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Advancing the ASEAN Power Grid through LTMS-PIP Phase 2

The regional energy landscape has achieved a significant milestone with the execution of the Energy Wheeling Agreement (EWA) under Phase 2 of the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP Phase 2). This agreement involves the Electricity Generating Authority of Thailand (EGAT), Électricité du Laos (EDL), and Tenaga Nasional Berhad (TNB) of Malaysia, representing a sophisticated evolution in multilateral cross-border electricity trade within Southeast Asia.

The EWA represents a substantial advancement from the project’s inaugural phase, doubling the capacity for multilateral cross-border electricity commerce from 100 megawatts (MW) to 200 MW over a two-year period. This enhanced mechanism facilitates the transmission of electricity generated in Laos and Malaysia to Singapore, utilizing the existing grid infrastructure of Thailand and Malaysia as transmission corridors.

Transmission Framework

The Transmission Framework establishes the structural and operational parameters for cross-border power flows under LTMS-PIP Phase 2. It delineates institutional roles, capacity allocations, and operational protocols that enable coordinated electricity transfers across multiple jurisdictions.

Under LTMS-PIP Phase 2, the transmission framework operates through a multidirectional power trade arrangement:

  • Lao PDR Supply Stream: Up to 100 MW of renewable hydropower from Laos, transmitted through Thailand and Malaysia to Singapore
  • Malaysia Supply Stream: Up to 100 MW of electricity from Malaysia directly to Singapore

This integrated framework enables a total seamless transfer capacity of 200 MW, representing a robust commitment to regional energy integration and demonstrating the technical feasibility of multilateral power trade in ASEAN.

Strategic National Contributions

The success of LTMS-PIP transcends technical achievement, serving as a strategic blueprint for the ASEAN Power Grid (APG). Each participating nation fulfills a critical role in this collaborative energy framework:

Thailand (EGAT)

Serving as the primary wheeling partner, EGAT manages the transmission of power across Thai territory. This role positions Thailand’s transmission infrastructure as a cornerstone of the APG, facilitating regional grid integration and strengthening overall energy stability. Thailand’s participation generates revenue through wheeling charges while enhancing national energy security.

Laos (EDL)

As the renewable energy supplier, EDL reinforces its commitment to the APG by providing clean hydropower resources. LTMS-PIP Phase 2 expands Laos’ participation in the regional electricity market, promoting sustainable development objectives and positioning the nation as a key renewable energy exporter within ASEAN.

Malaysia (TNB)

As both a wheeling partner and electricity supplier, TNB plays a dual role in facilitating the framework while actively participating in regional power trade. TNB’s involvement supports Malaysia’s Ministry of Energy Transition and Water Transformation in building a resilient, interconnected ASEAN energy infrastructure, while generating export revenue and strengthening regional energy cooperation.

Conclusion

The successful integration of cross-border electricity trade among Thailand, Laos, and Malaysia under LTMS-PIP Phase 2 establishes a functional model for multilateral energy cooperation within ASEAN. By harmonizing technical standards and optimizing grid utilization through the EWA, the participating nations have progressed from bilateral trade arrangements to a sophisticated regional exchange mechanism.

This partnership not only maximizes existing infrastructure efficiency but also serves as the primary pathfinder project for the broader APG initiative. LTMS-PIP Phase 2 demonstrates that coordinated technical frameworks and sustained political commitment can successfully address the energy needs of multiple nations while advancing toward a sustainable, low-carbon future. The project’s achievements provide valuable insights and operational precedents for future multilateral power integration initiatives across the ASEAN region.

Author: Panisa Suwanmatajarn, Managing Partner.

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BOI Unveils Draft National Semiconductor Roadmap Aiming to Attract Over 2.5 Trillion Baht in Investments

The Board of Investment (BOI) has presented the draft National Strategy for the Development of the Semiconductor and Advanced Electronics Industry to the National Semiconductor and Advanced Electronics Policy Committee. This comprehensive roadmap, prepared since April 2025 with the assistance of a leading global consulting firm, outlines a long-term vision to position Thailand as a leading hub for semiconductor production in the region.

The strategy builds upon Thailand’s existing strengths in downstream activities, such as outsourced semiconductor assembly and testing (OSAT) and integrated circuit design, while advancing capabilities across the full value chain—from upstream wafer fabrication to high-value design and production. The ultimate objective is to achieve “Made-in-Thailand Chips” by 2050, fostering a complete and integrated semiconductor ecosystem.

Strategic Focus and Targets:

The roadmap targets investments exceeding 2.5 trillion baht over the 25-year period from 2026 to 2050. It also aims to develop more than 230,000 highly skilled personnel to support industry growth.

Emphasis is placed on five product categories where Thailand demonstrates strong potential and alignment with domestic industries:

•  Power chips

•  Sensor chips

•  Photonics chips

•  Analog chips

•  Discrete chips

These segments are closely linked to key sectors including automotive, electronics, telecommunications, data centers, artificial intelligence, automation, and medical applications.

Phased Development Approach:

In the initial five-year phase (2026–2030), efforts will concentrate on leveraging current advantages in OSAT, IC design, and advanced electronics, while initiating investments in wafer fabrication and nurturing domestic enterprises to emerge as leading players. Subsequent phases will progressively expand the value chain toward full self-reliance in high-value production.

Five Key Driving Mechanisms:

To realize these ambitions, the strategy proposes action across five critical areas:

1.  Investment Incentives — Provision of financial support, including grants and long-term low-interest loans, to attract priority projects.

2.  Human Capital Development — Establishment of specialized curricula, industry-academia collaborations (both domestic and international), and vocational training programs to build expertise in semiconductor engineering and advanced research.

3.  Technology Advancement — Upgrading national research centers and fostering partnerships among government, private sector, and academic institutions for research and development.

4.  Infrastructure Enhancement — Development of dedicated clusters, reliable utilities (including clean energy), water systems, and robust disaster management capabilities.

5.  Business Environment Improvement — Streamlining approvals and permits, negotiating international trade agreements, and implementing government procurement mechanisms to support local enterprises.

Competitive Positioning and Supporting Context:

Although, Thailand’s semiconductor industry remains in its early stages compared to regional leaders such as Singapore and Malaysia, or competitors including Vietnam and the Philippines, the country possesses competitive advantages in infrastructure, workforce quality, business environment, and downstream industries.

From 2018 to November 2025, the electrical and electronics sector attracted 1,748 investment promotion applications totaling 1.17 trillion baht, representing 19% of all promoted investments and underscoring its status as the leading sector. The global semiconductor market is projected to reach 1 trillion U.S. dollars by 2030, presenting significant opportunities for strategic growth.

Key Takeaways:

•  Thailand’s national semiconductor roadmap targets over 2.5 trillion baht in investments and the development of more than 230,000 skilled professionals by 2050.

•  Focus is directed toward five high-potential chip categories that align with the country’s established industrial strengths.

•  A five-pillar approach addresses incentives, talent, technology, infrastructure, and business facilitation to build a complete ecosystem.

•  The strategy emphasizes transitioning from assembly-focused activities to high-value design and fabrication, aiming for “Made-in-Thailand Chips” and regional leadership in the sector.

•  This initiative positions the semiconductor industry as a key driver of long-term economic competitiveness amid rapid global technological and supply chain evolution.

Author: Panisa Suwanmatajarn, Managing Partner.

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Online Platform: ETDA’s Push for New Rules on Social Commerce to Safeguard Thai Consumers

In a move to tighten oversight on digital marketplaces, Thailand’s Electronic Transactions Development Agency (ETDA) is gearing up to introduce new regulations targeting social commerce platforms. This initiative aims to close loopholes in consumer protection, ensuring that online transactions meet stringent standards amid the growing popularity of buying and selling via social media. The announcement comes as platforms like Facebook argue they fall outside traditional e-commerce definitions, prompting ETDA to expand its regulatory net.

The backdrop for these changes is rooted in Thailand’s evolving digital economy. With e-commerce booming, the existing Electronic Transactions Committee’s announcement—set to take effect on December 31, 2025—already mandates that e-commerce platforms sell or advertise products adhering to standards from the Thai Industrial Standards Institute (TISI) and the Food and Drug Administration (FDA). However, social media giants such as Facebook have claimed exemption, citing the absence of integrated payment systems and separate user accounts for transactions. ETDA has countered this, stating, “Facebook has informed ETDA that they do not fall under the category. We are therefore preparing a new announcement to cover Facebook, as it cannot be denied that Facebook is widely used as a platform for buying and selling goods known as social commerce, which requires strict product standards.”

This conciliatory approach by ETDA also considers international trade dynamics, particularly U.S. policies under President Donald Trump, which threaten trade retaliation against countries restricting American platforms. By avoiding overly restrictive measures, Thailand seeks to balance consumer safety with open trade, preventing potential barriers for U.S.-based companies operating in the region.

Beyond social commerce, the new rules will extend to space-sharing platforms like Airbnb. ETDA plans to enforce standards for user safety, identity verification, and tenant rights, addressing common issues such as leaks or power outages. Additionally, concerns over monopolistic practices in delivery services—previously requiring platforms to offer at least three shipping options—have been shifted to the Trade Competition Commission (TCC) for handling and streamlining regulatory responsibilities.

These developments underscore Thailand’s commitment to fostering a secure digital ecosystem. As social commerce continues to thrive, with platforms blending social interaction and shopping, the need for robust oversight has become evident. ETDA’s efforts aim not only to protect consumers from substandard or unsafe products but also to promote fair competition and innovation in the online space.

Key Takeaways:

Future Implications: This could set a precedent for more comprehensive digital platform governance in Thailand, boosting trust in online transactions.

Expanded Regulation: ETDA’s new announcement will include social commerce platforms like Facebook, requiring them to enforce product standards from TISI and the FDA to plug consumer protection gaps.

Consumer Focus: The rules prioritize Thai buyers’ safety by mandating quality controls on goods sold online, effective from late 2025 onward.

International Considerations: A balanced approach avoids trade conflicts with the U.S., aligning with global digital trade norms.

Broader Scope: Space-sharing services like Airbnb will face new safety and rights standards, while delivery monopolies fall under TCC jurisdiction.

Author: Panisa Suwanmatajarn, Managing Partner.

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Updated Regulation on Official Secrets: Modernization, Electronic Security Measures, and Comparison with International Standards

On 30 December 2025, the Thai Cabinet approved in principle the draft Regulation on the Protection of Official Secrets (No. ..) B.E. …., as proposed by the Office of the Permanent Secretary to the Prime Minister. This revision updates the framework established in B.E. 2544 (2001), primarily to address the increasing reliance on electronic systems in government operations and resolve limitations in handling classified information digitally.

Background and Rationale:

The original regulation, enacted pursuant to Section 16 of the Official Information Act, B.E. 2540 (1997), mandated measures to prevent leakage of official secrets. It detailed procedures for classification, copying, translation, transfer, transmission, disclosure, destruction, storage, backup, and security, but focused predominantly on paper-based documents.

With the widespread adoption of electronic systems, agencies faced operational delays when handling classified information, often reverting to paper methods for compliance. This practice conflicted with the Prime Minister’s Office Regulation on Administrative Correspondence (No. 4), B.E. 2564 (2021), which promotes electronic administration.

The need for reform was identified as early as the Official Information Board No. 2/2554 meeting in March 2011, leading to the formation of a sub-committee. The revised draft, endorsed by the Board in its no. 2/2568 meeting on 28 October 2025, was subsequently submitted to the Cabinet.

Key Amendments: Electronic Classified Information

The primary enhancement is the introduction of Chapter 5: Electronic Classified Information, comprising 26 new provisions (Sections 50/1 to 50/26). These establish comprehensive guidelines for digital management of classified data, covering:

•  Classification and marking of electronic documents.

•  Procedures for creation, copying, translation, transfer, transmission, receipt, and disclosure via digital channels.

•  Secure storage, backup, and recovery to mitigate loss or unauthorised destruction.

•  Cybersecurity measures, including encryption, access controls, and system auditing.

•  Protocols for secure destruction of electronic classified information when no longer needed.

These provisions aim to facilitate efficient inter-agency coordination and public service delivery while preserving confidentiality.

Expected Benefits:

By providing clear protocols for electronic transmission, the regulation enhances administrative speed and aligns secrecy practices with modern information technology. It supports digital transformation in public administration without compromising national security or obligations under the Official Information Act, B.E. 2540 (1997).

Next Steps:

The Cabinet has directed submission of the draft to the Committee for the Scrutiny of Draft Legislation and Subordinate Legislation Proposed to the Cabinet. This review will incorporate observations from entities such as the Office of the Public Sector Development Commission, the Office of the Council of State, the Digital Government Development Agency, the National Economic and Social Development Council, and the National Security Council. Formal promulgation will follow upon completion.

Comparison with International Standards:

Thailand’s revisions demonstrate strong alignment with global best practices in electronic handling of classified information, which universally emphasize encryption, access controls, auditing, and secure storage.

•  United States: Executive Order 13526 and NIST SP 800-53 Revision 5 offer detailed, risk-based controls across multiple families (e.g., Access Control, System and Communications Protection). Thailand’s provisions mirror these in core areas but are less granular.

•  European Union: Council Decision 2013/488/EU requires approved cryptography for higher classifications and comprehensive information assurance. Thailand parallels this in transmission and storage requirements.

•  United Kingdom: The Official Secrets Act 1989 (as amended) and related policies incorporate encryption and secure systems, with recent enhancements under the National Security Act 2023 addressing contemporary threats.

•  ISO/IEC 27001: This standard mandates risk-based information classification and controls for transfer and protection. Thailand’s government-specific rules complement this approach.

Similarities include mandates for encrypted transmission, restricted access, secure storage, and audited destruction. Differences lie in depth: international frameworks like NIST provide extensive, customizable controls and certification requirements, whereas Thailand’s update remains procedurally focused on administrative adaptation.

Overall, this reform represents a commendable advancement toward international convergence, bolstering Thailand’s digital governance while upholding robust confidentiality safeguards. Further enhancements could involve adopting more detailed risk-based mechanisms and independent certification processes observed in mature systems.

Author: Panisa Suwanmatajarn, Managing Partner.

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Bank of Thailand Proposes Stricter Documentation Requirements for Inbound Foreign Exchange Transactions

In addition to the proposed increase in the foreign income repatriation threshold under the Bank of Thailand’s relaxations to foreign exchange regulations (as outlined in our previous article, Proposed Relaxations to Foreign Exchange Regulations), the Bank of Thailand (“BOT”) has proposed measures to strengthen regulatory oversight of inbound foreign exchange transactions. These measures aim to mitigate appreciation pressure on the Thai Baht, enhance transaction transparency, and prevent the inflow of funds inconsistent with their declared sources or otherwise undesirable.

The BOT has launched a public consultation on the Draft Notification on Rules and Procedures for Foreign Exchange Transactions (Draft Rules on Verification of Inbound Foreign Exchange Transactions). The consultation period runs from 30 December 2025 to 16 January 2026, with feedback informing the final regulatory framework.

Current Regulatory Framework

Under existing rules:

  • Foreign currency may be brought into Thailand without amount limitation for conversion into Thai Baht or deposit into a foreign currency deposit (“FCD”) account.
  • Transaction participants are required only to declare the source of funds.
  • No supporting documentary evidence is currently required.

Rationale for the Draft Rules

The proposed amendments are intended to:

  • Enhance scrutiny of inbound foreign exchange transactions and align inbound controls with outbound foreign exchange rules, under which purchases or transfers of foreign currency of USD 200,000 or more (or equivalent) are subject to documentary verification unless Know Your Business (“KYB”) procedures have been applied.
  • Increase transparency in foreign exchange transactions.
  • Prevent misrepresentation of fund sources and the use of inbound transactions for non-genuine or undesirable purposes.
  • Mitigate appreciation pressure on the Thai Baht by moderating demand arising from inbound foreign exchange transactions through enhanced verification and documentation requirements.

Key Features of the Draft Rules

While inbound foreign exchange transactions remain unrestricted in terms of amount, the Draft Rules propose stricter documentary verification requirements, differentiated by the type of licensed service provider.

1. Transactions Conducted Through Commercial Banks

A. Transactions of USD 200,000 or More (or equivalent)

Commercial banks are required to verify supporting documents corresponding to the declared source of funds on a transaction-by-transaction basis.

Exception: Documentary verification may be waived for routine transactions of business customers that are well known to the bank and subject to ongoing KYB and Customer Due Diligence (“CDD”) processes.

B. Certain High-Risk Inbound Transactions

For inbound transactions that may be used for non-business-related purposes or where the source of funds is unclear, commercial banks would be required to obtain supporting documentation on a transaction-by-transaction basis, even if the customer has already undergone KYC/KYB procedures. Such transactions include, but are not limited to:

  • Proceeds from the sale of real estate
  • Proceeds from the sale of digital assets
  • Capital inflows other than direct investment or securities investment
  • Other income sources that cannot be clearly identified

C. Digital Asset-Related Proceeds

Where foreign currency is derived from the sale of digital assets, banks must additionally obtain documents evidencing either:

  • The source of the digital assets, or
  • The source of funds used to acquire such digital assets.

2. Transactions Conducted Through Non-Bank Operators

A. Transactions of USD 200,000 or More (or equivalent)

Non-bank operators would be required to verify supporting documents corresponding to the declared source of funds for every transaction, without exception.

B. Digital Asset-Related Proceeds

Supporting documents evidencing the source of the digital assets or the funds used to acquire such assets must be obtained in all cases.

C. Inbound Cash Transactions Exceeding USD 15,000 (or equivalent)

Non-bank operators must obtain the customs declaration evidencing that the cash was declared to Thai Customs authorities upon entry into Thailand.

Potential Impacts

  • High-value transaction participants and business operators not subject to ongoing KYB processes, or whose transactions fall within categories requiring enhanced scrutiny, may face increased compliance burdens, particularly in preparing and submitting supporting documentation.
  • Commercial banks and non-bank operators will bear additional compliance and operational responsibilities in verifying documents and ensuring adherence to the enhanced regulatory standards.

Conclusion

The Draft Rules represent a clear move toward stricter verification of inbound foreign exchange transactions, particularly for high-value transfers and funds derived from digital assets or non-traditional sources. Although inbound transactions remain unrestricted in amount, documentation requirements will increase significantly. Market participants should review their transaction structures and supporting documentation in advance to ensure readiness once the rules are finalized.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand’s Top-up Tax Regime: Aligning Domestic Law with OECD Global Minimum Tax Standards

Overview of Thailand’s Top-up Tax Regime

Following the enactment of the Emergency Decree on Top-up Tax, B.E. 2567 (2024) (the “Emergency Decree“), Thailand has established a global minimum tax regime aligned with international tax reform initiatives. The Emergency Decree applies to large multinational enterprise groups (MNEs) with consolidated financial statement revenues of at least EUR 750 million (or the Thai Baht equivalent).

Under the Emergency Decree, in-scope MNEs are subject to a 15% global minimum effective tax rate on their profits through the imposition of a top-up tax. This mechanism ensures that profits are taxed at a minimum level, regardless of the jurisdiction in which they are earned. The Emergency Decree took effect for accounting periods commencing on or after 1 January B.E. 2568 (2025), marking a significant development in Thailand’s international tax framework and its alignment with the global minimum tax standards endorsed by the Organisation for Economic Co-operation and Development (OECD).

Draft Secondary Legislation

On 30 December B.E. 2568 (2025), the Cabinet approved in principle four draft items of secondary legislation (the “Draft Secondary Legislation“) issued pursuant to the Emergency Decree. The Draft Secondary Legislation sets out detailed rules governing the determination of multinational enterprise groups subject to the top-up tax and the adjustment of income, expenses, and covered taxes for calculating the top-up tax.

The Draft Secondary Legislation has been developed with reference to the Global Anti-Base Erosion (GloBE) Model Rules, the related Commentary, and the Administrative Guidance issued by the OECD. The four draft items of secondary legislation are as follows:

  1. Draft Royal Decree prescribing the criteria for determining the applicability of the top-up tax to multinational enterprise groups that have undergone organizational restructuring, B.E. ….;
  2. Draft Royal Decree prescribing entities that are not regarded as constituent entities, B.E. ….;
  3. Draft Ministerial Regulation No. .. (B.E. ….), issued pursuant to the Emergency Decree, concerning the allocation of residual top-up tax received by Thailand to constituent entities located in Thailand; and
  4. Draft Ministerial Regulation No. .. (B.E. ….), issued pursuant to the Emergency Decree, concerning adjustments to income, expenses, and covered taxes for calculating the top-up tax.

Applicable Stakeholders to the Emergency Decree and Draft Secondary Legislation

Scope of Application

The Emergency Decree, together with the Draft Secondary Legislation, applies to all constituent entities (CEs) located in Thailand that are members of an MNE group whose ultimate parent entity has consolidated revenues equal to or exceeding EUR 750 million (or the Thai Baht equivalent) in at least two of the four preceding fiscal years.

Organizational Restructuring

MNEs should plan in advance for organizational restructuring activities, including mergers and acquisitions, demergers, and intra-group transfers of assets, as such restructuring arrangements cannot be used to circumvent the top-up tax.

Investment Promotion Incentives

MNEs that have received investment promotion incentives from the Thailand Board of Investment (BOI) are exempt from corporate income tax (CIT); however, such incentives do not exempt them from the top-up tax. Where the effective tax rate falls below 15%, the relevant MNEs are required to pay top-up tax to reach the global minimum effective tax rate.

Tax Planning Requirements

Advance tax planning is essential. Where an MNE has CEs in Thailand, the effective tax rate of each CE should be carefully assessed. Even where the effective tax rate (ETR) exceeds 15% and no top-up tax is payable, GloBE information reporting obligations continue to apply. To ensure compliance with the OECD GloBE Rules, MNEs are advised to consult financial and tax advisors to maintain accurate accounting and tax information.

Reporting and Filing Obligations

All CEs in Thailand are required to electronically submit the following documents to the Thai Revenue Department within 15 months from the end of the relevant accounting period in which the top-up tax is assessed:

  • Notification reporting information relating to the MNE group, details of the constituent entity, and the jurisdiction in which it is located;
  • The GloBE Information Return; and
  • The top-up tax return, together with the payment of the corresponding tax.

Next Steps

The Draft Secondary Legislation issued pursuant to the Emergency Decree is currently undergoing the process for publication in the Royal Gazette. Once officially published, it will become enforceable as secondary legislation, marking the next stage in the implementation of Thailand’s top-up tax regime.

Conclusion

The Emergency Decree and the Draft Secondary Legislation ensure that Thailand’s top-up tax framework is fully aligned with the practices adopted by members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS). This approach is expected to significantly reduce base erosion and profit shifting by MNEs at both domestic and international levels while curbing competitive disparities in corporate income taxation. Moreover, it is anticipated to promote sustainable investment in Thailand, balancing fiscal sustainability with a competitive investment environment.

Related Article: Advancing Thailand’s Legal and Regulatory Reform under the OECD Framework – The Legal Co., Ltd.

Author: Panisa Suwanmatajarn, Managing Partner.

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Penal Code Amendment (No. 30): Criminalizing Sexual Harassment and Implications for Workplace Policies

On December 30, 2025, the Royal Gazette published the Penal Code Amendment Act (No. 30), B.E. 2568 (2025), marking a significant advancement in Thailand’s legal framework for addressing sexual offenses. This amendment introduces “sexual harassment”  as a distinct criminal offense, refines existing provisions to reflect contemporary societal dynamics, and emphasizes protection for individuals across all genders, ages, and identities. By elevating such acts from minor infractions to criminal liability, the law seeks to deter perpetrators, enhance victim support, and foster a safer society. The changes address limitations in prior legislation, which often treated harassment merely as a petty offense causing annoyance, insufficient for the severity and diversity of modern incidents.

Key Changes Introduced by the Amendment:

The amendment encompasses several pivotal modifications to the Thai Penal Code:

1.  Expanded Definition of “Rape”: The definition is broadened to include emerging forms of sexual violation, ensuring inclusivity for diverse gender identities and modern contexts.

2.  Abolition of the Offense of “Indecent Act by Intrusion”: This provision is repealed to modernize and streamline the legal structure.

3.  Establishment of Sexual Harassment as a Criminal Offense: A new, dedicated section defines sexual harassment broadly as any act—physical, verbal, auditory, gestural, communicative, involving stalking, or conducted via computer systems—with sexual connotations that causes another person distress, annoyance, embarrassment, or a sense of insecurity. This encompasses:

       •  Physical actions or contact.

       •  Verbal remarks, sounds, or displays.

       •  Persistent communication, following, or monitoring.

       •  Digital interactions, such as through emails, social media, or online platforms.

These updates recognize the evolving nature of sexual offenses, including those affecting individuals of all ages, genders, and sexual orientations, and account for the psychological and physical harm inflicted.

Penalties Under the New Provisions:

Penalties are structured progressively to reflect the offense’s severity, context, and impact:

•  General Cases: Imprisonment not exceeding 1 year, a fine not exceeding 20,000 baht, or both.

•  Repeated or Continuous Acts (disrupting the victim’s normal life): Imprisonment not exceeding 2 years, a fine not exceeding 40,000 baht, or both.

•  Acts in Public Places or Via Computer Systems: Imprisonment not exceeding 3 years, a fine not exceeding 60,000 baht, or both.

•  Acts Against Children (under 15 years): Imprisonment not exceeding 5 years, a fine not exceeding 100,000 baht, or both.

•  Acts by Persons in Authority (e.g., supervisors, employers, or those with power over the victim): Imprisonment not exceeding 3 years, a fine not exceeding 60,000 baht, or both.

This graduated approach underscores heightened accountability in cases involving vulnerability, repetition, public exposure, digital means, or power imbalances, particularly relevant in professional settings.

Broader Implications for Society and Business Operations:

The amendment responds to the increasing prevalence and complexity of sexual offenses in Thai society, where traditional laws proved inadequate. By criminalizing a wider array of behaviors, it aims to improve enforcement, provide stronger deterrence, and offer more effective remedies for victims. For businesses, the law has profound implications, especially given the elevated penalties for acts committed by authority figures. Organizations must adapt to avoid criminal liability for individuals, potential vicarious responsibility, reputational harm, or related civil claims.

Businesses, particularly those with employee hierarchies, customer interactions, or digital operations, should undertake the following preparations:

•  Policy Revision and Development: Update or create comprehensive anti-harassment policies that explicitly incorporate the new legal definition, including workplace-specific examples such as inappropriate comments during meetings, unwanted advances by supervisors, or harassing digital messages.

•  Training Initiatives: Implement mandatory, regular training programs for all employees, with specialized sessions for managers highlighting their increased responsibilities and risks under the law.

•  Robust Reporting and Investigation Frameworks: Establish multiple confidential reporting channels (e.g., HR contacts, anonymous hotlines) and impartial investigation procedures with clear timelines, ensuring protection against retaliation.

•  Risk Mitigation Strategies: Conduct assessments in high-exposure areas, such as supervisory roles or public-facing positions, and integrate policy references into employment contracts and handbooks.

•  Victim Support Measures: Provide resources like counseling, accommodations, and legal referrals to support affected individuals.

•  Ongoing Monitoring: Perform annual reviews of policies and maintain detailed records of compliance efforts as evidence of due diligence.

Consultation with legal and human resources experts is recommended to ensure alignment with complementary laws, such as the Labour Protection Act and the Gender Equality Act.

Developing Effective Workplace Harassment Policies:

In light of the amendment, workplace policies must be thorough and proactive. Essential components include:

1.  Precise Definitions and Illustrations: Mirror the statutory definition while providing contextual examples relevant to the organization’s environment.

2.  Comprehensive Scope: Extend coverage to employees, contractors, clients, and visitors, including remote work and work-related events.

3.  Accessible Reporting Mechanisms: Offer diverse, secure options with prompt acknowledgment and anti-retaliation safeguards.

4.  Fair Investigation Processes: Detail impartial, timely procedures involving trained personnel and thorough documentation.

5.  Disciplinary Measures: Outline consequences proportionate to the offense, up to termination, while addressing power dynamics.

6.  Preventive Education: Require ongoing training to promote awareness and cultural change.

7.  Support Services: Ensure access to assistance for complainants and respondents.

8.  Regular Evaluation: Commit to periodic audits and updates in response to legal or societal developments.

Leadership endorsement and cultural commitment are crucial for effective implementation.

Key Takeaways:

•  The 2025 amendment represents a landmark progression in Thailand’s approach to sexual offenses, criminalizing harassment in its various forms and imposing substantial penalties, effective from December 30, 2025.

•  It particularly heightens risks for those in positions of authority, necessitating urgent workplace adaptations.

•  Organizations that prioritize robust policies, training, and procedures will not only achieve compliance but also cultivate safer, more inclusive environments.

•  This reform aligns with global standards for victim protection and societal safety, encouraging proactive measures across all sectors.

•  Employers are advised to stay informed through official sources, such as the Royal Gazette and relevant ministries, for any additional guidance or interpretations. Prompt action will mitigate risks and contribute to a more equitable professional landscape in Thailand.

Author: Panisa Suwanmatajarn, Managing Partner.

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Advancing Thailand’s Legal and Regulatory Reform under the OECD Framework

On 2 December 2025, the Cabinet acknowledged a progress report on Thailand’s legal and regulatory development under the cooperation framework with the Organization for Economic Co-operation and Development (OECD). Since 2018, Thailand has engaged in cooperation with the OECD through the Country Programme, with the objective of enhancing the effectiveness, transparency, and overall quality of its legal and regulatory framework. The Office of the Council of State (OCS) serves as the principal authority responsible for driving legal reform and promoting Good Regulatory Practices in Thailand.

Evolution of Thailand’s Legal and Regulatory Reform under the OECD Country Programme

Phase I of the Country Programme

During the first phase of the Country Programme, Thailand focused on establishing the institutional and legal foundations for good regulatory governance by aligning domestic practices with OECD standards. Key developments included:

  • The adoption of OECD good regulatory practices to support the implementation of the Act on Legislative Drafting and Evaluation of Law B.E. 2562 (2019); and
  • The implementation of capacity-building initiatives, including training programmes for government officials, to enhance regulatory quality and institutional effectiveness.

Phase II of the Country Programme

During the second phase of the Country Programme, the focus shifted toward enhancing regulatory quality to address emerging economic and social challenges, with particular emphasis on reducing regulatory burdens on citizens and businesses. Key areas of cooperation during this phase included:

  • The joint implementation of projects between Thailand and the OECD aimed at modernising the legal and regulatory framework;
  • The adoption of measures designed to reduce both the cost of living and the cost of doing business; and
  • The introduction of proportionality principles into Thailand’s regulatory impact analysis (RIA) framework to ensure that regulatory measures are commensurate with their intended objectives and impacts.

Overview of the OECD Assessment

The OECD assessment provides a comprehensive evaluation of Thailand’s regulatory policy framework, encompassing existing laws and regulations, institutional arrangements, governance structures, and regulatory instruments. It examines both ex-ante and ex-post regulatory impact assessments, as well as mechanisms for stakeholder consultation and engagement.

OECD Recommendations for Strengthening Thailand’s Regulatory System

The OECD proposes 15 key recommendations aimed at strengthening Thailand’s legal and regulatory framework and enhancing overall regulatory quality:

  1. Promote evidence-based policymaking – Systematically integrate RIA into policymaking processes at all levels and strengthen stakeholder engagement.
  2. Enhance transparency and accountability – Improve public reporting on the quality of RIAs and the conduct of public consultations.
  3. Share regulatory best practices – Encourage knowledge-sharing and peer learning among agencies with strong regulatory performance.
  4. Reinforce the role of the Office of the Council of State – Designate it as the central authority responsible for regulatory quality oversight and standard-setting.
  5. Build policy analysis capacity – Develop multidisciplinary competencies within the public sector, including economics, data analytics, and policy evaluation.
  6. Improve RIA and consultation guidelines – Establish clear and consistent standards regarding the evidence required for regulatory assessments.
  7. Initiate RIA at an early stage – Consider a range of policy options and define clear, measurable objectives from the outset.
  8. Introduce forward regulatory planning – Prioritize high-impact legislation and optimize the allocation of limited regulatory resources.
  9. Ensure ministerial accountability – Require formal ministerial sign-off on RIA summaries to reinforce responsibility for regulatory decisions.
  10. Clarify the timing of stakeholder consultations – Promote early engagement during the problem-definition stage of policy development.
  11. Extend public consultation periods – Increase consultation timelines in line with OECD good regulatory practices.
  12. Enhance the use of the central legal portal – Develop it into a two-way platform that supports transparency and facilitates public feedback.
  13. Review laws based on their impact – Allocate review resources strategically to maximize regulatory effectiveness and outcomes.
  14. Mandate post-enactment reviews – Ensure systematic and regular reviews of high-impact laws and regulations.
  15. Develop a whole-of-government regulatory delivery policy – Integrate risk-based regulation, targeted enforcement, and effective inter-agency coordination.

Implementation Approach for Thailand

Thailand will implement the OECD recommendations through a combination of short-term and long-term measures aimed at strengthening the effective enforcement of the Act on Legislative Drafting and Law Evaluation B.E. 2562 (2019).

Short-Term Actions

Short-term efforts will focus on planning, prioritization, and capacity-building, including:

  • The introduction of forward regulatory planning and enhanced public disclosure;
  • The prioritization of high-impact laws and regulations;
  • Improvements to public consultation processes; and
  • Training programs on good regulatory practices for relevant public officials.

Long-Term Actions

Long-term reforms will aim to strengthen analytical capacity and institutional oversight mechanisms, including:

  • The adoption of advanced regulatory impact assessment methodologies;
  • Stronger linkages between pre-enactment and post-enactment evaluations;
  • The establishment of dedicated regulatory support units; and
  • Enhanced transparency, monitoring, and reporting of regulatory outcomes.

Conclusion

The OECD assessment and recommendations provide a clear and coherent roadmap for further strengthening Thailand’s legal and regulatory system. Through the systematic and effective implementation of these 15 recommendations, Thailand can significantly enhance regulatory quality, transparency, accountability, and stakeholder participation.

These reforms will contribute to a more effective and responsive regulatory environment that supports sustainable economic and social development, while further aligning Thailand’s governance framework with OECD international standards and good regulatory practices.

Author: Panisa Suwanmatajarn, Managing Partner.

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Progress in Thai–U.S. Trade Negotiations

On 12 December 2025, Thailand’s Minister of Commerce announced that the United States had conveyed a positive signal regarding the advancement of bilateral trade discussions. Washington indicated its intention to request the United States Trade Representative (USTR) to commence technical-level negotiations on tariffs and trade matters with Thailand.

This announcement follows intensified high-level engagement between both governments. In recent discussions, the U.S. President identified trade as a principal priority, committing to accelerate negotiations and reaffirm previous undertakings. The Department of Trade Negotiations within Thailand’s Ministry of Commerce has confirmed that technical-level discussions between Thailand and the United States are currently underway, with the 19% tariff rate on Thai goods remaining in effect. However, the resumption of technical-level dialogue indicates that future adjustments may be possible, underscoring the importance for businesses to remain vigilant and prepared.

Furthermore, the Thai Minister of Commerce reported that during her meeting with the U.S.–ASEAN Business Council (USABC), American companies and USABC members consistently advocated for both governments to expedite trade negotiations to unlock additional commercial and investment opportunities. Accelerated progress would benefit U.S. companies operating in Thailand, Thai exporters, and American consumers by facilitating access to high-quality products at competitive prices. This is particularly significant for sectors where the United States maintains import dependency, including Thai jasmine rice and other agricultural commodities, as well as broader manufacturing and supply-chain operations connected to Thailand.

The development has been characterized as an encouraging indication that the U.S. administration shares Thailand’s commitment to strengthening economic relations through a stable and predictable trade and taxation framework, notwithstanding broader geopolitical considerations. According to the Minister, such a framework would support sustainable growth in bilateral trade and investment while providing enhanced certainty for cross-border business planning.

Implications for Investment Structuring and Risk Management

The renewed trade engagement between Thailand and the United States necessitates a reassessment of existing investment structures and contractual arrangements. Export-oriented enterprises and operations integrated into U.S.-linked supply chains should evaluate corporate structures, transfer pricing mechanisms, and long-term commercial agreements to ensure continued operational efficiency under both the current tariff regime and potential future modifications. Strategic legal and tax planning can assist investors in mitigating compliance and cost-related risks while maintaining flexibility to capitalize on more favorable trade conditions as negotiations advance.

Conclusion

These developments represent a favorable outlook for investors and businesses with exposure to Thai–U.S. trade relations. Renewed momentum in bilateral negotiations reinforces confidence in Thailand as a strategic trade and investment destination while emphasizing the critical importance of proactive legal and regulatory planning. Investors, importers, exporters, and multinational corporations are advised to monitor these negotiations closely, as forthcoming developments regarding tariffs, trade regulations, and approval processes may directly impact investment structures, operational costs, and market access opportunities.

Author: Panisa Suwanmatajarn, Managing Partner.

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Government Measures to Promote Film Production in Thailand: Key Incentives and Regulatory Requirements

On 2 December 2025, the Cabinet of Thailand approved the Measures to Promote Film Production in Thailand (the “Measures“), designating the Ministry of Culture as the principal authority responsible for their implementation. The Ministry of Culture is mandated to prescribe the relevant eligibility criteria, incentives, and implementation procedures in accordance with the Cabinet’s approval.

The Thai film industry is recognized as a creative industry with substantial potential in terms of both economic contribution and the promotion of Thailand’s national image on the global stage. Pursuant to the government’s strategy to enhance the competitiveness of creative industries, Thai films have been designated as a Flagship Creative Industry with the capacity to compete with foreign productions and stimulate economic activity across multiple related sectors.

Objectives of the Measures

These Measures are designed to support and strengthen Thai film production at both domestic and international levels and encompass the following objectives:

  • Promote high-quality Thai film production – To support the production of films that meet international standards, thereby enhancing the competitiveness of Thai films in the global market.
  • Enhance industry competitiveness – To strengthen the capabilities of Thai film operators through skills development, infrastructure improvement, and market access expansion.
  • Support cultural exports and soft power – To leverage film as a medium for promoting Thai culture internationally and reinforcing Thailand’s soft power presence abroad.

Benefits Under the Measures

These Measures provide financial support to eligible Thai film productions to encourage high-quality content, enhance industry competitiveness, and promote Thai culture internationally.

Main Benefit

Eligible film projects with a production budget of at least THB 15 million are entitled to financial support equivalent to 15% of qualifying production expenses per project.

Additional Benefits

Supplementary financial support can be granted if certain conditions are met, as set out below:

  • Creative Content Incentive – Film projects presenting innovative storylines or creative content addressing the issues as prescribed by the Subcommittee on the Promotion of Film Production in Thailand under the Ministry of Culture, the applicant shall be eligible to apply for an additional incentive of 5%.
  • High-Budget Production Incentive – Film projects with production costs ranging from THB 40 million to less than THB 50 million will receive an additional 2.5% incentive. Film projects with production costs of THB 50 million or more will receive an additional 5% incentive.
  • International Screening Incentive – Film projects screened in cinemas or broadcast on television in at least four foreign countries or released on a streaming platform accessible in at least four foreign countries (with at least one country located outside Southeast Asia), will receive an additional 5% incentive.

Applicant Qualifications

Applicants seeking benefits under these Measures must satisfy the following criteria:

  • Thai Ownership – The applicant must be a legal entity in which more than 50% of the shareholding is held by Thai nationals, with at least one-half of the directors or managers being Thai nationals.
  • Operational History and Compliance – The entity must have been in operation for a minimum of two years and be duly registered with the Department of Business Development and other relevant government authorities. The applicant must have filed corporate income tax and value-added tax returns and maintained audited financial statements.
  • Copyright Ownership or Rights – The entity must either (i) own the copyright in the film, which must qualify as a Thai work, or (ii) lawfully hold the relevant copyright or exploitation rights obtained from a Thai copyright owner.
  • Business Purpose – The entity must operate in the film industry or related sectors, with such business objectives expressly stated in its business registration certificate filed with the Department of Business Development or other relevant authorities.
  • Office in Thailand – The entity must maintain its principal office or an establishment in Thailand that serves as an operational business location or official contact point.
  • Production Expense Threshold – The relevant film project must incur production expenses of at least THB 15 million per project within Thailand.

Conditions of the Measure

These Measures are implemented under the Thai Government’s framework. The Committee for the Consideration of Financial Support under these Measures (the “Committee”) is responsible for reviewing all financial documents and verifying compliance with regulations prescribed by the Revenue Department.

  • Legal Compliance – Film projects must fully comply with Thai laws and must not be subject to any legal disputes.
  • Eligible Expenses – Financial support covers costs incurred during the pre-production, production, and post-production stages. Expenses related to marketing and publicity, overseas expenditures, interest, gifts, entertainment, or prizes are excluded.
  • Exclusive Incentive – Film projects that received financial support or were granted incentives under other measures implemented by the Thai government shall not be eligible to apply for or receive support under these Measures.
  • Approval Requirement – Film projects must be reviewed and approved by the Film and Video Review Committee under the Film and Video Act B.E. 2551 (2008) or otherwise comply with the criteria prescribed by the Ministry of Culture.
  • Eligible Productions – Eligible productions include Thai films, Thai television series, and Thai music videos.
  • Revocation of Benefits – Approved incentives may be revoked under the following circumstances:
    • The applicant fails to produce the film or submit the required documents within the prescribed timeframe.
    • The content of the film violates Thai law or misrepresents, undermines, or damages Thailand’s image or national institutions.

Procedures for Submission of an Application for Entitlement to Financial Support

Application Submission

Applicants who meet the above-mentioned qualifications are able to submit the documents to apply for eligibility to receive financial support up to 2 times per year during the following periods.

  • Round 1: 1 January – 31 March
  • Round 2: 1 July – 30 September

Review and Approval

The Committee shall review the applications and approve eligible applicants as recipients of financial support within 60 days from the date of submission.

Production Timeline

Applicants approved as eligible recipients of financial support must complete the film production within 2 years from the date of approval. Applicants shall initially advance and bear all production costs at their own expense and subsequently submit an application for reimbursement.

Claiming Financial Support

  • Upon completion of the film production, applicants shall submit all required supporting documents for the application for financial support to the Committee within 90 days from the date of completion, in accordance with the approved production period.
  • An auditor appointed by the Committee shall review the submitted documents within 90 days.
  • The Committee shall review all documents verified by the auditor and approve the reimbursement in accordance with the said Measures within 60 days from the date of receipt of such documents with the said Measures and disburse the reimbursement to the eligible recipient of the financial support.
  • An eligible recipient who has already been granted the principal incentive (i.e., 15% of production costs per film) under these Measures and who wishes to apply for additional incentives under these Measures shall submit the relevant supporting evidence within 3 years from the date of approval of the financial support.

Current Program Status

The Cabinet has approved the underlying principles of these Measures, and the Ministry of Culture is currently preparing the detailed implementing measures for submission to the Cabinet for final approval. However, due to the dissolution of Parliament, final approval will be deferred until the formation of a new Cabinet.

Conclusion

These Measures aim to enhance the quality and competitiveness of Thai films while supporting the development of industry professionals. These Measures are expected to stimulate investment, create employment opportunities, and promote Thai culture through films, series, and music videos to audiences both domestically and internationally. Overall, these Measures contribute to strengthening Thailand’s national image and advancing the creative economy.

Author: Panisa Suwanmatajarn, Managing Partner.

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