal department and foreign law firms.
    • Sophisticated solutions in a complex legal environment. Serious legal and tax advice in the land of smile. • Please contact us in our Bangkok office for questions, comments and re-quests by phone or e-mail in Thai, English or German language. Thank you! ! PUGNATORIUS Ltd. | International Lawyers
 Central World Tower | 999/9 Rama 1 | Pathumwan
 Bangkok 10330 | Kingdom of Thailand
 ☎ +66 22072647 | lawyers@pugnatorius.com ! • PUGNATORIUS Limited is an independent legal practice 
 based in Bangkok, Thailand. The law firm provides inter-
 national corporations, investors and foreign law firms with
 premium legal and tax services relating to Thailand, Southeast Asia and offshore jurisdictions.
    • In a nutshell • Thailand offers exciting busi- ness opportunities to international investors prepared to take a serious interest in this dynamic market. • Thailand is strategically located at the heart of Asia and well placed to offer a gateway to both the ASEAN and AsiaPacific markets. • Thailand is the economic leader of the ASEAN - similar to Germany in the European Union.
    • 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". • Typically, foreigners are not allowed to work in Thailand as a freelancer or as employees of a company domiciled outside of Thailand.
    • 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.
    • Basic (green) and advanced (grey) tasks to set up a limited company in Thailand Company Shareholder HR Taxes Licenses Company's name One or two tier structure Appointment of director Tax registration and VAT Foreign Business License („FBL“) Bylaws / articles of association International tax planing Director's employment Accounting, payroll, audit Special business licenses Three or more shareholders Shareholders agreement Visa and work permit Social security / provident funds BOI promotion Equity & participation quota Financing and share pledge Expat income tax structuring Accounting of the participation IP protection 
 and Internet Preference share structure Share transfer agreements Thai employment agreements Bank account / equity payment Exit / deinvestment
    • The Thai two tier investment structure Foreign Investor Foreign Shareholder
 1% 1% Thai Shareholder
 48% 51% Holding (Thailand) Co., Ltd.
 48% 51% Thai Co., Ltd.

    • Legal requirements for establishing a factory under the Thai Factory Act in three steps 1. A „factory“ is defined as any premise that (i) uses machinery equivalent with five horsepower or more or (ii) that employs seven or more workers for manufacturing, producing ... or (iii) other facilities listed in the ministerial regulations. 2.Factory Act in combination with ministerial regulations define the characterization of a factory in three groups, based on type, kind and size Group 1 factory does not require specific notice or license 3. Group 2 factory does only require notification before start of operations Group 3 factory does require license before start of operations Additional requirements for all three groups exist by ministerial regulations regarding safety of work, environmental issues, specific qualifications of the workers, restricted areas (residential, schools, hospitals, temple...) and others.
    • Sophisticated solutions in a complex legal environment. Serious legal and tax advice in the land of smile. • Please contact us in our Bangkok office for questions, comments and re-quests by phone or e-mail in Thai, English or German language. Thank you! ! PUGNATORIUS Ltd. | International Lawyers
 Central World Tower | 999/9 Rama 1 | Pathumwan
 Bangkok 10330 | Kingdom of Thailand
 ☎ +66 22072647 | lawyers@pugnatorius.com ! • PUGNATORIUS Limited is an independent legal practice 
 based in Bangkok, Thailand. The law firm provides inter-
 national corporations, investors and foreign law firms with
 premium legal and tax services relating to Thailand, Southeast Asia and offshore jurisdictions.
    • Visa requirement for foreigners to do business in Thailand • To work in Thailand a foreigner needs a work permit. A work permit has to be applied by the Ministry of Labor, based on a valid business visa. The business visa can be applied at any Thai consulate outside of Thailand. Typically it is not required that the application is filed at the home country of the foreigner. • Apart from a business visa, it is possible to obtain a tourist visa, an education visa, a retirement visa or a dependent visa (accompanying Thai spouse). However, all these visa cannot be the legal basis for a work permit. • The visa application process can be normally concluded within 48 hours. It requires, above all, that the applicant has been offered a job or starts a Thai company to employ himself. • Part of the duly completed application for are certain registration documents and financial statements from the company.
    • Work permit requirement for working in Thailand • A work permit is required for any activitiy which is falls under the category of "work". Work in Thailand does not require a remuneration, does not require a sustainability and is fulfilled even in one day. • A work permit can be granted if the following conditions are met ✓Presentation of a business visa (so-called Non-immigrant B visa) ✓Thai company as sponsor and employer ✓Minimum registered share capital of THB 2 million, fully paid in (per work permit) ✓Minimum monthly salary of the applicant of THB 50,000 (for European. The salary amount may differ for other nationalities.) ✓Four Thai employees of the Thai company (per work permit) ✓certain documentations and duly completed application form evidencing certain additional requirements • A foreigner is entitled to work from abroad (outside of Thailand) for a Thai company as a director or employee without having visa or work permit.
    • Investing in Thailand • Investing in Thailand - Some- times the water is deeper than it looks. • We are specialized to guide foreign investors through the red-tape requirements, legal hurdles and international tax structuring of their foreign investments, trade operations or other business in Thailand and Southeast Asia. • We can assure the highest professional standards, level of availability and swift completion of challenging and demanding projects.
    • Please see an updated and completed version of this white paper at http://www.scribd.com/ PUGNATORIUS_LTD or at www.pugnatorius.com
    • Sophisticated solutions in a complex legal environment. Serious legal and tax advice in the land of smile. • Please contact us in our Bangkok office for questions, comments and re-quests by phone or e-mail in Thai, English or German language. Thank you! ! PUGNATORIUS Ltd. | International Lawyers
 Central World Tower | 999/9 Rama 1 | Pathumwan
 Bangkok 10330 | Kingdom of Thailand
 ☎ +66 22072647 | lawyers@pugnatorius.com ! • PUGNATORIUS Limited is an independent legal practice 
 based in Bangkok, Thailand. The law firm provides inter-
 national corporations, investors and foreign law firms with
 premium legal and tax services relating to Thailand, Southeast Asia and offshore jurisdictions.
    • www.PUGNATORIUS.com !