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Last Updated: Apr 20, 2022
At Smart Legal Solutions we are specialized in assisting foreign clients to protect their investment and/or conduct their business in Thailand in a wide array of legal cases.
We are aware that one of the main concerns of foreign investors is how to maintain the full control over its business activity or investment in Thailand. Consequently, we provide to our clients the best solutions to protect and manage their investment according with the existing possibilities offered by the Thai law.
The Foreign Business Act B.E. 2542 is the main governing law related with foreign investment in Thailand, which limits the ability of foreigners to engage in certain activities reserved only for Thai nationals. During the past years, the Thai government has implemented some legal amendments to attract the foreign investors into Thailand. However, some legal aspects and restrictions may still represent a difficulty for foreign nationals to manage their business and/or investment in Thailand.
In this regard, we would like to show a brief overview about the main legal measures to protect the foreign investment in Thailand:
Investment Promotion Act
Under the Investment Promotion Act B.E. 2520, it was established the Board of Investment (BOI). This Thai government body is aimed to attract investment from both foreign and local entrepreneurs to conduct certain business activities eligible for promotion, which are considered as beneficial for the social and economic development of the country and the protection of the it’s natural environment.
The major advantages of registering a company in Thailand under BOI promotion include, but are not limited to: 100% foreign ownership (regardless it’s nationality), exemptions or reductions on corporate taxes, multiple work permits without the requirement of hiring four Thai employees, own a land by the company in connection with its business activity etc.
US-Thai Amity Treaty
The US-Thai Amity Treaty provides especial benefits to American nationals who wish to establish a business in Thailand. Under this Treaty, those companies registered in Thailand which are owned by US nationals, whether corporate or individual persons, can be exempted from most of the foreign investment’s restrictions from the Foreign Business Act. That is why nowadays, the Amity Treaty is the preferred way for most American nationals, who are intended to set up a new company in Thailand.
The Treaty allows US nationals to form a company in Thailand by 100% US ownership, since according with the Treaty, at least the 51% of the company shares must be held by American nationals and the majority of directors with authorized signature must be American citizens.
However, it should be noted there are still certain activities which are restricted, such as fiduciary functions, operating in the field of banking, land ownership etc.
At Smart Legal Solutions, we advise our clients on the appropriate solutions to operate their planned business and protect their investment in Thailand.
According with the Thai Condominium Act B.E. 2522, foreigners, whether corporate or individual persons, are allowed to buy and inherit a condo (apartment unit or flat) in Thailand under certain conditions. These requirements are specified at the section 19 of the Condominium Act. The main restrictions for foreigners to own a condo in Thailand are as following:
The foreigner should transfer the purchasing amount into Thailand as foreign currency and exchanged into Thai Baht by a licensed financial institution within Thailand. Moreover, the foreigner who wishes to own a condo shall ensure that the building has enough available quota for foreigners, since the whole building units owned by foreigners should not exceed 49%.
Buying land or property in Thailand is an attractive investment for business reasons as well as residence or retirement purposes. But it should be noted that Thai Land Act generally prohibits foreigners from owning freehold land in Thailand.
However, companies formed 100% foreign ownership under BOI promotion are allowed to own land in Thailand under certain circumstances in connection with their business activity.
Regarding residence purposes, foreigners can safely enjoy the possession and use of the land, and also register this right at the Land Department for a term of 30 years (renewables), through a lease or usufruct agreement, according with the conditions agreed by the parties.
Nevertheless, before purchasing a property in Thailand (condo, house and land etc) it is highly advisable to engage the services of expert lawyers. At Smart Legal Solutions, we provide professional advice and legal assistance for purchasing and registering properties in Thailand.
Contact Smart Legal Solutions to obtain the best protection to conduct your business in Thailand.
By: Mr. Julio Pingarrón
Founder of Smart Legal Solutions
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