This paper will analyze Thailand's overall foreign investment legal environment and Thailand's
Finance, environment, intellectual property, foreign exchange management, employment, land, import and export management.
Specific laws and regulations, etc. Explain in detail the laws, regulations and risk points that need to be paid attention to when investing and building factories in Thailand.
I. Analysis of the Legal Environment of Foreign Investment
(1) Legal system of foreign investment
The Law on the Operation of Foreign Enterprises and the Law on Factories are important laws related to foreign investment in Thailand. The Factory Law 20 19 was revised again. In addition, there are other laws related to foreign investment in Thailand, such as the Employment of Foreigners Law, Trademark Law, Patent Law, Copyright Law, Business Registration Law, Tax Law, Foreign Exchange Control Law and Income Law. These laws and regulations constitute Thailand's foreign investment legal system.
(2) Foreign investment policy
Thailand is the first country in Asia to enact an investment promotion law to attract investors. In order to attract overseas investment, the Thai government has formulated a series of tax and preferential measures to encourage governments at all levels to develop their economies. According to the Investment Promotion Law, preferential policies include
Tax incentives
and
Non-tax incentives
.
Tax preference consists of some benefits, including import tariff reduction and exemption of machinery, raw materials or imported materials, exemption of enterprise income tax within 1-8 years, and double deduction of taxable income of transportation fee, electricity fee and tax. During the tax-free period, dividends of tax-free profits are also tax-free, as are goodwill fees, copyright fees and other rights obtained by encouraging acts.
Non-tax incentives include some incentives given by the Investment Promotion Committee. Investors under the Foreign Enterprise Law shall enjoy 100% ownership of the business they are engaged in, and such business must be clearly stipulated in Appendices 2 and 3 of the Foreign Enterprise Law and meet the corresponding conditions. Such investors are exempt from applying for business licenses of foreign enterprises, but they still need to notify the Ministry of Commerce and apply for certificates. But this is only an administrative procedure, not an application for permission.
Other non-tax incentives include allowing and encouraging foreigners among overseas employees of enterprises to own land, visas and work permits.
(3) Restrictions on foreign investment
Foreign commercial law is correct.
A company with more than half of its capital or shares held by foreigners.
Management has made special provisions for the following three industries.
limit
Foreign nationality
People are free to engage in.
：
1) Industries that are closed to foreigners for special reasons, such as newspaper, animal husbandry, Thai herbal medicine extraction, etc.
2) Industries that foreign investors can engage in only with the approval of the Minister of Commerce according to the decision of the Cabinet, such as domestic land transportation, domestic air transportation, antique or art trading, mining, etc.
3) According to the decision of the Foreign Trade Commission, businesses that can be engaged after the approval of the Commercial Registration Director, such as accounting services, legal services, advertising, etc.
Where a foreign legal person meets the following two conditions,
You can engage in the second category.
Industries specified in the following documents:
1) The shares held by Thai nationals or non-foreign legal persons according to the provisions of this Law shall not be less than 40% of the capital of the foreign legal person company (unless there are justified reasons, the Minister of Commerce may relax the above shareholding ratio according to the Cabinet resolution, but the minimum shareholding ratio shall not be less than 25%);
2) The directors held by Thai nationals shall not be less than 2/5.
If the Investment Promotion Law, the Industrial Zone Management Law or other relevant laws encourage foreigners to invest, they can engage in the industries specified in the second and third categories.
For the industries that need to be licensed according to the provisions of this Law, the minimum investment for foreign legal persons to conduct business in Thailand shall not be less than 3 million baht. Other industries have a minimum of 2 million baht.
Two. Specific legal provisions on investment in Thailand
Thailand's specific laws and regulations related to foreign investment include
Financial law, environmental law, intellectual property law, foreign exchange management law, labor law, land law, import and export law
Wait a minute. Let me introduce them to you one by one.
(1) Financial Law
Thailand's financial industry includes
the Ministry of Finance
and
Bank of Thailand
Control and management. The Ministry of Finance is responsible for formulating fiscal policies and supervising national finance, including issuing tax plans, issuing currency, supervising banking, managing state-owned enterprises and government monopoly enterprises, and controlling foreign exchange reserves. The Bank of Thailand is equivalent to the Central Bank of Thailand, and is responsible for implementing the plan formulated by the Ministry of Finance, including issuing bills, giving advice on the government's monetary policy, supervising financial institutions, and maintaining monetary stability. Generally speaking, the Bank of Thailand is considered as an independent institution.
Although Thai law does not explicitly require foreign investors to have bank accounts in Thailand, according to the practice of Thai banks,
All foreign exchange inflows should be converted into Thai baht or deposited into foreign exchange accounts of authorized banks in Thailand.
. In Thailand, banks are authorized to set up non-resident accounts, and there is no limit on the amount of funds deposited and withdrawn. The opening of individual and enterprise resident accounts should follow the practices and procedures generally recognized by the banking industry. For example, an individual may be required to provide a valid work permit or evidence issued by his embassy to prove his residence in Thailand; Enterprises may be required to show the business registration of the Ministry of Commerce and the tax registration of the Ministry of Taxation.
(2) Environmental law
Thailand's laws and regulations related to environmental protection are composed of several laws, including the Environmental Quality Improvement and Protection Law, the Factory Law, the Energy Law, the Hazardous Substances Law, the Public Health Law and the National Cleanliness and Cleanliness Law. Relevant institutions and subjects need to abide by the above laws and regulations and implement environmental protection activities.
The Thai government's attitude towards environmental protection is proper supervision and guidance. The government requires investors to study the environmental impact, prohibit logging, encourage environmental protection services and reports, and report temporarily.
(3) Intellectual Property Law
Thailand is a civil law country, and the protection of intellectual property rights is based on statutory law. The legal system of intellectual property rights includes: trademark law, patent law, copyright law, trade secret law, geographical indication protection law and integrated circuit layout protection law.
As a member of the WTO, Thailand is bound by the Agreement on Trade-related Aspects of Intellectual Property Rights. At the same time, Thailand is a member of Berne Convention for the Protection of Literary and Artistic Works, Paris Convention for the Protection of Industrial Property and Patent Cooperation Treaty, and needs to fulfill its obligations as a contracting state.
(4) foreign exchange management law
According to the foreign exchange control law and related decrees. 13, all matters related to foreign exchange are stipulated by the Bank of Thailand. Since May 1990, Thailand has relaxed foreign exchange control, and most transactions in Thai baht or other foreign currencies are not subject to any restrictions, but a few transactions still need the approval of Thai banks.
For non-residents, transit individuals are usually not restricted to carry foreign exchange and negotiable instruments, and can carry all the foreign exchange they carry without restriction; For investors, there are no restrictions on bringing foreign exchange into Thailand, such as investment funds and offshore loans, but they must
Receive or
Sell it to a designated bank within 7 days after entering Thailand, or convert it into Thai baht, or deposit it in the foreign exchange account of an authorized bank. After tax payment and liquidation, foreign-capital enterprises can freely remit investment funds, dividends and profits, repay loans and pay interest.
(5) Land Law
For real estate leasing, if the foreign real estate leasing in Thailand does not exceed three years, both parties can sign a lease contract by themselves; If it is more than three years, you need to go through the registration formalities with the land department, but you can go through the renewal procedures when it expires. According to the Industrial and Commercial Real Estate Lease Law, if investors provide written materials and register with the land department, the lease period of real estate can exceed 30 years, but not more than 50 years. However, after the expiration of 50 years, they can go through the formalities of renewing the lease for another 50 years.
Thai legal persons have the right to buy land and buildings, and foreigners are generally prohibited from owning land in Thailand. However, if foreign investors are engaged in industries encouraged by the Investment Promotion Committee, and the industries they operate are beneficial to Thailand, and the investment funds are retained in Thailand for at least 3 years, they are allowed to buy land.
(6) Import and Export Law
Thailand imposes export restrictions on certain types of goods, including strict prohibition, licensing, standard control and special fees, in order to achieve the purpose of quality control. Restricted species usually include local agricultural products, cultural and ethnic projects, local rare animals and plants, endangered wild animals, fruits and seafood.
This restriction is usually to satisfy the domestic market before all surplus commodities are exported.
(7) Labor Law
The employment of foreign employees in Thailand is regulated by the Foreign Employment Law and the Foreign Enterprise Law. These two laws have formulated certain preferential policies for labor and employment in Thailand. total
get
Generally speaking, for every foreign employee, employers should hire four Thai employees. Employees of foreign private enterprises need to obtain work permits without exception, which are issued by the Ministry of Labor.
Regarding whether to grant a work permit, the Ministry of Labor will consider the following factors: whether the work can be completed by Thai employees, whether foreigners meet the job requirements, and whether the work meets the national economic needs.