Tag: Commercial

on by

Thailand Approves Strategic Stimulus Fund Reallocation to Address Trade Pressures and Strengthen Key Industries

The Thai government has approved the strategic reallocation of funds from its Economic Stimulus Budget to support those affected from the U.S. tariff measures. The reallocated resources will prioritize rapidly implementable projects with demonstrable economic impact, focusing on mitigating U.S. tariff effects, strengthening the agricultural sector, and supporting small-scale entrepreneurs.

Economic Stimulus Budget Framework

Phase 1: Initial budget allocation supports 481 projects encompassing 8,939 activities across infrastructure investment, tourism development, agricultural modernization, and community economic programs.

Phase 2: Secondary budget allocation targets strategic industries and establishes a student loan fund. Priority industries include:

  • Next-Generation Automotive
  • Intelligent Electronics
  • High-Quality Tourism
  • Agriculture and Biotechnology
  • High-Value Food Processing
  • Robotics
  • Aviation
  • Digital Industry
  • Comprehensive Medical Industry
  • Biofuels and Biochemicals

Strategic Priorities for Fund Reallocation

Government officials have emphasized that reallocated funds will be deployed exclusively for projects demonstrating rapid execution capabilities and measurable outcomes. Priority areas encompass:

  • Supporting exporters from U.S. tariff affects
  • Strengthening the agricultural sector
  • Providing targeted assistance to small and medium enterprises (SMEs)

U.S. Trade Relations Context

Alongside budget management initiatives, trade negotiations with the U.S. remain a critical policy concern. Discussions regarding rules of origin for Thai exports have been deferred, while the establishment of a 40% local content requirement remains unresolved. Thai government officials maintain that adopting a definitive position is premature until the U.S. presents its formal policy stance, enabling Thai policymakers to formulate an appropriate strategic response. The budget as allocated will be measured to support the affected until this has come to the conclusion.

Partnership Talks for Sustainable Growth

The Minister of Finance has recently held discussions with members of the Congressional Delegation of the U.S. on various below issues for further consideration and collaboration.

  1. Investment in Thailand – The U.S. delegation recognized Thailand as a country with strong investment potential.
  2. Public Debt – Thailand’s public debt level is relatively low compared to other ASEAN member countries.
  3. 64.2% of its Gross Domestic Product (“GDP”)
  4. 99.2% domestic debt.
  5. 0.8% external debt.
  6. Trade Deficit and Reciprocal Tariff – reaffirmed its commitment to the agreement, including
  7. Increasing imports of the U.S. agricultural products, energy supplies, and military equipment;
  8. Reducing non-tariff barriers (NTBs); and
  9. Monitoring and regulating the transshipment of goods through third countries.

Conclusion

The stimulus fund reallocation demonstrates Thailand’s commitment to balancing immediate economic relief with long-term strategic positioning. Through measures to mitigate U.S. tariff pressures, strengthen agricultural competitiveness, and support SME resilience, the government seeks to stabilize near-term economic performance. Simultaneously, channeling resources into high-potential industries positions Thailand for sustained growth and enhanced global competitiveness.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

US Watch List: Strategic Intellectual Property Work Plan for Removal

Background:

Under the framework of the U.S. Special 301 Report, the Office of the United States Trade Representative (USTR) annually evaluates the intellectual property (IP) protection and enforcement standards of its trading partners. This assessment categorizes countries into three tiers: Priority Foreign Country (PFC), Priority Watch List (PWL), and Watch List (WL), each with significant implications for trade relations. The 2025 Special 301 Report maintains Thailand’s designation on the Watch List, a status it has held since 2017, following a decade on the PWL from 2007 to 2016. This placement reflects progress in Thailand’s IP framework but underscores ongoing challenges that impact its trade relationship with the United States. Please see 2025 Thailand status in our previous article in the link https://thelegal.co.th/2025/05/14/thailands-2025-special-301-report-on-intellectual-property-protection-and-enforcement-released/

To address these challenges and achieve removal from the Watch List, Thailand has developed a comprehensive IP Work Plan, aimed at aligning its IP ecosystem with international standards. On August 6, 2025, the National Intellectual Property Policy Committee, chaired by senior government officials and involving over 20 public sector agencies, convened to formalize this strategy. The meeting, held at the Ministry of Finance, emphasized the critical role of IP in driving economic growth, fostering innovation, and enhancing Thailand’s global competitiveness, particularly for small and medium enterprises (SMEs).

Key Pillars:

The approved Intellectual Property Development Plan for 2026–2027 serves as the cornerstone of Thailand’s efforts. This plan is structured around four key pillars:

1.  Legislative Development: Modernizing IP laws to meet global best practices, including updates to existing regulations and the introduction of new frameworks where necessary.

2.  Enforcement Enhancement: Strengthening mechanisms to combat IP infringement through improved inter-agency coordination, robust enforcement measures, and stricter penalties.

3.  Public Service Optimization: Streamlining IP-related services, such as registration and examination processes, to enhance accessibility and efficiency for stakeholders.

4.  Stakeholder Engagement and Awareness: Promoting public participation and increasing societal awareness of IP rights to foster a culture of respect for innovation and creativity.

These pillars aim to create a robust IP ecosystem that supports innovation from creation to commercialization, benefiting SMEs and attracting foreign investment. The plan also prioritizes elevating Thailand’s ranking in the Global Innovation Index (GII) through six strategic initiatives: leveraging research and innovation investments, enhancing innovation value through creativity and IP, developing financial and capital market mechanisms for innovation, promoting the scaling and utilization of innovations, fostering innovation-based enterprises and skilled talent, and improving innovation data management.

The IP Work Plan is a proactive response to the USTR’s concerns, specifically designed to address deficiencies highlighted in the Special 301 Report. By implementing these measures, Thailand aims to strengthen its IP framework, enhance enforcement, and demonstrate its commitment to international IP standards. Successful execution is expected to facilitate Thailand’s removal from the Watch List, improve bilateral trade relations with the United States, and provide greater protection for both domestic and international IP holders.

Key Takeaways:

  • Successful implementation of the IP Work Plan is critical for Thailand’s removal from the U.S. Watch List, strengthening trade relations, and enhancing protections for IP holders.
  • Thailand’s continued Watch List status in the 2025 U.S. Special 301 Report underscores the need for enhanced IP protection and enforcement.
  • The Intellectual Property Development Plan 2026–2027, built on legislative, enforcement, service, and awareness pillars, aims to align Thailand’s IP ecosystem with global standards.
  • Strategic initiatives focus on fostering innovation, supporting SMEs, and improving Thailand’s Global Innovation Index ranking.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Copyright: Legislative Amendments to Comply with the WIPO Performances and Phonograms Treaty under the RCEP

Thailand became a member of the Regional Comprehensive Economic Partnership (RCEP), a significant multilateral trade agreement, effective January 1, 2022. As part of its commitments under the RCEP, Thailand is obligated to accede to the WIPO Performances and Phonograms Treaty (WPPT) by January 1, 2027, within five years from the RCEP’s entry into force. The WPPT, administered by the World Intellectual Property Organization (WIPO), establishes international standards for the protection of performers’ and phonogram producers’ rights, particularly in the digital environment. To fulfill this obligation, Thailand has undertaken amendments to its Copyright Act B.E. 2537 (1994) (Copyright Act) to align domestic legislation with the treaty’s requirements and to address technological advancements. These amendments, outlined in a draft act reviewed by Thailand’s Council of State, aim to enhance protections for performers and creators while updating penalties for copyright infringement.

Purposes of the Draft Act:

The draft act introduces several key amendments to the Copyright Act to ensure compliance with the WPPT and to strengthen intellectual property protections. The primary objectives are as follows:

1.  Enhancement of Performers’ Rights: The draft revises Sections 44, 49, 52, and 53 and introduces new Sections 44/1 and 44/2 to expand performers’ exclusive rights. These rights now encompass the distribution of original works or copies, making works publicly accessible through electronic media, and renting originals or copies. Performers are also granted the authority to license these rights to others, with or without conditions, thereby strengthening their control over their performances.

2.  Fair Remuneration for Performers: Section 45 is amended to ensure performers receive fair compensation for the broadcasting or public distribution of sound recordings, regardless of whether the use is for commercial purposes. Previously, performers were entitled to remuneration only for commercial uses. The amended provision allows performers to collect compensation from users of sound recordings or from copyright owners (when the latter act as collectors), providing more comprehensive protection for performers’ economic interests.

3.  Expanded Protection for Creators’ Copyright: The draft amends Sections 8(1) and 8(2) to broaden the criteria for creators to acquire copyright. For unpublished works, creators must be Thai nationals, reside in Thailand, or be nationals of or reside in a country party to an international copyright protection convention during most or all of the creation period. For published works, copyright is granted if the work is published in Thailand or any country party to such a convention. These changes align Thailand’s copyright framework with international standards, ensuring broader protection for creators.

4.  Revision of Penalties for Infringement: The draft revises Sections 69, 69/1, and 70 to adjust penalties for copyright and performers’ rights infringements. Previously, under Section 69, infringement carried a fine of 20,000 to 200,000 baht, with commercial infringements incurring imprisonment of six months to four years and a fine of 100,000 to 800,000 baht, or both. The amendment removes the minimum penalties, setting a fine not exceeding 200,000 baht for general infringement and, for commercial infringement, imprisonment not exceeding four years and a fine not exceeding 800,000 baht, or both. Similarly, Section 69/1, addressing specific infringements under Section 28/1, now imposes imprisonment not exceeding four years or a fine not exceeding 800,000 baht, or both, also removing minimum penalties. These changes grant courts greater discretion in sentencing to ensure penalties are proportionate to the circumstances of each case while maintaining the maximum penalties.

Analysis of Key Provisions:

The amendments significantly strengthen performers’ rights by expanding their scope to include digital distribution and public accessibility, reflecting the WPPT’s emphasis on protecting performances in digital environments. The inclusion of non-commercial uses in performers’ remuneration rights under Section 45 marks a significant advancement, ensuring fair compensation across a broader range of uses. This provision enhances economic protections for performers, aligning with international standards for equitable remuneration.

The revised criteria for copyright acquisition under Section 8 facilitate broader protection for creators, particularly those from countries party to international copyright conventions. This amendment ensures Thailand’s compliance with global intellectual property frameworks, fostering an environment conducive to creative innovation.

The adjustment of penalty provisions reflects a balanced approach, removing mandatory minimum penalties to allow judicial flexibility while preserving stringent maximum penalties to deter infringement. This ensures that penalties are tailored to the severity and context of each case, promoting fairness in enforcement.

Key Takeaways:

•  RCEP and WPPT Compliance: Thailand’s accession to the RCEP mandates alignment with the WPPT by January 1, 2027, necessitating updates to its Copyright Act to protect performers and creators in line with international standards.

•  Strengthened Performers’ Rights: Amendments to Sections 44, 44/1, 44/2, 45, 49, 52, and 53 enhance performers’ exclusive rights and ensure fair remuneration for both commercial and non-commercial uses of sound recordings.

•  Broader Creator Protections: Revisions to Sections 8(1) and 8(2) expand copyright eligibility, aligning Thailand’s laws with international conventions and fostering creative output.

•  Flexible Penalties: Updates to Sections 69, 69/1, and 70 remove minimum penalties, granting courts discretion to impose proportionate sanctions while maintaining robust maximum penalties for deterrence.

•  Technological Alignment: The amendments address digital-era challenges, such as electronic distribution and technological protection measures, ensuring Thailand’s copyright framework remains relevant and effective.

These legislative changes position Thailand to meet its RCEP obligations while enhancing protections for intellectual property stakeholders, supporting the nation’s integration into the global creative economy.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Trade Competition: Draft Guideline on Unfair Trade Practices in Digital Platforms

Introduction:

The rapid expansion of digital markets, particularly in e-commerce and multi-sided platform businesses, has raised significant concerns regarding unfair trade practices and monopolistic behaviors. To address these issues, the Trade Competition Commission of Thailand (TCCT) has issued the Draft Guidelines for Considering Unfair Trade Practices and Monopolistic Acts in Multi-Sided Platform Businesses, Digital Services, and E-Commerce (the “Draft Guideline”). Open for public consultation from August 19, 2025, to September 18, 2025, these guidelines aim to strengthen regulatory oversight under the Trade Competition Act B.E. 2560 (2017) (the “Act”). This document outlines the key provisions of the Draft, the types of anti-competitive conduct it targets, and its implications for stakeholders in the digital economy.

Purpose of the Guidelines:

The Act seeks to promote free and fair competition in multi-sided platform markets, including e-commerce and digital services, by establishing clear guidelines for business conduct. The Draft Guideline addresses collaborative agreements or legal arrangements between digital platform operators and other businesses in related markets, ensuring compliance with the Act and associated legal frameworks. By doing so, the TCCT aims to prevent monopolistic practices and foster a competitive environment that benefits all market participants.

Categories of Anti-Competitive Conduct:

The Draft Guideline identifies two primary categories of conduct that may undermine competition or constitute unfair trade practices: price-related and non-price-related behaviors.

stock exchange board
Photo by Pixabay on Pexels.com

1. Price-Related Conduct:

The following practices are highlighted as potentially anti-competitive:

  • Predatory Pricing: Setting prices below the average total cost without legitimate economic justification, with the intent to eliminate competitors.
  • Rate Parity Clauses: Mandating uniform pricing across all sales channels, prohibiting sellers from offering lower prices on competing platforms.
  • Resale Price Maintenance: Imposing fixed resale prices on sellers and enforcing compliance through penalties, such as refusal to supply.
  • Unjustified Commissions and Fees: Levying excessive or discriminatory fees, including commissions, advertising, logistics, promotional, or payment processing fees, without reasonable justification. Examples include:
  • Setting fees at excessively high levels;
  • Aligning fees with competitors’ rates (parallel pricing);
  • Charging fees below average total cost to engage in predatory pricing; or
  • Practicing price discrimination, such as charging different rates to “mall sellers” compared to regular sellers.
  • Algorithmic Price Manipulation: Utilizing algorithms or automated tools to distort market prices unfairly, such as manipulating price rankings to favor certain sellers.

2. Non-Price-Related Conduct:

The Draft Guideline also addresses non-price behaviors that may restrict competition, including:

  • Self-Preferencing: Prioritizing the platform’s own products or those of affiliated sellers, while reducing the visibility of competitors’ offerings.
  • Bundling or Forced Usage: Imposing mandatory conditions, such as requiring sellers to use the platform’s proprietary payment gateway or participate in specific promotional events (e.g., “double date sales”).
  • Exclusive Dealing: Enforcing unconditional or predetermined exclusivity arrangements that limit sellers’ ability to engage with other platforms.
  • Discriminatory Practices: Engaging in unfair product rankings among sellers of identical goods or favoring the platform’s in-house logistics provider over competitors.
  • Data Leveraging: Using seller data collected on the platform to gain an unfair competitive advantage for the platform’s affiliated businesses.
  • Collusion: Coordinating with rival platforms or sellers on competitive elements, such as advertisement keyword bidding.
  • Other Restrictive Practices: Any conduct that results in monopolization, reduces competition, or restricts fair market practices.

Stakeholders Impacted:

The Draft Guideline will be enforced in a broad range of stakeholders who are considered to hold a dominant position in the market, including:

  • Digital platform operators in e-commerce and service sectors;
  • Sellers and merchants operating on these platforms;
  • Logistics and payment service providers; and
  • Advertisers and affiliate partners.

Businesses will face increased scrutiny, particularly where practices lack reasonable economic, business, or technological justification. Common practices, such as mandatory use of logistics partners or rate-parity clauses, may now be subject to regulatory challenge.

Conclusion:

The Draft Guideline reflects the TCCT’s heightened focus on regulating the digital economy, particularly platforms with significant market influence. Businesses operating in multi-sided platform markets must review their commercial strategies, pricing structures, and data practices to ensure compliance with the proposed regulations.

Key Takeaways:

Businesses must evaluate their practices to ensure compliance, particularly regarding pricing, data usage, and contractual arrangements.

The TCCT’s Draft Guideline targets unfair trade practices and monopolistic behaviors in digital platforms, with a focus on e-commerce and multi-sided markets.

Anti-competitive conduct is categorized into price-related (e.g., predatory pricing and rate parity clauses) and non-price-related behaviors (e.g., self-preferencing and exclusive dealing).

Stakeholders, including platform operators, sellers, logistics providers, and advertisers, will face increased regulatory scrutiny.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Foreign Geographical Indication Registration in Thailand

Overview of Geographical Indications

A Geographical Indication (GI) is a distinctive mark used for products originating from a specific geographical area, where the quality, reputation, or other characteristics of the products are essentially attributable to their geographical origin. It serves as a local brand that signifies both the quality and origin of products. GI marks can be registered regardless of whether they originate from Thailand or abroad by filing the applications with the Department of Intellectual Property (DIP).

To register Thai GI marks, applicants must use a proper name, symbol, and/or sign that identifies their geographical origin. It cannot be just a generic name of the goods. It is required to demonstrably establish a connection between the products and their geographical origin and ensure compliance with public interest, while also ensuring that they do not contravene public order, good morals, or public policy.

For the overseas applicants registering GI marks originating from abroad, it is required to show clear evidence that such marks are protected under the GI law of those countries, and the GI marks registered in those countries have been in continuous use up to the date of application for registration in Thailand.

Registering the GI marks grants the community exclusive rights to their names, enhances the products’ market value, ensures compliance with quality standards, and preserves unique local heritage. Currently, there are 257 registered GI marks, comprising 234 Thai GI products from all 77 provinces of Thailand and 23 foreign GI marks from 9 countries.

basket of mangosteen

International Agreement Context

Thailand and the European Union (EU) are currently negotiating a Free Trade Agreement (FTA), with the aim of concluding the negotiations by 2025. One of the EU’s key requirements is the protection of GI through the exchange of GI lists under the FTA.

Currently, there is no specific legislative provision in Thailand that governs the exchange of GI lists under international agreements. Accordingly, it is necessary to establish specific rules and procedures regarding the registration of foreign GI marks under such agreements. The government has therefore issued the Draft Ministerial Regulation on the Application for Registration of Foreign Geographical Indications under International Agreements B.E. …. (“Ministerial Regulation”), which sets out the criteria, application procedures, and examination processes for the registration of foreign GI marks under international agreements.

Key Features of the Draft Ministerial Regulation

Scope of Applications

This draft Ministerial Regulation is intended to facilitate the registration of foreign GI marks through the exchange of GI lists between Thailand and its negotiating partners.

Date of Protection

Foreign GI marks shall be protected in Thailand once the relevant provisions of the international agreements with Thailand have entered into force.

The Director-General of the DIP shall have the authority to announce, on a case-by-case basis, the date on which the provisions of such international agreements with Thailand will take effect.

Consequences of Unsuccessful Negotiations

In the event that negotiations for an international agreement fail to reach a conclusion, any pending applications for registration shall be deemed automatically withdrawn. Please see details of the draft Ministerial Regulation in our previously published article here [ใส่ลิงค์]

Eligible Applicants

Under the draft Ministerial Regulation, it is designed for the State or government agencies of the contracting party. Natural persons or private legal entities are not permitted to file applications under this Ministerial Regulation. They are required to obtain their GI mark protection through the general registration process.

Procedures for Foreign GI Registration

Although foreign GI marks can be protected in Thailand through the exchange list under the relevant international agreement, the protected right shall not be automatically granted. The registration processes under the draft Ministerial Regulation, as well as those prescribed under the Geographical Indications Protection Act B.E. 2546 (2003), shall still be required (i.e., filing, publication, opposition, counterstatement, registration, and appeal).

Next Steps

The DIP will submit the Draft Ministerial Regulation to the Council of Ministers for subsequent consideration and later publish the same in the Gazette for enforcement.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

New Tax Framework for Foreign-Sourced Income: Thailand’s Draft Decree Explained

The taxation of foreign-sourced income has emerged as a pivotal issue within Thailand’s tax system, particularly as increasing numbers of Thai individuals engage in overseas employment, investment, and asset holdings. The government seeks to achieve a delicate balance between closing tax loopholes and incentivizing the repatriation of overseas funds to stimulate domestic economic growth.

Historical Framework

Under the previous Revenue Department Order No. GorKhor 0802/696, dated 1 May 1987, foreign-sourced income remained exempt from Thai personal income tax provided it was brought into Thailand in a tax year different from the year in which it was earned. This provision enabled many individuals to legally defer the remittance of foreign income, thereby avoiding immediate taxation obligations.

Current Regulatory Changes

Effective 1 January 2024, the aforementioned provision was repealed by Revenue Department Order No. Por.161/2566. Under this regulation, individuals classified as Thai tax residents, those residing in Thailand for more than 180 days within a calendar year, are now obligated to pay personal income tax on foreign-sourced income if such income is remitted to Thailand, regardless of the calendar year it is earned. The applicable personal income tax rates for this remitted foreign income range progressively from 5% to 35%, determined by the total taxable amount.

Unintended Consequences and Policy Response

While Revenue Department Order No. Por.161/2566 was enacted to enhance tax transparency and align Thailand’s tax framework with international standards, including those established by the OECD, it has generated an unintended consequence. Many Thai individuals earning foreign-sourced income have opted not to remit such funds to Thailand due to concerns regarding potentially substantial tax burdens.

In response to these matters, the Revenue Department is currently drafting a new Royal Decree (hereinafter referred to as “the Draft“) designed to address these conditions.

person holding dollar bills while using a calculator

Key Proposed Provisions

The Draft includes the following principal proposals:

  • Tax Exemption Extension: Personal income tax exemption will apply to foreign-sourced income remitted to Thailand within one to two years from the year it was earned. If remitted after that, the income tax will be applied.
  • Elimination of Same-Year Requirement: The current requirement mandating income remittance within the same calendar year it was earned will be removed.

This revised approach aims to provide taxpayers with enhanced flexibility in managing financial transactions, such as year-end dividend payments, while serving as a positive incentive for overseas Thais to repatriate funds for domestic investment across capital markets, business enterprises, and real estate sectors.

Current Status and Implementation Considerations

While the Draft represents a promising policy development, it has not yet been formally enacted and enforced. Uncertainty remains regarding whether the new provisions will apply retroactively to income remitted to Thailand during 2024.

Until formal enactment occurs, timing remains a critical consideration. Remitting income outside the anticipated grace period may result in taxation under current regulations.

Conclusion

The recent policy initiative by the Thai government reflects a broader strategic objective to incentivize, rather than penalize, the repatriation of foreign-sourced income. This approach serves dual purposes—reducing the tax burden on individuals earning income abroad while acting as a catalyst for attracting capital back into the domestic economy. Should the Draft be formally enacted and enforced, it will communicate a clear and positive message to overseas Thai nationals that repatriating funds will no longer entail prohibitive tax costs.

The success of this policy framework will ultimately depend on its implementation details and the government’s ability to balance revenue generation with economic stimulus objectives.

Author: Panisa Suwanmatajarn, Managing Partner.

Source: International Comparison August 2025: Antea

Read Full Article

on by

Thai Government Policy Response to Recent U.S. Tariff Measures

Following the United States government’s official announcement imposing a 19% import tariff on Thai goods effective August 1, 2025, the Thai government has developed a comprehensive policy framework to mitigate economic impacts. This multi-pronged approach encompasses financial support mechanisms, fiscal policy adjustments, and targeted business assistance programs designed to maintain Thai export competitiveness in the U.S. market while ensuring economic stability throughout this transition period.

U.S. Trade Policy Changes

General Tariff Implementation

The United States has implemented a 19% import tariff on Thai goods, effective August 1, 2025, representing a significant shift in bilateral trade relations.

Copper Products Tariff Structure

Concurrently, the U.S. has imposed a 50% import tariff on copper products from all countries, effective August 1, 2025. This comprehensive measure applies to:

  • Semi-finished copper products
  • Goods with high copper content
  • Copper pipes, wires, rods, and cables
  • Copper connectors and electronic components

The tariff excludes copper scrap, imported raw copper materials, and refined copper—essential components of the global supply chain. These exemptions have precipitated a significant decline in copper prices, resulting in substantial losses for traders who had accumulated inventory in anticipation of increased demand.

Government Response Measures

Immediate Business Support Initiatives

Tax Relief Programs

  • Strategic tax incentives including deductions and credits
  • Reduced corporate income tax rates
  • Targeted relief measures to facilitate business adaptation during the tariff transition

Soft Loan Program

  • Allocation of a minimum of 200 billion baht through state financial institutions
  • Distribution via commercial banking networks
  • Designed to maintain business liquidity and operational continuity

Government Subsidies

  • Competitiveness enhancement funding administered by the Board of Investment (BOI)
  • Targeted support for strategic industries
  • Focus on maintaining competitive positioning in global markets

Cabinet-Approved Economic Stimulus

The Cabinet has authorized two major stimulus initiatives, totaling 18.5 billion baht, specifically designed to:

  • Strengthen national economic competitiveness
  • Provide enhanced student loan support programs

Institutional Support Framework

Export Support Infrastructure

On August 7, 2025, the Ministry of Commerce established a One-Stop Service Center at the Export Center, providing:

  • Comprehensive consultation services
  • Advisory support for affected businesses
  • Problem-solving assistance for both SMEs and large corporations
  • Export facilitation and promotional activities

EXIM Bank Financial Relief Package

The Export-Import Bank of Thailand has implemented comprehensive financial support measures including:

Liquidity Enhancement Programs:

  • Extended repayment terms up to 365 days to alleviate cash flow pressures
  • Interest rate reductions of up to 20% for existing and new loan facilities
  • Pre and post-export revolving credit facilities providing low-interest working capital

Specialized Financing Solutions:

  • Pre-emptive principal repayment holidays extending up to one year for qualifying long-term borrowers
  • Transformation loans starting at 2.75% interest for production upgrades and automation initiatives
  • Post-shipment working capital loans with export insurance (EXIM Safe Trade) providing protection against buyer default

Market Diversification Support:

  • Trade Fair Participation Loans (EXIM Department of International Trade Promotion Empower Financing) for overseas market exploration
  • SME support loans in partnership with the Social Security Office, starting at 2.00% interest, to maintain employment levels and operational stability

Strategic Outlook

The implementation of restrictive U.S. trade measures presents substantial challenges for Thai export sectors. While the Thai government has initiated comprehensive mitigation strategies, ongoing monitoring and assessment of their effectiveness remains critical. In an increasingly volatile global trade environment, Thailand must maintain agility, proactive policy development, and adaptive capacity to preserve its competitive position in evolving international markets.

The success of these measures will largely depend on their implementation efficiency, private sector engagement, and the ability to identify and capitalize on alternative market opportunities while maintaining strong bilateral relationships with key trading partners.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Digital Economy: Government Approves Comprehensive Three-Year Data Strategy and Advances AI and Smart City Initiatives

On August 21, 2025, the National Digital Economy and Society Committee convened to approve a series of transformative resolutions aimed at bolstering digital infrastructure, artificial intelligence (AI) development, and smart city initiatives. These decisions underscore the government’s commitment to fostering economic growth, enhancing national competitiveness, and ensuring a sustainable digital future for all citizens.

National Data Strategy:

The committee approved a three-year National Data Policy and Strategy, designed to provide a robust framework for digital transformation. The strategy focuses on four key pillars:

  • Data Infrastructure: Developing a resilient foundation for managing large-scale datasets to support digital innovation.
  • Data Governance: Establishing clear standards to enhance trust and efficiency in digital services.
  • Data Utilization: Promoting secure and widespread use of data across public and private sectors.
  • Digital Workforce: Cultivating a skilled workforce to meet the demands of the digital economy.

National Artificial Intelligence Committee:

A National AI Committee was established to oversee the implementation of the country’s AI action plan. The committee’s objectives include:

  • Advancing local talent and technological innovation in AI.
  • Leveraging AI to drive economic competitiveness.
  • Utilizing AI to address social and environmental challenges, thereby improving the quality of life.

Smart City Development:

The committee extended Smart City certifications for 16 existing projects and granted a new Smart Area certification to the Phuket Tinicon Valley Project, increasing the total number of certified smart cities to 37 across 25 provinces. Notable projects include Mae Moh Smart Living City (Lampang), Khlong Phadung Krung Kasem (Bangkok), Yala Smart City for Civic Engagement, and Samyan Smart City (Bangkok), each achieving over 80% progress. Since 2021, private sector investment in smart city development has surpassed 30.9 billion baht, driven by tax incentives and public procurement privileges. These initiatives integrate advanced technologies, such as intelligent transportation systems and clean energy management, to enhance urban living standards.

man standing on stairs

Public Internet Network Expansion:

The committee endorsed the management of the National Broadband Network, “Net Pracharat,” under an Open Access Network model. This initiative aims to ensure equitable and universal internet access, particularly in underserved areas. The Office of the National Digital Economy and Society Commission will lead the implementation, focusing on:

  • Economic Empowerment: Enabling citizens in remote areas to access online markets, thereby increasing income opportunities through activities such as selling agricultural products and handicrafts.
  • Cost Reduction: Lowering internet service costs by expanding access through government-supported infrastructure and making digital services more affordable.

Economic and Social Impacts:

The approved initiatives are poised to deliver significant economic and social benefits. The public internet network will bridge the digital divide, fostering economic inclusion and reducing connectivity costs. Smart city developments will enhance urban management, attract private investment, and improve residents’ quality of life through sustainable and innovative solutions.

Key Takeaways:

  • These initiatives reflect a commitment to building a competitive, inclusive, and sustainable digital economy.
  • The three-year National Data Strategy emphasizes data infrastructure, governance, utilization, and workforce development to drive digital transformation.
  • The establishment of a National AI Committee will advance AI innovation, economic growth, and solutions for social and environmental challenges.
  • Smart city certifications have been extended to 16 projects, with a new certification for the Phuket Tinicon Valley Project, contributing to 37 smart cities across 25 provinces.
  • The Open Access Network model for “Net Pracharat” will enhance internet accessibility, reduce costs, and create economic opportunities for citizens.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Thailand Labor Landmark Case: Employers Jailed for Unpaid Severance of more than 800 Workers

In August 2025, a pivotal moment in Thailand’s labor rights landscape occurred when the Samut Prakan Provincial Court denied bail to four executives of the company who were immediately imprisoned for unlawfully terminating of  more than 800 employees without paying mandated severance and advance notice compensation. This case marks a rare instance of employers facing immediate incarceration for violating labor laws, reinforcing the judiciary’s commitment to upholding workers’ rights under the Labor Protection Act B.E. 2541 (1998).

Background of the Case:

The dispute originated in November 2024, when the company terminated more than 800 employees without providing severance pay or advance notice payments, as required by Thai labor law. The total amount owed to the employees is approximately 220 million baht (USD 6.2 million). Despite labor inspectors’ orders to compensate the workers, the company’s executives failed to comply, prompting the affected employees, supported by labor advocates, to pursue criminal legal action against the company and executives.

Legal Framework: Labor Protection Act B.E. 2541 (1998):

The court’s ruling is grounded in the Labor Protection Act B.E. 2541 (1998), which outlines key protections for employees:

•  Mandates advance notice of termination and payment in lieu of notice.

•  Requires severance pay for employees terminated without cause, with amounts based on length of service.

•  Imposes penalties, including fines and up to six months’ imprisonment, for employers who fail to comply with severance or other compensation requirements.

The executives’ non-compliance with labor inspectors’ orders and their attempts to delay judicial proceedings justified the court’s decision to deny bail and order immediate detention.

Court Proceedings and Worker Advocacy:

The former employees attended the court’s hearing to oppose the executives’ bail applications, submitting objections citing the financial hardship caused by the employer’s actions and their defiance of legal orders. The court’s denial of bail and immediate imprisonment of the executives is an uncommon outcome in Thailand, where labor disputes often result in prolonged negotiations or unenforced rulings. The workers’ eight-month struggle involved repeated appeals to government bodies, including the Ministry of Labor, police, and public prosecutors, showcasing the power of collective action.

Broader Implications for Thai Labor Rights:

This case sets a significant precedent for Thailand’s labor movement, demonstrating that persistent advocacy can lead to criminal accountability for employers. Enforcement of labor laws in Thailand has historically been inconsistent, with many employers evading penalties. This case signals that violations of the Labor Protection Act B.E. 2541 (1998) can result in severe consequences, potentially deterring future non-compliance. However, the affected workers still await their 220 million baht in compensation, and the Ministry of Labor’s silence on this and similar cases involving over 43,000 workers nationwide highlights the need for stronger enforcement and systemic reforms.

Key Takeaways:

1.  Judicial Accountability: The court ruling upholds the Labor Protection Act B.E. 2541 (1998), affirming the judiciary’s role in protecting workers’ rights.

2.  Power of Collective Action: The workers’ eight-month campaign through protests and legal advocacy illustrates the impact of organized labor in achieving justice, despite limited union protections.

3.  Ongoing Challenges: The workers have yet to receive their 220 million baht in compensation, underscoring gaps in enforcement and the need for government intervention.

4.  Precedent for Employers: The imprisonment of the executives serves as a deterrent, warning employers of criminal penalties for labor law violations.

5.  Call for Reform: The case highlights systemic issues, including the Ministry of Labor’s inaction and weak unionization laws, necessitating reforms to strengthen labor protections.

This landmark ruling not only delivers justice for more than 800 affected workers but also galvanizes Thailand’s labor movement, proving that collective action can challenge systemic inequities.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Thailand’s Strategic Tax Reform: Tax Credit Incentives to Drive Investment and Startup Growth Under the Global Minimum Tax Framework

Thailand is implementing comprehensive tax reform measures to strengthen its competitive position within the evolving global investment landscape. In alignment with the Organization for Economic Co-operation and Development (OECD) Global Minimum Tax (GMT) framework, the government has introduced Qualified Refundable Tax Credits (QRTCs) designed to attract high-quality foreign direct investment and foster domestic innovation. These strategic initiatives, coupled with an enhanced startup support program, aim to bolster national competitiveness, retain strategic industries, and promote sustainable economic growth.

Legislative Framework and Approval

On August 1, 2025, Thailand’s National Committee on Enhancing Competitiveness for Targeted Industries Policies formally approved amendments to the National Competitiveness Enhancement Act of 2017. This legislative milestone establishes the foundation for implementing new investment rights and incentives, including refundable tax credits, in direct response to GMT adoption requirements.

OECD Alignment and Global Minimum Tax Response

The GMT framework mandates that multinational enterprises (MNEs) with consolidated global revenues exceeding €750 million (approximately THB 28 billion) maintain a minimum effective tax rate of 15% across all operational jurisdictions. When host countries offer tax incentives that reduce the effective tax rate below this threshold, the MNE’s home country reserves the right to impose supplementary taxes to capture the differential.

To preserve Thailand’s attractiveness as a foreign investment destination, the National Committee has strategically approved amendments introducing QRTCs as a new category of investment incentives. This mechanism positions Thailand to effectively compete for investment capital, maintain existing manufacturing operations in targeted sectors, and stimulate new investments that enhance competitiveness while driving sustainable economic development.

Qualified Refundable Tax Credit Structure

These tax credits will be available to qualified foreign investors, particularly those engaged in:

  • Manufacturing and Research & Development Operations: Establishing or expanding production facilities and R&D centers in Thailand
  • High-Value Employment Generation: Creating positions that promote skilled workforce development and knowledge transfer
  • Sustainable Innovation: Advancing environmental sustainability through green technology adoption and innovative solutions

The credits function as flexible instruments that can be applied toward various tax obligations, including corporate income tax, top-up tax under GMT provisions, and other applicable taxes and duties. Should credit balances remain after tax applications, investors may request cash refunds within a four-year period, subject to established eligibility criteria and regulatory requirements.

Enhanced Startup Support Framework

Complementing international tax policy reforms, the Thai government has prioritized domestic innovation through targeted support for Thai startups operating in deep technology (Deep Tech) sectors where Thailand demonstrates competitive advantages. Priority sectors include agriculture and food technology, biotechnology, robotics and automation, artificial intelligence, medical technology, and green industries.

Support is delivered through a Matching Fund mechanism administered under the Competitiveness Enhancement Fund, managed by the Board of Investment (BOI). The program operates under the following parameters:

  • Co-Investment Requirements: Startups must secure minimum co-investment of THB 10 million from venture capital funds registered with the National Innovation Agency (NIA) or established by licensed financial institutions operating in Thailand
  • Matching Fund Provision: The BOI may provide matching funds equivalent to venture capital contributions, capped at THB 20 million per project

Ownership and Control Requirements

To ensure direct benefits accrue to Thai-owned enterprises, the following ownership structures are mandated:

  • Thai Majority Ownership: Thai nationals or Thai-registered entities must maintain at least 51% shareholding
  • Founder Control:  founders must collectively retain at least 60% of total shares

Therefore, as long as the startups remains under this promotional project or has not yet received the full amount of matching funds from the BOI, it is required to maintain a minimum of 51% Thai shareholding. Additionally, the founders, including both Thai and foreigners, must collectively retain at least 60% of the control throughout this period.

Strategic Implications and Outlook

The amendment to the National Competitiveness Enhancement Act provides the BOI with sophisticated policy instruments to reinforce investor confidence during a period of significant transformation in global tax policy. While QRTC implementation awaits Cabinet approval and subsequent regulatory framework development by the Revenue Department, this initiative represents a crucial evolution in Thailand’s investment promotion strategy.

Simultaneously, the strengthened startup promotion measures will expand market opportunities and accelerate the development of Thai Deep Tech enterprises, further establishing Thailand’s position as a regional hub for innovation-driven, sustainable investment.

These coordinated policy measures demonstrate Thailand’s proactive approach to navigating the complexities of international tax harmonization while maintaining its competitive edge in attracting both foreign direct investment and nurturing domestic innovation capabilities.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles