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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.

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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.

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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

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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.

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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.

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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.

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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.

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The Ripple Effect EP. 10: Thailand–U.S. Tariff Agreement: Navigating the Reduction from 36% to 19%

Following intensive diplomatic negotiations, Thailand has successfully secured a substantial reduction in U.S. import tariffs from 36% to 19%, effective August 1, 2025. This agreement represents a significant diplomatic and economic achievement that will enhance Thailand’s export competitiveness and strengthen bilateral trade relations.

Background of Thailand–U.S. Tariff Negotiations

On July 7, 2025, the United States government formally notified Thailand of its intention to impose a 36% tariff on Thai imports, scheduled to take effect on August 1, 2025. This proposed tariff threatened to significantly impact Thailand’s international trade sector and prompted immediate diplomatic action.

The Thai government responded swiftly by initiating comprehensive diplomatic engagement with U.S. authorities to seek reconsideration and reduction of the proposed tariff rates. On July 17, 2025, the Minister of Finance formally commenced trade negotiations with the Office of the United States Trade Representative (USTR) by submitting a comprehensive revised trade package. This proposal included:

  • Reciprocal tariff reductions on various U.S. goods
  • Expanded market access for U.S. products
  • Enhanced investment opportunities for U.S. companies in Thailand

Following the USTR’s feedback and additional queries, Thailand refined its proposal through multiple iterations. On July 23, 2025, Thailand submitted its final trade proposal to the USTR, representing the culmination of intensive negotiations during which Thailand had already presented over 90% of its revised trade offers.

The final phase of negotiations occurred on July 29, 2025, when the Minister of Finance and the Thai delegation conducted another round of high-level discussions with the USTR. During this meeting, the USTR presented a final draft document for submission to the U.S. President, which the Thai delegation reviewed and returned, marking one of the final procedural steps before the formal presidential announcement.

Negotiation Outcome

On July 31, 2025, the White House officially announced through its website that Thailand had successfully negotiated a reciprocal tariff agreement with the United States, achieving a significant reduction in import duties on Thai goods from 36% to 19%.

aerial view of containers and machinery in a port

Key Implementation Details

  • Effective Date: The new 19% tariff rate takes effect on August 1, 2025
  • Transition Period: Shipments currently in transit will remain subject to the existing 10% tariff rate
  • Full Implementation: The new tariff structure will be fully operational by August 7, 2025
  • Enforcement Measures: Goods involved in transshipment or tariff evasion will face a penalty rate of 40%

This reduction is expected to significantly enhance Thailand’s competitiveness in the U.S. market while bolstering investor confidence in Thailand’s economic prospects.

Strategic Government Support

1. Financial Support Mechanisms for Entrepreneurs

The Thai government has developed targeted support measures for domestic entrepreneurs affected by the evolving U.S. tariff environment:

Soft Loan Program: Implementation of low-interest loan facilities designed to enhance liquidity for affected businesses and maintain operational continuity.

Capital Enhancement Fund: Establishment of a dedicated THB 10 billion fund to strengthen business capabilities and competitiveness. The Federation of Thai Industries and the Thai Chamber of Commerce have been designated as implementing partners responsible for:

  • Data collection and entrepreneur classification
  • Facilitating machinery modernization initiatives
  • Supporting production efficiency improvements

2. Economic Restructuring and Investment Enhancement

The government has committed to comprehensive economic reform aimed at increasing domestic investment from the current average of 20% to 35% of GDP. Key strategic elements include:

Short-term Objectives:

  • Maintaining economic growth rate targets of 3% for the second quarter
  • Managing transition challenges while preserving economic stability

Long-term Vision:

  • Adoption of advanced technologies to address structural investment constraints
  • Systematic removal of barriers that have historically limited investment growth
  • Achievement of sustained investment levels between 30-35% of GDP to ensure long-term economic stability

Conclusion and Outlook

The successful reduction of U.S. tariffs on Thai goods from 36% to 19% demonstrates Thailand’s diplomatic effectiveness and commitment to strengthening bilateral trade relations. This achievement will deliver tangible benefits including:

  • Reduced export costs for Thai manufacturers
  • Expanded market access opportunities in the U.S.
  • Enhanced competitive positioning for Thai products
  • Increased investor confidence in Thailand’s economic resilience

The agreement positions Thailand favorably for sustained export growth while reinforcing its status as a reliable trading partner. Moving forward, continued monitoring of policy implementation and adaptive measures will be essential to maximize the benefits of this tariff reduction and maintain Thailand’s competitive advantage in the evolving global trade environment.

Author: Panisa Suwanmatajarn, Managing Partner.

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Investment: Government Advances 99-Year Property Lease Law to Boost Investment

The Thai government is accelerating efforts to amend the Right-Based Property Act B.E. 2562 (2019), aiming to extend the lease term for real estate from 30 years to 99 years. This legislative push is designed to attract foreign investment, stimulate economic growth, and support key national policies such as the “Housing for Thais” initiative, the Land Bridge project, and land reclamation efforts. The proposed law introduces a novel legal concept known as “right-based property”, which offers a framework for long-term property leases while ensuring assets revert to state ownership after the lease term expires. This article explores the objectives of the law, the significance of right-based property, and its anticipated economic impact.

Understanding Right-Based Property:

Right-based property, as defined under the Right-Based Property Act B.E. 2562 (2019), is a new category of property introduced to enhance the economic utility of real estate in Thailand. According to the Civil and Commercial Code, “property” refers to tangible objects, while “assets” encompass both tangible and intangible items that hold economic value and can be legally possessed. Real estate, or immovable property, includes land, structures permanently affixed to it, and associated property rights. Movable property covers all other assets, including related rights.

Right-based property, however, is a distinct legal construct that refers to the right to use and benefit from immovable property for a specified period, as stipulated in the Right-Based Property Act B.E. 2562 (2019). Unlike traditional leases under the Civil and Commercial Code, which are limited to contractual rights between parties, right-based property can be transferred, inherited, or used as collateral for debt through mortgaging. This makes it a more flexible and economically viable instrument for long-term investment.

To establish right-based property, the owner of immovable property, such as titled land, land with buildings, or condominium units, must apply to the relevant authority, typically the Land Department. The application requires the submission of documents specifying the lease term, which is currently capped at 30 years but proposed to be extended to 99 years. Once registered, a certificate of right-based property is issued, and the property cannot be subdivided or merged with other parcels during the lease term. Any modifications, such as new constructions, revert to the original property owner upon the lease’s expiration, unless otherwise agreed.

Government’s Push for 99-Year Leases:

The Thai government is prioritizing the amendment of the Right-Based Property Act B.E. 2562 (2019) to extend the maximum lease term to 99 years. The amendment aims to remove legal barriers to foreign investment, encourage large-scale real estate projects, and attract high-income individuals and skilled professionals to Thailand.

The government anticipates that the extended lease term will support transformative projects, including:

an aerial view of a large warehouse with trucks

1.  Land Bridge Project: A mega-infrastructure initiative to connect the Gulf of Thailand and the Andaman Sea, fostering trade and logistics.

2.  Land Reclamation: Private-sector-led coastal reclamation projects to create new investment zones, with long-term leases incentivizing participation.

3.  Housing for Thais: Affordable urban housing schemes integrated with reduced public transport costs (e.g., 20-baht flat-rate fares) to lower living expenses for middle-income Thais.

4.  Green Energy Initiatives: Long-term land leases for projects like solar farms, particularly in the Northeast, to produce affordable electricity (estimated at 3 baht per unit) for economic hubs like Bangkok and data centers.

5.  Talent Hub Development: Attracting high-skilled global professionals by offering long-term property rights, enhancing Thailand’s appeal as a destination for talent.

Economic and Legal Implications:

The proposed law is expected to yield significant economic benefits while addressing legal loopholes. Key advantages include:

•  Increased Foreign Investment: The 99-year lease term aligns Thailand with countries like the United Kingdom, where leases can extend up to 99 years. This makes Thailand more competitive in attracting foreign investors for high-end real estate projects, such as luxury hotels, office buildings, and residential complexes. The influx of capital is expected to stimulate economic activity without funds leaving the country.

•  Enhanced Transparency: The law aims to curb illegal practices, such as the use of Thai nominees to bypass foreign ownership restrictions. By requiring assets under the right-based property scheme to be managed by the Treasury Department and revert to state ownership after 99 years, the government ensures national control over land resources, refuting claims of “selling out” the country.

•  Support for Diverse Industries: Beyond real estate, the law facilitates long-term investments in sectors like international education (e.g., foreign ownership of international schools) and financial hubs, fostering economic diversification.

•  Addressing Demographic Challenges: With Thailand’s population projected to decline to 37 million within 50 years, the law seeks to attract high-skilled foreign workers to bolster economic growth. The extended lease term provides the stability needed to encourage long-term residency.

Safeguards and Conditions:

To address concerns about national sovereignty, the government has incorporated safeguards into the proposed law. Notably, assets under the right-based property scheme will transfer to the Treasury Department upon lease expiration, becoming part of the nation’s sovereign wealth. Agricultural land is explicitly excluded from the program to protect food security and rural livelihoods. Additionally, any property encumbered by mortgages or other rights requires consent from relevant parties before entering the right-based property scheme.

Legislative Timeline:

The government is fast-tracking the amendment process, aiming for parliamentary approval and enactment by 2025.

Conclusion:

Thailand’s push to extend property lease terms to 99 years through the Right-Based Property Law represents a strategic effort to unlock economic potential, attract global investment, and support transformative national projects. By introducing the concept of right-based property, the government offers a flexible, legally robust mechanism to enhance the economic utility of real estate while safeguarding national interests. If enacted as planned in 2025, this law could position Thailand as a leading destination for foreign capital and talent, driving sustainable economic growth in the face of demographic and global challenges.

Author: Panisa Suwanmatajarn, Managing Partner.

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The Ripple Effect EP. 9: Navigating Tariffs and Technology Controls: Thailand’s Strategic Response to U.S. Trade Pressures

Thailand is currently navigating a rapidly evolving trade landscape marked by two significant challenges. Firstly, the United States set to increase tariffs on selected Thai exports to 36%, effective on August 1, 2025. Secondly, the U.S. Department of Commerce is reportedly considering stricter export controls on high-performance NVIDIA AI chips destined for particular countries, including Thailand, citing concerns about potential transshipment to China. These developments could have substantial implications for Thailand’s trade relations and regulatory compliance framework.

In response, the Thai government has implemented swift and strategic measures, including initiating diplomatic engagements with U.S. counterparts, implementing targeted investment promotion strategies, and enhancing oversight of advanced technologies to ensure compliance with international trade regulations.

Trade Negotiations and Economic Safeguards

The Finance Minister has proposed offering tariff exemptions on selected U.S. imports as leverage to negotiate the reduction of retaliatory tariffs from 36% to levels comparable to those imposed on Vietnam and Indonesia—approximately 20%.

1. Selective Market Opening

Thailand is prepared to reduce tariffs—potentially to 0%—on U.S. goods that the country does not produce or cannot produce in sufficient quantities, such as specific agricultural or industrial products. However, this market access must not conflict with Thailand’s commitments under existing Free Trade Agreements (FTAs). Thai agricultural producers will remain protected under these arrangements.

2. Promoting Thai Investment in the United States

The U.S. seeks to boost domestic manufacturing and exports, while Thailand aims to increase investment in processed agriculture and energy sectors. On the other hand, the U.S. currently maintains an energy surplus, offering natural gas at significantly reduced prices (2–3 USD per million BTU compared to the market price of 10–11 USD) to Thailand.

3. Preventing Origin Fraud and Promoting Local Content

The U.S. has proposed stricter local content requirements, potentially increasing from 40% to 60–70%, to prevent the misuse of trade privileges. However, Thai business operators view this as an opportunity to boost domestic production and strengthen the local supply chain. By relying more on local content, Thailand can create opportunities for its manufacturers to enhance their production capabilities and become more competitive in global markets.

Small and Medium Enterprise (SME) Support Measures

To mitigate the impact on Thai SMEs and the agricultural sector, the government plans to allocate 200 billion THB in soft loans through state-owned banks, with interest rates as low as 0.01%. This initiative will support investment, employment, inventory management, and other operational costs. The government will subsidize the standard 2% interest rate as part of its comprehensive business relief measures.

people walking on pedestrian lane during daytime

Board of Investment (BOI) Measures to Retain Investment

Following the U.S. government’s announcement of reciprocal tariffs over the past two months, Thailand’s BOI has consulted with both domestic and foreign investors and introduced a comprehensive policy package. This initiative addresses two primary objectives:

1. Enhancing Thai Business Competitiveness and Strengthening Domestic Supply Chains

a. SME Efficiency Support: Thai SMEs are encouraged to invest in upgrades including machinery modernization, automation, energy efficiency improvements, and sustainable practices. Tax incentives have been enhanced from a 3-year exemption at 50% of investment value to a 5-year exemption at 100%.

b. Local Content Promotion: Companies in the electric vehicle (EV) and electronics sectors that meet specific local content requirements and obtain “Made in Thailand” certification will receive an additional 2-year corporate income tax reduction of 50%.

2. Mitigating Risks from U.S. Trade Measures and Regulating Specific Sectors

a. Enhanced Production Process Requirements: For sensitive industries (e.g., automotive parts, electronics, metals), the BOI now mandates clearly defined transformation of raw materials, requiring a change in customs tariff classification of at least four digits to ensure value-added production within Thailand.

b. Investment Regulation in High-Risk or Oversupplied Sectors: The BOI will discontinue promotion of specific low-technology or oversupplied industries (e.g., solar panels, furniture, long steel products). Certain sectors must maintain majority Thai ownership unless located in designated economic zones.

c. Foreign Labor Regulation Adjustments: Manufacturing facilities employing over 100 staffs must maintain a workforce that is at least 70% Thai nationals to ensure local employment benefits.

These incentives aim to attract foreign manufacturers to Thailand, strengthen supply chain integrity, and enhance the country’s overall economic resilience.

U.S. AI Chip Export Controls and Regional Implications

The U.S. has intensified export controls on advanced AI chips to prevent potential rerouting to China—a measure that could disrupt regional digital infrastructure projects. However, the Federation of Thai Industries (FTI) has clarified that such restrictions are unlikely to impact legitimate initiatives, including Amazon Web Services’ (AWS) has planned to set up data center in Thailand.

Current U.S. measures primarily target transshipment risks rather than restricting local deployment. Nevertheless, uncertainties persist, particularly regarding the scope and enforcement of these controls. For instance, U.S. regulations prohibit foreign data centers from exceeding the processing capacity of their American counterparts, and chipmaker NVIDIA is already prioritizing U.S.-based clients due to supply constraints.

Given these challenges, Thailand must continue monitoring U.S. policy developments closely while accelerating digital infrastructure upgrades and ensuring regulatory transparency.

Conclusion: A Unified and Strategic Path Forward

Thailand’s evolving role in global trade necessitates, a comprehensive strategy to address rising tariffs, technological scrutiny and pragmatic diplomatic approach and reinforcing investor confidence through proactive BOI measures and credible technology governance, Thailand can establish itself as a trustworthy and resilient economic partner.

The path forward requires coherence between domestic policy, international engagement, and innovation readiness, ensuring that Thailand not only weathers current economic headwinds but emerges stronger in the global economic arena.

Author: Panisa Suwanmatajarn, Managing Partner.

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