In a document published in the Royal Thai Government Gazette on April 20th, the Minister of Commerce announced a significant decrease in company registration fees, which came into force on April 23rd.
This directive is intended to promote investment in corporate entities in Thailand, reduce unnecessary bureaucracy and slash costs for investors and business-owners. The purpose of the policy is to improve the domestic economy by rolling out a supportive regulatory framework and streamlining foreign direct investment (FDI) procedures. These new procedures closely follow the World Bank guidelines for simplifying Thai bureaucracy.
The document specifies that the new regulation, which will completely replace the old one, does not impose a range of rates dependent on the company’s paid-up capital, but features a single fixed rate for each process. In the past, incorporation fees could reach as much as 250.000 Baht. The Thai Government has set the new fees as follows:
– 1000 Baht for registering or merging a new partnership
– 5000 Baht for registering or merging a new limited company
– 500 Baht for increasing or decreasing the company’s capital, and for amending the company’s regulations, articles of association or list of shareholders
This is one more meaningful step forward by the Thai government to facilitate and attract FDI to the Kingdom. Along with two other major policy changes, namely the amendment to the Private Public Partnership law and last year’s DBD online company e-registration, this law is expected to contribute to a surge in the number of FDIs, beginning late in 2018.
Let’s take a look at two other similarly intentioned directives enacted by the government.
The amendment of the PPP Promotion Act, which was approved by the Cabinet on April 3rd, provides for a more transparent, streamlined and swifter PPP application process. The new bill was created to replace the 2012 Private Investment in State Undertakings Act, and should play a crucial role in attracting investors in Thai infrastructure and public services, further enhancing Thailand’s attractiveness and competitiveness. The act can be summarized in four principal points:
1. Facilitation. The new bill aims to make processes easier and more convenient. Funds for PPP projects will be raised in order to increase funds for project support and problem solving.
2. Alignment. The new bill seeks to ensure that proposed projects are all aligned with the country’s development plan.
3. Streamlining. The new bill was designed to simplify the bureaucratic procedures into a clear, concise and collaborative process. This goal will be achieved through the implementation of the PPP Fast Track, a new system that will help cut wait times, from the current total of 25 months-from proposal to signing-to just 9 months.
4. Transparency. The new bill mandates a more efficient dialogue between private investors and the public. A step-by-step summary must be disclosed and available for verification at every stage of the process.
The Department of Business Development (DBD) took its first step toward improving the ease of doing business in Thailand last year, when it launched the e-Registration platform on its website. This platform has given entrepreneurs an easy and immediate system to complete corporate registration (including incorporations, amendments to corporate particulars, dissolution, and liquidation). The e-registration process is much more direct than hand-filling the previous paper forms, which then had to be physically submitted to the DBD office. The new process requires obtaining a digital signature from the DBD website. The signature consists of a username and password and gives the user access to the company’s page. A One Time Password is sent to the user’s smartphone for authentication. The user is then able to directly submit their documents. This new procedure has been successfully operating for one year, helping companies save time and money.
Thanks to these legislative updates, doing business in Thailand is becoming progressively more straightforward. The new laws and regulations form a solid foundation for increased FDI into the foreseeable future, a trend that will lead to a prominent role for Thailand in the Asian marketplace.