Thailand Legal News Updates:
The Immigration Department has recently begun implementing new retirement visa guidelines. Although the change in the regulations were approved over two years ago, they have only recently begun to be applied. There are three categories for Retirees living in Thailand:
(1) Those who received a permit to stay before October 1998 and who have maintained an unbroken record of annual extensions with the Immigration Department since then and they must, as previously, be able to show that they have 200,000 baht in a Thai bank when they apply for an extension.
(2) Those over 55 years old arriving now on a Non-Immigrant O visa. They must have either 800,000 baht in a Thai bank or an assured income of at least 65,000 per month
(3) Those who arrived in October 1998, or thereafter, who have already obtained a permit to stay on the basis of having 200,000 baht in a Thai bank, must increase the amount to 800,000 baht before applying for the next extension.
1 March 2001
Foreign Business Act Developments
Certain Businesses No Longer Open To Foreigners Under New Foreign Business Act
Since coming into effect in March 2000, certain businesses are now closed to foreigners. However, if the company or branch office was in existence prior to the effective date of the new Foreign Business Act it may be possible to get a permit to continue in operation in the prohibited categories. Businesses wishing to continue in operation in the restricted categories need to proceed to the Commercial Registration Department by 2 March 2001 to obtain a business certificate.
New categories of businesses affected Include the following service businesses:: rental businesses, deposit of goods, warehouse, pawnshop, school, theater, money-lending, leasing, insurance.
Under the new foreign business act, engaging in a restricted business without a license would be subject to a fine of Baht 100,000 to 1,000,000 and/or up to three years imprisonment
1 March 2001
Reporting Rules To Limit Trade
Currency markets are expected to remain quite over the next few days as dealers await the new trading rules established by the Bank of Thailand. The new rules require banks to specify the reasons behind transfers, the names of counterparties and what the positions of the parties are. The new rules are aimed at stemming the outflow of baht to the offshore market and to prevent a further decline in the value of the baht.
Under the new rules the BOT does not allow financial institutions to buy foreign currencies and sell baht to non-residents without an underlying business. In some cases financial institutions that buy foreign currencies and sell baht to non-residents must report to the central bank for permission beforehand.
For transactions that exceed Bt 50 million per day per person permission must be sought. For transaction between 5 and 50 million financial institutions are required to submit records of each transaction to the BOT. For transactions of more than Bt 200,000 but less than Bt 5 million, financial records must be kept for three (3) years.
Further, the Central Bank has reaffirmed its prior ruling that prevents banks from making direct baht denominated loans to non-residents.
1 March 2001
Finance To Consider Tax Overhaul
The Revenue Department will submit a study of the pros and cons of a new taxation proposals to the Ministry of Finance. The proposals include corporate tax cuts for listed firms, a VAT increase, and the separation of dividend tax credit from personal income tax.
The proposed reduction of corporate tax for listed firms to 20 percent from 30 percent is aimed at increasing capitalization of the market. This tax cut would initially reduce the governmentís revenue but is expected to generate additional revenue in the future as the tax base is increased by more forms listing.
15 February 2000
VAT Filing by Internet
A recent announcement by the Director general of the Revenue Department has stated that the Revenue Department is developing a service project on tax return filing via the Internet. The pilot project is expected to commence in May 2001 and will provide VAT return services. The program will be voluntary and registrants using the program would be required too use one of four designated banks from their accounts would be debited.
15 February 2001
On-line Registration for New Companies
The Commercial registration Department will soon be allowing online registration of the companies with the aid of new software. It is expected that on-line registration will help relieve the backlog of work created by the manual registration process and the departmentís lack of staff. Last year new company registrations totaled 29,148. Applicants would be able to pay on-line for registration of a memorandum of association and booking the name of a company. The Commercial Registration Act of 1956 requires a company owner to apply for commercial registration within 30 days of starting a business.
13 February 2001
FRA Tallies Progress
The Financial restructuring Authority (FRA) said yesterday that it had disposed of BT 743.1 billion of distressed assets under its supervision, generating 263.3 billion. This translates to a 35.44 percent recovery ratio.
The FRA was originally set up to manage Bt 851 billion of problem assets seized from 56 failed finance companies closed by authorities in December 1997 during the financial crisis. The FRA stated that it expected to complete bankruptcy proceedings for closed finance companies by October.
New IRS Rules for Taxpayers Filing Abroad
Previously, documents sent to the IRS were deemed timely files if their postmark from a foreign mailing service was within the filing deadline period. Under new regulations effective from January 11, 2001, a document sent to the IRS must be both postmarked prior to the filing deadline period and received by the IRS within the same period as of time as if it were sent by the US Postal service in the same class of mail. Authorities have interpreted this to mean that to be timely sent a document sent to the IRS from abroad must be received by the US Postal Service in the same period of time as a similar document sent by the US Postal Service, which would normally mean approximately three (3) days.