Thailand is one of the top locations in Asia to set up a business. it is one of the founding members of the association of South East Asian nations, and is placed strategically within the continent. you may recall it as the gateway to the rest of Asia, from which your business may want to extend to the other countries within asia. similarly, Thailand’s infrastructure is remarkable. It has 7 international airports, fast internet connection, professional educated manpower access, high-tech metropolitan transportation and it is well centrally located with other asean regions .
Thailand is a foreigner-friendly country. Its tourism is most busiest in Asia. however, when it comes to business and investment, the country is quite strict on how foreigners can make or begin a business in its jurisdiction. however, there are incentives to investing in the kingdom as the Board of investment offers exemptions, and even tax breaks for international organizations.
The foreign business Act of 1999
B.E. 2542, or often called the foreign business Act of 1999, is the regulation that governs overseas investment and businesses in Thailand. For purposes of discussion, the term “foreigner”, in the context of the law, refers not only to real persons who do not keep Thai citizenship however also entities that are majority-owned via foreigners in addition to agencies which have been registered out of the country.
The three business Annexes under BE 2542
The foreign enterprise Act divides business niches into three annexes – Annex 1, Annex 2 and Annex 3.
Annex 1 includes niches wherein foreign corporations can’t start a business in. these are niches that deal with local tradition and require an understanding of Thai way of life. The niches consist of herbal medication manufacture, rice farming, real estate development, shery, livestock and the trade of antiques which are sourced in Thailand, amongst others. but, agencies registered in countries that have treaties with Thailand can be exempt from this limitation.
Annex 2 include agencies that issue countrywide protection and security, as well as trade which have cultural and artistic effect to Thailand, and those that may have an effect on the local environment and Thailand’s natural or ecological resources. Any foreign company that needs to interact in alternate in any of these niches might need to secure a allow from the Minister of commerce. In incorporating the entity, 40% of the business’ shareholders should be Thai locals. The Minister of commerce can reduce this to 25% if the company makes an application.
Annex 3 incorporates companies that the Thai government thinks will actually lose to foreign competition. these organizations consist of legal, accounting, architectural and engineering services, in addition to hospitality services, advertising and marketing, farming, and food and drinks. it might take a license from the Director general of the Ministry of commerce to permit a foreign entity to perform in these groups.
With BE 2452, it is clearly easy now for foreigners to begin their own business in Thailand. The law lays out the standards and necessities very clearly for these businessmen. This is yet another purpose why Thailand is one of the best countries in Asia for foreigners to invest in.
If you need a Phuket Lawyer for cases like this or setting up business, handle property and real estate or even immigration cases, don’t hesitate to contact us! We will be glad to review your case and provide solutions!