Thailand Legal News Updates:
Home
Legal News
Thailand Lawyers
Type of Thailand
         Lawyer
US Visa Immigration
        Articles
Articles Archive
Links
Law Database


Thailand Attorneys

Siam Foreign Consultants: Assisting foreigners in Thailand with real estate, condo, land purchase and lease, USA immigration and visas, business investigation, service of process, marriage, prenuptial agreements, and divorce in Thailand.
Thailand Lawyer

USA Visa Thailand

Fiance Visa Thailand
K-1 Visa Thailand
USA Visa Thailand
Marriage Visa Thailand

 

18 May 2001

Customs Department Assistance Sought to End Speculation

Although there has been a strengthening of bank regulations aimed at curtailing currency speculation against the baht, the problem has continued. This has led the Central Bank to request the Customs Department to assist in preventing disguised foreign currency exchange transactions. Apparently, fake trade invoices are used as a way for speculators to secure foreign currency and speculate against the baht. Fake invoices where companies claim to be purchasing or exporting goods when there are no actual goods shipped is one way to transfer funds outside of the effect of existing regulations.

Regulators currently require exporters with earnings of 500,000 baht to transfer funds into the country immediately on settlement or no longer than 120 days subsequent to shipment and funds must be exchanged for local currency within one week.

However the problem stems from transactions carried out between foreign companies and banks outside of Thailand, which are beyond the power of Thai authorities.

The Central Bank has asked the Customs Department to monitor trade transactions more carefully with a view to disclosing fictional trade transactions.

 

14 May 2001

New Consumer Loan Contracts Implemented 

On May 14, 2001 lenders began incorporating demands made by the Consumer Protection Board (CPE) with regard to consumer loan contracts. Fine print has been made easier to read. The CPB demanded that type be at least two millimeters high be used. Additionally, borrowers will be allowed to makes amendments to contracts within a certain period of time. The new contracts require lenders to inform borrowers at least 30 days in advance of any changes to lending rates. In the section relating to guarantors, warnings must be printed in bold letters at least four millimeters in size, followed by text on guarantorís obligations in letters at least two millimeters high.

 

9 May 2001

Deputy Minister of Commerce Speaks at FCCT

Dr. Suvarn Valaisathien spoke at the Foreign Correspondentís Club of Thailand on May 9, 2001 and gave an overview of the Thaksin administrationís policies concerning the legal framework for business and foreign investment. Dr. Suvarn is a lawyer by trade and an expert in taxation and is currently Thailandís Deputy Minister of Commerce.

Regarding proposed amendments to the Public Companies Act, Dr. Suvarn stated that the first proposed change would be allowing shares with no par value. The rationale for this is that the government feels shares should have a present value and that par value has no meaning. The second proposed change would be to allow for debt to equity conversion. This, Suvarn claimed, would benefit creditors. The third proposed change would be to allow treasury stock, so that companies could buy back their stock, a practice currently forbidden under Thai law.

With regard to changes in the bankruptcy law, Dr. Suvarn stated that one proposal is that any debtor able to pay one half of his debt and show that he has no other assets would be released from his obligations. In addition, the guarantor would be released as well.

Dr. Suvarn also stated that the existing bankruptcy law was adopted from the laws of other countries but created problems in practice. The problems Thailand has encountered with regard to the corporate restructuring area of the law are: (a) whether the debtor should have a say in the plan drafted by the Planner and approved by the Creditor. Currently if 75% of the creditors agree, the Plan may be approved. (b) With regard to the fee paid to Plan Administrator, right now there is no fee structure built into the law. This can lead to abuses by the Plan Administrator charging excessive fees (c) With regard to responsibility of creditors in making the plan succeed, many debtors complain that the plan is drafted by the creditors only. After five years or after the completion of the plan, if the company is still insolvent, the debtors should be released from their financial obligations.

With regard to the Foreign Business Act, the current administration does not plan any new amendments, but believes that it will give a more liberal interpretation to the Act than previous administrations. Approximately seven new regulations have been drafted to the Act, but these regulations have not been promulgated and are currently in the Council of State. It is not certain when or if these regulations will ever be made into law.

Dr. Suvarn stated that the Thaksin administration welcomes foreign investment so long as foreign businesses do not unduly compete with Thai businesses.

 

5 May 2001

New Tax Police Unit Proposed 

As announced by the deputy minister of the Finance Department on 5 May 2001, a special police unit has been proposed to be set up the Ministry of Finance for examining tax fraud. The special police unit is intended to be similar to United States tax compliance and enforcement units. If approved, the special unit might be active in as little as three months. The regular police currently investigate tax cases.

   
 

26 April 2001

Proposed Tax Cuts for Listed Companies

Under plans laid out by the Finance Ministry, companies listed on the Stock Exchange of Thailand (SET) would have their corporate tax rate reduced from 30 per cent to 25 per cent

There will be a difference in the application of the tax rates between already listed companies and companies that are in the process of listing. For companies already listed, the tax rate would only apply to a portion of their corporate income.

Companies to be listed on the SET in the next three years would be eligible for the reduction to twenty five per cent from thirty per cent for a period of five years.

   
 

18 April 2001

Refunds to Become More Difficult Under New Provision

Under a new measure being drafted by the Revenue Department (A) and aimed at cutting down on fraud, value added tax refunds for exporters may require more documentation.

A Department of Finance spokesman stated that under the new measure, exporters would have to demonstrate appropriate documents that showed fund transfers into the country for goods shipped in order to be entitled to tax refunds. Current provisions only require that exporters show proof of export to claim value added tax (VAT) refunds.

Government officials have stated that the change is necessary to prevent fraudulent claims such as where exporters submit fake shipping documents in order to claim refunds when no transaction s has occurred in reality.

   
 

4 April 2001

Stalled Collateral Bill Would Provide New Options for Lenders

A proposed law that would allow assets other than real estate to be used as collateral and pledged against loans may assist in the recovery of the economy.

However, the bill has been not been progressing in spite of having been drafted over two years ago. The bill is now before the Council of State.

Thamanoon Pitayaporn, the secretary of the sub-committee reviewing the draft stated that the bill would allow the identification of assets such as goods, raw materials, machinery, vehicles, and claims on debt repayments, intellectual property rights and project finance, all of which might be used as loan collateral.

Under the proposed bill, there would be collateral contracts between businesses that would allow the parties to register the collateral at special centers designed for that purpose.

If the debtor defaulted on the loan, the bill would allow the pledged property to be sold at a public auction or by some other method approved by the court.

Under the proposed law, only registered companies would be allowed to pledge the new types of collateral.

Mediation Center Opened

The newly established Mediation Center opened on 4 April 2001 and is expected to settle at least 20 per cent of the estimated 50,000 cases that involve non-recoverable debts, a spokesman from the Court of Justice has stated.

The Mediation Center is a pre-trial process that is directed toward accelerating loan restructuring and reducing the backlog of cases in the Court. To decrease the backlog of cases, which are estimated to comprise loans of up to 1 trillion baht, judges will request litigants to put their cases in the mediation center. The pre-trial mediation process is expected to take 75 days to settle. If the cases were not successful in mediation, they would proceed according to the normal court process.

Customs Department Impose Additional Duty for Broker Transactions

The Customs Department issued an April announcement that it will add a 3% duty to goods brought in by an importer using the services of a broker. Evidence of a brokered transaction may include: (1) invoices that reveal that the party shipped to is not the same company as the buying company, (2) money passing through a third party and (3) other evidence of a financially interested third party in the sale.

   
 

Expat Corner

Work Permit News

There have been reports by applicants of increased scrutiny of work permit applications by the Department of Labor. Foreigners have reported what appears to be increased investigation of income and tax records, and requests for company records that have included requests for documents such as correspondence of the company.

Although there seems to be a tightening up of the work permit process there does not seem to be an officially stated policy to that effect.

Rise in Work Permit Cost Being Considered

There is a new amendment to the work permit law that would increase the cost of obtaining such a permit from 1,000 baht to 10,000 baht per year. The amendment is currently in committee session of the Parliament but no final vote has yet taken place.