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only. It does not constitute legal advice. Legal, business
and other information is subject to change and no warranty
is either expressed or implied.
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Silk, Wine, and Liquor Subject to Specific Geographic Origin
in July 2004 new ministerial regulations were enacted regarding
protection for goods from specific geographic origins. Rice,
silk, wine, and liquor which have identical or similar geographic
indications as products already registered, as well as those
products which are already registered but are from different
geographic origins, must clearly specify the geographic origin
and country of manufacture at the end of their geographic
indication. The regulations govern the rules for both applying
for registration and protesting against previously registered
goods. Submissions must be made to the Department of Intellectual
Property, Ministry of Commerce or relevant Provincial Commercial
Office. In evaluating applications, the Ministry will evaluate,
among other things, details concerning quality, reputation,
relationship between the goods and the geographic origin,
and location of the geographic origin.
Rejects Definition of "Dominant Player" for Trade
the Trade Competition Board agreed upon a new definition for
"dominant player" in May 2004, a cabinet screening
committee subsequently rejected the definition in mid July.
The new definition would have raised the market share requirement
from 33% to 50% for individual companies and up to 75% for
any three separate companies combined. The reason behind the
denial was its potential to limit the growth of large companies
and state enterprises. An official from the Trade Department
conceded that the business environment had changed since the
Trade Competition took affect in 1999. However, without a
clear definition of "dominant player" there is expected
to be continued difficulty enforcing the law against large
companies that unfairly impair competition as a result of
their strong market position.
Agricultural Commodity Futures Market Open for Trading
more than 10 years of planning, on May 28, 2004 Thailand's
first agricultural commodity futures market opened for trading.
The main objectives of the futures market is modernizing and
strengthening farming as well as encouraging farmers to reduce
risk by diversifying their crop output. The first commodities
to be traded are rice and rubber, while tapioca and shrimp
are slated to be listed soon.
Regulations for Damages Related to Personal Injury in Vehicle
ministerial regulations were passed in May that fix preliminary
damages that can be paid to individuals injured in vehicle
accidents. According to the regulations, some of the types
of costs that would be entitled to preliminary damages include
medical expenses, examinations, fees for machines used in
treatment (including organ transplants), room and food, and
transportation to the medical facility where treatment was
provided. The regulations place a 15,000 baht cap on the amount
that can be awarded for bodily injury and 50,000 baht in the
event of loss of life for preliminary damages.
Tax Incentives to be Extended Indefinitely
an effort to keep Thailand competitive with neighboring countries
the Board of Investment (BoI) considered in May 2004 to extend
its current corporate tax breaks from 8 to 10 years. In June
it appeared that the corporate tax waiver would be extended
indefinitely. A BoI representative, citing neighboring countries'
flexibility in providing foreign investors with favorable
tax conditions believes that the current Thai regulations
are insufficient. While the Thai government now gives tax
breaks for investors in specified areas, the new plans are
designed to promote incentives in other regions of Thailand
so as to coincide with the government's current initiative
to develop outlying areas of the countryside. By deciding
to extend the tax breaks indefinitely on a case by case basis
with a consideration for the business venture's potential
benefit for the country the BoI believes it will have greater
flexibly to lure foreign investors who are currently drawn
to the 20 year periods granted by China, Singapore, and Malaysia.
of Asia" Proposed via Incentive Package.
an effort to promote Thailand as the "Hollywood of Asia"
the Board of Investment (BoI) has agreed to a new film related
incentive package. Thailand's movie industry is expected to
draw nearly 40 billion dollars in new investment this year
and the new incentives may increase that amount up to 25%
more. The plan calls for including the industry in its corporate
tax waiver program and waiving import duty on equipment used
for filmmaking. In order to qualify for the current waivers
documentary, feature film, commercial, and animation projects
must be made at a studio with both indoors and outdoors facilities
that include post-production. An eight billion baht joint
venture by Australian producer RGM group (whose credits include
Lord of the Rings) and Thailand's Kantana Group is expected
to be one of the first to qualify under the plan.
Rubber Producers may Receive Tax Benefits
June 2004, the Thailand Rubber Association had succeeded in
convincing the Board of Investment (BoI) to discuss providing
the Thai rubber industry with tax breaks in order to maintain
the its competitiveness. The association had originally petitioned
the government to end tax incentives to foreign businesses
operating in the rubber business. The situation has appeared
to worsen for local producers as two foreign tire makers have
decided to produce their own rubber in Thailand rather than
continue to purchase the materials from Thai sources. While
Thailand is currently the world's largest rubber exporter,
the rubber association warns of potential production cuts
and factory closings. As a result the BoI is considering extending
tax privileges to local rubber producers.
Enacted as Guidelines for Foreign Banks to Set Up Thai Subsidiaries
May 27, 2004 The Ministry of Finance passed ministerial regulations
regarding foreign banks that desire to establish subsidiary
commercial banks in Thailand. The regulations specify that
foreign banks may apply for permission to set up subsidiary
companies in the form of commercial banks under certain guidelines
that fall under the Commercial Banking Act (No. 2) B.E. 2522
(1979). In particular, the regulations provide for the specifications
for foreign banks that wish to either set up a branch in Thailand
to operate commercial banking operations or to open and operate
international banking facilities in the Kingdom.
Waste Management Law Under Development
to increasing levels of trash produced in the Kingdom, researchers
at Chulalongkorn University have been commissioned by the
Pollution Control Department to draft a packaging waste management
law. As approximately 30% of Thailand's 14.5 million tons
of annual garbage are a result of packaging materials, the
government hopes to encourage both producers and consumers
to contribute to a reduction and recycling oriented program.
Manufacturers would be lured by tax relief and investment
incentives to use more disposable materials, take back packaging
materials, and/or dispose of those materials. Consumers would
be required to sort plastic and foam in order to facilitate
recycling. Models for the proposed concept are European countries,
the United States, and Japan.
Requirements Raised for Foreigners Extending One-Year Visas
married to Thai citizens and those who are legal guardians
of Thai children are now subject to new financial regulations
when applying for one-year extensions to stay in Thailand.
Previously the requirement was providing proof of 200,000
baht deposited in a bank account or an income of 20,000 baht
per month. As of June 10, 2004 the rates doubled to 400,000
in the bank or 40,000 per month income. The new regulations
apply to new applicants as well as those who are applying
for renewals. In addition, authorities made it clear that
the requirements of the bank deposit or income are separate,
and that only one of the two qualifications need to be met.
Finally, authorities claim to be focused on checking bank
records of individuals who appear to have suspicious looking
bank activity, but claim that innocent people should have
little difficulty with their applications.
Tax Law Designed to Boost Local Government Revenues
tax law, proposed in June 2004, is expected to be submitted
to Parliament soon. The new tax framework that would include
schools, land, and buildings could expand tax revenue from
25 billion baht to 90 billion baht per year within 5 years.
The major change to the framework would be to compel residents
that depend on public services to pay taxes. School and land
taxes would now be required for all residents, set at a maximum
rate of .1% of the value of the land or building, and property
left unused for more than three years would be subject to
higher rates. According to government officials, a major aim
of the new tax code would be to increase revenues for local
governments while reducing the burden on the central government.
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are advised to seek the advice of an attorney qualified in the area of law
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