Publications

As a part of our corporate social responsibility commitment DUENSING KIPPEN provides regular legal column contributions to numerous international, national and local hard and soft copy publications including: our regular legal column in The Phuket News newspaper, Mondaq, the Danish - Thai Trade News, Tropical Living magazine, Director magazine, Exotiq magazine, Samui - Phangan Real Estate magazine, The Pattaya Mail newspaper, Samui Express newspaper, Chiang Mai Mail newspaper and many others. We also make these publications available here below.


Leading the way

TIME TO REGULATE ESTATE AGENCY IN THAILAND? – PART TWO

What happens if an estate agent in Thailand lies, double deals, cheats or misrepresents…? “Can you count on and trust every single estate agent in Thailand?”

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TIME TO REGULATE ESTATE AGENCY IN THAILAND? – PART ONE

What happens if an estate agent in Thailand lies, double deals, cheats or misrepresents…? “Can you count on and trust every single estate agent in Thailand?”

Download


The Supreme Court in Thailand just ordered a completed, high‐end, high‐rise, 100 M USD +, residential project demolished, why?

A high‐end mixed use residential Complex consisting of a twenty‐four storey hotel and an eighteen storey apartment in the heart of Bangkok, which was only recently completed with a construction cost price tag of approximately three billion Thai Baht (almost one hundred million USD) — has just been ordered demolished by the Supreme Administrative Court in Thailand; there is no further appeal available, the order is final.

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THE LICENSING FACILITATION ACT – A More Business Friendly Licensing Procedure in Thailand?

Historically, obtaining a desired business license, registration, or other requisite government permission has often been time consuming and incurred arguably unnecessary costs in Thailand. Such inefficiencies stem in large part from the broad discretion government offices are generally given to determine what an applicant must do or provide, to obtain a license, registration, or permission.

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THE LEASE‐MORTGAGE: The better way to protect investors and promote Thailand’s residential real estate market

Recent Thai court rulings which have held the so‐called “collective leasehold” or “secured leasehold” (“Collective Lease”) to be void, have created quite a stir among Thai real estate developers and investors. This is because many developers who sell to foreign investors have been marketing and selling the Collective Lease for several years now in Thailand.

Download


The inheritability of a lease in Thailand – a legal issue not well understood

Recently, our attention was called to an Article, which raised an end of the world zombie scenario for certain real estate investors in Thailand. We were surprised to also see the several comments and confirmations of this purported apocalypse by a number of Thailand based legal professionals — a number of whom specialize in real estate.

Download


The “collective leasehold” — does it fix your lease renewal problem? – Part 2

In part one of this blog we addressed several legal errors in a recently published Article in an English language news publication in Thailand. Now we turn to what the Article’s substance, the commonly marketed “collective leasehold” structure.

Download


The “collective leasehold”— does it fix your lease renewal problem? – Part 1

You may have read a recent Article in a Thailand news publication which stated: “Collective leasehold structures provide owners in villa developments the legal means to have a greater say in their villa projects. Importantly, this means that owners have increased control over the renewal of their leases, thus mitigating a major risk associated with long‐term leases in villa developments.”

Download


Thai Courts Just Held the “Secured”/”Collective” Lease Structure VOID – bad news for many foreign real estate investors

Some real estate development structures that are marketed to foreigners in Thailand are commonly referred to as a “collective lease” or a “secured lease”. For simplicity’s sake we will refer to it in this article as a “Secured” Lease.

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Overview of Arbitration in Thailand

Our article that appeared in the American Chamber of Commerce’s T‐AB: Thai‐ American Business magazine, “Arbitration: Enforcing Contracts Outside of Thai Courts”

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MISPLACED HOPES FOR LONGER LEASE TERMS IN THAILAND: the JFCC is heading down the wrong road

It is well known that ownership of land by foreigners in Thailand is restricted. Thus, a long term leasehold is often the best option for a foreigner to invest in real estate.

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Leasing Property in Thailand? – Danish Chamber of Commerce of Thailand asks; Olaf Duensing answers

Leasing Property in Thailand? – Danish Chamber of Commerce of Thailand asks; Olaf Duensing answers

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Investor‐State Arbitration – a view from Thailand

“Investor – State Agreements: Protecting Investors and Encouraging Investment”, in the American Chamber of Commerce’s May‐June 2014 Thai‐American Business magazine; our latest published article on international commercial arbitration.

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CLASS ACTIONS ARE COMING TO THAILAND — AND THEY MAY CHANGE THE LEGAL AND CORPORATE LANDSCAPE

“Class actions” are coming to Thailand and they have the potential to significantly change civil litigation and corporate practices in Thailand. Class actions are litigation cases that combine the claims of several (often in the thousands or more) claimant parties against one or possibly a few defendants.

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A Thai government official’s opinion about the law does NOT mean that it is legally correct

In Thailand government officials are generally considered much more authoritative than in western countries. Thai culture also considers non‐conflict to be a virtue of particularly high regard.

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A building permit does NOT = ownership in Thailand

You might have heard something like the following all too common assertion: “in Thailand the party named in a building permit is considered to be the owner of that building.” To have heard such may have been particularly disturbing to many foreigners who are allowed to legally own buildings in Thailand.

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Dispute Resolution

The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is the foundation upon which the whole of international commercial arbitration stands: PART 3 – how is it applied?

Under Article 1(3) of the New York Convention, ratifying states have the option to limit the applicability of the New York Convention. The first of the two limitations refer to a reciprocal approach by states declaring to only enforce awards made in a country that is also a contracting state of the New York Convention.

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The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is the foundation upon which the whole of international commercial arbitration stands: PART 2 – why is it relevant today?

The relevance of the New York Convention is demonstrated by the fact that a majority of countries have adopted it. By 2013, 149 countries have adopted the New York Convention.

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The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is the foundation upon which the whole of international commercial arbitration stands: PART 1 – why and where did it come about?

After alternative dispute resolution was introduced and regulated by certain national legislators, it was recognised at the beginning of the 20th century that in light of expanding international trade, an international dispute resolution process was required. The International Chamber of Commerce (“ICC”) established its International Court of Arbitration in 1923 in Paris, France.

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Thai Courts Just Held the “Secured”/”Collective” Lease Structure VOID – bad news for many foreign real estate investors

Some real estate development structures that are marketed to foreigners in Thailand are commonly referred to as a “collective lease” or a “secured lease”. For simplicity’s sake we will refer to it in this article as a “Secured” Lease.

Download


Investor-State Agreements in Thailand . . . . . . encouraging investment by protecting foreign investors

For several years now, commentators – particularly in the business community – have opined that Thailand is in need of a significant infrastructure upgrade such as its mass transportation, road and railways systems.

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Institutional Arbitration in Thailand – The Thai Arbitration Institute: PART 2 – costs, fees, and who pays

“Class actions” are coming to Thailand and they have the potential to significantly change civil litigation and corporate practices in Thailand. The Thai Arbitration Institute (TAI) — currently under the auspices of the Thai government’s judiciary — is the most commonly chosen institutional arbitration service provider by commercial parties to administer their contractual dispute arbitrations seated in Thailand.

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Institutional Arbitration in Thailand – The Thai Arbitration Institute: PART 1 – procedure and timing

The Thai Arbitration Institute (TAI) — currently under the auspices of the Thai government’s judiciary — is the most commonly chosen institutional arbitration service provider by commercial parties to administer their contractual dispute arbitrations seated in Thailand. Unless the parties agree to deviate from the TAI Rules — and somewhat controversially — “with the consent of the Director of the Alternative Dispute Resolution Office”, the TAI Rules will apply to any arbitration proceeding under its administration.

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Employment Litigation in Thailand: PART 2 – what the court can award to an employee

When there is a dispute between an employer and an employee in Thailand that cannot be settled informally one of the parties may consider taking the issue to court. By way of the Labor Court Establishment and Procedure Act (1979) (the “Act“), Thailand has established a special Labor Court and procedure to resolve employment related disputes.

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Employment Litigation in Thailand: PART 1 – procedure and timing

When there is a dispute between an employer and an employee in Thailand that cannot be settled informally one of the parties may consider taking the issue to court. By way of the Labor Court Establishment and Procedure Act (1979) (the “Act“), Thailand has established a special “Labor Court” and procedure to resolve employment‐related disputes.

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INVESTOR-STATE AGREEMENTS Encouraging Investment By Protecting Foreign Investors

For several years now, commentators – particularly in the business community – have opined that Thailand is in need of a significant infrastructure upgrade such as its mass transportation, road and railways systems. The government appears to agree. Despite the differences between Thailand’s two main political parties, both of them have presented proposals for large scale and comprehensive infrastructure projects.

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Commercial Contract Dispute Resolution in Thailand – THE THAI ARBITRATION INSTITUTE – Part 2: Costs, Fee & Who Pays

The Thai Arbitration Institute (TAI) — currently under the auspices of the Thai government’s judiciary — is the most commonly chosen institutional arbitration service provider by commercial parties to administer their contractual dispute arbitrations seated in Thailand. Unless the parties agree to deviate from the TAI Rules — and somewhat controversially — “with the consent of the Director of the Alternative Dispute Resolution Office”, the TAI Rules will apply to any arbitration proceeding under its administration.

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Commercial Contract Dispute Resolution in Thailand – THE THAI ARBITRATION INSTITUTE – Part 1: Procedure & Timing

The Thai Arbitration Institute (TAI) — currently under the auspices of the Thai government’s judiciary — is the most commonly chosen institutional arbitration service provider by commercial parties to administer their contractual dispute arbitrations seated in Thailand. Unless the parties agree to deviate from the TAI Rules — and somewhat controversially — “with the consent of the Director of the Alternative Dispute Resolution Office”, the TAI Rules will apply to any arbitration proceeding under its administration.

Download


CLASS ACTIONS ARE COMING TO THAILAND — AND THEY MAY CHANGE THE LEGAL AND CORPORATE LANDSCAPE

“Class actions” are coming to Thailand and they have the potential to significantly change civil litigation and corporate practices in Thailand. Class actions are litigation cases that combine the claims of several (often in the thousands or more) claimant parties against one or possibly a few defendants.

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Civil Litigation in Thailand: PART 6 – damages

As a general rule civil courts in Thailand limit recovery for contractual breaches and wrongful conduct to actual monetary damage caused. The aim is to put the harmed party in the same financial position they would have been in had the wrongful act not occurred.

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Civil Litigation in Thailand: PART 5 – appeal

In most instances of a civil court case in Thailand either party may appeal the judgment of a trial court. And, in most cases, appeal to intermediate courts of appeal is available with a final option to appeal to the relevant supreme court.

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Civil Litigation in Thailand: PART 4 – trials

After both parties have made their first filings in civil court case in Thailand, the court sets a date for a pretrial conference. However, the Thai Civil and Procedure Code allows the presiding court to order a settlement conference at any time during the case.

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Civil Litigation in Thailand: PART 3 – defense and evidence

A defendant in Thai court must present a reply to the complaint within a statutorily prescribed time. If the defendant fails to do this, the court may refuse to allow admission of his defense if the result will be and unfounded delay of the proceedings.

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Civil Litigation in Thailand: PART 2 – filing a case and notifying the defendant

Suing or being sued by someone in Thailand begins by the filing of a complaint (or what is most commonly referred to in Thailand as a “plaint”) against the accused defendant party. The complaint must contain all the facts which would be sufficient to support a legally cognizable claim against the defendant under Thai law.

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Civil Litigation in Thailand: PART 1 – Thai courts

Thailand’s legal framework is based on the continental European “civil law” tradition. Although there are some statutory provisions that have their origin in common law systems both the substantive and procedural law of Thailand is modeled on the civil law system.

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Arbitration in Thailand: PART 5 – the arbitrators

One of the advantages of arbitration proceedings over domestic court proceedings is the opportunity for the parties to select the person(s) that will decide on the issue in question, the arbitrator(s). In arbitration proceedings the parties are enabled to nominate arbitrators that have a certain specialized and up‐to‐date know‐how that might be required to understand the technical background of the issues in question.

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Arbitration in Thailand: PART 4 – the agreement to arbitrate

In our last blog we explained that arbitration can only take place if both of the contract parties agree to the use of such a mechanism to resolve any dispute arising from their contract. In fact, in Thailand, Section 11 of the Arbitration Act (2002) (the “Act”) specifically requires that the parties, must enter into a written “Arbitration Agreement” that is signed by both parties.

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Arbitration in Thailand: PART 3 – arbitration offers serval advantages to litigation in Thai courts

Arbitration proceedings offer various important advantages to the normal local court proceedings in Thailand. To resolve business related disputes quickly and with finality is advantageous to the business community.

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Arbitrations in Thailand: PART 2 – enforcing contracts outside of Thai courts

If you are doing business in Thailand you might have already had some experience with the local court system. An all too common complaint of the local business community is that court proceedings in Thailand are agonizingly slow.

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Arbitration in Thailand: PART 1 – introduction

Thailand is a signatory to the 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards. Therefore, Thailand is obligated to recognize foreign arbitration agreements and will enforce foreign arbitration awards pursuant to the Convention.

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Arbitration in ASEAN: Part Three — Why arbitration?

In part one of this blog we introduced you to formal arbitration. We told you that formal arbitration is way for you to resolve your dispute with your contract partner without having to take them to court.

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Arbitration in ASEAN: Part Two — How does arbitration work?

In part one of this blog we told you that formal arbitration offers many advantages over domestic court proceedings when you need to resolve a dispute with your contract partner. We also told you that “formal” arbitration is arbitration “prescribed by law”—in other words recognized, supported and enforced by law. Here, we tell you how.

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Arbitration in ASEAN: Part One — What is arbitration?

If you have entered any contracts in any of the the Southeast Asia “ASEAN” countries, you might have already had some less than pleasant experience with the local court systems. An all too common complaint is that the court proceedings are often agonizingly slow.

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Arbitration Under the “New Model” ASEAN Investment Agreement

As a firm that specializes in international arbitration to resolve commercial disputes we often hear “people actually arbitrate in Thailand?” or something to that effect. One must admit that Thailand is not regarded as being an “arbitration friendly” jurisdiction—at least not in the international context.

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Real Estate

Your off‐shore entity’s rental income tax

The use of off‐shore entities, such as a company incorporated in the British Virgin Islands (“BVI”) to own real estate is not uncommon in Thailand. One reason often cited by investors using such entities organized under foreign law for such purpose is that they believe it will result in significant tax savings.

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Why you should NOT use a Thai company to buy a home in Thailand – PART 2

In part 1 of this blog we outlined the potential negative corporate income tax consequences where a Thai company is used to own a holiday home in Thailand. We also detailed the potential personal income tax liability of a director using such holiday home as his residence as well as the potential withholding tax liabilities that the Thai company itself would incur as a result of such use.

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Why you should NOT use a Thai company to buy a home in Thailand – PART 1

According to Section 1012 of the Civil and Commercial Code of Thailand (the “CCC”), the purpose of forming a limited liability company is to make profit. However, in Thailand, especially in its resort destinations, such companies have frequently been used for a different purpose.

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What is the “official value” of a CONDOMINIUM in Thailand and why does it matter?

In this blog will examine the Land Office’s appraised value of condominium units. The appraised value of a condominium unit is of significant importance for the calculation of fees and taxes upon transfer of such unit.

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What is the “official value” of LAND in Thailand and why does it matter?

Ownership of land, house and/or a condominium unit is legally transferred by a written registration at the relevant authorized Land Office. In general, the current fee and taxes applicable to and payable upon the registration of such change of ownership of an immovable property are the: 1) transfer fee; 2) income tax (payable as withholding tax); and 3) stamp duty or specific business tax/local development tax.

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What is the “official value” of a BUILDING in Thailand and why does it matter?

Ownership of land, house and/or a condominium unit is legally transferred by a written registration at the relevant authorized Land Office. In general, the current fee and taxes applicable to and payable upon the registration of such change of ownership of an immovable property are the: 1) transfer fee; 2) income tax (payable as withholding tax); and 3) stamp duty or specific business tax/local development tax.

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TIME TO REGULATE ESTATE AGENCY IN THAILAND? – PART TWO

What happens if an estate agent in Thailand lies, double deals, cheats or misrepresents…? “Can you count on and trust every single estate agent in Thailand?”

Download


TIME TO REGULATE ESTATE AGENCY IN THAILAND? – PART ONE

What happens if an estate agent in Thailand lies, double deals, cheats or misrepresents…? “Can you count on and trust every single estate agent in Thailand?”

Download


The Supreme Court in Thailand just ordered a completed, high‐end, high‐rise, 100 M USD +, residential project demolished, why?

A high‐end mixed use residential Complex consisting of a twenty‐four storey hotel and an eighteen storey apartment in the heart of Bangkok, which was only recently completed with a construction cost price tag of approximately three billion Thai Baht (almost one hundred million USD) — has just been ordered demolished by the Supreme Administrative Court in Thailand; there is no further appeal available, the order is final.

Download


THE LEASE‐MORTGAGE: The better way to protect investors and promote Thailand’s residential real estate market

Recent Thai court rulings which have held the so‐called “collective leasehold” or “secured leasehold” (“Collective Lease”) to be void, have created quite a stir among Thai real estate developers and investors. This is because many developers who sell to foreign investors have been marketing and selling the Collective Lease for several years now in Thailand.

Download


The inheritability of a lease in Thailand – a legal issue not well understood

Recently, our attention was called to an Article, which raised an end of the world zombie scenario for certain real estate investors in Thailand. We were surprised to also see the several comments and confirmations of this purported apocalypse by a number of Thailand based legal professionals — a number of whom specialize in real estate.

Download


The “collective leasehold” — does it fix your lease renewal problem? – Part 2

In part one of this blog we addressed several legal errors in a recently published Article in an English language news publication in Thailand. Now we turn to what the Article’s substance, the commonly marketed “collective leasehold” structure.

Download


The “collective leasehold”— does it fix your lease renewal problem? – Part 1

You may have read a recent Article in a Thailand news publication which stated: “Collective leasehold structures provide owners in villa developments the legal means to have a greater say in their villa projects. Importantly, this means that owners have increased control over the renewal of their leases, thus mitigating a major risk associated with long‐term leases in villa developments.”

Download


Thailand’s (outdated) House and Land Tax, often overlooked and potentially very costly

If you or your company own a condominium unit or villa here in Thailand that was used, even if only for one day, by someone other than its legal owner (with or without you having received rental income), then you or your company have incurred liability under the House and Land Tax Act (A.D. 1932) (“HLT“). The HLT is imposed on the owner of such structures, if they receive or should have received, rental income.

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Thai Courts Just Held the “Secured”/”Collective” Lease Structure VOID – bad news for many foreign real estate investors

Some real estate development structures that are marketed to foreigners in Thailand are commonly referred to as a “collective lease” or a “secured lease”. For simplicity’s sake we will refer to it in this article as a “Secured” Lease.

Download


Temporary reduction of Thai real estate transfer and mortgage registration fees: effective 29 October 2015 to 28 April 2016

The relevant details of the three regulations providing for the fee reductions are as follows: 1. UNREGULATED LAND AND BUILDINGS: Ministry of Interior Regulation Regarding Registration Fee under the Land Code for Housing (published in the Royal Gazette on 28 October 2015)

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Taxes and fee payable when you sell your land, house, or condominium in Thailand

Ownership of land, house, or condominium unit is transferred by a written registration at the authorized Land Department Office in Thailand. The transaction is recorded on the title deed in the case of land and condominiums and other documents, in the case of a house.

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Taxation of personal rental income in Thailand

Many purchasers of real estate in Thailand are not using their newly purchased home as a permanent personal residence. Such assets are often meant to be used as a holiday home only and are unoccupied for the remainder of the year.

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Selling a real estate lease in Thailand — caution, it is not just a matter of “assigning” it

“Assignment” and “Novation” are lofty sounding legal terms frequently used by consultants and lawyers. In Phuket these terms are used especially often in relation to lease agreements.

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Public Land Encroachment in Thailand: what does the law say? – a recent example in Phuket

For a law firm that includes real estate matters among its core specializations, it is fascinating to follow the executive branch of the Thai state in its effort to implement the law. We are referring to the latest investigations by the Department of National Parks, Wildlife and Plant Conservation (the “DNPWPC”) and particularly those you may have recently heard about in Phuket.

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Owning illegal real estate in Thailand when the military enforces the law and how to avoid being in that situation

The current news about some of the investigations and actions of the military government have resulted in a panic among certain real estate investors regarding the security of their investment. What has led to this situation and how could it been avoided?

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MISPLACED HOPES FOR LONGER LEASE TERMS IN THAILAND: the JFCC is heading down the wrong road

It is well known that ownership of land by foreigners in Thailand is restricted. Thus, a long term leasehold is often the best option for a foreigner to invest in real estate.

Download


Leasing Property in Thailand? – Danish Chamber of Commerce of Thailand asks; Olaf Duensing answers

Leasing Property in Thailand? – Danish Chamber of Commerce of Thailand asks; Olaf Duensing answers

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Investing in Thailand – Real Estate Law Basics

Foreign Ownership Thai Law basically restricts foreigners from buying or owning land under freehold title, however there are exceptions that male it possible for foreigners to own land in the following circumstances: The Board of Investment (BOI) and the Industrial Estates Authority has power to permit promoted companies to own land for the purpose of the promoted business.

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Having a building permit in Thailand does not guarantee it will be built or stay built…here’s why

Recent media reports have cited certain development projects, which are not progressing and are currently stalled purportedly due to legal issues relating to their building permits. Although these projects have obtained a building permit for the construction of the project, they are still facing challenges. Why?

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You Must Follow The Law When Building In Thailand . . . . . . But There Are Exceptions

One of the most significant land use laws in Thailand is the Building Control Act (1979) (the "Act"). The Act regulates what and where can build in Thailand. To that end it empowers the Minister of the Interior to issue ministerial regulations ("MR").

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Changes to the Phuket land use zoning regulations

On 6 July 2011 the Ministerial Regulation Regarding City Planning of Phuket Province (2011) (the “MR”) was issued and went into effect pursuant to the Town and City Planning Act (1975) (the “Act”). The MR divides the land in Phuket Province into sixteen different land use zones.

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Capital gain . . . but more tax than your company bargained for

What people commonly suspect in the Thai real estate market is that if a company sells immovable property such as land it is subject to a specific “capital gains tax” or that the sale of that land is taxed at the corporate income tax (“CIT”) rate of 30%. However, such is not necessarily the case.

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Can your heir inherit your freehold condo? UPDATE

If you are a non‐Thai who has purchased a condominium unit on a freehold ownership basis in Thailand, you may be under the impression that part of the value you purchased was the peace of mind in knowing that you could easily leave the unit to your heir. For quite sometimes the inheritance of a condominium unit by a non‐ Thai person or entity was the subject of legal debate in Thailand.

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Can your heir inherit your freehold condo . . . are you sure?

If you are a foreigner who has purchased a condominium unit on a freehold ownership basis in Thailand, you may be under the impression that part of the value you purchased was the peace of mind in knowing that you could easily leave the unit to your heir. However, if your heir is also a foreigner then, unfortunately, this is only partially true.

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Can you turn an apartment or office building into a hotel or condominium?

With the continued development and proliferation of new hotels and condominiums in the face of may unused or underused older pre‐existing office and apartment buildings in places like Bangkok and Phuket, some have wondered if it would not be an environmentally wise as well as an economically prudent move for a prospective hotel or condominium developer to consider refurbishing such a pre‐existing structure for their purposes. At the same time it seems there is common misconception that such a conversion of a building is not possible under Thai law.

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You Must Follow The Law When Building In Thailand . . . . . . But There Are Exceptions

One of the most significant land use laws in Thailand is the Building Control Act (1979) (the “Act“). The Act regulates what and where can build in Thailand. To that end it empowers the Minister of the Interior to issue ministerial regulations (“MR“).

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Buying a THB 10 M condo in Thailand? Good news, you get to stay in it –Thailand’s New Long‐Term Investment Visa

Prior to the summer of 2014, many foreigners in Thailand who did not qualify for a long‐term visa would achieve the same by entering, exiting, and re‐entering Thailand on a short‐term tourist visa. Thailand’s 2014 post‐coup military government enacted regulations that ended this practice.

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A foreigner can legally own some Thai‐LAND

It is a common misunderstanding that foreigners are per se restricted from owning land in Thailand. One of the most interesting exceptions from the restrictions of foreign ownership of land in Thailand has been enacted for foreigners who bring at least Thai baht forty million equivalent into Thailand for certain prescribed investments.

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A building permit does NOT = ownership in Thailand

You might have heard something like the following all too common assertion: “in Thailand the party named in a building permit is considered to be the owner of that building.” To have heard such may have been particularly disturbing to many foreigners who are allowed to legally own buildings in Thailand.

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Thailand Eases Restrictions on Properties Used for Short-Term Rentals

We have previously explained HERE (and with a further follow-up HERE) that most villa or condominium unit owners who are renting out their property on a short-term basis (that is, for periods of less than 30 days) are most likely violating the Hotel Act (2004) if they do so without having received a hotel license. The potential punishment for such violation includes significant fines, or imprisonment, or both.

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Doing Business

What to know and do about bad debts in Thailand – Part II

In Part I of this two part article we noted the importance for your company to comply with the legal requirements to “write‐off” uncollectable or “Bad Debts” so that your company would not be required to pay income tax on these uncollected monies. And we saw that under Section 65 of the Thailand Revenue Code (“RC“) and Ministry of Finance regulation No. 186 (1991) (“MR”) in order for Bad Debts to be written‐off they generally my have (1) arisen from your company’s business and (2) it must not be too late to file a court action to collect them.

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What to know and do about bad debts in Thailand – Part I

Is your company unable to collect money from a person that owes you certain funds? In that case your company might be eligible to write‐off that Bad Debt. From a corporate accounting perspective, a “Bad Debt” is generally defined as an account receivable that is uncollectable.

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The Thailand “Hotel Tax”

The surprising increase of the so called “local tax” for hotels from 1% to 2% in Phang Nga Province created a fear among hotel business operators in other provinces of Thailand that they could also be affected by an increase or the establishment of such “local tax”. In the following we would like to explain briefly the legal basis of such local “tax” and whom it affects.

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The new corporate income tax rates in Thailand

After 2011 elections in Thailand there was little discussion about the new government’s plan to reduce the corporate income tax rates (“CITR”). Attention focused mostly on the potential negative impact of the minimum wage rate increase on businesses in Thailand being proposed by the new government.

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THE LICENSING FACILITATION ACT – A More Business Friendly Licensing Procedure in Thailand?

Historically, obtaining a desired business license, registration, or other requisite government permission has often been time consuming and incurred arguably unnecessary costs in Thailand. Such inefficiencies stem in large part from the broad discretion government offices are generally given to determine what an applicant must do or provide, to obtain a license, registration, or permission.

Download


The EU’s Generalized System of Preferences and its impact on Thailand

Since 1971, the EU’s Generalized System of Preferences (GSP) allows developing countries easier market access to the European Union through tariff reductions. It is a unilateral measure by the EU and there is no expectation or requirement that this access is reciprocated by the countries concerned.

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Labor Law in Thailand: PART 11 – The Skill Development Promotion Act

When an employer’s work force totals one hundred or more employees, the Skill Development Promotion Act (the “Act”) must be considered. The objectives of the Act are to promote and support occupational skill training and upgrade skill standards for employed labor in Thailand.

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LABOR LAW IN THAILAND: PART 10 – The Employees Compensation Act

The Employees Compensation Act (the “Act”) requires an employer with one employee or more to register employees (with the exception of certain categories of employees such as government officials and teachers at private schools) with the Employees Compensation Fund (the “Fund”) at the Social Security Office. The purpose of the Fund is to compensate employees — or their estate — for lost wages in the event of the employee’s employment‐related injury, illness, or death, as well as for such an employee’s, medical treatment and rehabilitation, or funeral costs.

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LABOR LAW IN THAILAND: PART 9 – The Social Security Act

The Social Security Act (the “Act”) requires employers, employees and the government to contribute the Social Security Fund (the “Fund”). The purpose of the Fund is to insure employees against costs incurred by: non‐work related injury; illness; invalidity; death; maternity; child support; retirement pension; or unemployment.

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LABOR LAW IN THAILAND: PART 8 – The Labor Protection Act: employees committee

The major legislation governing labor protection law in Thailand is the Labor Protection Act (the “LPA”). The LPA prescribes labor protection standards applicable to both employers and employees working in Thailand.

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LABOR LAW IN THAILAND: PART 7 – The Labor Protection Act: work rules

The major legislation governing labor protection law in Thailand is the Labor Protection Act (the “LPA”). The LPA prescribes labor protection standards applicable to both employers and employees working in Thailand.

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LABOR LAW IN THAILAND: PART 6 – The Labor Protection Act: warnings prior to termination

The major legislation governing labor protection law in Thailand is the Labor Protection Act (the “LPA”). The LPA prescribes labor protection standards applicable to both employers and employees working in Thailand.

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LABOR LAW IN THAILAND: PART 5 – The Labor Protection Act: termination

The major legislation governing labor protection law in Thailand is the Labor Protection Act (the “LPA”). The LPA prescribes labor protection standards applicable to both employers and employees working in Thailand.

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LABOR LAW IN THAILAND: PART 4 – The Labor Protection Act: leave

The major legislation governing labor protection law in Thailand is the Labor Protection Act (the “LPA”). The LPA prescribes labor protection standards applicable to both employers and employees working in Thailand.

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LABOR LAW IN THAILAND: PART 3 – The Labor Protection Act: pay

The major legislation governing labor protection law in Thailand is the Labor Protection Act (the “LPA”). The LPA prescribes labor protection standards applicable to both employers and employees working in Thailand.

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LABOR LAW IN THAILAND: PART 2 – The Labor Protection Act: work hours and break time

The major legislation governing labor protection law in Thailand is the Labor Protection Act (the “LPA”). The LPA prescribes labor protection standards applicable to both employers and employees working in Thailand.

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LABOR LAW IN THAILAND: PART 1 – The Labor Protection Act: introduction

The major legislation governing labor protection law in Thailand is the Labor Protection Act (the “LPA”). The LPA prescribes labor protection standards applicable to both employers and employees working in Thailand.

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Foreign Business Investment in Thailand – Work Permits

If a non‐Thai person wants to live and work in Thailand he must obtain a work permit. Thailand regulates work permits through the Working of Aliens Act (“Act”). The definition of “working” under the Act is very broad.

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Foreign Business Investment in Thailand – The Foreign Business Act

In 1999 Thailand enacted the Foreign Business Act (“FBA”), which regulates business by foreigners in Thailand. [It should be noted that certain business activities, for example banking, insurance and telecommunication are regulated–and generally more stringently–by legislation specific to them].

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Foreign Business Investment in Thailand – Investment Incentives through the “Board of Investment”

Thailand created the Board of Investment (“BOI”) to support foreign investment into Thailand. The Investment Promotion Act (“IPA”) regulates the promotions provided for certain businesses in Thailand.

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Employment Litigation in Thailand: PART 2 – what the court can award to an employee

When there is a dispute between an employer and an employee in Thailand that cannot be settled informally one of the parties may consider taking the issue to court. By way of the Labor Court Establishment and Procedure Act (1979) (the “Act“), Thailand has established a special Labor Court and procedure to resolve employmentrelated disputes.

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Employment Litigation in Thailand: PART 1 – procedure and timing

When there is a dispute between an employer and an employee in Thailand that cannot be settled informally one of the parties may consider taking the issue to court. By way of the Labor Court Establishment and Procedure Act (1979) (the “Act“), Thailand has established a special “Labor Court” and procedure to resolve employment‐related disputes.

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Employee Termination in Thailand — caution, not as simple as you might assume

Occasionally an employer‐employee relationship does not work out. In fact, sometimes the relationship degrades to such a degree, that one or both of the parties wishes to terminate it immediately.

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Doing Business in Thailand – the “Amity Company”‐ a Thai Company without Thais

The Foreign Business Act (1999) of Thailand (the “Act“) generally restricts foreigners from engaging in most business activities in Thailand, without special permission as provided by the Act. Serious violations of the Act by a foreigner or facilitated by a Thai carry significant criminal penalties.

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Doing Business in Thailand – Sole Proprietorship

The sole proprietorship is the most commonly used form of engaging in business in Thailand. It is an unincorporated commercial business, which is owned and operated by a single natural person, the proprietor.

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Doing Business in Thailand – Representative Office

One of the most interesting ways to start a business presence in Thailand for a foreign investor is the “Representative Office”. The Representative Office is not a distinct legal entity or “juristic person” under Thai law.

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Doing Business in Thailand – Private Company Limited

A “private company limited” is a “juristic person”, which means it is a fictional “person” in the send that the law assigns to it most of the rights and obligations that a natural person has (the exceptions being those which the law considers only a natural person can have). It is the most common way for foreigners do business and invest in Thailand.

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Doing Business in Thailand – Personal Income Tax

New personal income tax provisions for 2013 2012 saw the beginning of a significant reduction of the corporate income tax in Thailand. The long established 30% rate was reduced to 23% in the year 2012 and further 20% in the year 2013.

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Doing Business in Thailand – Partnership: Unregistered or Registered

Thai law distinguishes between unregistered partnerships and partnerships which are registered with the government. The relevant difference is the legal status of those partnerships.

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Doing Business in Thailand – Limited Partnership

The third form of partnership under Thai law is the limited partnership. The limited partnership is – as the registered ordinary partnership – a juristic person.

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Doing Business in Thailand – Corporate Income Tax

Under the Revenue Code of Thailand (“RC”) the corporate income tax rate (“CITR”) on profit for Thai companies is 30%. However, pursuant to Title I, Section 3(1) of the RC, this rate may be reduced for some or all such companies if the Prime Minister’s Cabinet issues a Royal Decree (“RD”) to such effect.

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INVESTOR-STATE AGREEMENTS Encouraging Investment By Protecting Foreign Investors

For several years now, commentators – particularly in the business community – have opined that Thailand is in need of a significant infrastructure upgrade such as its mass transportation, road and railways systems.

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Can you name your Thailand company “[your name here] Limited”?

Prior to the legal formation of a company under Thailand Civil and Commercial Code, the company’s name must be approved, then reserved at the Thai authorities. The applicant must be a partner, a promoter or a director of that company.

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Can you hold your own Thai Company shareholders meeting?

Do you think that you can make decision in your company without other shareholders? First of all it is important to note that the Thai Civil and Commercial Code (“CCC”) Section 1237(4) requires every private Thai limited to maintain at least 3 shareholders or risk court ordered dissolution of the company.

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Business Signs (part II): is Thai language required in yours?

In our last column we had a look at the common legal misnomer regarding businesses organized under a Thai limited company that asserts: “You must have ‘company, limited’ on your business sign.” In this column, we examine a second very common legal misnomer regarding business signs in Thailand.

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Must You Include “Company, Limited”, In Your Thai Business Sign?

If you started a business here in Thailand, you probably did so by setting up a Thai company limited. All Thai limited companies are required to have and to report to the authorities a registered address, pursuant to Section 1148 of the Civil and Commercial Code (the “CCC”). And, pursuant to Section 14 of The Offences Relating to Registered Partnerships, Limited Partnerships, Limited Companies, Associations and Foundations Act (1956) and as amended (the “Juristic Persons Offences Act”) if a Thai limited company does not comply with Section 1148 of the CCC, such company will be subject to a fine of up to Thai baht twenty thousand.

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Are you the director of a Thai company? You should be aware of your significant legal liabilities

If you are a managing director of a private limited company in Thailand you may have decided to leave the task of dealing with your company’s legal, tax and accounting formalities to your firm’s in house lawyer and accountant or to outsource it to a law firm and an accounting office.

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A Step Towards an End to Frustration and “Tea‐Money” in Thailand?

Historically, obtaining a desired license, registration, or other requisite government permission has often been frustrating and costly in Thailand. Inefficiencies, and the all too common “tea money”/unofficial “fees” charged by government offices to perform their administrative duties, stem from the broad discretion government offices are generally given to determine what an applicant must do or provide, to obtain a license, registration, or permission.

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Thailand Eases Restrictions on Properties Used for Short-Term Rentals

We have previously explained HERE (and with a further follow-up HERE) that most villa or condominium unit owners who are renting out their property on a short-term basis (that is, for periods of less than 30 days) are most likely violating the Hotel Act (2004) if they do so without having received a hotel license. The potential punishment for such violation includes significant fines, or imprisonment, or both.

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Tax

Your off‐shore entity’s rental income tax

The use of off‐shore entities, such as a company incorporated in the British Virgin Islands (“BVI”) to own real estate is not uncommon in Thailand. One reason often cited by investors using such entities organized under foreign law for such purpose is that they believe it will result in significant tax savings.

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What to know and do about bad debts in Thailand – Part II

In Part I of this two part article we noted the importance for your company to comply with the legal requirements to “write‐off” uncollectable or “Bad Debts” so that your company would not be required to pay income tax on these uncollected monies. And we saw that under Section 65 of the Thailand Revenue Code (“RC“) and Ministry of Finance regulation No. 186 (1991) (“MR”) in order for Bad Debts to be written‐off they generally my have (1) arisen from your company’s business and (2) it must not be too late to file a court action to collect them.

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What to know and do about bad debts in Thailand – Part I

Is your company unable to collect money from a person that owes you certain funds? In that case your company might be eligible to write‐off that Bad Debt. From a corporate accounting perspective, a “Bad Debt” is generally defined as an account receivable that is uncollectable.

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What is the “official value” of a CONDOMINIUM in Thailand and why does it matter?

In this blog will examine the Land Office’s appraised value of condominium units. The appraised value of a condominium unit is of significant importance for the calculation of fees and taxes upon transfer of such unit.

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What is the “official value” of LAND in Thailand and why does it matter?

Ownership of land, house and/or a condominium unit is legally transferred by a written registration at the relevant authorized Land Office. In general, the current fee and taxes applicable to and payable upon the registration of such change of ownership of an immovable property are the: 1) transfer fee; 2) income tax (payable as withholding tax); and 3) stamp duty or specific business tax/local development tax.

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What is the “official value” of a BUILDING in Thailand and why does it matter?

Ownership of land, house and/or a condominium unit is legally transferred by a written registration at the relevant authorized Land Office. In general, the current fee and taxes applicable to and payable upon the registration of such change of ownership of an immovable property are the: 1) transfer fee; 2) income tax (payable as withholding tax); and 3) stamp duty or specific business tax/local development tax.

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The Thailand “Hotel Tax”

The surprising increase of the so called “local tax” for hotels from 1% to 2% in Phang Nga Province created a fear among hotel business operators in other provinces of Thailand that they could also be affected by an increase or the establishment of such “local tax”. In the following we would like to explain briefly the legal basis of such local “tax” and whom it affects.

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The new corporate income tax rates in Thailand

After 2011 elections in Thailand there was little discussion about the new government’s plan to reduce the corporate income tax rates (“CITR”). Attention focused mostly on the potential negative impact of the minimum wage rate increase on businesses in Thailand being proposed by the new government.

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The EU’s Generalized System of Preferences and its impact on Thailand

Since 1971, the EU’s Generalized System of Preferences (GSP) allows developing countries easier market access to the European Union through tariff reductions. It is a unilateral measure by the EU and there is no expectation or requirement that this access is reciprocated by the countries concerned.

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Thailand’s (outdated) House and Land Tax, often overlooked and potentially very costly

If you or your company own a condominium unit or villa here in Thailand that was used, even if only for one day, by someone other than its legal owner (with or without you having received rental income), then you or your company have incurred liability under the House and Land Tax Act (A.D. 1932) (“HLT“). The HLT is imposed on the owner of such structures, if they receive or should have received, rental income.

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Taxes and fee payable when you sell your land, house, or condominium in Thailand

Ownership of land, house, or condominium unit is transferred by a written registration at the authorized Land Department Office in Thailand. The transaction is recorded on the title deed in the case of land and condominiums and other documents, in the case of a house.

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Taxation of personal rental income in Thailand

Many purchasers of real estate in Thailand are not using their newly purchased home as a permanent personal residence. Such assets are often meant to be used as a holiday home only and are unoccupied for the remainder of the year.

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Foreign Business Investment in Thailand – Investment Incentives through the “Board of Investment”

Thailand created the Board of Investment (“BOI”) to support foreign investment into Thailand. The Investment Promotion Act (“IPA”) regulates the promotions provided for certain businesses in Thailand.

Download


Doing Business in Thailand – Personal Income Tax

New personal income tax provisions for 2013 2012 saw the beginning of a significant reduction of the corporate income tax in Thailand. The long established 30% rate was reduced to 23% in the year 2012 and further 20% in the year 2013.

Download


Doing Business in Thailand – Corporate Income Tax

Under the Revenue Code of Thailand (“RC”) the corporate income tax rate (“CITR”) on profit for Thai companies is 30%. However, pursuant to Title I, Section 3(1) of the RC, this rate may be reduced for some or all such companies if the Prime Minister’s Cabinet issues a Royal Decree (“RD”) to such effect.

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Capital gain . . . but more tax than your company bargained for

What people commonly suspect in the Thai real estate market is that if a company sells immovable property such as land it is subject to a specific “capital gains tax” or that the sale of that land is taxed at the corporate income tax (“CIT”) rate of 30%. However, such is not necessarily the case.

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Business Signs (part II): is Thai language required in yours?

In our last column we had a look at the common legal misnomer regarding businesses organized under a Thai limited company that asserts: “You must have ‘company, limited’ on your business sign.” In this column, we examine a second very common legal misnomer regarding business signs in Thailand.

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