Cannabis and Hemp: Comprehensive Extract Regulations for Medical, Industrial, and Research Applications
Breaking Development
The Thai Cabinet has approved a crucial draft ministerial regulation governing the licensing of Category 5 narcotics, specifically for cannabis and hemp extracts. This regulation, proposed by the Ministry of Public Health, will serve as a subordinate law under the Narcotics Act B.E. 2564 (2021), with a critical stipulation that cannabis and hemp extracts containing THC exceeding 0.2% remain classified as narcotics.
Licensing Framework
The new regulation establishes four specific categories for licensing as follows:
Medical applications
Commercial and industrial purposes
Medical and scientific research
Law enforcement and narcotics control
Eligibility Criteria
The framework sets clear eligibility requirements for license applicants as follows:
Individual applicants must be Thai nationals aged 20 or above
Corporate entities must be registered under Thai law with a minimum of 51% Thai ownership
Community enterprises
Government agencies
Thai Red Cross Society
Private higher education institutions offering medical or pharmaceutical programs
Industry Impact
The regulation has already shown a significant impact on Thailand’s cannabis-related industries, with over 2,900 products receiving approval as follows:
Cosmetics sector leads with 2,121 approved products
Food products account for 596 approvals
Herbal products comprise 189 approvals
International exports have commenced, with successful shipments to South Korea and African nations
Regulatory Controls
To maintain safety and quality standards, the framework implements several key controls as follows:
Mandatory electronic license applications
Three-year license validity period
Strict storage requirements for extracts
Regular THC content testing
Prescribed fee structure
Future Outlook
This regulatory framework positions Thailand as a pioneer in progressive cannabis policy while maintaining necessary safeguards. Including public and private stakeholders in the licensing system, coupled with clear guidelines for various applications, creates a balanced approach that promotes economic opportunity and public safety.
The success of this framework will likely depend on continued collaboration between government agencies, private sector participants, and research institutions, as well as ongoing monitoring and adjustment of regulations to meet evolving industry needs while ensuring public health protection.
Key Takeaways
A robust licensing system implements strict eligibility criteria for both individuals and organizations
Cabinet approves new ministerial regulation for cannabis and hemp extract licensing
Framework expands access beyond government agencies to the private sector and individuals
THC content exceeding 0.2% remains classified as a controlled substance
Four specific categories of permitted use established for licensing purposes
Proposed Reforms for Migrant Workers in Thailand: Temporary Stay and Work Permit Relaxations
Thailand hosts numerous migrant workers from neighboring countries, including Cambodia, Laos, Myanmar, and Vietnam. These workers often face legal challenges such as expired documents, lack of proper work permits, or illegal entry. To address these issues and create a more supportive environment, the Thai Cabinet approved the Ministry of Labor’s proposal on 24 September 2024, with an official announcement expected to be published in the Royal Gazette soon. Key reforms include:
1. Management of Migrant Workers
Eligible Nationalities: Cambodian, Laotian, Myanmar, and Vietnamese workers with expired work permits, expired visas, or no work permits, including those who entered the country illegally.
Dependents: Children under 18 may stay with their parents. Those turning 18 have 60 days to apply for a work permit.
Temporary Stay: The Ministry of Labor will define the period for migrant workers to legalize their status and apply for work permits. Employers must apply for permits, granting workers a one-year permit upon approval.
2. Work Permit Renewal
Eligibility: Migrant workers from Cambodia, Laos, Myanmar, and Vietnam with valid permits under prior Cabinet decisions (2022-2023) and Memorandum of Understanding (MOU) until February 13, 2025.
Extension: Eligible workers can apply for a two-year extension, renewable once for an additional two years.
3. Employment Conditions Amendment
Employer Change: Migrants leaving their job before contract expiry or at its conclusion must begin working for a new employer within 60 days (previously 30 days).
Validity: These changes are valid until February 13, 2029.
4. Exemption from Employment Notifications
Exemption: Migrants with work permits are exempt from notifying authorities of employer or job details unless changing or adding an employer.
Validity: This exemption is effective until February 13, 2029.
Conclusion: The Thai government’s proposed reforms mark significant progress in improving conditions for migrant workers. By easing temporary stay regulations, extending work permits, and simplifying employer change processes, these measures aim to create a more stable and supportive environment. These reforms are expected to benefit both migrant workers and the Thai economy by promoting legal employment and reducing the risks associated with undocumented labor.
Key Takeaways:
Both migrant workers and the Thai economy are expected to benefit from these reforms.
The Thai government has introduced reforms to improve conditions for migrant workers from Cambodia, Lao, Myanmar and Vietnam.
The reforms include relaxed temporary stay rules, extended work permits, and easier employer change procedures.
These changes aim to create a more stable and supportive environment for migrant workers.
Cannabis and Hemp: A Comprehensive Analysis of the Draft Act
Introduction:
Thailand’s Draft Amendment to Cannabis and Hemp Act represents a significant step in the country’s approach to regulating these plants. This comprehensive legislation aims to balance the economic potential of cannabis and hemp with necessary safeguards for public health and safety. The act acknowledges that cannabis and hemp are no longer classified as narcotics under Thai law and seeks to establish appropriate control measures while promoting their development for maximum economic benefit.
Public Hearing Process:
The Thai government has initiated a public hearing process for the Draft amendment of Cannabis and Hemp Act, demonstrating a commitment to transparent and inclusive policymaking. This process recognizes that the following groups will be affected by this legislation:
General public
Community enterprises
Entrepreneurs
Farmers
The public hearing document outlines the following background and objectives:
Cannabis and hemp are no longer classified as narcotics under Thai law, potentially leading to widespread possession, consumption, and use.
There are concerns about the impact on public health, as well as economic and social implications.
The plants have recognized medical and health benefits, as well as economic value.
There is a need for appropriate control measures to ensure proper use of cannabis and hemp.
The act aims to promote the development of cannabis and hemp for maximum economic benefit.
A committee system is proposed to oversee control and promotion efforts.
Key Objectives:
Establish appropriate control measures for the use of cannabis and hemp
Promote the development of cannabis and hemp for maximum economic benefit
Protect public health and prevent misuse
Create a committee system to oversee control and promotion efforts
Licensing System:
Types of Licenses
The act introduces a comprehensive licensing system for various activities related to cannabis and hemp:
Cultivation
Production
Import
Export
Distribution of cannabis, hemp, or their extracts
Cultivation License Categories
Cultivation licenses are categorized based on the size of the cultivation area:
Small: Up to 5 rai (approximately 0.8 hectares)
Medium: 5-20 rai (0.8-3.2 hectares)
Large: 20-400 rai (3.2-64 hectares)
Eligibility for Licenses
Licenses can be granted to:
Thai individuals aged 20 or older
Thai-registered legal entities
Community enterprises
Thai Red Cross Society
Government agencies or state enterprises with relevant missions
License Duration and Renewal
Licenses are valid for three years from the date of issue
Renewal applications must be submitted before the license expires
Licensing Process Improvements
The new draft specifies the use of an electronic system for license issuance, application submission, renewal, and notifications
The process must be completed within 60 days
Scope of Controlled Substances:
The new draft clearly specifies that it controls extracts, residues, or remnants from extraction with THC content not exceeding 0.2% in plants.
Exemptions from Licensing Requirements:
No license is required for the use, sale, production, and export of roots, stems, branches, leaves, and seeds of cannabis and hemp.
Obligations of License Holders:
License holders are subject to several obligations, including:
Providing secure facilities for licensed activities
Conducting activities only at specified locations
Adhering to approved cultivation area sizes
Maintaining accurate records and submitting regular reports
Implementing measures to protect individuals and prevent misuse
Advertising and Promotion Regulations:
Prohibited Advertising
It is forbidden to advertise or conduct marketing communications related to:
Cannabis flowers or resin
Hemp flowers or resin
Extracts
Tools and equipment associated with smoking cannabis
Regulated Advertising
Advertising or marketing communications about cannabis, hemp, or extracts that are not prohibited must not:
Use language that is unfair to consumers
Use language that may cause harm to society as a whole
Enforcement Powers
The licensing authority can issue written orders to cease offending advertisements.
Sales Restrictions:
The new draft introduces several sales restrictions:
Prohibition of sales to individuals under 20 years old, pregnant women, and breastfeeding mothers
Ban on sales for entertainment purposes
Prohibition of sales in temples and educational institutions
Transitional Period:
Individuals cultivating cannabis or hemp before the law takes effect must apply for a license within 60 days of the law’s implementation.
Suspension and Revocation of Licenses:
The act outlines procedures for license suspension (up to 180 days) and revocation, including an appeals process for licensees who disagree with official decisions.
Cessation of Business:
The act provides clear guidelines for license holders who wish to cease their operations, including notification requirements and procedures for disposing of remaining stock.
Comparison with Previous Legislation:
The Draft Amendment to Cannabis and Hemp Act introduces several significant changes compared to the previous regulatory framework:
Legal Status: Cannabis and hemp are reclassified from narcotics to controlled substances, opening up possibilities for wider use and economic exploitation.
Licensing System: A more comprehensive and nuanced licensing system is introduced, including categories based on cultivation area size.
Economic Focus: There is a stronger emphasis on promoting the economic potential of cannabis and hemp.
Public Health Safeguards: Specific sales restrictions are introduced to protect public health while allowing broader use.
Advertising Regulations: Detailed restrictions on advertising are included, which were not necessary under the previous narcotics classification.
Committee Oversight: A committee system for oversight suggests a more complex and participatory regulatory approach.
Broader Eligibility: A wider range of entities can participate in the industry, including community enterprises.
Exemptions: Specific exemptions from licensing requirements are outlined for certain parts of the plants.
Transitional Provisions: A transitional period for existing cultivators suggests a more accommodating approach.
Conclusion:
Thailand’s Draft Amendment to Cannabis and Hemp Act represents a significant step towards creating a robust regulatory framework for the cannabis and hemp industry. By establishing a structured licensing system, imposing clear obligations on license holders, and implementing strict advertising and sales regulations, the act aims to balance the economic potential of cannabis and hemp with necessary safeguards for public health and safety.
The comprehensive nature of this legislation demonstrates Thailand’s commitment to addressing various aspects of the cannabis and hemp industry, from cultivation to marketing. The recent amendments reflect the government’s efforts to create a balance between utilizing the benefits of cannabis and hemp and preventing negative impacts on society by establishing a clearer and more comprehensive legal framework.
The comparisons with the previous law highlight the substantial shift in Thailand’s approach to cannabis and hemp regulation. The draft amendment moves from a prohibitive stance to a more nuanced, economically-focused framework while maintaining public health safeguards. This change represents a significant evolution in policy, potentially opening up new economic opportunities while still addressing public health and safety concerns.
The initiation of a public hearing process further underscores the government’s commitment to inclusive policymaking. By seeking input from various stakeholders, including the general public, community enterprises, entrepreneurs, and farmers, the government aims to refine the legislation to better serve the needs of all affected parties while achieving its regulatory objectives.
As the legislative process continues, stakeholders from various sectors will likely contribute to refining this regulatory framework, potentially shaping the future of the cannabis and hemp industry in Thailand. The transition from the previous restrictive approach to this more comprehensive and economically oriented framework will likely have far-reaching implications for businesses, healthcare providers, and consumers in Thailand.
BOI: New Measures to Promote Thailand’s Automotive Parts Industry
Introduction:
On June 28, 2024, the Thailand Board of Investment (BOI) unveiled new investment promotion measures aimed at bolstering the country’s automotive parts industry. These measures, detailed in the BOI Announcement No. 11/2024, are designed to motivate and encourage automotive parts manufacturers to enhance their production capabilities and facilitate their transition to new industries.
Background:
As the global automotive industry shifts towards electric vehicles (EVs), Thailand, a leading automotive hub, recognizes the need to support both traditional combustion engine vehicle manufacturers and emerging EV parts producers. The BOI’s new measures aim to encourage manufacturers to modernize their machinery, invest in personnel training, and adopt advanced technologies. This approach is intended to enhance efficiency and competitiveness, positioning Thailand to thrive in the evolving automotive landscape and explore new industry opportunities.
Eligibility Criteria:
To qualify for support under these measures, entrepreneurs must meet the following criteria:
Operational Status: The project must be currently operational, regardless of previous promotion status. Projects that were previously promoted must either no longer be eligible for corporate income tax exemptions and reductions or must have never received such benefits.
Investment Plan: Applicants must submit a comprehensive investment plan to the BOI, outlining strategies for industry upgrade or transition. This plan should address technological advancements, industry standards, and workforce development.
Minimum Investment: A minimum investment of 1 million baht is required, excluding land costs and working capital. The investment value will be calculated based on: a. Machinery and equipment b. Standards certification for the new industry c. Consultancy fees for production enhancement or transition d. Employee training for relevant technology or courses e. Software, programs, or information systems investments f. Cloud services or data center usage
Application Deadline:
Interested parties must submit their applications for promotion under this announcement no later than the last business day of 2025.
Benefits for Eligible Projects:
Upon approval and receipt of a promotion certificate, eligible projects will be granted the following benefits:
Machinery Import Duties Exemption: Full exemption on import duties for qualifying machinery.
Corporate Income Tax Exemption: A three-year corporate income tax exemption, calculated as follows:
50% of the project investment (excluding land and working capital)
100% of the project investment (excluding land and working capital) if at least 30% of the changed machinery’s value supports the domestic automatic machinery manufacturing industry
Conclusion:
These new measures reflect Thailand’s commitment to maintaining its position as a key player in the global automotive industry. By incentivizing modernization and technological adoption, the BOI aims to ensure that Thailand’s automotive parts sector remains competitive and adaptable in the face of evolving industry trends, particularly the shift towards electric vehicles.
Key Takeaways:
Modernization Focus: The BOI is encouraging manufacturers to adopt advanced technologies, modernize machinery, and invest in personnel training to enhance efficiency and competitiveness.
Comprehensive Eligibility Criteria: Applicants must demonstrate a commitment to industry upgrade or transition, meet minimum investment thresholds, and adhere to specific investment guidelines.
Attractive Financial Incentives: Eligible projects benefit from exemptions on import duties and corporate income tax.
Time-Sensitive Opportunity: Investment promotion applications must be submitted by the end of 2025, emphasizing the need for timely action by interested parties.
Responsibilities of the Board of Directors under Thai Law
Introduction
In the corporate structure, the Board of Directors (BOD) plays a crucial role as the company’s representative in business operations. The BOD is responsible for acting on behalf of the company and holds significant responsibilities under Thai law.
Responsibilities of the BOD and Due Care
The BOD has duties and responsibilities outlined in various laws, regulations, and the company’s articles of association. Thai law imposes an additional obligation on the BOD to operate the company’s business with the diligence of a careful businessperson, considering the company’s interests and operating under shareholders control. This practice, known as “Due Care,” is a fundamental principle in Thai corporate law, emphasizing the need for careful and prudent business operations.
The Right to Sue the BOD
A limited company in Thailand is a juristic person, separate from its directors and shareholders. Actions performed by the BOD within the company’s objectives and in the company’s name are the responsibility of the company itself. Claims arising from these actions should be made directly against the company, not the BOD.
However, when the BOD’s actions cause damage to the company, the right to sue the BOD for compensation is granted to:
The company itself
Shareholders
Creditors of the company (to the extent that their claims against the company remain unsatisfied)
Third parties can claim damages from the BOD only when the BOD’s actions fall outside the company’s objectives. If the actions comply with the company’s objectives, third parties have no right to claim compensation directly from the BOD.
Burden of Proof for the BOD
In lawsuits brought by the company, shareholders, or creditors, the BOD must demonstrate that they:
Exercised due care in business operations, or
Their actions were ratified by resolutions of the general meeting
For third-party claims, the BOD must prove that their actions were conducted within the scope and objectives of the company.
The Illegitimacy of Shifting the Burden of Proof to the BOD in Criminal Cases
The Constitutional Court Decision (CCD) No. 12/2555 ruled that laws allowing charges of an offense against the BOD automatically when the wrongdoer is a juristic person were unconstitutional. The CCD ruled that the laws presume the BOD guilty based on status as the one responsible for undertaking the business of such entity that commits an offense, not the actual fact of the case, unless proven not involved in the said entity’s offense, resulting in improperly shifted the burden of proof to the BOD as defendants when the wrongdoer is juristic person, contradicting the principle of presumption of innocence enshrined in Section 29, paragraph 2 of the Constitution of the Kingdom of Thailand. Under the fundamentals of human rights, the defendant shall be proved beyond reasonable doubt by the plaintiff that the defendant is guilty, it is not the duty of the defendant to prove themselves innocent just that he or she is a person responsible for undertaking the business of a juristic person that commits an offense.
Conclusion
The BOD has significant duties and responsibilities under Thai law, including adherence to the company’s scope and objectives. In cases of damages arising from company operations, the right to sue is granted to the company, shareholders, and creditors. Third parties may only sue the BOD for actions outside the company’s scope and objectives. However, direct criminal suits against the BOD have been deemed unconstitutional as they contradict the presumption of innocence principle in the Thai Constitution.
Investment: Corporate Structure and Investment Opportunities in Thailand
Thailand represents a dynamic and promising economic environment for both local and international investors. Understanding the process will benefit entrepreneurs and corporations looking to establish a presence in Thailand.
Incorporation Option:
Investors in Thailand can choose from several types of business entities, including sole proprietorship, partnership, and limited company. Among these, the limited company stands out as the most popular form of incorporation due to its favorable features like limited liability to shareholders and flexibility in management and operations.
Registered Capital:
In terms of capital requirement, the law mandates for Thai companies a minimum registered capital based on the type of business and its specific operational needs.
Minimum Investment Capital:
The legally permissible minimum registered capital for a limited company incorporated under Thai law is 10 baht. However, in practice, no businesses opt for such a low capital amount as it does not reflect the true nature of business operations and may lead to business partners and clients perceiving the company as financially unstable.
However, foreign businesses in Thailand require a minimum registered capital of 2 million THB for non-restricted operations and 3 million THB for those under restriction by the Foreign Business Act. Thai-owned companies are not subject to these requirements.
Action Steps After Establishing a Limited Company:
To ensure your company operates businesses smoothly and in compliance with national law, there are several important steps to take once you have established a company. Those include:
Open a corporate bank account: to manage financial activities effectively and maintain financial transparency
Social security registration: to comply with legal requirements, manage employee contributions and claims
Visa and work permit application for foreign employees: to enter Thailand to do business, a non-immigrant B visa and work permit are required
Shareholder:
Thai Majority-Owned Limited Company
In companies where Thai nationals hold more than 50% of the shares, the enterprise is classified as a Thai-majority-owned limited company. Generally, these companies face fewer operational restrictions in Thailand.
Foreign Majority-Owned Limited Company
A business is considered foreign-owned if at least 50% of its ownership is foreign-owned. Although foreign investors are generally allowed to fully own such companies, the Foreign Business Act specifies certain sectors, such as those involving natural resources or national security and some services, which are exclusively reserved for Thai nationals.
In these sectors, foreign investors are restricted to owning a maximum of less than 50% of the company’s shares. Exceptions to this restriction include situations where a Foreign Business License/Foreign Business Certificate is issued, or when the company receives a promotion from the BOI or benefits under international agreements like the Thai-U.S. Amity Treaty. These exceptions enable foreign investors to own a majority or even 100% of the company’s shares in otherwise restricted business sectors.
Business Types:
In Thailand, the business landscape offers distinct operational freedoms and restrictions for Thai nationals and foreign investors.
Thai nationals – Thai nationals may face fewer restrictions on the types of business they can operate, however, certain businesses such as import-export or restaurant businesses still require specific licenses.
Foreign investors – Foreign investors are free to establish and operate businesses in Thailand. Nevertheless, the Foreign Business Act categorizes businesses into 3 lists in which foreign operators must obtain a Foreign Business License or Certificate if one will engage in a business activity that falls under the scope of lists nos. 2 and 3 (e.g. restaurant, construction, hotel, services business, etc.). Business and technology transfer plans are required to be submitted when applying for a Foreign Business License. If foreign investors are promoted by the BOI or their nations are part of international agreements with Thailand, they become eligible to apply for Foreign Business Certificates.
This license/certificate permits them to engage in business activities that are otherwise highly restricted in Thailand, providing them with significantly more operational flexibility. Still, certain businesses require specific licenses.
Special Incentives:
The Board of Investment of Thailand (BOI) provides an attractive range of incentives, for entrepreneurs who engage in a particular business, designed to encourage foreign investment, especially in high-tech industries, research and development, and environmentally friendly projects. These compelling benefits include tax incentives (e.g. reduction or exemption of corporate income tax (up to 8 years) or import duty on machinery and raw materials), and non-tax incentives (e.g. expedited work permit and visa processes or land ownership rights).
Besides the BOI, the business operator or investor who engages in particular industries (e.g. advanced robotics, aviation, digital technology, etc.) and operates within the promotional economic zone within the Eastern Economic Corridor (EEC) area which all are situated in either Chachoengsao, Chonburi, or Rayong provinces, can apply for incentives; i.e. tax incentives and non-tax incentives, which include extended tax holidays, grants and subsidies for R&D, expedited work permit and visa processes, from the EEC.
It is essential to note that if you have already received incentives from the BOI, you can only apply for incentives that are not covered by the BOI Act from the EEC. However, if you have already received incentives from the EEC, it will be prohibited for you to apply for BOI incentives going forward.
Taxation:
In Thailand, there are key tax considerations for a limited company. Those include:
Corporate Income Tax: It is calculated from net profit. The rate is currently fixed at 20%, however, if the business is an SME, it qualifies for a reduced tax rate. The business operators are required to submit corporate income tax semi-annually and annually.
Value Added Tax (VAT): A limited company has the option to register for VAT, except for companies that meet specific criteria that are required for VAT without exception. By registering VAT, an additional 7% tax will be added to the price of goods and services. A company must file a detailed VAT return monthly, even if there are no transactions in that month. Failure to file shall result in penalties.
Withholding Tax: the obligation to deduct a specific percentage of tax depends on what type of payment is being made and to whom. However, if a company receives incentives from the BOI, its tax obligations, among others, may be reduced or even exempted. Stakeholders must evaluate the criteria applicable to their company.
Land and Property:
Unlike Thai citizens or entities that are entitled to own land, foreigners are not eligible to do the same. However, there are practical solutions for foreign entities including:
Long-term lease: Land can be leased for up to 30 years and it is also renewable.
Condominium ownership: Foreigners can purchase and be the sole owner of condominium units. However, such condominiums cannot have more than 49% of their units owned by foreigners. In light of this, the government is in discussion to increase the maximum foreign condominium unit ownership from no more than 49% of all condominium units to no more than 75%.
Business investment: Foreigners whose investment meets particular conditions and the minimum amount may own land for residential purposes. Also, foreign juristic persons promoted by the BOI can own land that shall be used in their promoted activities, such land can be used as their staff accommodation.
Building ownership: Although foreigners are generally prohibited from owning land, they can own a building.
Stock Market Investments:
Foreigners are welcome to participate in the Stock Exchange of Thailand (SET), with opportunities to invest across a broad range of sectors. Key points to consider include:
Foreign ownership limits on individual stocks vary by industry and company.
Some brokers may require in-person account openings, but others are beginning to offer digital solutions to streamline this process.
Access to emerging markets with potential, particularly in some industries like energy, technology, and consumer goods.
Overall, establishing a company requires navigating multiple steps, gathering the necessary documentation, and addressing complex details. Investors must ensure they comply with all requirements to prevent any potential issues. Thailand presents a compelling investment landscape for foreign investors. With its strategic location, dynamic economy, and supportive government policies, the country offers abundant opportunities for businesses to flourish. Foreign investors can successfully establish a presence in Thailand and tap into the nation’s economic growth potential.
Key takeaways:
Incorporation options: Carefully consider the most suitable business entity based on the business goals.
Foreign ownership restrictions: Be aware of limitations in certain sectors and explore options for obtaining necessary licenses or exemptions.
Business incentives: Leverage the generous incentives provided by the BOI and the relevant sector to reduce costs and enhance profitability.
Tax considerations: Understand the tax implications of operating a business in Thailand and seek professional advice to ensure compliance.
Foreign land and property ownership: Foreigners can own land and property in Thailand under particular conditions.
Legal and administrative requirements: Adhere to the necessary legal and administrative procedures to maintain a smooth and compliant operation
Labor: An Overview of Whistleblower Protection in Thailand
Introduction:
The concept of whistleblowing, while well-established in many countries, is relatively new in Thailand. Whistleblowing serves as a crucial tool for enhancing accountability and transparency within organizations. The protection of whistleblowers is essential to encourage employees to expose unethical behavior, corruption, and labor law violations without fear of retaliation. This article examines the current state of whistleblower protection in Thailand’s labor law context.
Legal Framework:
Absence of Specific Legislation
Thailand currently lacks specific legislation dedicated to protecting whistleblowers. The term “whistleblower” itself is not formally defined in Thai law. However, existing laws provide some degree of protection for employees reporting unethical practices as follows:
1. Protection from Thai Labor Legislations
In Thailand, there is currently no legislation specifically protecting whistle-blowers, nor is the term formally defined in Thai law. However, the Labor Relations Act B.E. 2518 (1975) (“Labor Relations Act”) provides some level of protection for employees who report unethical practices. The objective is to protect employees so that they receive protection and can exercise their various labor rights without interference, pressure, or coercion from others, whether from their employers or other organizations. The Labor Relations Actprohibits employers from terminating employees or taking actions that would prevent them from continuing their work due to protesting, filing complaints, serving as witnesses in labor law matters, or being a member of the labor union. These provisions can be interpreted as protective measures for whistle-blowers, imposing penalties of imprisonment and fines on employers who retaliate against them.
In addition to the Labor Relations Act, there are also provisions related to whistleblower protection in the Labor Court Establishment and Labor Litigation Procedure Act B.E. 2522 (1979) which allows the labor court to order an employer to reinstate an employee at the wage rate received at termination if it finds the termination unfair. If the employer cannot continue working, the court will assess the damages, considering the employee’s age, employment length, hardships, grounds for termination, and any compensation the employee is entitled to.
2.Awareness Among Organizations
Organizations in Thailand, such as the Stock Exchange, have recognized the importance of protecting employees. They utilize whistleblowing as a tool to gather complaints regarding violations of laws, regulations, or ethical standards, which can damage the organization’s reputation and assets.
The amendment to the Securities and Exchange Act B.E. 2535 (1992) has introduced additional sections related to whistleblower protection. This amendment prohibits companies from engaging in any unfair practices against employees, workers, or other individuals hired by the company who assist the Securities and Exchange Commission, the Capital Market Supervisory Board, or the Office of the Securities and Exchange Commission in investigating wrongdoing. Violations of these provisions may result in criminal penalties, including fines for the listed companies and imprisonment for directors of such listed companies.
3.Legal Framework for Disputes
As mentioned above, when there is a labor-related offense or unfair acts between employers and employees, it will fall under the jurisdiction of the labor court. If there is a crime in other cases involved, for example, if employee A is sexually harassed by the manager and employee B reports the offense to management, employee B will act as a whistleblower and have the right to receive protection under the Labor Relations Act and the Labor Court Establishment and Labor Litigation Procedure Act B.E. 2522 (1979).
4. Judicial Precedents
Currently, no precedent judgment is directly related to whistleblowing cases. However, there is a judicial precedent reflecting the protection of employees from unfair dismissal resulting from their action against the employer to request compliance with their rights as employees.
Under the Precedent Supreme Court No. 3451-3452/2549, around 200 employees protested their management, requesting that their employment conditions regarding bonus payment be amended. The protest began at 7 a.m. and ended at 7.15 a.m., with the employer’s management team declaring to alter the employment conditions and refrain from pursuing any disciplinary action against those employees. Later, the employer filed a case to dismiss these employees.
The Supreme Court ruled that when an employer expressed a desire not to pursue any disciplinary action against employees, the employer was not entitled to terminate the employees.
According to the precedent case given, protesting to obtain a change in employment conditions is comparable with the whistleblower filing a labor rights complaint. The court will rule following the Labor Relations Act, which safeguards employees’ actions based on their rights.
Conclusion:
Although, Thailand lacks specific legislation for whistleblower protection, existing labor laws provide a framework that can be interpreted to safeguard employees who act as whistleblowers. The Labor Relations Act and the Labor Court Establishment and Labor Litigation Procedure Act offer mechanisms to protect employees from unjust termination and other retaliatory actions.
As awareness of the importance of whistleblower protection grows among organizations and regulatory bodies, it is likely that more robust protections will evolve within Thailand’s labor system. However, there remains a need for comprehensive legislation specifically addressing whistleblower protection to ensure that employees can report misconduct without fear of reprisal.
Trade Competition: Overview of Provisions, Remedies, and Legal Recourse
Introduction:
The Trade Competition Act B.E. 2560 (2017) (Act) of Thailand serves as pivotal legislation aimed at fostering fair competition in the marketplace and preventing monopolistic practices. This act is fundamental in creating an equitable competitive environment, stimulating business development, and safeguarding consumer interests against exploitation.
Key Provisions and Regulatory Authority:
Prohibited Practices
The Trade Competition Act prohibits several anti-competitive practices, including:
Business consolidation leading to monopolies
Collusion to monopolize or limit competition
Abuse of market power
Unfair commercial practices
Unreasonable agreements with foreign businesses that significantly harm the economy and consumers
Regulatory Body
The Office of Trade Competition Commission (OTCC) is the primary agency responsible for overseeing and enforcing this law. The OTCC’s duties include:
Monitoring market activities
Investigating potential violations
Imposing administrative penalties when necessary
Establishing guidelines for regulating mergers and acquisitions to prevent market monopolization
Legal Recourse for Affected Parties:
Parties Authorized to Initiate Legal Proceedings
Individuals or juristic persons affected by violations of the Act
The Committee on Consumer Protection (CCP)
Foundations or associations certified by the CCP under consumer protection law
For certain violations, such as those criminal cases related to market dominance, affected parties must file complaints with the OTCC rather than pursue criminal cases directly.
Filing a Lawsuit
Cases filed under this Act fall under the jurisdiction of the Central Intellectual Property and International Trade Court (CIPITC).
Preparing for Legal Action
When preparing for a lawsuit, affected parties shall:
Gather evidence of economic damage
Obtain OTCC resolutions or judgments confirming trade competition law violations (if available)
Assess damages and prepare economic evidence resulting from the violation
Damage Compensation and Remedies:
Types of Damages Claimable
Actual damages: Direct losses from the wrongful act, such as lost income or expected profits
Legal costs: Litigation expenses, including attorney fees and document preparation costs
Damages from legal violations: Compensation for harm caused by violations of the Act
Additional Remedies
Beyond monetary compensation, the Act provides for various forms of remedies:
Restoration of status: Returning the injured party to their pre-damage condition, e.g., canceling unfair agreements
Injunctions: Court orders to cease unlawful or unfair acts and prevent future harm
Business recovery support: Assistance for affected businesses through advice or support for business improvements
Preventive measures: Establishing guidelines to prevent recurrence, such as training on fair competition practices
Mediation: Facilitated discussions among involved parties to reach mutually acceptable resolutions
Temporary Protection
Victims can request temporary protection under the Act for the Establishment of and Procedures for the Intellectual Property and International Trade Court. A victim must provide:
Clear evidence: Indicating possible violations that could harm businesses or consumers
Proof of potential harm: Demonstrating that severe or irreparable damage can occur without temporary protection
Current Status of Implementation and Case Law:
The Act has been in effect for years, but no cases have yet been brought to the IPITC’s consideration. Most cases have been settled during OTCC review, with administrative fines applied.
Notable OTCC rulings include:
Food House Catering Services Co., Ltd. was fined 12 million baht for unreasonably exercising superior bargaining power.
Lazada Co., Ltd. was fined 1.8 million baht for abusing its market dominance.
As of now, there are no supreme court decisions directly related to this Act, as most cases have been resolved at the OTCC level.
Key Takeaways:
The Act aims to promote fair competition and prevent monopolistic practices, with the OTCC as the primary regulatory authority.
The Act prohibits various anti-competitive behaviors, including business consolidation leading to monopolies, collusion, abuse of market power, and unfair commercial practices.
Affected parties, the CCP, and certified organizations can initiate legal proceedings, with some cases requiring direct complaints to the OTCC.
Cases under this Act fall under the jurisdiction of the CIPITC.
Claimable damages include actual damages, legal costs, and compensation for harm caused by violations of the Act.
Additional remedies such as injunctions, business recovery support, preventive measures, and mediation are available beyond monetary compensation.
Temporary protection can be requested with clear evidence of violations and potential harm.
While the Act has been in effect for seven years, most cases have been settled through OTCC review and administrative fines, with no cases yet reaching the CIPITC level.
The OTCC has issued significant rulings and imposed fines in cases involving abuse of market power and unfair business practices.
This comprehensive overview provides insights into the legal framework, remedies, and current implementation status of Thailand’s trade competition Law and system, offering valuable guidance for businesses, legal professionals, and affected parties navigating this important area of economic regulations.
On 12 September 2024, Prime Minister Paetongtarn Shinawatra presented the Policy Statement of the Council of Ministers to the National Assembly. This statement outlined a comprehensive set of economic policies aimed at addressing Thailand’s current challenges and positioning the country for future growth. The policies are divided into various areas, including immediate-term measures, medium to long-term development strategies, and environmental and business facilitation.
Immediate-Term Economic Policies:
Debt Restructuring: Implementation of comprehensive debt restructuring measures, with a particular focus on home and automotive loans.
Support for SMEs: Introduction of measures to alleviate issues faced by Thai SMEs, including debt moratoriums and public-private co-investment schemes. This policy aims to protect Thai businesses from increasing competition with foreign entities, especially in online platform services.
Informal Economy Integration: Efforts to bring the informal and underground economy into the formal revenue system.
Digital Economy Stimulation: Launch of the Digital Wallet project as a foundation for the digital economy. This initiative includes improving public information centers to facilitate access to funding information, aiming to strengthen the Thai financial structure and build trust among domestic and foreign investors.
Tourism Promotion: Acceleration of tourism promotion through visa facilitation and the development of new tourism sectors, such as man-made destinations and entertainment complexes.
Medium and Long-Term Economic Development Strategies:
Automotive Industry Transition: Promotion of a shift from combustion engine vehicles to future vehicles, including HEVs, PHEVs, BEVs, and FCEVs.
Green Economy: Leveraging Thailand’s geographical advantage for solar energy production, with aims to establish the country as a clean energy market. This includes developing energy-free trade areas and a carbon credit market.
Digital Economy Enhancement: Building on Thailand’s existing strengths in electronic device and hard disk production, the government plans to attract foreign investment in data centers, chip production factories, and the semiconductor industry. This strategy also includes promoting the use of Artificial Intelligence (AI) technology across various sectors.
Care and Wellness Economy: In response to Thailand’s aging society, the government will promote domestic production of medical devices and encourage cannabis-based medical treatments. The long-term goal is to establish Thailand as a regional medical hub by adopting advanced health technologies and biotechnology.
Financial Hub Development: Plans to improve the Thai financial system to meet international standards, including the revision of current financial laws and regulations, and the creation of attractive incentives for foreign investors.
Environmental and Business Facilitation Policies:
Carbon Neutrality: Continuation of carbon neutrality policies to position Thailand as a leader in reducing carbon dioxide emissions, potentially giving Thai producers a competitive edge in markets prioritizing eco-friendly practices.
Ease of Doing Business: Elevation of public sector services to provide fast and convenient services to the private sector, reducing unnecessary legal and procedural barriers.
These economic policies reflect the Thai government’s commitment to addressing current economic challenges while preparing for future opportunities. The focus on digital transformation, green economy, and enhancing Thailand’s competitiveness in key sectors, demonstrates a forward-thinking approach to economic development. By implementing these policies, Thailand aims to attract both domestic and international investors, stimulate economic growth, and improve the overall business environment.
BOI: Unveil New Measures to Boost High-Potential Startups in Targeted Industries
The Thailand Board of Investment (BOI) has introduced new measures to promote high-potential startup businesses in targeted industries. These measures, outlined in the Notification of the Commission on the National Competitiveness Enhancement for Targeted Industries Policies no. 2/2567, aim to foster innovation and enhance Thailand’s competitiveness in key sectors.
Background:
The National Competitiveness Enhancement for Targeted Industries Fund, established under the BOI, focuses on supporting business projects in 13 targeted industries. These industries include Digital, Smart Electronics, Agriculture and Biotechnology, High Value-Added Food Processing, Medical Hub, Robotics, Aviation, Tourism, Next-Generation Automotive, Biofuels and Biochemicals, Circular Economy, Defense Industry, and Human Resource Development & Research for Targeted Industries.
Eligibility Criteria:
To qualify for support under these new measures, startups must meet the following criteria:
Legal Structure: Be a juristic person established under Thai law, with Thai individuals or juristic persons holding at least 51% of shares, and the Startup Founder holding at least 60% of shares.
Industry Alignment: Operate within one of the targeted industries determined by the Commission.
Venture Capital Investment: Have secured at least 15 million Baht from Venture Capital (VC) and/or Corporate Venture Capital (CVC) investors.
Innovation Focus: Demonstrate high potential through a detailed business plan introducing new products, services, technologies, or advanced production processes.
Exclusive Government Support: Not receive monetary support from other government agencies for the same project.
Benefits for Eligible Startups:
Qualified startups can access the following benefits:
Innovation Support: Receive up to 20-50 million Baht for innovation development, not exceeding the amount invested by the Listed VC registered with the National Innovation Agency (NIA). This support is disbursed in two parts over a period not exceeding 3 years:
Part 1: 50% of the support upon receiving the specified investment from the Listed VC registered with the National Innovation Agency (NIA).
Part 2: The remaining 50% upon meeting specified business indicators.
Foreign Talent Access: Obtain permission to bring in foreign experts with facilitated visas and work permits.
Key Takeaways:
The BOI is actively promoting high-potential startups in 13 targeted industries crucial for Thailand’s economic development.
Eligible startups must have significant Thai ownership, secure substantial VC/CVC funding, and operate in targeted industries.
The support package includes substantial financial aid for innovation development, with up to 50 million Baht available.
The initiative facilitates access to foreign talent, addressing potential skill gaps in the startup ecosystem.
This program aims to position Thailand as a regional innovation hub and drive economic growth through technology advancement.
The measures reflect Thailand’s commitment to fostering a vibrant startup ecosystem and enhancing its global competitiveness in key industries.
By implementing these measures, the BOI seeks to accelerate innovation, stimulate growth, and enhance Thailand’s competitiveness in targeted industries. This initiative underscores the vital role of startups in driving economic development and technological advancement in the country.
