19 Jan ASEAN Today – Regional Legal and Business News – December 2020
ASEAN Today – Regional Legal and Business News for December 2020 including an Update on Work Permit Rules at the One Stop Service Center and Corporate Law News including Extensions for E-Tax Filing, an Update on Social Security Fund Contributions, and a Fee Reduction for a Partnerships and Limited Companies Established via DBD e-Registration.Download PDF
ASEAN Economic Community News
ASEAN Comprehensive Recovery Framework
The COVID-19 outbreak has caused a number of shocks to the ASEAN region, namely, a public health crisis, a faltering regional economy, and stressed financial sectors, and the pandemic is far from over. The member states’ responses have been to first combat the public health crisis and then restore the economy. Given the scale of the socioeconomic impacts on region, the 37th ASEAN Summit recognized the need for coordinated action and promulgated the ASEAN Comprehensive Recovery Framework (ACRF) and its implementation plan to guide ASEAN towards post-COVID-19 recovery. The ACRF focuses on five elements: enhancing the health system, strengthening human security, maximizing the potential of intra-ASEAN market and broader economic integration, accelerating inclusive digital transformation; and advancing towards a more sustainable and resilient future. The implementation plan still needs to be enacted and measures could include bolstering transnational supply chain resilience, promoting e-commerce, the digital economy, sustainable infrastructure, and the possible development of an ASEAN SMEs recovery facility.
ASEAN Capital Markets Forum
At the 33rd ASEAN Capital Markets Forum (ACMF) Chairs Meeting held earlier this month, capital market regulators from the 10 ASEAN member states endorsed five key priorities for the ACMF’s 2021-25 action plan. The plan’s five priorities include improving levels of transparency and disclosure, continuing regulatory harmonization, intensifying capacity building, amplifying communication and awareness, and strengthening cooperation and coordination. The ACMF also wants to explore ASEAN-sustainability linked bond standards to facilitate bond issuance and complement the ACMF’s current bond standards for green, social, and sustainable bonds. The ACMF was established in 2004 and its primary responsibility is to develop a deep, liquid, and integrated regional capital market.
Thailand COVID-19 Update
Effective January 7, 2021, Thailand’s government released new regulations and guidelines to combat the new wave of COVID-19 infections in Thailand. The government announced that it was necessary to issue strict measures to intercept and inhibit the rapid spread of the disease. These include the elevation of disease prevention measures and for competent officials, communicable disease control officers, and persons responsible for establishments, activities, and businesses to ensure that users, travelers, and the general public act strictly in accordance with disease prevention measures. The new measures also include placing very strict levels of control on specific provinces and areas that include quarantining, closing provincial borders, and travel bans, and the suppression and punishment of wrongdoers causing the spread of the disease.
Emerging Fintech Hub
To further digitalize its economy and become an emerging fintech hub in Asia, particularly for Islamic fintech, Malaysia’s two financial regulators, Bank Negara Malaysia (BNM) – the central bank – and the Securities Commission Malaysia (SCM) continue working closely together to create a conducive regulatory environment. They have also teamed up with the Malaysia Digital Economy Corporation (MDEC) to facilitate the entry of fintech startups into the market and draw in investors. Three initiatives have allowed the creation of a flourishing fintech environment in Malaysia: the 2015 launch of the Alliance of FinTech Community (aFINity) program by the SCM, the 2016 launch of the BMN fintech regulatory sandbox framework that enables experimentation with fintech solutions in a live environment, and the 2020 launch of the Fintech Booster Program that assists digitally-powered fintech companies with legal, compliance, regulations, and other requirements.
Greenhouse Gas Emissions Goals
The Brunei Darussalam National Council on Climate Change submitted the country’s Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC) this month. Brunei’s NDC aims at reducing the country’s total national greenhouse gas (GHG) emissions by 2030. Brunei ratified the Paris Agreement in 2016 and is one of the world’s smallest GHG emitters. The NDC is part of Brunei’s goal to turn the country into a low carbon and climate-resilient nation.
Chinese Direct Investment
Chinese direct investment in Cambodia for the first 11 months of 2020 hit US$860 million, up 70% from 2019. The bulk of the direct investment went to construction, garments, electric and electric components, and agriculture. The two most costly construction projects backed by Chinese direct investment are the 190km Phnom Penh-Sihanoukville Expressway and the new Siem Reap International Airport. Bilateral trade between Cambodia and China was worth $9.42 billion in 2019, up 27.29 per cent from $7.4 billion in 2018.
Business Environment Index 2020
The Asia Foundation released the Myanmar Business Environment Index 2020 (MBEI) earlier this month. The MBEI is a survey of primarily businesspeople measuring perceptions on the ease of doing business across Myanmar. The MBEI 2020 found that Yangon, Sagaing, Nay Pyi Taw, and Bago have the highest scores for economic governance in the country and are the best environments in which to do business in Myanmar. Yangon and Nay Pyi Taw (and Mandalay) excel at infrastructure, environmental compliance, and labor recruitment due to urbanization and greater funds of human capital. Sagaing and Bago have less-dense populations and excel at reducing favoritism towards businesses with connections, regulatory costs, post-entry regulatory compliance, and in instilling confidence in the legal system and law enforcement.
New Information Disclosure Rules
Vietnam’s issued Circular 96/2020/TT-BTC (Circular 96) which regulates information disclosure activities for certain business entity categories in the securities industry which will take effect in January 2021. Circular 96 provides guidance on the content, medium, periodicity, and principles of information disclosure on Vietnam’s stock exchange. With more clarity on information disclosure, Vietnam hopes to attract more foreign investment. The new rules apply to public companies, entities that list corporate bonds, securities companies and branches of foreign securities companies or foreign fund management companies in Vietnam, public securities investment companies, and IPO issuers.
Revised Intellectual Property Rights Rules
The Philippines’ Supreme Court issued revised rules on intellectual property rights cases under the 2020 Revised Rules of Procedure for IPR cases in order to improve, facilitate and expedite IP rights litigation. The Supreme Court has also designated more courts outside of Metro Manila for intellectual property rights cases. Under the revised rules, Special Commercial Courts (SCCs) in Baguio City, Iloilo City, Cebu City, Cagayan de Oro City and Davao City can now issue writs of search and seizure in civil and criminal actions which can be enforced nationwide. Additionally, due to the rising number of IP rights related cases, the period to render judgment in regular cases has been shortened to 60 calendar days from 90 days.
THAILAND LEGAL REVIEW
Work Permit at OSSC Update
With immediate effect, the Labour Office at the OSSC announced the implementation of a new reduced eligibility period for the submission of work permit renewal applications. This new rule applies to non-BOI work permits.
Instead of the previous 45-day window for the submission period prior to the expiration date, the OSSC has decided to reduce the window submission period for work permit renewal applications down to 30 days prior to the expiration date. The reason of the change is conformity and to have every work permit holder use the same submission period rules, both for the rapid process at the OSSC and for the regular process at the Employment Department in all parts of the country.
Please note that for long term-visa renewals (non-BOI visa), Immigration at the OSSC has not changed the rules for the window submission period for visa extensions. The 45-day window submission period remains the same when filing visa extensions. This means the eligible window submission period for visa extensions is 45 days before the visa expiration date.
To summarize, the eligible window submission period for work permit and visa renewals for non-BOI company are as follows:
A. Non-BOI company eligible for OSSC process
• Work permit renewal: 30 days prior to expiration date
• Visa renewal: 45 days prior to expiration date
B. Non-BOI company eligible for regular process
• Work permit renewal: 30 days prior to expiration date
• Visa renewal: 30 days prior to expiration date
Corporate Law News
Extension for E-Tax Filing
According to the 8-day extension for e-Tax filing under the previous Notification of the Ministry of Finance which will expire on January 31, 2021, to support and promote the National Strategy Thailand 4.0, such extension will continue for the following e-Tax filings made between February 1, 2021 and January 31, 2024, pursuant to the Notification (No. 3), dated December 15, 2020. A summary of the 8-day extensions are as follows:
|Personal Income Tax Return|
|P.N.D. 90||March 31st of the following year||April 8th of the following year|
|P.N.D. 94||September 30th of the tax year||October 8th of the tax year|
|Withholding Tax Return|
|P.N.D. 1||Within 7 days from the last day of the month in which assessable income is paid||Within 15 days from the last day of the month in which assessable income is paid|
|P.N.D. 1 Kor||Within February of the following year||March 8th of the following year|
|P.N.D. 2 Kor||Within January of the following year||February 8th of the following year|
|P.N.D. 3 Kor|
|Corporate Income Tax Return|
|P.N.D. 50||Within 150 days from the last day of the accounting period||Within 158 days from the last day of the accounting period|
|P.N.D. 51||Within 2 months from the last day of the first half year of the accounting period||Within 2 months and 8 days from the last day of the first half year of the accounting period|
|P.N.D. 54||Within 7 days from the last day of the month in which assessable income is paid, or profit is disposed abroad||Within 15 days from the last day of the month in which assessable income is paid, or profit is disposed abroad|
|Value Added Tax (VAT)|
|P.P. 30||Within the 15th of the following month||Within the 23rd of the following month|
|P.P. 36||From regular filing within 7 days after the last day of the month in which:
§ the payment of goods / services is made to a business person residing outside Thailand, who temporarily carries on the business in the sale of goods or provision of services in Thailand and does not apply for temporary VAT registration;
§ a property of a VAT registrant is auctioned; or
§ a VAT liability has occurred for 30 days to a transferee of goods or services under Section 83/7 of the Revenue Code.
To within 15 days after the last day of the month in which such aforementioned case is made, as the case maybe.
|Specific Business Tax (SBT)|
|P.T. 40||15th of the following month||23rd of the following month|
Update on Social Security Fund Contributions
The Ministerial Regulation on the Prescription of the Contribution Rate Submitted to the Social Security Office B.E. 2563 (A.D. 2020) will come into force from January 1, 2021 onwards, and repeals (i) the Ministerial Regulation on the Prescription of the Contribution Rate Submitted to the Social Security Office for the Benefit Payment in Case of Unemployment B.E. 2546 (A.D. 2003) and (ii) Ministerial Regulation on the Prescription of the Contribution Rate Submitted to the Social Security Office B.E. 2556 (A.D. 2013). The summary of contribution rates is as follows:
|Maximum Rate for Employer||Maximum Rate for the insured under Section 33|
|General||5%||THB 750||THB 750|
|January – March 2021||3%||THB 450||THB 450|
|April – December 2021||5%||THB 750||THB 750|
Fee Reduction for a Partnership and Limited Company Established via DBD e-Registration
The Ministerial Regulation on the Prescription of Fee, Fee Reduction, Fee Exemption for Registration, Document Inspection, Certified Copy of Document and other Related Fees to Partnership and Limited Company B.E. 2563 is now in force and replaces the previous one from January 1, 2021 onwards. Fee rates under new law still remain unchanged. However, for a partnership and limited company applying for the following registrations via DBD e-Registration between January 1, 2021 and December 31, 2023, the related fees will be reduced from 30% to 50% of the original rates as summarized here:
|Registration of Partnership||THB 1,000||THB 500|
|Registration of Memorandum of Association (Limited Company)||THB 500||THB 250|
|Registration of Limited Company||THB 5,000||THB 2,500|
|Registration of Amalgamation:
(b) Limited Company
|THB 1,000||THB 500|
|THB 5,000||THB 2,500|
|Registration of Transformation from Registered Partnership or Limited Partnership into Limited Company||THB 5,000||THB 2,500|
|Registration of one or more of the following items:|
|– Change of Partners or Contributions of Partners||THB 500
|– Change of Memorandum of Association (Before/After the Registration of Limited Company)|
|– Change of Articles of Association for Limited Company|
|– Change of Director|
|– Increase/Decrease of Capital for Limited Company|
|– Dissolution of Partnership or Limited Company|
|– Other related matters to the registration|
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.