11 May ASEAN Today – Regional Legal and Business News – April 2022

ASEAN Today – Regional Legal and Business News for April 2022 including an Immigration Update on the New Entry Schemes and Corporate Law Update and Social Security Fund Rates.

ASEAN Economic Community News

ASEAN Auto Insurance Market Growth
A recent report by industry experts says that the ASEAN auto insurance market is forecast to expand to US$17 billion by 2027, a growth of 44% over the forecast term. The report credits the growth to the rising number of vehicles on the road and equally higher number of accidents for which the ASEAN market has seen a rise in the penetration of both the commercial business and individual insurance segments. As vehicles are getting more digital and connected, maintenance costs are rising and making insurance a viable alternative. ASEAN has a favorable regulatory environment and the entry of multiple players in the market is allowing customers to leverage bargaining power and get the best deals and appropriate risk cover. The report says that Thailand has the largest market, and the Philippines has the market with the highest compound annual growth rate (CAGR).

ASEAN Consumer Protection
The ASEAN Committee on Consumer Protection (ACCP) launched the ASEAN Guidelines on Online Dispute Resolution (ODR). The Guidelines will assist ASEAN countries in setting-up or improving their national ODR systems to help resolve e-Commerce transactions and includes recommendations on the proper design and management of an ODR System. Site topics include design criteria for a national ODR system, IT requirements to ensure interoperability, data security and privacy; legal and procedural requirements; and regional and international cooperation. The establishment of a unified AMS system will allow the national ODR systems to be interlinked and form the ASEAN ODR Network. Currently only Indonesia, the Philippines, and Thailand have a national ODR system in place.

Hainan Freeport
China plans to turn Hainan, a 35,000 sq/km island in the South China Sea, into the world’s largest free-trade port by 2035. The free-trade port will facilitate trade and strengthen ties with ASEAN which became China’s biggest trading partner in 2020. China plans to use lower taxes to attract investors, businesses, and individuals, looser visa requirements to lure foreign tourists and talent, and expects to have an independent customs regime in place by 2025. ASEAN companies will be incentivized to invest in Hainan, especially in the service sector, through the easing of restrictions and tax breaks. Chinese investors will be encouraged to register in Hainan as their overseas spending will receive an income tax exemption. The island’s transformation is part of Beijing’s dual circulation strategy to boost domestic consumption and bolster economic independence to offset external uncertainty.

ASEAN SME Academy
ASEAN, the US-ASEAN Business Council (US-ABC), and the United States Agency for International Development (USAID) launched the ASEAN SME Academy 2.0, an upgraded version of the online learning platform, this month. The updated website allows micro, small and medium enterprises (MSMEs) to choose courses available in local languages, namely Bahasa Indonesia, Thai, and Vietnamese, and has a new visual design and top-quality resources including specific modules for COVID-19 recovery.

Singapore News
Cryptocurrency Bill Passed
Singapore passed new legislation this month that will impact the country’s burgeoning cryptocurrency industry. Under the Financial Services and Markets Bill, crypto firms based in Singapore, but exclusively serving companies overseas, will now be required to obtain a special license to do business. This will impact cryptocurrency businesses from India and other countries that have been incorporating in Singapore to escape the regulatory obstacles in their home countries. It may also set a precedent for other countries to tax crypto businesses based in their jurisdictions but earning profits in overseas markets. The government is also worried about reputational risks brought by digital token service providers created in Singapore that provide services relating to virtual assets outside of Singapore. The new bill will help mitigate risks and impose regulatory requirements on the crypto industry.

Cambodia Update
Capital Gains Tax Delay
Cambodia announced that it will officially delay the implementation of the country’s capital gains tax to January 1, 2024, so business sectors can continue to recover, especially those outside of textile and garment and tourism sectors. The delay is part of the government’s new plan to bolster post-pandemic economic growth, the Strategic Framework and Programs for Economic Recovery in the Context of Living with the COVID-19 in a New Normal 2021-2023. Under the new capital gains tax regime, capital gains received by residents and non-resident taxpayers will be taxed at a fixed rate of 20%.

Myanmar Bulletin
Conversion of Foreign Currency
Myanmar announced that it will exempt approved foreign investors, embassies, United Nations agencies, and non-government organizations from its new rules requiring conversion of foreign exchange into the local currency. At this time, foreign currency bank holdings must be converted to Myanmar kyats within one day of their receipt in an attempt to alleviate a shortfall in hard currency and stabilize the exchange rate.

Laos Watch
Bribery Report
A recent report by a regional development bank says that 70% of businesses that applied for registrations, licenses, and permits in Laos paid bribes to government officials to get approval. The report notes that informal charges must be paid for everything because the access to the officials and the system they control is difficult, and the system is slow to adopt technology. In Transparency International’s 2021 Corruption Perceptions Index, Laos received a score of 30, placing it in 128th place among 180 countries.
Indonesia Brief
Palm Oil Export Ban
Indonesia, the world’s top palm oil producer, banned the export of palm oil and its raw material earlier this month as part of a government move to ensure the availability of food products in response to global food inflation. Global prices of crude palm oil have surged to historic highs this year due to rising global demand and weak output from top producers Indonesia and Malaysia.

Malaysia News
Pharmaceutical Investment Incentives
Malaysia announced that it will continue accepting applications for tax incentives from pharmaceutical manufacturers until December 31, 2022, as the government wants to strengthen the country’s position in the global pharmaceutical value chain and promote its healthcare industry as an attractive foreign investment destination. Eligibility requirements for manufacturers include collaborating with local higher learning institutions, incurring the first qualifying capital expenditure within a year of approval, hiring a minimum number of local employees, and undertaking research and development (R&D) activities.

Vietnam Update
Tax Reform Plans
As part of planned Vietnam’s tax policy reform, the government will expand the country’s tax base by reducing both the group of goods and services not subject to value added tax and the group with only a 5% tax rate so they can be charged the normal VAT rate. Vietnam also plans to increase its value added tax rate over time and adjust the revenue threshold. The government also plans to amend its excise tax policy and adjust tax increases for the consumption of tobacco, beer, and alcohol products and other commodity items. For corporate income tax, the government plans to amend or abolish tax exemptions and reduction incentives that are no longer consistent with development requirements and international integration requirements.

THAILAND LEGAL REVIEW

Immigration News
New Entry Schemes
On April 22, 2022, Thailand’s Centre for COVID-19 Situation Administration approved the lifting of the RT-PCR testing requirement for international arrivals beginning May 1, 2022, and introduced two new entry schemes customized for vaccinated and unvaccinated travelers. The health insurance coverage policy will also be reduced to at least 10,000 USD (currently 20,000 USD).

1. Fully Vaccinated Persons:
• Register on Thailand Pass
• Attach required documents including passport and certificate of vaccination
• Attach proof of insurance of at least 10,000 USD coverage for medical treatment in Thailand (for non-Thais only)

Note: A COVID-19 test, both prior to entering and after arriving in Thailand, is no longer required.

2. Unvaccinated/Partially vaccinated Persons:
Option 1 – Exemption from quarantine: Travelers who are unvaccinated / partially vaccinated are eligible to claim an exemption for quarantine upon arrival in Thailand if they enter Thailand with a negative RT-PCR test result issued within 72 hours before traveling. For this option, they must:
• Register on Thailand Pass
• Attach required documents including passport and COVID-19 RT-PCR test result issued within 72 hours before traveling (must attach on Thailand Pass only)
• Attach proof of insurance of at least 10,000 USD coverage for medical treatment in Thailand (for non-Thais only)
Note: A COVID-19 test after arriving in Thailand is not required.

PLEASE NOTE: Travelers who have been approved to enter Thailand under the AQ scheme, but wish to enter Thailand under exemption from quarantine must re-apply on Thailand Pass.

Option 2 – Quarantine: Travelers who cannot produce a RT-PCR test result within 72 hours before traveling or wish to be quarantined must:
• Register on Thailand Pass
• Attach required documents including passport and Alternative Quarantine (AQ) hotel confirmation for 5 days (including 1 RT-PCR test)
• Attach proof of insurance of at least 10,000 USD coverage for medical treatment in Thailand (for non-Thais only)
• Undergo a RT-PCR test on Day 4 – 5 in Thailand during the mandatory 5-day quarantine at their AQ hotel

PLEASE NOTE: If the Thailand Pass has already been issued, a traveler can travel with the issued QR Code and does not need to register for a new Thailand Pass.

Corporate Law News
Update on Social Security Fund Rates
For May-July 2022, the rates of social contributions which shall be monthly submitted to the Social Security Office will be reduced for employers and the insured under section 33, section 39, and section 40 of the Social Security Act B.E. 2533 as follows:

Section 33 (Refers to general employees including employer)

Contribution rate will be reduced from 5% to 1% of salary

Section 39 (Refers to employees having paid contributions for not less than 12 months and subsequently ceased being employees of not more than 6 months, but wish to voluntarily continue to be in the social security system)

Contribution rate will be reduced from 9% to 1.9%

Section 40 (Refers to freelancers)

The insured under this Section can be divided into 3 options as follows:

Option 1: Contribution rate will be reduced from 70 Baht to 42 Baht for the insured who selects to receive the 3 following benefits:
1) Injury or sickness benefit
2) Invalidity benefit
3) Death benefit

Option 2: Contribution rate will be reduced from 100 Baht to 60 Baht for the insured who selects to receive the 4 following benefits:
1) Injury or sickness benefit
2) Invalidity benefit
3) Death benefit
4) Old-age benefit

Option 3: Contribution rate will be reduced from 300 Baht to 180 Baht for the insured who selects to receive the 5 following benefits:
1) Injury or sickness benefit
2) Invalidity benefit
3) Death benefit
4) Old-age benefit
5) Child benefit

Disclaimer
The material contained herein is only provided for information purposes. No part thereof may be deemed to constitute legal advice or the opinions of this law firm or any of its attorneys. Whilst every effort has been made to verify the contents of the material contained herein, we do not represent, warrant, undertake, or guarantee that the information contained in this newsletter is correct, accurate, or complete. Legal advice must be sought before acting on any information contained herein.