Investment activities and productive settlement

.

.

.

.

.

.

.

Investment activities and productive settlement in the Country
Contractualistics
agency, representation, distribution, license, transfer of technology.

Corporate legislation
Representative office: a foreign entity can establish a representative office in Thailand which is not subject to tax withdrawal. The representative office has the function to carry out research, marketing and promotional activities, etc. The capital must be about 70,000 euro. The office can operate 5 years, prior to renewal. Branch: a company registered in foreign country is able to operate the branch of head office in country of origin. Each activity carried out by the head office in Thailand is subject to taxation, like the income produced by the branch. The branch must have the minimum capital of 70,000 euro which must be brought in the country. It can operate for the period of 5 years prior to renewal.

Joint venture: it can be described in accordance with the general criteria; a group of natural or legal persons who reunite in order to develop a communal activity. In Thailand, it is not recognized yet as the legal entity from the Civil and Commercial Code. However, it is subject to the corporation tax, in accordance with the Fiscal Code.

Law of the foreign investment
for commercial tertiary and operations in Thailand, a local partner (legal or natural person) who holds the majority of shares of investment is required. It is possible that the local partner holds the corporate control for productive plants but not re-enter in the sectors reserved to Thai people. In any case, the Thai partner does not need to be thoroughly involved in the activity management. The forms of possible investment are: single ownership, capital company (limited-liability company or limited company), joint venture, branch or representative office (the latter under revision). If a partnership or joint-stock company transfers the profit coming from a branch established in Thailand or from economic activities exercised in Thailand to overseas, the company is subject to the tax 10% of the remittance, besides the income tax of juristic person.

Licenses and Intellectual Property
The “Trade Mark Act” disciplines the matter regarding the registration and type of protection of trade mark, service brand, patent and collective trade mark, and protect the owners of trade mark by penalizing those who break the law on the rights of Intellectual Property. The discipline related to the licenses, models of utilities and designs is contained in “Patent Act” of 1979, amended from “Patent Act” (no.2) of 1992 and “Patent Act” (no.3) of 1999 respectively. The title of licenses, one model of utility or one design has the exclusively right to use, authorize, construct, distribute and import products and patented processes in Thailand. The “Copyright Act” brought Thailand to the international standard required from the TRIPS agreement.

Tax System
Personal income taxes: the shares of the income tax vary from 5% on the first 1.607 Euro to 37% beyond the 83,333 Euro of annual income. Corporate income taxes: taxation system on world-wide base. The share of tax is 30%. The companies: whose plans of investment have been approved from Board of Investment, benefit the exemption from the corporate income tax for 3 years (if located in zone 1), 5 years (if located in zone 2), and 8 years (if located in zone 3). The system is being completely reviewed and will be modified with the greater consideration the validity of the plan that localization. The commercial transactions are burdened from VAT (Value Added Tax) whose share was being reduced in March 1999 from 10% to 7% in order to stimulate the inner demand.