Openness to Foreign Investment
Despite internal political tensions and severe flooding in 2011,
maintain an open, market-oriented economy and encourages foreign direct investment
as a means of promoting economic development, employment, and technology transfer.
In recent decades,
and hundreds of
continues to welcome investment from all countries and seeks to avoid dependence on
any one country as a source of investment. Following the significant impact of flooding
in 2011, investors are seeking development and implementation of an improved
government water management plan as a critical element to maintaining investor
confidence.
The Thai economy remains resilient in the face of the severe domestic floods and
continuing global economic crises. GDP growth in 2010 was nearly 8 percent, and the
government anticipated 2011 growth at a rate of four to five percent pre-floods (year-onyear). However, with flooding affecting 60 provinces of 77 provinces, a contraction
occurred in the fourth quarter following growth of 3.1 percent in the first three quarters.
Annual GDP growth for 2011 is expected to be 1.1 percent for the year.
In the wake of the 1997-98 Asian Financial Crisis,
International Monetary Fund (IMF)-sponsored economic reform program designed to
foster a more competitive and transparent climate for foreign investors. Legislation in
1999 established a new bankruptcy court, reformed bankruptcy and foreclosure 66
procedures, and allowed creditors to pursue payment from loan guarantors. Other 1999
reforms include amendments to the Land Code, Condominium Act, and the Property
Leasing Act, all of which liberalized restrictions on property ownership by non-Thais. The
Foreign Business Act (FBA) of 1999 continues to govern most investment activity by
non-Thai nationals. The FBA opened some additional business sectors to foreign
investment; however, foreign investment in most service sectors is limited to 49 percent
ownership. Other key laws governing foreign investment are Alien Employment Act B.E.
2521 (1978) and Investment Promotion Act B.E. 2520 (1977).
Business Registration: Any entity wishing to do business in
the Department of Business Development at the Ministry of Commerce, generally taking
from three to six months to complete. Firms engaging in production activities need to
register with the Ministries of Industry and Labor and Social Welfare. If the entity falls
under the definition of non-Thai national as defined by the Foreign Business Act, they
have to obtain a 'foreign business license' (or a certificate for US investors as mentioned
above), which must be approved by the Council of Ministers (Cabinet) or DirectorGeneral of Department of Business Development at the Ministry of Commerce
depending on types of restricted businesses.
Taxation
Corporate Income Tax
All business establishments must have a taxpayer identification card within sixty days of incorporation. The corporate income tax rate is 30% of net profit. Corporate taxes are due semi-annually. Financial statements must be prepared annually by a company auditor. The Revenue Department requires that accounts be in the Thai language. The books must be kept at a place of business for ten years.
For more information on corporation income tax, please refer to the Revenue Department Click here
Value Added Tax
Created in 1992, the VAT is applied to each stage of the production process, and is paid on a monthly basis. The VAT rate is 7%. Exports, domestic transportation and certain other sales are exempted from VAT.
Personal Income Tax
Every person, resident or non-resident, who derives assessable income from employment or business in
For more information on tax structures, please refer to the Revenue Department Click here
Treaties to avoid double taxation
