General Information
Thailand faces the Andaman Sea and Myanmar to the west, Laos and Cambodia to the north and east, and Malaysia to the south. Bangkok is the largest metropolitan area, with a population of 11,234 million.
Thailand is one of the funding members of ASEAN, also member of WTO. Malaysia, Singapore, Vietnam, Cambodia, and Myanmar are all Thailand’s major exporting partners.
Major Types of Entity
There two options for FDI to establish a presence in Thailand:
| 1. |
Set up a foreign-owned company – at least 25% of the subscribed shares must be fully paid. |
| 2. |
Open a branch or representative office. |
The foreign Business Act (FBA) sets out three lists of activities in which FDI is prohibited or restricted:
| List 1 – |
Businesses not permitted for foreigners, including newspaper, Thai antiques. |
| List 2 – |
Prior approval is needed and requiring some Thai participation. Activities include transportation, mining of certain minerals. |
| List 3 – |
FDI must obtain a Foreign Business License prior to engage these activities including accountancy, legal services, advertising and tourism. |
If a FDI engages in List 2 or 3 activities, its minimum registered capital must not less than THB 3 million (US$96,000). If a FDI does not engage in the above specified activities, the minimum registered capital is THB 2 million (US$64,000).
The investment Promotion Act gives authority to the Board of Investment (BOI) to grant tax and non-tax incentives to foreign investors who are engaged in promoted business activities as designated by the BOI.
To benefit from BOI incentives, foreign companies must either be located within the Investment Promotion Zones or invest in activities which the BOI are keen to promote (e.g. technology and innovation development, electronics industry and electrical appliances).
Major Taxes in Thailand
Major types of taxes levied in Thailand are as below:
CIT-Corporate Income Tax
VAT-Value Added Tax |
PIT-Personal Income Tax
WHT-Withholding Tax |
Employment
Employment of foreign workers is permitted upon approval from the Ministry of Labor. Approvals are dependent on (1) The Paid-up capital must be THB 2 million (US$64,000) per one foreign employee; (2) The number of Thai employees hired – in the ratio of four Thai employees per each foreign employee.
Land Ownership
Foreign investors locate their projects in a General Industrial Zone and Free Zones promoted by the Industrial Estate Authority of Thailand (IEAT) are eligible for the permission to own land in an industrial estate.