Landing merger with MTL Law Firm successfully signed

What is Foreign Business License (FBL) A Foreign Business License (FBL) in Thailand can be awarded to a foreign company (majority of the company’s shares are owned by non-Thais) or foreign investors that wish to operate a business that is normally restricted to foreign nationals under Thai Law. If a Foreign company would like to apply for a foreign business license, they must first check the “Foreign Business Act” to verify if the business type that they wish to operate is permitted by Thai Law. Some business types are wholly reserved for Thai Nationals. However, under the Thailand/United States Treaty of Amity and Economic Relations, American citizens and businesses incorporated in the United States or in Thailand, are allowed to engage in business just as would someone of Thai nationality. In other words, under this treaty, American foreign nationals are allowed to maintain the majority of their company’s shares. Foreign investors, foreign shareholders, and foreign-owned businesses can apply for a Foreign Business License at the Foreign Licensing Department of the Ministry of Commerce in Thailand. The total minimum capital requirement for the formation of such a company in Thailand is 2 million Thai Baht (It could be higher than 3 million Thai Baht in some industries, depends on the requirements of the authority). An interesting to note is that the process of obtaining a Foreign Business License (FBL) is often expedited if a Thai BOI approval is obtained. Restrictions from Foreign Business Act Thailand There are 3 types of business activities provided for under the Foreign Business Act: List 1: Business Not Permitted to Foreigners The following businesses are not permissible to foreigners, in its strict sense, by special reason: The press, radio broadcasting station or radio and television station business; Rice farming, plantation or crop growing; Livestock farming; Forestry and timber processing from a natural forest; Fishery, only in respect of the catchment of aquatic animals in Thai waters and specific economic zones of Thailand; Extraction of Thai medicinal herbs; Trading and auction sale objects or objects of the historical value of Thailand; Making or casting Buddha images and monk alms-bowls; and Land trading. List 2: Business Permitted to Foreigners under Conditions Business activities fall under List Two are those businesses related to national safety or security or having an impact on arts, culture, traditions, customs and folklore handicrafts or natural resources and the environment. Chapter 1: Businesses related to National Safety or Security Production, distribution, and maintenance of: firearms, ammunition, gun powders and explosives; components of firearms, ammunition and explosives; armaments, ships, aircraft or vehicles for military use; equipment or components of all types of war materials Domestic transportation by land, water, or air, including domestic aviation Chapter 2: Businesses Having Impacts on Arts, Culture, Traditions, Customs and Folklore Handicrafts Trading of antiques or artistic objects that are artistic works or handicrafts of Thailand Production of wood carvings Silkworm raising, production of Thai silk yarn, weaving of Thai silk or printing of Thai silk patterns Production of Thai musical instruments Production of goldware, silverware, nielloware, bronzeware or lacquerware Production of crockery or porcelains representing Thai arts and culture Chapter 3: Businesses Having Impacts on Natural Resources or the Environment Production of sugar from sugar cane Salt farming, including non‐sea salt farming Production of rock salt Mining, including rock blasting or rock crushing Timber processing for production of furniture and utensils List 3: Businesses in Respect of Which Thai Nationals Are Not Yet Ready to Compete with Foreigners Activities stated in List 3 are designated as businesses in which Thai nationals are not yet ready to compete with foreigners. In order for foreigners to engage in activities stated in List 3, the foreign company must apply for and obtain a Foreign Business License prior to commencing the activity. The following business activities are listed as follows: Rice milling and production of flour from rice and economic plants; Fishery only in respect of the hatching and raising of aquatic animals; Forestry from a grown forest; Production of plywood, veneer wood, chipboards or hardboards; Production of lime; Provision of accounting services; Provision of legal services; Provision of architectural services; Provision of engineering services; Construction, with some exceptions; Brokerage or agency businesses, with some exceptions; Sale by auction, with some exceptions; Internal trade related to traditional agricultural products or produce not yet prohibited by law; Retail sale of goods of all types with the total minimum capital in the amount lower than one hundred million Baht or with the minimum capital of each store in the amount lower than twenty million baht; Wholesale of all types with the minimum capital of each store in the amount lower than one hundred million baht; Advertising business; Hotel business, with the exception of the hotel management service; Guided touring; Sale of food and beverages; Cultivation, propagation or development of plant varieties; Other service businesses, with the exception of service businesses as prescribed in the Ministerial Regulation. A foreign entity seeking to engage in any of these business activities must first obtain a Foreign Business License (FBL) from the Foreign Business Committee and the Director-General of the Department of Business Development (DBD). There are also cases for exemptions or special permissions from the Board of Investment or Industrial Estate Authority of Thailand, as well as through free-trade agreements and treaties between Thailand and certain nations. What are Qualifications for Foreign Business License Application? Under Section 16 of the Foreign Business Act: A foreigner intending to apply for a foreign business license must have the qualifications and must not be under prohibitions as follows:  (1) being of not less than twenty years of age; (2) having a residence in the Kingdom or having been permitted to enter the Kingdom temporarily under the law on immigration; (3) not being an incompetent or a quasi‐incompetent person; (4) not being a bankrupt; (5) not having been punished by a court judgment or ordered to pay a fine in settlement of any offence under this Act or under the Notification

The Office of the Board of Investment is a government agency under the Office of the Prime Minister. Its main roles and responsibilities are to promote direct investment. Incentives Under the Investment Promotion Act In order to obtain investment promotion, the BOI applicant must follow the conditions prescribed by the Board of Investment as specified in the BOI promotion certificate in which the following incentives will be granted: Tax Incentives Exemption/reduction of import duties on machinery (Section 28/29) Reduction of import duties for raw or essential materials (Section 30) Exemption of import duties on materials imported for R&D purposes (Section 30/1) Exemption of corporate income tax on the net profit and dividends derived from the promoted activity (Section 31 and 34) A 50 percent reduction of the corporate income tax (Section 35(1)) Double deduction from the costs of transportation, electricity and water supply (Section 35 (2)) Additional 25 percent deduction of the cost of installation or construction of facilities (Section 35(3)) Exemption of import duty on raw or essential materials imported for use in production for export (Section 36) Non-Tax Incentives  Permit for foreign nationals to enter the Kingdom for the purpose of studying investment opportunities. (Section 24) Permit to bring into the Kingdom skilled workers and experts to work in investment promoted activities (Section 25 and 26) Permit to own land (Section 27) Permit to take out or remit money abroad in foreign currency (Section 37) Seven-year Investment Promotion Strategy (2015 – 2022) According to the Announcement of the Board of Investment No.2/2557 Policies and Criteria for Investment Promotion announced on December 3, 2014, which is enforced on BOI applications submitted from January 1, 2015, onward: Vision To promote valuable investment, both investment in Thailand and Thai overseas investment to enhance Thailand’s competitiveness, to overcome the “Middle Income Trap” and to achieve sustainable growth in accordance with the sufficiency economy philosophy. Investment Promotion Policies  1. Promote investment that helps enhance national competitiveness by encouraging R&D, innovation, value creation in the agricultural, industrial and services sectors, SMEs, fair competition, and reduce social and economic disparity. 2. Promote activities that are environment-friendly, save energy or use alternative energy to drive balanced and sustainable growth. 3. Promote clusters to create investment concentration in accordance with regional potential and to strengthen value chains. 4. Promote investment in border provinces in Southern Thailand to help develop the local economy, which will support efforts to enhance security in the area. 5. Promote the special economic zones, especially in border areas, both inside and outside industrial estates, to create economic connectivity with neighboring countries and to prepare for entry into the ASEAN Economic Community (AEC). 6. Promote Thai overseas investment to enhance the competitiveness of Thai businesses and role of Thailand in the global economy. Criteria for Project Approval (Please inquire us about specifics) Criteria for Foreign Shareholding The Board stipulates the following criteria for foreign shareholding in projects that apply for investment promotion:  1. For projects in activities under List One annexed to the Foreign Business Act, B.E. 2542, Thai nationals must hold shares totaling not less than 51% of the registered capital. 2. For projects in activities under List Two and List Three annexed to the Foreign Business Act, B.E. 2542, there are no equity restrictions for foreign investors except as specified in other laws.  3. The Board may set foreign shareholding limits for certain activities eligible for investment promotion, as deemed appropriate. Investment Incentives Scheme 1. Activity-based Incentives- 8 years corporate income tax exemption Bio and Medical Industries Advanced Manufacturing Industries Basic and Supporting Industries Digital, Creative Industries, and High Value Services 2. Technology-based Incentives- 10 years corporate income tax exemption Biotechnology Nanotechnology Advanced Material Technology Digital Technology 3.  Merit-based Incentives for Competitiveness Enhancement： Research & Development (R&D) Support academic / research institutes, or technology and human resource development fund IP licensing fee Advanced technology training Development of local suppliers Product and packaging design 4. Area-based Incentives EEC 3 Provinces SEZ 10 Provinces Southern Border Provinces 20 provinces with lowest income Industrial Estates/Zones Science and Technology Parks (TSP, Food Innopolis, Space Krenovation Park) 5. Agenda-based Incentives Investment Promotion Measures for Companies Listed in the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (MAI) Efficiency Enhancement Measure (Source：BOI official website） About promotions, processes, industries, applications, etc., please inquire us any time in your convenience. 

Starting a business in Thailand, there are many ways to start a business such as e-commerce business (individual), real estate business, service business, professional service, construction business, hospitality business, warehouse, etc., but is it the good way? The most popular form of business organization among foreign investors is the limited company. Limited companies in Thailand have basic characteristics similar to those of Western corporations. The Company shall be established under the provisions of the Civil and Commercial Code of Thailand (the “CCC”) and shall be registered with the Department of Business Development, Ministry of Commerce (the “DBD”), according to the following steps and requirements:   What do you have to know about a limited company? Promoters The Civil and Commercial Code required a minimum of 3 natural persons (not juristic persons), who are at least 12 years of age, as promoters and each person shall subscribe to at least one share of the Company, which may be transferred to the Company’s shareholders after the establishment of the Company. And the promoters must be available to sign documentation during the registration process.   Director(s) The director is the representative of the Company who acts on behalf and under the scope of the Company’s business. The director shall not be liable to the shareholder if he acts in accordance with the approval of the general meeting of shareholders. The director must be a natural person and does not need to hold a share of the company.   Shareholder(s) The shareholders of a limited company must always contain at least three people both natural persons and juristic persons. The shareholders of a limited company have the right which specifies in the articles of association of the company.   （“AOA”）    regulation of the internal procedure of directors and the shareholders of the Company e.g., the right and power of shareholders, shares and shareholders, directors and board of directors, shareholders’ meeting, balance sheet, dividend and reserve fund which are the general articles.     The Registration All documents associated with the Company’s registration must be submitted to the DBD, or, where the Company’s location is to be situated outside of Bangkok, it also can be submitted to the office of DBD in the province in which the Company’s business will be situated. The registration contains as follows:   Reservation of the Company’s name The first step involved in establishing the Company is to file an application to reserve its name with the DBD. Within a few days, the DBD will advise whether the proposed name is available (i.e., does not conflict with an existing company name). If the name is approved, the applicant will have thirty (30) days from the date of approval. The MOA has a fixed format, and its content includes: Name of the Company (which has been reserved); Location of the registered office of the Company (at this stage only the province need be specified); The list of business objectives of the Company; A declaration that the liability of the shareholders will be limited; The total amount of registered share capital and the number of shares and the par value thereof (which must be at least five (5) THB per share)   Holding a statutory meeting of the Company The promoters and the shareholders shall be required to hold a general meeting of subscribers, and the following matters shall be passed at the Statutory Meeting: Approval of contract executed for or expenses incurred from the establishment of the Company by promoters; The fixing of the amount to be paid to the promoter (if any); The fixing of the number, nature and rights of the preference shares (if any); The fixing of the number of ordinary shares or preference shares to be allotted as fully or partly paid-in; The appointment of the first directors and auditors of the Company and the fixing of their respective powers. （You need to confirm the candidates for the Company’s auditors at the statutory meeting, including the names, license numbers and remunerations. Promoters need to submit this information at the Company’s registration.)   Anytime you have further questions, please contact our partner and the team via email：[email protected], [email protected]