2019 INVESTMENT POLICY AND REGULATORY REVIEW Thailand © 2020 The World Bank Group 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org All rights reserved. This volume is a product of the staff of the World Bank Group. The World Bank Group refers to the member institutions of the World Bank Group: The World Bank (International Bank for Reconstruction and Development); International Finance Corporation (IFC); and Multilateral Investment Guarantee Agency (MIGA), which are separate and distinct legal entities each organized under its respective Articles of Agreement. We encourage use for educational and non-commercial purposes. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Directors or Executive Directors of the respective institutions of the World Bank Group or the governments they represent. The World Bank Group does not guarantee the accuracy of the data included in this work. This publication contains information in summary form and current as of the specified cut-off date. It is not a substitute for detailed research nor the exercise of professional judgment. The World Bank Group cannot accept any responsibility for loss or losses occasioned by any person acting or refraining from action as a result of any material in this publication. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. All queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. Photo Credits: Shutterstock.com TABLE OF CONTENTS ACKNOWLEDGEMENTS 2 GLOSSARY 3 1. INTRODUCTION 5 2. OVERVIEW OF INVESTMENT POLICY FRAMEWORK 7 A. Domestic Legal Instruments Regulating Foreign Investment 7 B. International Legal Instruments Regulating Foreign Investment 8 C. Key Institutions for Investment Promotion 11 D. Foreign Investment Promotion Strategy 12 3. INVESTMENT ENTRY AND ESTABLISHMENT 14 4. INVESTMENT PROTECTION 20 5. INVESTMENT INCENTIVES 22 6. INVESTMENT LINKAGES 24 7. OUTWARD FOREIGN DIRECT INVESTMENT 25 8. RESPONSIBLE INVESTMENT 26 9. RECENT POLICIES ON NEW TECHNOLOGIES 26 10. CITY SPECIFIC REVIEW—BANGKOK 27 11. COMPETITION LAW & POLICY 28 A. Merger Control 28 B. Leniency Program 30 ENDNOTES 31 LIST OF REFERENCE MATERIALS 33 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND |1 ACKNOWLEDGEMENTS A team led by Priyanka Kher and Peter Kusek The report benefited from the comments of these prepared this report. The core team members were World Bank Group colleagues: Mara K. Warwick, Maximilian Philip Eltgen and Azza Raslan. The Birgit Hansl, Souleymane Coulibaly, Ratchada team would like to thank Caroline Freund (Global Anantavrasilpa, Tanja K. Goodwin, Sara Nyman, Director, Trade, Investment and Competitiveness), Mariana Iootty De Paiva Dias, Guilherme De Christine Zhenwei Qiang (Practice Manager, Aguiar Falco, Emma Verghese and Abhishek Investment Climate), Ivan Nimac (Global Lead, Saurav. The team would like to thank Nick Younes Investment Policy and Promotion), Georgiana Pop for editing, and Aichin Jones and Amy Quach for (Global Lead, Competition Policy) and Graciela providing design, layout, and production services. Miralles Murciego (Senior Economist, Competition Policy) for their guidance. The report was prepared under the Analyzing Barriers to Investment Competitiveness Project, Legal research for the preparation of this report supported with funding from the Prosperity Fund was carried out by the international law firm Baker of the United Kingdom. McKenzie. | 2 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND GLOSSARY AEC ASEAN Economic Community ASEAN Association of South-East Asian Nations B Baht (currency) BOI Board of Investment BOT Bank of Thailand BUILD BOI Unit for Industrial Linkage Development CPC Central Product Classification DG Director General DTAA Double Taxation Avoidance Agreements EPA Economic Partnership Agreement ESCO Energy Service Company FBA Foreign Business Act FBL Foreign Business License FDI Foreign Direct Investment FET Fair and Equitable Treatment FIE Foreign-invested Enterprise GATS General Agreement on Trade in Services IBC Thai International Business Center ICSID International Centre for Settlement of Investment Disputes IEAT Industrial Estate Authority of Thailand IIA International Investment Agreement IMF International Monetary Fund IPA Investment Promotion Act IPC Investment Promotion Certificate IPR Intellectual Property Rights IPRR Investment Policy and Regulatory Review ISDS Investor-State Dispute Settlement JV Joint Venture MFN Most-Favored-Nation MOC Minister of Commerce 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND |3 NT National Treatment OFDI Outward Foreign Direct Investment OSOS One Start One Stop Investment Center PDPA Personal Data Protection Act SCM Agreement on Subsidies and Countervailing Measures SMEs Small and Medium Enterprises SOE State-owned Enterprises STI Science, Technology and Innovation TCC Trade and Competition Commission TIP Treaty with Investment Provision TRIMs Agreement on Trade-Related Investment Measures TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights UNCTAD United Nations Conference on Trade and Development VAT Value-added Tax WTO World Trade Organization | 4 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND 1. INTRODUCTION This Investment Policy and Regulatory Review on a review of currently applicable policies, laws (IPRR) presents information on the legal and and regulations. In some cases, consultations with regulatory frameworks governing foreign direct regulators were conducted to collect up to date investment (FDI) and competition that affect information. businesses and foreign investors in Thailand. Since legal and regulatory frameworks are The research was guided by a standardized constantly evolving, a cut-off date was set for the questionnaire, covering a limited set of research. This country review therefore covers topics, including foreign investment entry, information available as of May 31, 2019, unless establishment, protection and select competition otherwise indicated in the review. IPRRs are related aspects. The questionnaire focused on available for the following middle-income countries de jure frameworks as generally applicable to a (MICs): Brazil, China, India, Indonesia, Malaysia, foreign investor, not located in any specialized Mexico, Nigeria, Thailand, Turkey, and Vietnam. or preferential regime (such as special economic zones). It primarily focused on national, economy- The research for preparing this IPRR was wide (rather than sector-specific) laws and undertaken by the international law firm Baker regulations. For the purpose of the research, McKenzie, under the supervision of the World it was assumed that the foreign investor is a private Bank Group. The research was primarily based multinational company with no equity interest or Figure 1. Overview of topics covered in IPRR Merger control Leniency ■ Key institutions for investment policy/rule ■ Remedies to limit ■ Extent of immunity on making, implemention and FDI promotion anticompetitive fines and damages ■ Key legal instruments effects of merger ■ Ease of admin ■ Transparency/consultation in laws and Main Policy & ■ Ease of admin in leniency regulations Legal Instruments procedures application and Institutions ■ Prohibited and Restricted Select Investment Entry Sectors ■ Equity ceiling Competition and ■ Minimum investment Policy Aspects Establishment requirement ■ FDI approval IPRR ■ R&D, local sourcing, ■ Schemes to increase Questionnaire employment, quantitative, local sourcing and geographic, export build capacity of local Other Areas suppliers (Linkages, OFDI, ■ Restrictions on OFDI Investment Responsible Protection ■ Measures on technology Investment, New Tech) ■ Expropriation ■ Transfer of currency Investment ■ Dispute Settlement Incentives ■ Fair administrative conduct ■ Source of tax and financial incentives ■ Accessibility of tax and financial incentives 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND |5 management control by the government of its home as well as the country’s foreign investment country (that is, not state-owned enterprise). promotion strategy; it also delineates the country’s international investment legal framework, There are aspects that this IPRR does not cover. including the country’s commitments under the It is not a comprehensive review of the entire legal World Trade Organization (WTO) and select and regulatory framework affecting investment. international investment agreements (IIAs); Information presented is not exhaustive, but illustrative of the main topics and issues covered n Sections 3-6 cover the country’s policies and (for example, it does not exhaustively list all domestic legal framework concerning different available tax and financial incentives in the dimensions of the lifecycle of an investment: country). It does not present recommendations entry and establishment (Section 3), protection on reform areas. Notably, it does not capture de (4), incentives (5) and linkages (6); facto implementation of laws and regulations in the country. Given these limitations, information n Sections 7-9 explore emerging investment policy presented in this IPRR should be interpreted and and regulatory areas — Section 7 considers used keeping in view the overall country context outward FDI, Section 8 responsible investment, and realities. Further, it contains information in and Section 9 considers recent policies on new summary form and is therefore intended for general technologies; guidance only. It is not intended to be a substitute n Section 10 focuses on city-specific investment for detailed legal research. policy and regulatory measures in the largest This IPRR is organized as follows: commercial center; and n Section 2 provides an overview of the country’s n Section 11 covers select aspects of competition investment policy framework, including the legal law and policy, specifically merger control and instruments regulating foreign investment, key leniency frameworks. institutions involved in investment promotion, | 6 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND 2. OVERVIEW OF INVESTMENT POLICY FRAMEWORK A. Domestic Legal Instruments Sector Specific Laws Regulating Foreign Investment The FBA expressly states that it shall not apply Thailand has a specific foreign direct investment to matters specifically provided for under law that governs foreign investment in the other laws, so that in certain sectors foreign country. In addition to this law, sector specific laws investment is governed by sector-specific laws. and bilateral and international treaties also regulate Those laws will prevail if and to the extent that they FDI in the country (in addition to the general legal regulate shareholding, partnership or investment framework applying to all businesses). of foreigners; permit or prohibit the operation of certain business activities relative to foreigners; or prescribe rules regarding operation of businesses of FDI Law and Regulation foreigners. As such, foreign investors are subject The primary legislation governing foreign to sector-specific laws and regulations depending investment in the country is the Foreign Business on the sector of the contemplated investment. Act B.E. 2542 of 1999 (FBA), as amended. The For example, the Telecommunications Business FBA regulates foreign investment and stipulates Act B.E. 2544 (2001) prohibits the issuance of the limitations applicable to foreign investors in Type 2 and Type 3 telecommunication licenses to the country. foreigners, permitting the issuance of only Type 1 licenses to foreigners. Similarly, the Financial The FBA defines a business as foreign if (i) it is Institution Business Act B.E. 2551 (2008) caps not incorporated in Thailand (that is, established foreign investment in a Thai commercial bank to under foreign law); or (ii) half or more of its capital no more than 25% which may be increased on a is owned by foreigners (either individuals or legal case by case basis, up to 49% subject to approval entities) even if the company is incorporated in by the Bank of Thailand, and above 49% subject to Thailand, or (iii) half or more of the value of approval by the Ministry of Finance. the total capital is being invested by foreigners. It enumerates over forty categories of business Public Access to Foreign Investment activities divided into three lists (List 1, List 2 Laws and Policies and List 3, described in Section 3 — Entry and Establishment) that are subject to prohibitions and It is mandatory for the government to ensure different levels of restrictions for foreign investors. public access to laws, regulations and other legal instruments relating to foreign investment. The The Investment Promotion Act B.E. 2520 Constitution of Thailand requires the government (1977) (IPA) is another important law that to ensure public access to all laws, including the affects foreign investors. It empowers the Board country’s foreign investment laws. Pursuant to of Investment (BOI) to promote investments and the Constitution, after a bill is approved by the business activities in Thailand in general, not just National Assembly (the country’s legislative FDI. A business operator, whether Thai or foreign, body), the Prime Minister must present the bill to who wishes to operate a business “promoted” by the the King for royal assent, following which the bill BOI can apply to obtain an investment promotion will come into force only after it is published in certificate from the BOI. the Government Gazette. Pursuant to the Official Information Act, B.E. 2540 (1997), government 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND |7 agencies are also mandated to disclose publicly all made publicly available for comments before their regulations and legal instruments such as ministerial passing. However, the Cabinet issued a resolution regulations, Cabinet resolutions, orders, circulars, on April 4, 2017 as a guideline for the government rules, and policies that have the same force as law, agencies to conduct public hearings during the by publishing them in the Government Gazette. drafting of laws and regulations for at least 15 days via websites or by other means. All laws and regulations are available online at the portal maintained by the Office of the Council of State, and periodically updated to reflect B. International Legal Instruments changes in laws and regulations. This portal also Regulating Foreign Investment contains local rules and regulations issued by the Thailand has undertaken legally binding local administrative agencies. Further, laws and international investment commitments through regulations concerning a particular regulator or a variety of international investment agreements sector are available online through the portals of (IIAs) — signed at the bilateral, plurilateral and the official department or the government agency multilateral level. These commitments mainly responsible for such sector. For example, laws and cover entry and establishment conditions, protection, regulations relative to the Foreign Business License as well as the legality of specific types of incentives (FBL) are available on the website portal of the (see Table 1). It is important for Thailand to reflect Department of Business Development, the Ministry these commitments in its domestic legal framework to of Commerce. ensure consistency as well as to monitor compliance. Consultation with Stakeholders Having been a member of the World Trade Organization (WTO) since January 1, 1995, It is mandatory for the government to ensure Thailand has commitments under several WTO consultation with stakeholders prior to Agreements. Under the General Agreement on passing any law or regulation. The Constitution Trade in Services (GATS), Thailand grants rights mandates that before the enactment of any law, to services suppliers from other WTO member the government must consult with stakeholders to countries. These include services supplied through thoroughly and systematically assess and analyze commercial presence (defined as establishment the effects of the law, disclose the results of the of a territorial presence), in other words consultation and analysis to the public, and take through FDI. These rights are granted through stakeholder and public concerns into consideration commitments undertaken in “schedules”. The at every stage of the legislative process. Further, the “schedules” list sectors being opened, the extent 2019 Act on the Criteria for Drafting the Law and of market access being given in those sectors Assessing the Effectiveness of the Law underscores (for example, whether there are any restrictions the principle that a government agency must consult on foreign ownership), and any limitations on with stakeholders during the law drafting process, national treatment (whether some rights granted as specified in the Constitution. It also requires the to local companies will not be granted to foreign concerned government agency to state clearly the companies). Thailand has made commitments to reasons and necessity for the new law, undertake market access and national treatment (NT) in 11 out thorough cost-benefit analyses, and ensure no other of 12 services sectors in the WTO Classification:1 suitable measures or methods exist to address the (i) Business services, (ii) Communication services, matter other than enacting a new law. In addition, (iii) Construction and related engineering services, after a law comes into force, the government must (iv) Distribution services, (v) Educational services, undertake a regular evaluation of its outcomes (vi) Environmental services, (vii) Financial every five years. The government agencies are services, (viii) Health related and social services, similarly mandated to consult with stakeholders (ix) Tourism and travel related services, (x) in the drafting process for subordinate regulations. Recreational, cultural and sporting services, There is no specified statutory period during which and (xi) Transport services. In these 11 sectors, the laws, regulations, or other measures must be Thailand has made partial commitments towards | 8 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND Table 1. Thailand’s International Investment Framework Agreement(s) as basis of commitments Type of Agreement Investment Policy Dimensions Covered WTO GATS Agreements Multilateral Entry and establishment WTO TRIMs Agreement Multilateral Entry and establishment, Incentives WTO SCM Agreement Multilateral Incentives WTO TRIPS Agreement Multilateral Protection Treaties with Investment Provisions Plurilateral or Bilateral May cover entry and establishment, (23 signed, 20 in force) protection, incentives Bilateral Investment Treaties Bilateral May cover entry and establishment, (39 signed, 36 in force) protection, incentives Convention on the Recognition and Multilateral Protection Enforcement of Foreign Arbitral Awards (New York Convention) IMF Articles of Agreement Multilateral Protection (Art. VIII Acceptance) Double Taxation Avoidance Agreements Bilateral Taxation (71 treaties in force) Source: World Bank Analysis market access and national treatment for specific both when the obligation for the foreign investors services in 29 sub-sectors. “Partial” means that is mandatory and when it is tied to obtaining an although commitments have been made, there advantage (that is, an incentive). Incentives are are still limitations and/or reservations, which further regulated by the WTO Agreement on may differ in their restrictiveness. For example, Subsidies and Countervailing Measures (SCM), they may be more restrictive by limiting the which among others prohibits certain types of equity contribution of the foreign investor, or less export subsidies. Under the WTO Agreement on restrictive by merely requiring foreign service Trade-Related Aspects of Intellectual Property suppliers to become a member of a union chamber. Rights (TRIPS), foreign investors’ intellectual In addition, under GATS every member is obligated property rights are protected. In case of a violation to unconditionally extend to service suppliers of any of its WTO commitments, Thailand may be of all other WTO members most-favored nation sued under the WTO dispute settlement mechanism. (MFN) treatment. However, Thailand has made reservations in that regard. It reserves the right to Thailand has further entered into obligations discriminate on specific grounds between foreign through international investment agreements investors in certain business and transport services, (IIAs) — 36 Bilateral Investment Treaties and across all sectors to only grant American (BITs) and 20 Treaties with Investment citizens and entities national treatment with respect Provisions (TIPs) are currently in force. The to operating a business and providing services in latter category comprises treaties that include Thailand. obligations commonly found in BITs (for example, a preferential trade agreement with an investment Under the WTO Agreement on Trade Related chapter), or treaties with limited investment related Investment Measures (TRIMs), Thailand has provisions. Table 2 provides an overview of select committed not to apply certain investment Agreements: Thailand’s IIA with the largest measures that restrict or distort trade home country measured by that country’s share (local content requirements, trade balancing in Thailand’s total FDI stock (Japan-Thailand requirements, foreign exchange restrictions and Economic Partnership Agreement, 2007), an IIA export restrictions). These measures are prohibited with expansive regional coverage (ASEAN-China 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND |9 Table 2. Comparison of Thailand’s Select IIAs Largest Home Country Latest IIA (date of entry Expansive Regional IIA (% of total FDI stock): into force): Thailand- Coverage IIA (highest Japan-Thailand Economic United Arab Emirates number of members): Partnership Agreement BIT (2016) ASEAN-China Investment (2007) Agreement (2010) Scope of Application Covers pre-establishment Yes No Yes Exclusions from scope Measures pursuant to - Taxation (except immigration laws and expropriation and regulations, Government transfers), government procurement procurement, subsidies or grants, services supplied in the exercise of governmental authority Standards of Treatment National Treatment (NT) Pre- and post-establishment Post-establishment Post-establishment Most-Favored Nation Post-establishment Post-establishment Pre- and post- Treatment (MFN) establishment Fair and Equitable Yes Yes Yes Treatment (FET) Full Protection & Security Yes Yes Yes Expropriation Direct and indirect Direct and indirect Direct/indirect expropriation expropriation, payment of expropriation, payment of and payment of compensation compensation compensation Rights to Transfer Funds Yes Yes Yes Prohibition of TRIMs reference; positive No TRIMs+ (Prohibiting Performance commitments included in a larger number of Requirements country-specific schedules performance requirements than TRIMs) Dispute Resolution State-State Dispute Yes Yes Yes Settlement Investor-State Dispute Yes Yes, following exhaustion of Yes, limited to Settlement local remedies for 6 months post-establishment Source: World Bank analysis based on IIAs obtained from United Nations Conference on Trade and Development (UNCTAD) Investment Policy Hub Investment Agreement, 2018) as well as its latest Thailand EPA and the ASEAN-China Investment IIA (Thailand-United Arab Emirates BIT, 2016). Agreement include a provision prohibiting the use The table shows that generally the main protection of performance requirements. Whereas the former guarantees are provided in the reviewed agreements. makes a reference to TRIMs and further makes This includes access to investor-state dispute sector and country specific commitments included settlement (ISDS), although for the BIT with UAE in a schedule, the latter prohibits a larger number access is contingent upon using the domestic court of performance requirements than in TRIMs in all system for a period of 6 months. Both the Japan- sectors (a so-called TRIMs+ standard). | 10 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND Some of Thailand’s reviewed IIAs contain C. Key Institutions for Investment commitments to liberalize. Both the EPA with Promotion Japan and the ASEAN-China Investment Agreement include such commitments, but Thailand has a national-level investment with a different scope and under reservations. promotion agency charged with investment The former provides national treatment and promotion functions for foreigners and Thais. the latter MFN in the pre-establishment phase. There are no sub-national level or local agencies The Japan-Thailand EPA, as part of a schedule charged with promoting FDI. included as Annex 6 of the Agreement, sets out a list of sectors for which the countries make National Level Institutions: positive commitments to liberalize. The ASEAN- China Investment Agreement does not include The Thailand Board of Investment (BOI), a such a list. It also maintains reservations for any government agency under the Office of the Prime existing or new measures that do not conform with Minister, is the main national-level investment commitments under the agreement, thereby diluting promotion agency charged with the responsibility the commitments. to promote investments in Thailand by Thais and foreigners, as well as overseas investments. Thailand is a member of the New York In particular, the main objective and vision of Convention that facilitates enforcement of the BOI is to promote inbound and outbound arbitral awards. The country has also signed the investment to enhance Thailand’s competitiveness, International Centre for Settlement of Investment to overcome the “middle income trap”, and to Disputes (ICSID) Convention in 1985, but has not achieve sustainable growth and promote investment ratified it, meaning that the convention has not activities that are beneficial to the economic and entered into force in Thailand. Thailand has been social development and security of the country. a respondent in two publicly known investor-State The BOI is comprised of the Prime Minister (as the arbitrations. The first case, initiated in 2005 by a Chairman), the Minister of Industry (as the Vice German investor, involved a concession agreement Chairman), up to 10 experts (for example, ministers to construct and operate a toll highway in Bangkok. or senior government officials) as appointed by the The tribunal decided in favor of the investor, Prime Minister, and the Secretary General. The finding a breach of fair and equitable treatment Prime Minister may also appoint up to five other due to the failure of Thai authorities to approve experts as advisors. toll hikes as contemplated in the concession contract. The second dispute was initiated in 2017 The Investment Promotion Act mandates by an Australian investor who held a metallurgical the BOI to designate the types and sizes of processing license of the Chatree gold mine located investments eligible for promotion (that is, in central Thailand. The investor alleged indirect targeted for increasing investment and therefore expropriation of the mine through measures taken eligible for receiving tax and non-tax incentives) by the Government in 2016, including non-renewal in the country. The BOI has the power to stipulate of the investor’s processing license for the mine the conditions applicable to a promotion, amend beyond 2016 and an order to suspend all gold or abolish the stipulated conditions at any time, or mining and related activities in the country by the cancel a promotion temporarily or permanently if end of 2016. it deems the underlying activity is no longer to be promoted in the country. Acceptance of Art. VIII of the IMF Articles Agreement requires Thailand maintain current The BOI is also empowered with regulatory account convertibility, enabling investors to functions. These include powers to review transfer certain payments related to their investment promotion applications, grant investment investments. Thailand is also party to 71 Double tax and non-tax incentives, impose conditions, issue Taxation Avoidance Agreements (DTAAs) that investment promotion certificates, and/or revoke are in force, influencing its ability to tax foreign rights and benefits granted to the promoted business, investors and investments. in accordance with the Investment Promotion Act. 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 11 Sub-National Investment Promotion Certain activities are itemized, as having special Agencies: importance and benefits to the country. Incentives are offered for investments in the following There are no sub-national agencies charged with categories: foreign investment promotion functions. n Category 1.3 — Economic forest plantations (except for Eucalyptus); D. Foreign Investment Promotion Strategy n Category 3.9 — Creative product design and development centers; The country’s current investment promotion strategy is set out in its Seven Year Investment n Category 4.11.1 — Manufacture of airframes, Promotion Strategy (2015-2021): Investment airframe parts and major aircraft appliances, for Promotion Criteria and Activities and in the example, engines, aircraft parts, propellers and Announcement of the Board of Investment No. avionics; 2/2557: Policies and Criteria for Investment Promotion (BOI Announcement No. 2/2557). n Category 5.6 — Electronic design; The main thrust of the investment promotion n Category 5.7 — Software; policies is to: n Category 7.1.1.1 — Production of electricity or n Promote investment that helps enhance steam power from waste or refuse-derived fuel; national competitiveness by encouraging R&D, n Category 7.8 — Energy Service Company innovation, value creation in the agricultural, (ESCO); industrial and services sectors, small-and- medium enterprises (SMEs), fair competition n Category 7.9.2 — Industrial zones or technology and inclusive growth; industrial zones; n Promote activities that are environmentally- n Category 7.10 — Cloud services; friendly, save energy or use alternative energy to drive balanced and sustainable growth; n Category 7.11 — Research and development; n Promote clusters to create investment n Category 7.12 — Biotechnology; concentration in accordance with regional n Category 7.13 — Engineering design; potential and strengthen value chains; n Category 7.14 — Scientific laboratories; n Promote investment in border provinces in Southern Thailand to help develop the local n Category 7.15 — Calibration services; economy, which will support efforts to enhance security in the area; n Category 7.19 — Vocational training centers. n Promote special economic zones, especially in The country’s investment promotion strategies border areas, both inside and outside industrial for targeted industries and regions can be found estates, to create economic connectivity with in specific laws. neighboring countries and to prepare for entry into the ASEAN Economic Community (AEC); n The National Competitiveness Enhancement Act for Targeted Industries B.E. 2560 was enacted n Promote Thai overseas investment to enhance in 2017 to improve the investment promotion the competitiveness of Thai businesses and measures and tools to increase efficiency in Thailand’s role in the global economy. attracting investments in the targeted industries and enhancing the level of competitiveness | 12 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND relative to other countries in the region. The development zones. The relevant subordinate Act provides tax and non-tax benefits, and legislation prescribes Chachoengsao, Chonburi, establishes a fund for promoted investments. and Rayong provinces as the investment Currently, the “targeted industries” specified by promotion zones consisting of (i) special the subordinate legislation are: business promotion zones of Eastern Airport City, Eastern Economic Corridor of Innovation n Next-generation automotive industry; and Digital Park Thailand, (ii) targeted industries n Intelligent electronics industry; promotion zones, and (iii) industrial estates or industry promotional zones. n Quality tourism industry; Foreign investment reforms in the country are n Agriculture and biotechnology industry; driven by the Foreign Business Commission established under the FBA. The Commission n High-value food processing industry; has the responsibility to undertake a periodic review of the FBA lists restricting FDI and provide n Robotics industry; advice and recommendations to the Minister of n Aviation industry; Commerce on categories of businesses for foreign participation, including assessment of impact on n Biofuel and biochemical industry; the Thai economy. n Digital industry; There are two other high-level committees tasked with responsibility for driving investment n Medical hub industry; reforms in general (not specifically foreign n National defense industry; investment) for targeted industries and special economic zones: n Industry directly and significantly supporting a more circular economy for example, n The National Competitiveness Enhancement producing fuel from waste, water resource Policy Committee established under the National management, and so on. Competitiveness Enhancement Act for Targeted Industries Act. n The Eastern Special Development Zone Act B.E. 2561 was enacted in 2018 to specify certain n The EEC Policy Committee established under areas in the eastern part of Thailand as special the Eastern Special Development Zone Act. 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 13 3. INVESTMENT ENTRY AND ESTABLISHMENT Market Entry and Sectoral Limitations Pursuant to the FBA, foreign investors from countries with which Thailand has a treaty are exempt from Foreign investment is expressly prohibited in these restrictions subject to the provisions under the certain business activities (Prohibited Sectors) respective treaties. For industries not included in and restricted in certain others (Restricted these three Lists, the general position is that foreign Sectors) pursuant to Appendix 1 of the Foreign investors are accorded equal treatment as afforded Business Act. to domestic investors and FDI is permitted without More specifically, the FBA differentiates between restrictions or the need to obtain a Foreign Business 3 types of business: License, subject to applicable sector-specific laws and regulations. n List 1 covers businesses strictly prohibited to foreign investors. Regarding foreign land ownership, land may only be owned by Thai nationals or companies in which n List 2 covers businesses prohibited to foreign Thai nationals own 51% or more of the registered investors for reasons of national security or share capital and more than half the number of impact on natural resources, environment its shareholders are Thai nationals. Nonetheless, or Thai culture, arts, traditions, and folklore foreign land ownership exceptions may be granted handicrafts, unless a foreign investor obtains for businesses receiving investment promotion permission from the Minister of Commerce with certificates from the BOI, oil concessions under the the approval of the Thai Cabinet. Petroleum Act, and businesses located in certain industrial estates. n List 3 covers businesses prohibited to foreign investors for reasons relating to Thai nationals’ Prohibited and Restricted Sectors non-readiness to compete, unless a foreign investor obtains permission from the Director- Table 3 lists Prohibited and Restricted Sectors General of the Department of Business based on the three Lists in the FBA. Development with the approval of the Foreign Business Commission. | 14 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND Table 3. List of Major Prohibited and Restricted Sectors List 1 — Prohibited Sectors Scope Agriculture Rice farming, plantation or crop growing. Fishery Fishery, only in respect of catching marine animals in Thai waters and in specific economic zones of Thailand. Livestock Livestock farming. Forestry Forestry and timber processing from a natural forest. Manufacturing Making or casting images of the Buddha and bowls for monastic alms. Trading Trading and auctioning Thai antiques or antiques of national historical value. Medicine Extraction of Thai medicinal herbs. Press, radio, broadcasting Press, radio broadcasting station or radio and television station business. Land Land trading. List 2 — Restricted Sectors Requiring Permission from Minister of Foreign Equity Cap Commerce and Cabinet — FBL required Group 1 — Businesses concerning n Manufacturing, distribution, repair or Up to 60%; may be national security or safety maintenance of: increased up to 75% nFirearms, ammunition, gunpowder, and with Cabinet approval explosive materials. nComponents of firearms, ammunition, and explosive materials. nArmaments, ships, aircraft, or military vehicles. nEquipment or parts of any type of war equipment. n Domestic land transportation, water transportation, or air transportation, including domestic aviation. Group 2 — Businesses with adverse n Trading of antiques or artifacts that are Up to 60%; may be effect on arts and culture, customs, Thai works of art or Thai handicrafts. increased up to 75% and native manufacturing/handicrafts n Wood carving. with Cabinet approval n Silkworm rearing, manufacture of Thai silk, Thai silk weaving, or Thai silk printing. n Manufacturing of Thai musical instruments. n Manufacturing of gold-ware, silverware, nielloware, bronzeware, or lacquerware. n Making bowls or earthenware which are of Thai art and culture. Group 3 — Businesses with adverse n Manufacturing of sugar from cane. Up to 60%; may be effect on natural resources or the n Salt farming, including rock salt farming. increased up to 75% environment n Mining of rock salt. with Cabinet approval n Mining, including stone quarrying or crushing. n Timber processing for making furniture and utilities. Insurance Life insurance and non-life insurance company Up to 25% List 3 — Restricted Sectors Requiring Permission from Department of Foreign Equity Cap Business Development and Foreign Business Commission — FBL required Agriculture, Fishery, Horticulture, n Rice milling and flour production from rice Up to 100% Livestock and plants. n Fisheries, specifically breeding of aquatic creatures. n Forestry from re-planting. n Planting and culture of plants. 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 15 Manufacturing and Production n Production of plywood, veneer, chipboard or Up to 100% hardboard. n Production of lime. Construction Except: Up to 100% n Construction of infrastructure in public utilities or communications requiring tools, technology or special expertise in such construction where the minimum foreign capital is 500 million baht (B) or more from foreigners. Agency or Brokerage Except: Up to 100% nBrokerage or agency of securities or service related to future agricultural commodities futures or financial instruments or securities. nBrokerage or agency for the purchase/sale or procurement of goods or services necessary to production or providing services to affiliated enterprises. nBrokerage or agency for the purchase or sale, distribution or procurement of markets, both domestic and overseas for the distribution of products made in Thailand, or imported from overseas in the category of international business, with minimum foreign capital of B100 million or more. Auctioneering Except: Up to 100% nAuctioneering in the manner of international bidding, not being auctions of antiques, ancient objects or artifacts that are Thai works of art, Thai handicrafts or antique objects, or with Thai historical value. Trading n Domestic trade in local agricultural products not prohibited by law. n Retailing all categories of goods having less than B100 million capital in total or having the minimum capital of each shop of less than B20 million. n Wholesaling all categories of goods having minimum capital of each shop less than B100 million. Food and Beverage Sale of food and beverage Up to 100% Hospitality Hotel operation, excluding hotel management. Up to 100% Professional services nAccountancy. Up to 100% nLegal services. nArchitecture. nEngineering. nOther services, except those prescribed in the ministerial regulations. “Other services” serves in practice as a “catch-all” service category. As such, foreign investment in any services business even if not contained in List 3, would trigger requirement to obtain a Foreign Business License prior to commencing operation. Tourism Guided touring Up to 100% Source: Analysis by Baker McKenzie based on country’s laws and regulations. Note: The table is based on a review of 32 specific sectors identified for the purpose of this research. The list of sectors is therefore not exhaustive.2 | 16 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND Forms of Establishment activity (as applicable), with at least 25% remitted in the first 3 months, and total of 50% within the Foreign investors can generally hold any type of first year. Of the remainder, at least 25% must be shares in a Thai-incorporated company. There remitted to the country each of the remaining two is no special requirement or restriction on the years. If the period of business operation is less type of local entity a foreign investor may invest than 3 years, then the minimum capital must be in or establish, subject to obtaining the necessary remitted to the country within 6 months of the date regulatory approvals. A foreign investor may hold of commencement of business operation or date 100% of the shares in an incorporated local entity if of permission (as applicable). The time period for (i) the subject business activity is not reserved for remittance is typically 5 years (instead of 3 years) Thai nationals or restricted to foreigners under the for investors having protections under international FBA or other applicable laws, (ii) it has obtained or bilateral treaties with Thailand. a foreign business license or foreign business certificate (as applicable), (iii) it has obtained an investment promotion certificate from the BOI, Restrictions on Expatriate Appointments or (iv) it qualifies as such under international or There are several restrictions on expatriate bilateral treaties to which Thailand is a party. In appointments. The FBA requires that Thai nationals business activities where foreign ownership is must make up at least 40% of the total number of restricted, it is common for a foreign investor to directors of companies operating businesses under form a joint venture with one or more Thai partners. List 2 of the FBA. The Thai law on private limited companies does not stipulate any limitation on the Foreign ownership is not constrained by director’s nationality or residency, while the law on restrictions on mergers and acquisitions, unless public limited companies requires that the majority the transaction falls within the prohibited or of directors reside in Thailand. Sector-specific laws restricted sectors (for example, List 1 and List 2 may also impose similar requirements. For example, of the FBA) subject to foreign equity restrictions 75% of directors of an insurance company and 50% under the FBA or other sector specific laws. In of directors in a tour guide company must be Thai. that case, the foreign investor would not be able to There are no general limitations on the appointment acquire shares in that sector above the prescribed of foreigners to key managerial positions of local FDI equity caps. companies. Minimum Investment Requirements Granting of work permits is subject to conditions The amount of minimum investment requirement under Thai laws, for example: is determined by the type of investment. Generally, n If the employer is a juristic person, the juristic the minimum capital of a foreign investor for person must have fully paid-up registered capital commencing business in Thailand must be no less of at least B2 million and employ four Thai than B2 million. However, if the foreign investor’s citizens to be able to sponsor 1 work permit. business activity falls under List 2 of the FBA (that Each additional foreign employee requires a is, it is a restricted activity) for which an FBL is respective capital increase of B2 million, and required, the requirement is increased to B3 million the number of work permits available to be or 25% of the annual average of three-year projected sponsored is capped at 10; and expenses, whichever is greater. Accordingly, for FDI in a Restricted Sector, the foreign investor is n If the employer is a branch office of the overseas required to submit three-year projections of income juristic person, the foreign investment amount and expenses along with the FBL application. The should be at least B3 million to be able to minimum capital must be remitted into the country sponsor 1 work permit. Each additional foreign within 3 years of the date of commencement of the employee requires a respective capital increase business operation or the date of permission granted of B3 million and the number of work permits to the foreign investor regarding the restricted available to be sponsored is capped at 10. 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 17 It is generally required that the ratio of foreign to If any of the foregoing exceptions apply, then Thai employees be 1:4. As such, a foreign investor the foreign investor must only obtain a “Foreign must employ at least 4 Thai nationals to be able to Business Certificate”, which is a less arduous sponsor the long-term visa of one foreign employee. process than obtaining a FBL. The process for This requirement may be waived if the employer obtaining a FBL takes four to six months and there company obtains an “investment promotion” from is no guarantee that the FBL will be granted. A FBL the BOI. However, the company will still need to is generally valid for the duration of the permitted justify the need to hire expats over Thai nationals business activity. for approval. The approvals are subject to the sole discretion of the officials, in determining the For FDI in a business activity under List 2 of necessity and suitability for employing foreign the FBA, the foreign applicant must make a nationals in such positions. The employment of FBL application in the prescribed manner to the Thai nationals is also among the factors that the Minister of Commerce (MOC) The MOC and the Foreign Business Commission would take into Cabinet have 60 days to consider the application for consideration when granting an FBL to a foreign approval. Once the Cabinet approves the project, investor. The process for obtaining a work permit the MOC is required to issue a FBL within 15 days is prescribed in written regulations, including the from Cabinet’s approval. At the time of issuing Emergency Decree on Managing the Work of Aliens a FBL, the MOC may prescribe conditions with B.E. 2560 (2017) and the Ministerial Regulations which the foreign investor must comply in order Regarding the Work Permit Application, Issuance to operate the approved business activity. If the and the Notification of the Work of the Foreigner Cabinet refuses to provide approval, the MOC is B.E. 2554 (2011).However, the practice of officials obligated to notify the applicant within 30 days in this regard may not be completely consistent along with clear reasons for refusal. with the written regulations. In considering applications for FDI beyond the 60% foreign equity threshold for List 2 activities, Local Sourcing and R&D Requirements the MOC (with Cabinet’s approval) has the There are no overarching local sourcing discretion to increase the FDI limits to 75% requirements or local R&D investments needed on a case-by-case basis, based on the following in order to establish business in Thailand. factors: n Advantageous and disadvantageous effects on Foreign Investment Approval national safety and security, economic and social development of the country, public order or good A foreign investor is required to obtain a Foreign morals, national values in arts, culture, traditions Business License to operate a business in any of and customs; the restricted categories in List 2 or List 3 of the FBA, unless the foreign investor is exempted n Impact on natural resources conservation, under one of the following exceptions: energy, environmental preservation, consumer protection; n Foreign investor qualifies under relevant treaty protection; n Size of undertakings; Foreign n investor obtains an Investment n Employment of Thai nationals; and Promotion Certificate from the BOI; or n R&D and technology transfer to Thai nationals. n Foreign investor obtains license to operate in the industrial or export estate from the Industrial Estate Authority of Thailand (IEAT). | 18 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND For FDI in a business activity under List 3 of new investment will have negative impact on the the FBA, the foreign applicant must make a business of Thai citizens and accordingly prescribe FBL application in the prescribed manner to the conditions at the time of issuing the FBL, on a case Director General of the Department of Business by case basis. Development, Ministry of Commerce (DG). Similar to the FBL process for List 2 business An Investment Promotion Certificate (IPC) is activities, the DG has 60 days to consider the issued by the BOI to an investor, whether Thai application for approval. Once the DG approves the or foreign, who wishes to invest in Thailand. An project, the DG is required to issue a FBL within IPC is not a mandatory requirement under the law. 15 days from the approval. At issuance of a FBL, Rather, it is a tool used by the Thai government to the DG may prescribe conditions with which the attract investment in “promoted” business activities foreign investor must comply in operating the in the country by offering incentives to qualifying approved business activity. If the DG refuses to investors. Not all types of business activity qualify provide approval, the DG is obligated to notify for an IPC. The investor must meet the investment the applicant within 15 days of the decision along type, size and eligibility criteria specified by the with clear reasons for refusal. A foreign investor BOI. Upon BOI’s approval of the applicant’s may appeal the DG’s refusal to the Minister of investment proposal, the BOI will issue the IPC Commerce. and grant tax and non-tax incentives subject to any conditions it stipulates in the IPC. These conditions Under the FBA, foreigners who have obtained a may be in the form of amount and source of capital, FBL to engage in businesses categorized under nationality and number of shareholders and workers, List 2 or List 3 of the FBA will be subject to the size of activity and types of products, date of project following conditions: commencement, reporting requirements, import/ export of machinery, standards compliance and n Minimum capital-to-loan ratio. The ratio is period of time, to name a few. The BOI is obligated currently 1:7. to notify the applicant within 15 days of the BOI’s n At least one authorized director/responsible resolution to grant the “investment promotion” to person must have domicile or residence in the applicant, subject to certain extensions of time. Thailand. In practice, BOI’s proposal evaluation can take 2-5 months or more depending on the nature and size n Minimum capital amount of at least B3 million of the proposed project. The applicant must confirm or 25 % of the annual average of three-year acceptance within 1 month of such notification to projected expenses, whichever is greater. the applicant and commence the project within 6 months from confirming acceptance, subject When considering projects to grant a FBL, the to extensions for up to an additional 1 year on MOC or the DG may take into account whether the reasonable grounds. 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 19 4. INVESTMENT PROTECTION Protection Against Expropriation The Administrative Procedure Act of 2006 prescribes requirements on procedural due There is no omnibus expropriation legislation in process, which is applicable to any persons the country. The FBA does not explicitly provide (regardless of nationality) who are subject to protections to foreign investors against direct the administrative decision-making process. or indirect expropriation measures. However, According to the Act, the relevant parties are both foreign and Thai investors who receive an allowed to present facts and arguments to the investment promotion certificate from the BOI competent official before the decision is made, and pursuant to the Investment Promotion Act are are also entitled to appeal the decision according to accorded protection against nationalization from the process prescribed under this Act or any other the state. The Land Expropriation Act B.E. 2530 specific laws (as applicable). (1987), applicable to both foreigners and Thais, permits the state to acquire or expropriate land or Thailand has entered into international immovable property only if it deems necessary for investment agreements that guarantee protection any public interest purpose prescribed under the to foreign investments against certain government Act, which include the following purposes; measures, including expropriation, which may unduly harm the investment. As such, these n Public utilities; treaties generally afford some protection against n National defense; expropriation of investments belonging to nationals and companies of the countries that are party to these n Obtaining natural resources; treaties, although the scope differs (see Section 2.B. — International Legal Framework). n Town planning; n Agricultural development; Restrictions on Inflow and Outflow of Funds n Industrialization; or Thailand regulates the inflow and outflow of n Land reform. funds pursuant to its exchange control laws (that is, Exchange Control Act B.E. 2485 (1942), Requirements for the expropriation process and as amended from time to time, and regulations reasonable compensation are also set out under promulgated thereunder). Approvals for the Land Expropriation Act. For example, in transactions subject to the exchange control laws are determining the compensation, the following delegated by the central Bank of Thailand (BOT) factors, among others, must be taken into account: to the commercial banks in Thailand, with the n Market price of the immovable property to be exception of some transactions that require the BOT’s expropriated; approval. Generally, there are no restrictions on the capital inflows and outflows, including foreign loans n Price of immovable property which is appraised (net of applicable taxes and subject to other standard for the purpose of paying local maintenance compliances). They are freely permitted into the taxes; country provided the transactions are conducted through authorized commercial banks. n Condition and a location of the immovable property; and n Cause and purpose of the expropriation. | 20 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND Inflow of Funds n Dividend payments: a document evidencing dividend payment of a share issuing company There are no requirements or restrictions (for example, shareholder resolution approving specifically imposed on a foreign investor dividend payment); regarding the inflow of funds into the country, but the exchange control laws impose reporting n Repayment of loan proceeds and interest obligations on Thai residents and not on the thereof: loan agreement, document evidencing foreign investor. With respect to equity investment a repatriation of loan proceeds into Thailand for the purpose of incorporating a company in (for example, credit advice), and document Thailand, there are no requirements from an exchange evidencing a calculation method for interest control law perspective (that is, the foreign investors payment (in case of interest payment); can freely remit money into Thailand for setting up a company in Thailand). However, the foreign investor n Technical fees and wages: a document evidencing would have to inject such funds into Thailand prior a receipt of services (for example, service to its proceeding with incorporation registration agreement), and, in case a service receiver is a with the Ministry of Commerce. Similarly, no juristic person, an invoice indicating name of a restrictions are imposed on a foreign investor (or a service provider, and so forth. foreign lender) in remitting the loan proceeds into Trade related outbound payments are deemed Thailand. Rather, the obligation is imposed on a permissible transactions on the condition that Thai borrower to transmit/remit the loan proceeds such payments are built in as part of a service into Thailand immediately upon receipt of the fee payable to a service provider. To this end, offshore loan proceeds and to convert the same into supporting documents required are those necessary THB or deposit it into a foreign currency deposit for the settlement of service fee, for example: account opened with a commercial bank in Thailand a document evidencing a receipt of services within 360 days from the repatriation date. (a service agreement); and, in case a service receiver is a juristic person, an invoice indicating name of a Outflow of Funds service provider. Proceeds of exports valued at more To effect an outbound transfer, BOT’s prior than USD 50,000 or equivalent per transaction must approval is generally required unless the be repatriated to Thailand after payment is received transfer falls within a “permissible” transaction not to exceed 360 days from the export date and prescribed by the BOT. In such cases, the transfer must be deposited with the commercial bank within can be effected net of applicable taxes and with the 360 days of receipt or entry into the country. requisite supporting documents to the satisfaction Pursuant to the exchange control laws, a of a commercial bank in Thailand acting as a conversion of Baht into foreign currency remitting bank. and outward remittance of the same may be The supporting documents required to effect prohibited, unless the transfer is related to a the transfer of payment under each permissible permissible transaction or a prior approval from transaction are those proving: the BOT is obtained. If the outward payments are made under the permissible transactions, the n Sale transaction: a document evidencing the conversion of currency for the purpose of settlement sale transaction (for example, sale and purchase could be at an exchange market rate (that is, the agreement); spot rate). Apart from requirements on permissible transaction and supporting document(s) to effect n Liquidation proceeds: certificate of completion the transfer, the Exchange Control Law does not of liquidation of a company issued by liquidator; stipulate the procedural steps in converting and n Capital gain proceeds: document evidencing a transferring of currency to foreign jurisdictions. sale of shares (for example, share subscription Therefore, the process depends largely on the agreement); procedures prescribed by each commercial bank. 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 21 Dispute Settlement the UNCITRAL Model Law on International Arbitration. Foreign investors are not required Foreign investors have access to international to exhaust local remedies (local courts) before arbitration, domestic courts, and domestic referring the dispute to international arbitration. arbitration. Thai arbitration law does not separate arbitration law regimes between domestic There is no formal institutional mechanism and international arbitrations. Therefore, both specifically established to address grievances arbitrations seated in Thailand and those seated between foreign investors and the State, prior to abroad are subject to the same act, which is escalation into legal disputes. the Arbitration Act B.E. 2545 (2002), based on 5. INVESTMENT INCENTIVES Thailand’s investment incentives regime applies The BOI Announcement No. 2/2557 lays out equally to both domestic and foreign investors. the quantitative criteria for project approval There are no incentives specifically targeted to and foreign shareholding as well as the criteria foreign investments only. for granting tax and non-tax incentives that are activity-based and merit-based. Activity- The Investment Promotion Act provides the based incentives are granted according to a group legal and administrative framework to grant classification (A or B) based on the level of investment incentives to promote investments importance of the activity (for example, activities in in the country. The BOI issues written policies infrastructure development, electricity production, stipulating the promoted businesses, and applicable manufacturing, activities using advanced criteria and conditions for granting investment technologies, and so forth). Merit-based incentives promotion certificate. It grants tax and non-tax are offered based on the merit of the project incentives to promoted businesses in the following (for example, R&D, IP acquisitions, advanced core business categories: tech training, and product design). Tax incentives n Agriculture and agricultural products; granted include: n Mining, ceramics, and basic metals; n Full or partial reduction in corporate income tax. n Light industry; n Import duties exemption and/or reduction for machinery, raw materials, goods imported n Metal products, machinery, and transportation for R&D and testing purposes, raw materials equipment; imported for producing, mixing or assembling goods for export, and goods imported for n Electronic industry and electrical appliances; re-export. n Chemicals, paper, and plastics; n Export duties exemption for goods produced or n Services and public utilities; assembled by the promoted person. n Exemption on withholding tax on dividend n Technology development and innovation. payment for the profits derived from the promoted business. | 22 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND The National Competitiveness Enhancement Act There are additional customs privileges under for Targeted Industries promotes investments the Customs Act such as duty refund or duty in 10 targeted industries and offers corporate drawback for the goods which are temporarily income tax exemption and cash grants for imported into Thailand and exported out of investment in R&D and innovation activities. Thailand within a specific time. Other privileges The tax incentives are the same as those provided include the right to obtain a duty refund from the under the Investment Promotion Act except the duty paid on imported goods where those goods will corporate income tax which may be exempted for up have undergone production, mixing, assembling, to 15 years. The financial incentives are in the form or packing in Thailand, and then exported out of of cash grants to support expenses for investment, Thailand. R&D, promotion of innovation, or development of technical personnel for the targeted industries. Incentives are also available to investors under the Thai International Business Center (IBC) Similarly, the Eastern Special Development Scheme. An IBC is a company registered under Zone Act targets investments in certain areas the laws of Thailand, performing functions of: in the eastern part of Thailand as special (a) providing support services to Thai or foreign development zones. The targeted industries are the affiliates, (b) permitted treasury functions as ones provided under the National Competitiveness Treasury Center, or (c) international trading center Enhancement Act such as robotics, aviation, and providing services related to international biofuel and the biochemical industries. However, trading. The tax incentives may include: this Act allows the EEC Policy Committee to further specify targeted industries and designate n Reduced corporate income tax rate to 8%, 5%, incentives to be granted to business operators in or 3% based on expenditures in Thailand of each of the special business promotion zones. The B60 million, B300 million, and B600 million, tax incentives include corporate income tax and respectively. duty exemption and/or reduction, but not exceeding n Exemption on corporate income tax for dividend the incentives provided under the Investment received from an affiliate. Promotion Act and the National Competitiveness Act for Targeted Industries Act (the subordinate n Exemption on specific business tax for income legislations specifying the criteria and conditions from a treasury center function. are not yet announced). n Reduced personal income tax rate to 15% for The Thai Revenue Code also provides incentives expatriates working for an IBC. such as: n Exemptions on withholding tax for offshore n Value-added tax (VAT) exemptions for certain affiliates receiving dividend or interest paid from types of business such as those that sell an IBC. agricultural products; newspapers, magazines or school books; provision of educational services There is no readily accessible centralized portal of public educational institutions, educational that serves as a repository of all tax and financial institutions under the relevant laws; and incentives available to investors in the country. provision of domestic transport, and so forth. The relevant authority (for example, BOI, Revenue Department, and the Customs Department) n Reduced corporate income tax rates are available publishes its laws and regulations, including for SMEs (with paid-up capital not exceeding incentive schemes, on its official website. The B5 million and revenues of not exceeding BOI maintains a database of the companies that B30 million, regardless of whether the investors are granted investment incentives from the BOI. in such SME are Thais or foreigners). This database is accessible to the public via BOI’s website. n Exporters exporting at least 70% or 50% of the total sale can apply with the Revenue Department for the good exporter scheme. 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 23 Eligibility Criteria and Approval Process to obtain investment promotion or incentives must submit applications to the relevant authority All tax and financial incentives granted to such as the Office of the BOI or the Revenue investors, both Thai and foreign, are based on Department, and the applications will be reviewed eligibility criteria provided in law, regulation on a case-by-case basis in accordance with the set or policy. For example, the Investment Promotion criteria. However, enterprises who qualify for the Act and relevant notifications of the BOI set out preferential corporate tax rate may self-assess and the business activities, conditions and incentives self-declare to make use of the incentive, and the eligible for investment promotion for both tax department may verify an enterprise’s eligibility foreign and Thai investors. These incentives do after the fact. not automatically apply. The person who wishes 6. INVESTMENT LINKAGES For the purposes of this section, research was The BOI has established the BOI Unit for Industrial focused on availability of incentive schemes Linkage Development (BUILD) to help investors to increase local sourcing, technology transfer coordinate with government agencies, and/or the and measures to improve information exchange private sector, including providing support on between foreign investors and domestic industrial linkage and sourcing of local suppliers. suppliers. Although not specifically intended for foreign investors and equally applicable to domestic In some cases, BOI provides incentives that help enterprises, certain tax benefits are available for with imports and impede local sourcing. The BOI qualified technology transfer. In particular, the provides import duty exemption for investments BOI provides corporate income tax exemptions for involving (i) raw and essential materials imported investments involving: for use in producing, mixing, or assembling promoted products for export and (ii) machinery n Development of advanced technology training that cannot be produced or assembled domestically. and technical assistance for local suppliers Yet, the imported machinery exempt from import (at least 51% Thai shareholding); duties and import VAT must be approved by the BOI based on certain conditions such as the fact that it n Advanced technology training. cannot be produced or assembled in Thailand in the same quality or quantity of the imported machinery. | 24 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND 7. OUTWARD FOREIGN DIRECT INVESTMENT For this section, research was focused on whether b. it is a remittance of foreign currency to invest in there are any legal instruments specifically or grant loans to its foreign Related Companies; covering outward investment and if there are, whether they impose any restrictions on c. it is a remittance of foreign currency for granting outward investment. While there is no statutory loan to a foreign enterprise in a manner other restriction prohibiting state-owned enterprises than those listed in (a) and (b), above, in the from investing abroad, any investment by the state, amount not exceeding US$50 million per year; regardless whether it is international or domestic, d. it is a remittance of foreign currency by an requires approval from the Cabinet. Because there individual to incorporate or invest in a foreign is no specific OFDI legislation in the country, enterprise which will result in it holding of at private sector OFDI is regulated by the exchange least 10% of the shares or equities in such control laws. From Thai exchange control laws foreign enterprise; perspective, OFDI is generally deemed an outward remittance of money for the purpose of making an e. it is a remittance of foreign currency by an investment in or lending to an offshore enterprise individual to grant loan to a foreign entity in (d), that does not operate a business of foreign securities above; or trading. An outward remittance requires Bank of Thailand’s approval unless it relies on a permissible f. it is a remittance of foreign currency by an transaction.* OFDI is not automatically deemed a individual to invest in or grant loan to a Related permissible transaction. Rather, to be permissible, Companies of a foreign entity in (d), above. OFDI must be for one of the following purposes: A Thai entity or individual can rely on the above- a. it is a remittance of foreign currency by a juristic mentioned permissible purposes to remit foreign person to incorporate or invest in a foreign currency so long as they can present supporting enterprise which will result in it holding at least documents to the satisfaction of a commercial bank 10 % of the shares or equities in such foreign acting as a remitting bank. enterprise; * It should be noted that new measures to ease capital flows, including on outward FDI may have been introduced by the Bank of Thailand, that are beyond the period covered in this document. 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 25 8. RESPONSIBLE INVESTMENT For this section, research was focused on whether broader legal framework to preserve the environment, there are any measures within the country’s protect health and to ensure products produced investment legislation that are specifically targeted comply with national and international standards. to ensure responsible investment. Thailand has In particular, the two main legislations in this regard no specific measures on responsible investment in are the Enhancement and Conservation of National the country’s foreign investment policy and legal Environment Quality Act B.E. 2535 (1992) and the framework. It has undertaken several measures in its Factory Act B.E. 2535 (1992). 9. RECENT POLICIES ON NEW TECHNOLOGIES This section considers Thailand’s recent policy n High-value food processing industry; measures on new technologies (that may affect n Robotics industry; both domestic and foreign investors). Globally, policy measures on new technologies tend to focus n Aviation industry; on the enabling (sectoral) regulatory framework, as well as on incentives, digital standards, and clusters. n Biofuel and biochemical industry; At the same time, countries have taken measures n Digital industry; that highlight their changing approaches to national security. Other emerging policies that, though not n Medical hub industry; directly related to investment, nevertheless impact n National defence industry; investments, are data localization requirements as well as rules and regulations concerning the n Industry directly and significantly supporting treatment and use of digitized information. circular economy—for example, producing fuel from waste, water resource management, and so on. The National Competitiveness Enhancement Act for Targeted Industries, effective as of February The Cybersecurity Act, B.E. 2562 (2019) was 2017, specifically targets new technologies for published in May 2019, and is now effective. attracting investment and enhancing Thai The statute is controversial due to concerns around competitiveness. It aims to promote investment the government’s potentially sweeping access to in industries new to Thailand or which use new internet user data. technology. The Act provides tax and non-tax benefits, and establishes a fund with an initial Data Localization budget of B10 trillion for promoted investments. The “targeted industries” include the following: There are no data localization requirements under Thai law. On May 27, 2019, the Thai government n Next-generation automotive industry; published the Personal Data Protection Act B.E. n Intelligent electronics industry; 2562 (2019) (PDPA) in its official gazette, giving effect to this new law on data privacy. Companies n Quality tourism industry; have a 1-year period to bring their practices into compliance by May 27, 2020. The PDPA does not n Agriculture and biotechnology industry; impose any data localization requirements. | 26 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND 10. CITY SPECIFIC REVIEW—BANGKOK Thailand has only national level laws, and no permission to use land for industrial operations, specific laws and regulations exist at the city requesting permission to use utilities, and providing level. Since in practice many government agencies advice on other matters such as funding, banking are located in Bangkok, foreign investors generally and financing. have better access to information and materials. For example, the One Start One Stop Investment Center The Investment Promotion Act generally (OSOS) located in Bangkok provides investment- promotes investments on a business activity basis related services and facilitates investments in and not on location basis, with the exception of Thailand by both Thais and foreigners. The OSOS certain underdeveloped areas. Similarly, the operates as part of the BOI and is a channel to Eastern Special Development Zone Act targets submit documents and obtain advice relating to investments in certain areas in the eastern part of establishing companies, obtaining “investment Thailand as special development zones. These are promotions” obtaining foreign business licenses, national level laws, not city specific, and apply to conducting environmental assessments, requesting both Thais and foreigners. 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 27 11. COMPETITION LAW & POLICY For the purposes of this section, research was A merger is defined to include the following: focused on merger control and leniency frameworks in the country. n Merger between a manufacturer and another manufacturer, a distributor and another The primary law governing competition in distributor, a manufacturer and a distributor, or Thailand is the Trade Competition Act BE 2560 of between a service supplier and another service 2017 (Competition Act) and relevant subordinate supplier, which results in the continuity of legislation. The Competition Act provides two one business and the termination of the other types of restrictive trade practices: restrictive trade business, or the creation of a new business; practices not eligible for permission and restrictive trade practices eligible for permission. Restrictive n Purchase of the whole or part of assets of another trade practices that are not eligible for permission business in order to have control over its policies include abuse of dominant position, joint price on business administration, administration or fixing and certain forms of joint conduct by two or management, pursuant to the criteria prescribed more business operators. Restrictive trade practices by the TCC; or that are eligible for permission include mergers that n Purchase of the whole or part of the shares of may result in a monopoly or unfair competition, as another business whether directly or indirectly in well as certain other restrictive joint practices. order to have control over its policies on business The Trade and Competition Commission (TCC), administration, administration or management, established in 2017, is the main body in charge pursuant to the criteria prescribed by the TCC. of implementing competition law and policy in “Control” is understood to mean acquisition of at the country. least 25% of the voting rights of a publicly listed company and exceeding 50% of the voting rights A. Merger Control of a non-listed company, while in asset acquisition it means acquiring assets exceeding 50% of the Thailand’s merger control regime is primarily total value of assets used in the ordinary course of governed by the Competition Act and the business of the seller. relevant subordinate legislation, administered by the TCC. Under the Competition Act, a pre- The definition does not address joint ventures merger filing is required if the merger may result (JVs), thus our understanding is that JVs may in the creation of either a ‘monopoly’ or ‘a business trigger a notification only if they fall under one of operator with dominant market power.’ On the other the above situations for example, JV via assets or hand, a post-merger notification is required seven share acquisition. days from the date of business merging, if it may result in the ‘substantial lessening of competition Further definitions apply depending on the type in a market.’ It should be noted that other sectoral of filing that is required. For purposes of pre- regulations may also include merger rules applied merger filing, ‘a monopoly’ is defined as a situation by the respective regulators such as the Bank of where there is only one business operator in any Thailand, Energy Commission or the Broadcasting market possessing absolute power to determine and Telecom Commission. In this regard businesses price and supply of products or service freely; and that are specifically regulated under other sectoral such business operator has a sales turnover of at laws having jurisdiction over competition matters least B1 billion. A ‘business operator with dominant will fall outside the scope of the law. market power’ is defined as (i) any business operator having a market share of 50% or more and having a | 28 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND sales turnover of at least B1 billion in the previous The law does not contain any specific provisions year; or (ii) any of the top three business operators addressing information requests from the TCC. that together have an aggregate market share of 75% It merely specifies that the TCC must complete or more and a sales turnover of at least B1 billion in its review of the pre-merger application within 90 the previous year (excluding any business operator days from the date the TCC receives the application having a market share in the previous year of lower (with an extension of not more than 15 days, than 10% or having a sales turnover in the previous if necessary). year of lower than B1 billion). For post-merger notification, the threshold is a merger in which the Remedies sales turnover of any one business operator, or of all relevant business operators undertaking a merger The merger parties can propose commitments to in any market, amounts to B1 billion or more and limit anticompetitive effects of mergers and the that does not result in a ‘monopoly’ or result in a TCC can approve a merger within a specific time ‘business operator with dominant market power’. period and under conditions. The law does not address the type of commitments, but it is expected A merger by a business operator falls within the that both structural and behavioral remedies can be ambit of the Competition Act if that business included. operator engages in business activities or commerce in Thailand. If a foreign legal entity File Access and Third Part Intervention has a ‘business presence’ in Thailand (that is, it operates a business in Thailand through a branch Although parties cannot access the TCC’s office or a subsidiary), it would be subject to the merger files, if the TCC does not approve a application of the Competition Act. merger, it is required to state the reasons for the non-approval, both the factual circumstances Mergers implemented for the purpose of internal and legal rationale. The Competition Act prohibits restructuring or reorganization of business operators any person (including the TCC) from disclosing having relationship in terms of policy direction or confidential information about the business or control pursuant to the criteria prescribed by the business operation acquired or known as a result TCC, are not subject to the merger notification of compliance with the Competition Act, unless the requirements. disclosure is necessary for performing the TCC’s duties or for the purposes of investigation, lawsuits, Pre-notification Meetings or reaching decisions. The Competition Act does not specify a process Although the Competition Act does not contain for merging parties to have pre-notification any provisions expressly permitting a third meetings with the TCC on merger control matters party to participate in the merger procedures, (unlike several other matters such as abuse of in practice it is possible for a third party to dominant positions, unfair trade practices where file a complaint to the TCC if the proposed formal pre-consultation is expressly provided transaction adversely affects their interests. The for). However, business operators may request an TCC is also empowered to solicit inputs from third unofficial pre-notification meeting with the TCC to parties affected by the proposed transaction during discuss the applicable merger control processes and the merger approval process. initial assessment of TCC. Substantive Assessment Fast Track Procedure and Information Requests The TCC will consider the following factors in its substantive assessment of a merger: No fast track procedure is available under the Competition Act. n An analysis of the market structure before and after the merger of businesses. 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 29 n Relevant market. Penalties and Appeals n Market share of the merger parties before and Different types of penalties may be imposed. after the merger of businesses. Penalties for failure to notify mergers that may significantly lessen the competition in a market n Total sales volume of the merger parties of the would result in a fine of not more than B200,000 and businesses before and after the merger. a daily fine of not more than B10,000 per day until n Assessment of impacts on competition after the the merger is notified. Penalties for implementing a merger of businesses in the following aspects: merger that may result in a monopoly or a dominant business operator in the market without pre-merger n Concentration in the market. approval would result in a fine of not more than 0.5% of the transaction value, and the TCC has n Entering into the market of new business the authority to unwind the transaction. Penalties operators and expansion of production of for failure to comply with the TCC’s order in this competitors in the market, by taking into regard would result in a fine of not more than B6 consideration various factors, such as laws million and a daily fine of not more than B300,000 and regulations, costs of transportation, per day throughout the period of violation. access to old technology patents, access to raw materials or other necessary production If the merger parties do not agree with the articles, and so forth. TCC’s decision, they have the right to appeal to the Administrative Court within 60 days. An n Non-coordinated effect, which refers to an appeal of a decision of the Administrative Court effect caused by the merged entity that may may be made to the Supreme Administrative Court, make increasing profits from the increasing whose decision will be final. of prices or the reduction of quality of goods owing to reduced competition. Publicity and Deadlines for Merger n Coordinated effect, which refers to an effect Decisions arising from the merger of businesses that The merger decisions are not published or publicly may increase the possibility of the business available. operators cooperating with each other to increase the price of goods after the merger The TCC is mandated to issue merger decisions of their businesses. within ninety calendar days from the date of the application, extendable by a maximum of fifteen n Effect on the benefits economically and on calendar days. the consumers as a whole. n Other effects that may affect the competition B. Leniency Program in the market (if any). There is currently no leniency program in Thailand. | 30 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND ENDNOTES 1 The WTO services sectoral classification list Services are categorized into 12 sectors: (W/120) is a comprehensive list of services sectors and sub-sectors covered under the GATS. It was 1. Business services compiled by the WTO in July 1991 and its purpose 2. Communication services was to facilitate the Uruguay Round negotiations, ensuring cross-country comparability and 3. Construction and related engineering services consistency of the commitments undertaken. The 160 sub-sectors are defined as aggregate 4. Distribution services of the more detailed categories contained in 5. Educational services the United Nations provisional Central Product Classification (CPC). The list can be accessed 6. Environmental services under the following link: http://www.wto.org/ english/tratop_e/serv_e/mtn_gns_w_120_e.doc. 7. Financial services 8. Health related and social services 9. Tourism and travel related services 10. Recreational, cultural and sporting services 11. Transport services 12. Other services not included elsewhere 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 31 2 For the purpose of this research, 32 sectors have been identified. This is not an exhaustive list of all sectors of the economy. Primary: Services: 1. Agriculture, Hunting, Forestry, and Fishing 18. Electricity, Gas, and Water 2. Mining, Quarrying, and Petroleum 19. Alternative Energy 20. Construction Manufacturing: 21. Wholesale and Retail Trade 3. Agroprocessing, Food Products, and Beverages 22. Hotels and Restaurants 4. Textiles, Apparel, and Leather 23. Other Travel and Tourism-related Services 5. Chemicals and Chemical Products 24. Logistics, Transport, and Storage 6. Rubber 25. Telecommunications 7. Plastic Products 26. Computer and Software Services 8. Pharmaceuticals, Biotechnology, and Medical Devices 27. Financial Services including Insurance 9. Metals and metal products 28. Real Estate 10. Non-metal mineral products 29. Business Services 11. Wood and wood products (other than Furniture) 30. Professional, Scientific and Technical Services (Engineering, Architecture, and 12. Furniture so on.) 13. Paper and paper products 31. Health Services 14. Printing and publishing 32. Media and Entertainment 15. Automobiles, Other Motor Vehicles, and Transport Equipment 16. Information Technology and Telecommunications Equipment 17. Machinery and Electrical and Electronic Equipment and Components | 32 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND LIST OF REFERENCE MATERIALS Primary Sources 17. Foreign Business Act B.E. 2542, 1999 Constitution 18. Immigration Act B.E. 2522, 1979 1. Constitution of the Kingdom of Thailand 19. Industrial Estate Authority of Thailand Act B.E. 2560, 2017 B.E. 2522, 1979 Code 20. Investment Promotion Act B.E. 2520, 1977 2. Civil Procedure Code B.E. 2477, 1934 21. Land Expropriation Act B.E. 2530, 1987 3. Criminal Procedure Code B.E. 2477, 1934 22. Land Transport Act B.E. 2522, 1979 4. Land Code B.E. 2497, 1954 23. Life Insurance Act B.E. 2535, 1992 5. Penal Code B.E. 2499, 1956 24. Narcotics Act B.E. 2522, 1979 6. Revenue Code B.E. 2481, 1938 25. National Competitiveness Enhancement for Targeted Industries Act B.E. 2560, 2017 Act 26. Non-Life Insurance Act B.E. 2535, 1992 7. Administrative Procedure Act B.E. 2539, 1996 27. Official Information Act B.E. 2540, 1997 8. Anti-Money Laundering Act B.E. 2542, 1999 28. Petroleum Act B.E. 2514, 1971 9. Arbitration Act B.E. 2545, 2002 29. Public-Private Partnership Act B.E. 2562, 2019 10. Bankruptcy Act B.E. 2483, 1940 30. Social Security Act B.E. 2533,1990 11. Customs Act B.E. 2560, 2017 31. Tax and Duty Compensation on the Exported 12. Draft Criteria for Drafting the Law and Goods Produced in Thailand Act Assessing the Effectiveness of the Law Act B.E. 2524, 1981 B.E. (pending promulgation in Government Gazette) 32. Telecommunications Business Act B.E. 2544, 2001 13. Eastern Special Development Zone Act B.E. 2561, 2018 33. Thai Vessels Act B.E. 2481, 1938 14. Establishment of Administrative Courts and 34. Tourism Business and Guide Act Administrative Court Procedure Act B.E. 2551,2008 B.E. 2542, 1999 35. Trade Competition Act B.E. 2560, 2017 15. Exchange Control Act B.E. 2485, 1942 16. Financial Institution Business Act B.E. 2551, 2008 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 33 Subordinate Legislation 49. Notification of Customs Department No. 133/2561 re: Manual on e-Export 36. Announcement of the Board of Investment Customs Formalities No. 2/2557 re: Policies and Criteria for Investment Promotion 50. Notification of the Director-General of the Revenue Department on Value Added Tax 37. Customs Tariff Decree B.E. 2530, 1987 (No. 20) re: Prescription of Criteria, 38. Draft Guideline for Government Agencies Procedures and Conditions relating to to Conduct Public Hearings during the Deposition and Withdrawal of Guarantee, Drafting of Laws and Regulations (pending issued under Section 83/8 of Revenue Code promulgation in the Government Gazette) 51. Notification of the Competent Officer re: Rules 39. Emergency Decree on Managing the Work of and Practices regarding Currency Exchange, Aliens B.E. 2560, 2017 issued under the Exchange Control Act B.E. 2485, 1942 40. Ministerial Regulation (No. 13) B.E. 2497, 1954, issued under the Exchange Control Act 52. Notification of the Ministry of Finance re: B.E. 2485, 1942 Duty Reduction on Goods, issued under Section 12 of the Customs Tariff Decree 41. Ministerial Regulation on the Determination B.E. 2530, 1987 and Application of Customs Valuation B.E. 2560, 2017 53. Notification of the Ministry of Finance re: Duty Reduction on Goods, issued under 42. Ministerial Regulation Prescribing the Fees Section 12 of the Customs Tariff Decree and Fees Exemption according to the Customs (No. 2) B.E. 2530, 1987 Laws, B.E. 2560, 2017 54. Notification of Trade Competition Commission 43. Ministerial Regulation Prescribing Service re: Criteria, Procedures, and Conditions of Businesses which do not require a Foreign Post-Merger Filing B.E. 2561, 2018 Business License B.E. 2556, 2013 55. Notification of Trade Competition Commission 44. Ministerial Regulation Prescribing Service re: Criteria, Procedures, and Conditions of Businesses which do not require a Foreign Pre-Merger Approval B.E. 2561, 2018 Business License (No. 2) B.E. 2559, 2016 56. Notification of Trade Competition Commission 45. Ministerial Regulation Prescribing Service re: Merger by Way of Purchasing Assets or Businesses which do not require a Foreign Shares in order to Acquire Control of Policy Business License (No. 3) B.E. 2560, 2017 or Management of Another Business Operator B.E. 2561, 2018 46. Ministerial Regulation re: Application and Issuance of Work Permits and Notification 57. Order of Revenue Department No. Tor. of Employment relating to Aliens 128/2560 re: Criteria of the Classification of B.E. 2554, 2011 the Good Exporter and Registered Exporter 47. Ministerial Regulation re: Rules on 58. Royal Decree, issued under Revenue Code Duty Interest Reduction B.E. 2560, 2017 re: Tax Reduction and Tax Exemption (No. 674) B.E. 2561, 2018 48. Notification of Customs Department No. 132/2561 re: Manual on e-Export Customs Formalities | 34 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND Others 72. Japan-Thailand Economic Partnership Agreement, 2007 59. A Guide to the Board of Investment, 2018 73. Thailand-United Arab Emirates BIT, 2016 60. ASEAN Comprehensive Investment Agreement (ACIA) 74. ASEAN-China Investment Agreement, 2010 61. Asian Framework Agreement on Services Secondary Sources (AFAS) 75. Board of Investment of Thailand’s website 62. Japan-Thailand Economic Partnership (http://www.boi.go.th) Agreement (JTEPA) 76. Customs Department of Thailand’s website 63. Thailand-Australia Free Trade Agreement (http://www.customs.go.th) (TAFTA) 77. Ministry of Commerce of Thailand’s website 64. 1996 Treaty of Amity and Economic Relations (http://www.moc.go.th) between Thailand and United States 78. Office of the Council of State of Thailand’s 65. General Agreement on Trade in Services website (http://www. krisdika.go.th) (GATS) 79. Office of Trade Competition Commission of 66. Agreement on Trade-Related Aspects of Thailand’s website (http://www.otcc.or.th/ Intellectual Property Rights (TRIPS) home/php) 67. Agreement on Trade-Related Investment 80. Revenue Department of Thailand’s website Measures (TRIMs) (http://www.rd.go.th/publish/) 68. Agreement on Subsidies and Countervailing 81. Royal Thai Government Gazette’s website Measures (SCM) (http://www.ratchakitcha.soc.go.th) 69. Convention on the Recognition and 82. UNCTAD Investment Policy Hub Enforcement of Foreign Arbitral Awards (https://investmentpolicy.unctad.org/ (New York Convention) international-investment-agreements) 70. International Centre for Settlement of 83. I-TIP Services database Investment Disputes (ICSID) Convention) (https://i-tip.wto.org/services/default.aspx) 71. Articles of Agreement of the International 84. Double Taxation Avoidance Agreements Monetary Fund (https://www.rd.go.th/publish/766.0.html) 2019 INVESTMENT POLICY AND REGULATORY REVIEW – THAILAND | 35 This Investment Policy and Regulatory Review presents information on the legal and regulatory frameworks governing foreign direct investment and competition that affect businesses and foreign investors. Since legal and regulatory frameworks are constantly evolving, a cut-off date was set for the research. This country review therefore covers information available as of May 31, 2019, unless otherwise indicated in the review. IPRRs are available for the following middle-income countries: Brazil, China, India, Indonesia, Malaysia, Mexico, Nigeria, Thailand, Turkey, and Vietnam.