Thailand – New Government with its Executive and Legislative Policies to Promote Foreign Direct Investment

The new government, which has taken office following a nine-year ruled by General Prayuth Chan-o-cha, signifies Thailand’s return to democracy after the 2014 military coup. Under the leadership of the Pheu Thai Party, led by Prime Ministerial candidate Srettha Thavisin, the government has set forth a visionary agenda, with a primary focus on promoting foreign direct investment to invigorate the country’s GDP.

To achieve this overarching objective, the government has implemented a multifaceted strategy that encompasses both executive and legislative policies. This strategy revolves around three core principles: reducing expenses, increasing income, and expanding opportunities, all designed to enhance Thailand’s overall business environment and attractiveness to foreign investors within the ASEAN region.

One of the government’s primary measures is an extensive economic stimulus program. This program aims to reduce the cost of living and production costs in the country. Key components include significant reductions in electricity prices, petrol prices, personal consumption loan interest rates, and suspension of debt payments for farmers. These measures are strategically designed to enhance the appeal of Thailand as a destination for foreign investment by improving the overall cost structure for businesses operating within its borders.

Furthermore, the government is focusing on boosting the Electric Vehicle (EV) industry as a driver of foreign investment. To achieve this, it plans to reduce tax exemptions for imported EV cars, incentivizing domestic EV manufacturing. By nurturing this emerging sector, Thailand seeks to enhance its industrial and technological capabilities, making it a compelling option for foreign investors looking to capitalize on the growing EV market.

The government has also implemented visa policies to promote foreign investment and tourism. Passport holders from China, Kazakhstan, Taiwan, and India already benefit from a free-visa policy, with plans to extend this privilege to other nationalities in the near future. Such policies foster an environment conducive to foreign business travel and investment in various sectors.

Furthermore, the government is taking steps to upgrade the country’s infrastructure. The proposed land bridge project, connecting the Andaman Sea to the Gulf of Thailand, will significantly enhance international trade routes, positioning Thailand as a pivotal transportation hub in the Indo-Pacific region. This infrastructure investment opens up opportunities for foreign investments in logistics and related industries.

Lastly, the government plans to introduce legislation to fund the 10,000 THB digital wallet project. This initiative will provide digital currency to adults with monthly incomes below 70,000 THB and savings below 500,000 THB. Any unused funds will be channeled into the National Competitiveness Enhancement for Targeted Industries Fund, further enhancing economic competitiveness and making Thailand an attractive destination for foreign investment.

In conclusion, the government’s comprehensive approach to economic development, with a focus on improving the business environment, supporting key industries such as EV manufacturing, and encouraging foreign investment, positions Thailand for substantial growth and prosperity. If effectively implemented, these policies have the potential to transform Thailand into a regional economic powerhouse.

Author: Panisa Suwanmatajarn, Managing Partner.

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Trade Competition Commission Draft Announcement on Suggested Price List

In 1999, Thailand enacted the Trade Competition Act B.E. 2542 (1999) (“Act”), establishing the Trade Competition Commission. The Thai Ministry of Commerce proudly introduced this Act with the aim of attracting Free Trade Agreements (FTAs) from countries around the world, thereby enhancing international trade and investments. In 2017, the Thai government proposed a new version of the Act to address new challenges that the previous version did not cover.

The Act is of paramount importance to Thailand for several reasons. Firstly, they promote healthy competition, encouraging businesses to become more efficient, offer lower prices, improve product quality, and foster innovation. This ultimately benefits consumers by providing them with more choices and better access to goods and services. Secondly, the Act protects consumers from anti-competitive practices that could result in higher prices, reduced product quality, or limited options. By preventing monopolistic behavior and collusion, these laws safeguard consumer interests. Additionally, they help attract foreign investment by demonstrating the fairness and transparency of Thailand’s business environment, which can lead to increased economic growth and align with international trade standards, further enhancing the country’s competitiveness in the global market.

white water boat

Furthermore, the Act ensures a level playing field for businesses of all sizes, supporting the growth of small and medium-sized enterprises (SMEs) while preventing market abuse by larger companies. They foster consumer trust in the marketplace, which can lead to increased spending and economic stability.

One key provision within the Act is Section 54, which prohibits business operators from colluding in various ways such as fixing purchasing or selling prices or any trading conditions that affect the price of goods or services, limiting the number of goods or services produced, purchased, sold, or provided by each business operator, as agreed, knowingly establishing an agreement or conditions for one side to win an auction or a bid for goods or services, or allocating areas in which each business operator will sell, or reducing the sale or purchase of goods or services.

In practice, many manufacturers or wholesalers provide suggested price lists. However, these suggestions, when followed by wholesalers and retailers, can result in monopolistic practices, reduced competition, or the elimination of competition in a given market.

low angle photography of glass buildings

To address this issue, the Trade Competition Commission has been granted authority under Section 17(3) of the Act. This authority enables the Trade Competition Commission to regulate business operations and issue Announcements to enforce free and fair competition. In response, the Trade Competition Commission has drafted an Announcement on Suggested Price List Guidelines (“Announcement”).

Once enacted and enforced, this Announcement would prohibit business operators to conduct such as refusing to sell goods and services, reducing the sales of goods and services, or increasing the price of goods and services without reasonable grounds. This Announcement is intended to reinforce Section 54(1) of the Act, preventing monopolies, oligopolies, or any reduction in competition within relevant markets.

Author: Panisa Suwanmatajarn, Managing Partner.

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Proposed Rehabilitation Processes for Small and Medium Enterprises (SMEs)

In 2016, the regulation concerning small and medium enterprises (“SMEs”) was initially introduced to aid SME owners in managing their debts through rehabilitation processes that safeguard the interests of both debtors and creditors.

However, as of 2023, there are over 3 million SMEs in Thailand, playing a critical role in driving the country’s economy. Recognizing this, the Legal Execution Department has expressed a keen interest in ensuring the well-being of SMEs. To this end, they have conducted a public hearing on the draft amendment of the Bankruptcy Act B.E. 2483 (1940), specifically focusing on the business rehabilitation processes for SMEs. Consequently, active efforts are underway to formulate regulations.

In the past, debtors seeking to manage their debts through rehabilitation processes were required to adhere to the provisions outlined in the Bankruptcy Act B.E. 2483 (1940). These requirements included being insolvent and indebted to one or multiple creditors. However, the recent introduction of business rehabilitation proceedings for SMEs has brought about a new rule by eliminating the requirement of being an insolvent person. This means that anyone, regardless of their solvency status, can now initiate the rehabilitation processes.

The recent amendment to the Bankruptcy Act B.E. 2483 (1940) aims to simplify the business rehabilitation processes, making it more accessible for small debtors. This simplification is driven by the current economic and social conditions, and it offers several benefits for debtors. Notably, it introduces a new section that includes an accelerated business rehabilitation processes.

The key summary of the amendments is as follows:

  1. Broadening the definition of debtors in Section 90/91: Previously, the term “debtor” was limited to those specifically prescribed by the Office of SMEs Promotion (OSMEP). The amendment expands the definition to include any juristic person, regardless of the legal classification of SMEs. This change provides SMEs business owners with the opportunity to participate in business rehabilitation, enabling them to restructure their debts and maintain the continuity of their businesses.
  • Revision of the debt threshold in Section 90/92: When a debtor is unable to pay one or several creditors in aggregate, they may file a petition with the court for business reorganization. For individual debtors, the debt threshold has been lowered from 2 million baht to 1 million baht. For juristic persons, the threshold has been revised from not less than 3 million baht to not less than 2 million baht, with an upper limit of 50 million baht. These changes apply regardless of the debtor’s financial status or the number of creditors involved. However, both types of debtors must demonstrate a reasonable cause and prospects for the reorganization of their businesses.
  • Extension of the Business Reorganization Plan (“Plan“) period in Section 90/96(9): Recognizing that a 3-year plan may be insufficient, the amendment extends the Plan period from 3 years to 5 years. This extension aims to enhance efficiency and provide debtors with more opportunities to effectively proceed with their reorganization efforts while ensuring that creditors receive full payment of their debts.
  • Removal of certain rehabilitation processes in Section 90/95: Prior to the draft amendment, individuals seeking business reorganization has to wait for a court order granting absolute control over their property and approval of the Plan before filing a petition for reorganization. This process involved strict legal requirements, such as providing reasons for business reorganization, detailed asset information, and principles and methods, as per Section 90/96 of the Bankruptcy Act B.E. 2483 (1940). These requirements often proved time-consuming and costly. The draft amendment has eliminated some of these processes, allowing debtors or legally authorized individuals to initiate the plan. This change allows both debtors and one or several creditors of the debts arising from a business operation to take the necessary steps toward rehabilitation.
low angle photography of glass buildings

However, the recent amendment to the Bankruptcy Law B.E. 2483 (1940) is currently pending approval from the Council of Ministers. After this, the next stage will involve the draft amendment proceedings to the Members of the Parliament for consideration and approval before proceedings to the King’s endorsement and publish in the Royal Gazette.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand Implements Mechanism to Promote Tax Transparency and Combat Tax Evasion on a Global Level  

The Cabinet has approved a Ministerial Regulation issued under the Royal Decree on the Exchange of Information for International Agreements on Taxation B.E. 2566 (2023) (“Ministerial Regulation”) to implement the automatic information exchange for tax purposes. In addition, Thailand will be bound by Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (MCAA).

Thailand has been a member of The Global Forum on Transparency and Exchange of Information for Tax Purposes since 2017. The Global Forum is a framework for the exchange of tax information by the Organization for Economic Cooperation and Development (“OECD”) committing to implement the automatic information exchange for tax purposes and Thailand’s Royal Decree on the Exchange of Information for International Agreements on Taxation B.E. 2566 (2023) (“Royal Decree”) to specify Thailand’s procedure in order to comply with OECD standards.   OECD is an international organization that promotes economic cooperation and development among its 38 member countries and other partner countries around the world. The OECD provides policy advice, conducts research and analysis, and exchanges information on a wide variety of economic and social issues, including trade, investment, taxation, education, health, and the environment, among others. Thailand is not a member of the OECD but is an associate and participant in some OECD bodies and adheres to some OECD legal instruments.

businesspeople talking

MCAA on Automatic Exchange of Financial Account Information and The Global Forum on Transparency and Exchange of Information for Tax Purposes are both necessary for promoting tax transparency and combatting tax evasion on a global level. The Global Forum on Transparency and Exchange of Information for Tax Purposes provides a framework for countries to exchange information and collaborate in the fight against tax evasion, while the MCAA sets out the rules and procedures that countries must follow when automatically exchanging financial information under the OECD Common Reporting Standard (CRS). The MCAA is a tool that enables countries to meet their obligations to exchange information under the CRS, while the Global Forum provides a platform for cooperation and information exchange at the international level. Together, these two initiatives help to ensure that taxpayers cannot hide their assets and income in offshore jurisdictions and that all taxpayers pay their fair share of taxes according to their respective tax laws.  

For Thailand, under Section 5 of the Royal Decree, the Ministry of Finance has proposed the Ministerial Regulation to set the criteria and procedures for the duties of persons responsible for reporting financial accounting information of financial institutions in Thailand. This Ministerial Regulation will support the exchanging of information in accordance with the Multilateral Competent Authority Agreement on Automatic Exchange of Information (“MCAA CRS”), improve data exchange operations as well as Thailand’s taxation transparency, and promote Thailand’s taxation and economic system. The Ministerial Regulation contains 6 titles:

  1. Reporting Persons,
  2. General Audits,
  3. Natural Person Account Audits,
  4. Juristic Person Account Audits,
  5. Special Criteria for Checking Customer Information, and
  6. Miscellaneous.

It also imposes precise definitions such as Depository Institutions, Financial Accounts, Deposit Accounts, and Reportable Financial Accounts, as well as types of reporting financial institutions, which are financial institutions by virtue of Thai law situated in Thailand and branches of financial institutions not under Thai law but located in Thailand, types of audits, and special criteria for checking customer information.  

As mentioned, the Ministerial Regulation has been approved by the Cabinet and it will become effective after the date of publication in the Royal Gazette.  

Author: Panisa Suwanmatajarn, Managing Partner.

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New Rule on Calculation of Interest for Default Payments and Sequence of Repayment

A default interest rate is the interest rate applied to a loan or other financial obligations when the borrower fails to make the required payments on time. Default interest rates are typically higher than the interest rate that was agreed upon at the time the loan was made and they are intended to compensate the lender for the increased risk and inconvenience of having to deal with a delinquent borrower. Some lenders may not clearly disclose the default interest rate applied to a loan or credit facility agreement or they may not clearly explain the circumstances under which the default interest rate will be triggered. This can make it difficult for borrowers to understand the terms of their loans and to anticipate the potential consequences of falling behind on payments.

In 2020, the Bank of Thailand (“BoT”) issued Notification No. SorKorSor2. Re: Calculation of Interest on Default Payments and Sequence of Repayment to charge default interest that does not create too much burden to debtors who struggling with the financial situation to be in the possibility that debtors will be able to settle the debt in which it shall not accelerating the incurrence of non-performing loans (Non-Performing Loans: NPL), reflecting actual cost, does not cause debtors to lose financial discipline, supporting the process of debt restructuring negotiations, providing economic equity and also allowing debts write off to reduce the principal debt so that the debtors have a better chance to completely settle their outstanding debt.

However, in order to create equity among all groups of debtors, the BoT has therefore amended the said notification by issuing the Notification of BoT No. SorKorSor2. [unidentified number]/2566 Re: Calculation of Interest on Default Payments and Sequence of Repayment (“Notification”) which shall be enforced and come into effect from 1 April 2023 onward and the notification mentioned above shall be repealed. This Notification expands the scope of default interest rates to cover all groups of debtors and expands the scope of financial service providers to include credit card operators.

This Notification applies to certain financial service providers as follows:

Financial institutions according to the financial institutions’ business law;

Companies within a financial business group with the business of credit card, personal loan, nano finance, leasing, hire-purchase and asset management company;

Specialized financial institutions according to the financial institutions’ business law;

Credit card operators, personal loan operators and nano finance operators according to the Notification of the Ministry of Finance Re: Business which requires authorization under Clause 5 of the Announcement of the National Executive Council No.58; and

Asset management companies according to the asset management company law.

(collectively as “Financial Service Providers”)

man in black suit sitting on chair beside buildings

Moreover, this Notification specifies various criteria as briefly summarized below:

Default Interest Rate

Regarding installment loans and revolving loans, Financial Service Providers can charge the default interest rate higher than the rate specified in the contract but not more than 3% per annum, relevant factors should be considered appropriately. For loans with floating interest rates, the interest rate on the date of default is used as a reference rate.

However, loans that have a specific maximum rate of interest, fines, service charges, and any other fees shall comply with its specific law.

Default Interest Calculation Base

Regarding installment loans, Financial Service Providers shall calculate the default interest based on the principal of the outstanding installments in each installment until at least the date the court accepts the lawsuit on this matter. To file a lawsuit against debtors to the court, debtors must be in arrears for more than 90 days from the due date.

Regarding revolving loans, Financial Service Providers shall calculate the default interest based on the full amount of the outstanding principal.

Default Interest Charged Grace Period

Financial Service Provider shall specify a grace period to not charge default interest in the event that the debtor may have force majeure that causes the debtor to be ineligible to pay the debt on time.

Sequence of Repayment

Regarding installment loans, upon receiving debt repayment, Financial Service Providers shall write off the debt incurred from fees, interest, and principal of the debt of the longest overdue installment first, and then write off the next longest overdue installment respectively.

Furthermore, this Notification also specifies the detail on notifying the debtors, sale or transfer of debt to other Financial Service Providers, Loans under foreign law, and Financial Service Provider’s foreign branches and companies in the financial business groups established in foreign countries.

Author: Panisa Suwanmatajarn, Managing Partner

Thailand – Royal Decree on Controlling the Online Service Platform Business

Thailand faces the similar problems as EU due to COVID-19 pandemic where people shift from physical sale to online sale. Throughout the operation of online platform for business, both producers and customers counter several troubles such as details of the product, ambiguous service terms, limited choices of delivery, delay in delivery, damages, products are not as advertised, fraud, unable to track the orders of products, unfair prices, or the problems of complaint system and their quality to tackle the complaint sent in. On the service providers’ side, they are in need of certain standard or guideline to a clearer operation from the governmental units. Another issue is the foreign or international online service platforms that have not registered their identity in Thailand making it harder to follow up of feedback or dispute arise in which sometimes create bias or unfair treatment and protection of international service providers and Thai service providers.

As such the regulator introduces legal instrument to govern this online platform and digital service business especially such as the EU implement platform to business regulation (P2B) to attend operation of online intermediation services and business users. Leads to process of commencing a guideline to govern the online platform in Thailand, currently there is no rule or regulation issued to attend this matter but only a drafting of Royal Decree on Controlling the Online Service Platform Business that Must Be Registered B.E. …. (“Royal Decree”) as a scope of controlling to ensure security, safety, creditability in giving service to the customer which can develop a certain standard or qualification in giving fair and quality service.

Before introduction of this draft, the service provider must register under Business Registration Act B.E. 2499 (1956) as certified of legal existence where the noncompliance result is in a form of fine. Under the Direct Sale and Direct Marketing Act B.E. 2560 (2017), online sellers with sales over 1.8 million baht per year must register the business as noncompliance result is in a form of fine and imprisonment. Not only the registration compliance, but the providers must also display the products or services in an appropriate manner as stated under Rule 4 of Announcement of the Central Committee on the Price of Goods and Services No. 70 B.E. 2563 (2020). However, the mentioned existing laws cannot solve the current problems, therefore, the new draft will come up to assist these existing laws.

The draft royal decree introduces similar but new and different contents with clearer and wider range of definition and information of the business conducting on the digital platform, for instance define the term of online service platform, service providers on the online platform, users of the online platform. The draft emphasis clearer details of the types and characters of online service platform that need to notify Electronic Transactions Development Agency (ETDA) before operating the business of the details regarding the businesses and services or products display, relative data of users, complaint mechanisms, terms and conditions of services and products offer to the users, service terms and conditions, suspension or ban from using services of service providers. All these clauses introduce to endorse and support transparency and fairness.

The essence of this draft Royal Decree is to create standard of service that ensure fairness, transparency and protection to the customers. The service providers governed under this draft Royal Decree will be depending on their gross income and numbers of platform users under Section 8 and the foreign service providers for Thai user in Thailand will be under Section 9. The service providers notify the ETDA of the details and information regarding the operation of online platform business will be under Section 11. The service providers under Section 15 must notify the users of service agreement and conditions in accordance with Section 16. Where the service providers do not hold Thai nationality but give services to consumers in Thailand, there must be a Thai representative acting in compliance with this regulation to ensure no bias treatment measures implemented such as complaint channels, dispute resolutions, compensation measures, conditions of displaying, advertising, and categorising products and services.

The P2B and the draft Royal Decree set to promote fair, transparent, and predictable business environment for smaller businesses and traders on online platforms. The P2B applies to the providers of online intermediation services and search engines with certain set of rules. Providers subjected under the P2B is obliged to the conditions and qualifications set forth such as languages of terms and conditions and their informative characters, procedures in amend or change of terms and conditions of services, rights and obligations of the providers under the P2B, voluntary actions that could be done by the providers and notifying to the service providers and customers.

Both P2B and draft Royal Decree have similar purposes and directions. Both oblige the platforms to implement conditions and terms regarding suspension or band of using the services from the platforms. But the P2B provides more details and specifications by categorising providers and conditions for each provider. It also concerns the users of services and contribute provisions to notify them of their rights and obligations.

AMC – Tools for solving NPLs

Asset Management Company (AMC) does business through purchasing or auctioning NPLs (non-performance loans) from commercial banks or financial institutions and manages such NPLs through restructuring of NPLs. The AMC business is governed by the Bank of Thailand (BOT), where the selective NPLs from the banks will be sold to the AMCs through auction. The banks will notify the debtors and creditors before and after the auctions of debt. AMCs that win such auctions have the duty to inform the debtors of their rights to claim the debt in place of the banks. Still, the original right to claim the capital, interest, and other relatives’ rights and obligations agreed with the banks are still enforceable. The debtors just have to perform their obligations with the AMCs.

buildings with glass windows

Under this current situation, a joint venture agreement between AMCs and commercial banks is to be entered into giving the banks more flexibility in managing bad debts and also helping AMC in playing a key role in the country’s bad asset management as some have capital limitations in terms of buying distressed debt.

According to the published news in May 2022, All Inspire Development Plc. is one of the companies operating AMC businesses. The company aims to buy the NPLs for about 500-1000 million baht with an estimated return of around 4 – 4.5 billion baht. 

Based on Bangkok Commercial Asset Management or BAM’s forecast, the value of NPLs from the banks will be around 200-300 billion baht, and other financial institutions will be around 9 billion baht.

Under the BOT rules and regulations, a limited company or public limited company with a registered capital not less than 25 million baht and having a purpose of business to be transferred of NPLs from the banks or financial institutions to manage the NPLs are able to apply for operating of AMCs business with the BOT. The AMC that did not comply with the regulations and rules set by the BOT will result in revocation of registration. 

The joint venture entities will be operated for not more than 15 years from the date of approval for their operation, and after that, those will need to be liquidated or changed of shares proportion held to be in accordance with the relevant laws and regulations governed their business. 

The booming of AMC business is the gravely additional tool or assistance for the banks to manage the NPLs during this downhill of economic due to the pandemic. However, this AMC tool is not a long-term resolution in which the government is needed to launch and implement the economic policy to solve this problem on a long-term basis.

Author: Panisa Suwanmatajarn – Managing Partner, The Legal Co., Ltd.

Tax Relief Measures for Digital Asset Trading

The Cabinet, on 8 March 2022, has approved in principle drafts Royal Decree under the Revenue Code regarding VAT exemption (No. ..) B.E. …. (“Royal Decree”) and Ministerial Regulation (No. ..) B.E. …. (“Ministerial Regulation”) issued under the Revenue Code regarding VAT and income tax exemption as proposed by the Ministry of Finance.

close up shot of two people holding a gold coin

These drafts Royal Decree and Ministerial Regulations are measures to relieve the tax burden for people in trading digital assets by exempting VAT for transferring of cryptocurrencies or digital tokens in digital asset exchanges and transferring of digital currencies issued by the Bank of Thailand (“BOT”) as well as exempting personal income tax from the benefit of transferring of cryptocurrencies or digital tokens from the profits earned.

The main points of these Royal Decrees and Ministerial Regulation are as follows:

  • The drafts Royal Decree is applied for VAT exemption for transferring of cryptocurrencies or digital tokens in digital asset exchanges approved by the Minister of Finance and VAT exemption for transferring of digital currencies under the development and trial program for public sector usage issued by the BOT, starting from the 1st date of the next month that the Cabinet has granted its approval until 31 December 2023.
person holding gold and silver round coins in clear glass jar
  • The draft Ministerial Regulation is applied for personal income tax exemption on profits obtained from transferring of cryptocurrencies or digital tokens in digital asset exchanges approved by the Minister of Finance in the amount equal to losses in the same fiscal year (the other words, profits – losses = amount of income for tax calculation), starting  from 14 May 2018 onwards, in which rules, procedures and conditions announced by the Director-General of the Revenue Department will be applied.

Draft Royal Decree issued by virtue of the Revenue Code Regarding Tax Exemption (No. ..) B.E. …. [Tax Measures to Promote Fundraising in Startup Enterprises]

The Cabinet, on 8 March 2022, has approved in principle of drafting Royal Decree issued by virtue of the Revenue Code regarding Tax Exemption (No. ..) B.E. …. (“Royal Decree”) as proposed by the Ministry of Finance which improves tax incentives measures to promote fundraising in startup enterprises according to previous Royal Decree regarding Tax Exemption (No. 597) B.E. 2559 and Royal Decree regarding Tax Exemption (No. 636) B.E. 2560.

This Royal Decree exempts personal income tax and corporate income tax on profits from transferring of shares and unit trusts in enterprise investment and investment in startup enterprises through venture capital. This tax exemption shall be effective from the date following the date of its publication in the Government Gazette until 30 June 2032 in order to enable Thai startup enterprises to raise more fund from the investors which will result in further expanding of the country’s economic system. The main points of this Royal Decree regarding the tax incentives are as follows:

antique bills business cash
Investment TypesTax Benefits
1. Direct investment of an individual or a juristic partnership or a company registered in Thailand and a juristic partnership or a company registered overseas (previously not mentioned)An individual or a juristic partnership or a company both registered in Thailand and overseas will receive exemption on personal income tax or corporate income tax for income (only profit) from transferring of shares of startup enterprises. However, such startup enterprises shall operate on the targeted industries as supported by the government.
2. Investment through Venture Capital (VC)Corporate Venture Capital (“CVC”) will receive exemption on corporate income tax on income (only profit) from transferring of shares of startup enterprises only on transferring of shares of startup enterprise. However, such startup enterprises shall operate on the targeted industries as supported by the government. · Private Equity Trust (PE Trust) is not subject to corporate income tax. · Investors in CVC will receive exemption on personal income tax or corporate income tax on income (only profit) from transferring of CVC shares. · Investors in PE Trust will receive exemption on personal income tax or corporate income tax on income (only profits) from transferring of unit trusts on PE Trust.

The Cabinet approved a Draft Credit Information Business Operation Act (No. ..) B.E. …. (the “Draft Act”) as proposed by the Ministry of Finance (the “MOF”) on 22 December 2020 in order to revise the Credit Information Business Operation Act B.E. 2524.

Summary of the Draft Act are as follows:

  • The main purpose of this Draft Act is to allow entrepreneurs who operate as intermediate entity in providing credit facility in forms of new transactions or financial innovations (Final Technology) which are rapidly expanding in Thailand (the “Entrepreneurs”) to be members of a credit information company in which such Entrepreneurs are able to send credit information of their SMEs and start-up businesses to the credit information company enabling the said Entrepreneurs to have their financial history information in its system. This will allow such Entrepreneurs having more opportunities to access to legal sources of fund, gain financial support or loans from other registered financial institutions in the future. This will also, in the meantime, reduce numbers of illegal loan debt.
  • The Draft Act will revise procedures for disclosing information of credit information or credit score (“Information”). In regard to the said revised procedures, the credit information company will need to notify in writing to its customers (owners of the Information) within 30 days from the date of disclosing or providing such Information, except for collective Information of financial institutions or Entrepreneurs that the credit information company has admitted as its members.
  • The credit information company, information controllers, information processors, members, customers, persons who know Information from working or performing a duty at the credit information company or persons who know Information from the above-mentioned entities/persons shall be basically prohibited to disclose the Information.
  • A service user shall not disclosure or disseminate the Information to the others who do not have the right to be informed and that it shall use the Information for specified purposes only, such as using the Information for the purposes of credit analysis and credit card issuance.
  • Entrepreneurs will be able to disclose or provide Information to its members for the purpose of credit analysis on behalf of the credit facility provider only.
  • Entrepreneurs will be able to use its customers’ Information obtained from the credit information company in order to create a credit model. If such Entrepreneurs use the Information other than for the purpose of credit analysis on behalf of the credit facility provider and other than for the purpose of risk management for the credit facility provider, such Entrepreneurs will be penalized by the provision under this Draft Act.   
  • Entrepreneurs will be required to explain the reasons for refusal of the services or for increasing of service charges, including sources of customers’ Information to such customers in writing.
  • Financial institutions, members or service users, who do not explain the reasons for refusal of the services or for increasing of service charges, including sources of customers’ Information to such customers in writing, will be penalized by the provision under this Draft Act.

This Draft Act will be submitted to the Parliament for its consideration and approval before publishing in the Royal Gazette and then become enforced.