[ESTABLISHING A BUSINESS ENTITY IN THAILAND] 482
business entities to participate in and contribute their support to their employees. There are penalties for any non-compliance by
The FBA’s three Annexes contain three (3) categories of such restricted activities. Mainly, Annex 1: media, rice farming, forestry and herbs - be restricted from foreigners; Annex 2: national safety or security, arts and culture, natural resources - subject to permission of the Minister of Commerce and the Cabinet; and Annex 3 (the most common case): wholesale and retail, specific services such as accounting and legal services, construction, agency, auction, hotels, and general services - subject to a business license. Non-restricted business includes manufacturing business, export business. On June 13, 2019, Thai government has announced following Inter-companies servicing activities i.e. domestic loan provisions, office space rental services with public utilities, and consulting services specifically in the areas of administrative management, marketing, human resources and information technology as exempted service businesses that foreign investors (individual/entity) can conduct without obtaining prior permission pursuant to the FBA. The businesses must be made between related juristic persons having one of the following relationships: (a) More than half of the number of shareholders or partners in one juristic person are also more than half of the shareholders or partners in the other juristic person; (b) Shareholders or partners that hold shares or are partners valued from 25% of the capital in one juristic person also hold shares or are partners with such value in the other juristic person; (c) One juristic person that holds shares or is a partner with the value from 25% of the capital in the other juristic person; or (d) More than half of the authorized directors or managing partners in one juristic
an employer. Works Rules:
An employer, when having employees altogether amounting to 10 persons or more, will be obligated to establish a “Work Rules” containing of specific provisions as required by law, announce and disclosure to employees at the working place within 15 days. Any non-compliance will be subject to a specific fine. Remitting funds out of the country: All foreign exchange transactions must be done through commercial banks or authorized non-banks. Both direct and portfolio foreign inbound investments are freely permitted. Repatriation of investment funds and repayment of overseas borrowing in foreign currency can be remitted freely upon submission of supporting evidence. Legal Capacity and Limitation: Limitations for undertaking business operations in Thailand will depend upon the type of business transaction and the qualifications of an operator wishing to conduct such business. In principal, Thai operators, whether individuals or juristic entities, can conduct all kinds of legal businesses in Thailand, unless a specific law requires certain prior qualifications and specific approvals. The main legislation concerning foreigners who wish to operate a business in Thailand is the 1999 Foreign Business Operation Act ( “ FBA ” ). The FBA lists the restrictions on the type of business a foreigner can conduct in Thailand as an individual, as a juristic entity registered overseas, or as a juristic entity registered under Thai law with 50% or more of its shares are owned by foreigners, unless a specific business operation license has been obtained when applicable.
ILN Corporate Group – Establishing a Business Entity Series
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