ASEAN Today – Regional Legal and Business News – February 2020

ASEAN Today – Regional Legal and Business News for February 2020 including an update on the TM 28 Exemptions, an overview of a company’s duties to submit financial statements and list of shareholders, and a notification from the Department of Business Development on interruptions for holding meetings of juristic persons.

 

ASEAN Economic Community News

Regional Trademark System
Representatives from the intellectual property offices of the 10 ASEAN member states, the ASEAN Secretariat, and the European Union Intellectual Property Office (EUIPO) met in Bangkok for the ARISE+IPR trademark consultation meeting this month. The ARISE Plus Intellectual Property Rights (ARISE+ IPR) program is a component of the Enhanced ASEAN Regional Integration Support from the European Union (ARISE+). Representatives attended consultation meetings on trademarks, information technology (IT), and design. The proposed ASEAN Regional Trademark System and the scope of a feasibility study on it carried out by ARISE+IPR were a major topic of discussion. The regional trademark feasibility study will examine legal infrastructure, operational setup, fee structures, stakeholder interests, and impact on national trademark systems, and is expected to commence later in 2020. ARISE+IPR is a 5-year program that was launched in 2017 and is funded by a 5.5 million euro grant by the European Union.

Regional Tech Investment
A new report by a Singapore-based venture capital firm says that while Southeast Asia remains attractive to tech investors, overall tech investment in the region dropped from US$12 billion in 2018 to US$7.7 billion in 2019. The report says that while there were fewer mega deals in 2019, there was a significant increase in smaller deals worth less than US$50 million. Multi-vertical and online retail were the most heavily funded categories with financial services, payments, and the travel sectors also attracting significant investment. While Indonesia captured the most capital invested in the region in 2019, its overall share dropped from 76% in 2018 to 59% in 2019. Investment in Vietnam-based startups in 2019 jumped to 18% of the total investment in the region, up from 4% in 2018.

Myanmar Watch
New Insolvency Law
Myanmar passed a new Insolvency Law this month that replaces the Yangon Insolvency Act of 1909 and the Myanmar Insolvency Law of 2020. However, the law has not come into effect and is awaiting a notification from the President of Myanmar. The law includes recourse for micro, small and medium-sized enterprises (MSMEs) and adopts the United Nations Commission on International Trade Law (UNICITRAL) Model Law on cross-border insolvency. The new Insolvency Law has nine objectives including compatibility between national law systems and commerce systems, effective management, predictability, and fairness throughout the insolvency process, a focus on and support for MSMEs facing financial difficulty, and the protection of local firms entering the international market by building a framework for cross border insolvency.

Laos News
New Income Tax Law
Laos’ new Income Tax Law came into effect on February 17, 2020. The new law adjusted the progressive rates for personal income tax (PIT) and lowered the profit tax (PT) rate. PIT will be collected monthly and the progressive rate will be maximized at 25% for income over US$ 7,300 a month. The new law lowers the profit tax for most business activities for foreign and domestic businesses with a progressive rate of 0-20% for business described as general activities. PT will now be filed twice annually, instead of the previous four times a year.

Indonesia Bulletin
Priority Investment List
Indonesia announced that it plans to issue new foreign investment rules including the priority investment list before the three omnibus bills on labor, investment, and taxation, part of the country’s sweeping economic reforms, pass into law. The priority list will describe the sectors open for investment and replace the current negative investment list. Certain business sector under the new priority list will be eligible for tax holidays and super tax deductions.

Singapore Update
Locarno Agreement
Singapore acceded to the World Intellectual Property Organization’s (WIPO) Locarno Agreement in 2019 which will enter force on March 19, 2020. The Locarno Agreement is a global classification system for industrial designs and stipulates the procedures for establishing, amending, and additionally creating international classifications for industrial designs. The Locarno Agreement allows national intellectual property offices the advantage of filing industrial design registration applications with reference to a single classification system. This facilitates industrial design searches and prevents substantial reclassification work when documents are exchanged at the international level. Singapore is the 71st country to accede to the Locarno Agreement.

Malaysia News
Digital Services Tax
Malaysia’s digital service tax (DST) came into force on January 1, 2020. The DST is 6% and will be charged and levied on any digital service provided by a foreign digital services provider to any consumer in Malaysia. Foreign digital services provider with a yearly turnover of more than 500,000 ringgit (US$120,000) are obligated to collect and remit the DST. According to the Royal Malaysian Customs Department, to be considered a consumer in Malaysia; a person must meet two of the following requirements:

1. Pay for digital services using a credit or debit facility provided by a Malaysian company.
2. Acquire digital services using an IP address registered in Malaysia or with a phone number with a Malaysian country code.
3. Reside in Malaysia.

Foreign digital service providers are required to submit DST returns every three months. Malaysia is the second country in ASEAN to introduce and digital services tax. Singapore was the first.

Vietnam Watch
Solar Energy
A new report by the World Bank recommends new approaches to the bidding and deployment processes for solar projects in Vietnam. Currently, the country uses a feed-in-tariff (FIT) policy, but is considering changing to a competitive bidding scheme to help reduce the costs of solar power generation. The FIT policy has been very successful and Vietnam has become a world leader in solar module manufacturing. However, underuse of the country’s solar generation power has become a problem. The World Bank recommends two deployment schemes for Vietnam. One is competitive bidding for solar parks. The other is substation-based bidding which is competitive bidding based on the available capacity at electrical substations. The World Banks says these two schemes would address the underuse issue and improve risk allocation between public and private investors.

Cambodia Bulletin
Cross-Border QR Payments
The National Bank of Cambodia (NBC) and the Bank of Thailand (BOT) agreed to create a QR-code based payment system, the Interoperable QR Payment, for cross-border exchanges in local currencies. The Bank of Thailand announced that it will allow Thai bank to begin QR cross-border payments with Cambodia, Singapore, and Myanmar by mid-2020. Under the Interoperable QR Payment, Cambodians will be allowed to purchase goods and pay for medical treatment in Thailand using Cambodia Riel, and Cambodian migrant workers in Thailand will be able to send remittances to Cambodia in riel too.

THAILAND LEGAL REVIEW

Corporate Law News
Duties to Submit Financial Statements and List of Shareholders
All juristic entities (Focused only on limited companies and public limited companies) are obligated to submit all required documents to the Ministry of Commerce in the prescribed period of time in compliance with Accounting Act, the Civil and Commercial Code on Partnerships and Companies, including the Public Limited Company Act, as the case may be, as follows:

Limited Companies shall submit the following:
1. A financial statement which is audited and states the opinions of the company’s auditor to the annual general meeting of shareholders for approval within 4 months from the end of the fiscal year;
2. Such financial statement as approved to the Registrar within 1 month from the approval date; and
3. The list of shareholders as of the annual general meeting of shareholders to the Registrar within 14 days from the annual general meeting of shareholders.

Public Limited Companies shall submit the following:
1. A financial statement which is audited and states the opinions of the company’s auditor to the annual general meeting of shareholders for approval within 4 months from the end of the fiscal year;
2. The annual report, a copy of the financial statement, and a copy of the minutes of the annual general meeting of shareholders that are all certified by the authorized director(s) to the Registrar within 1 month from the approval date; and
3. The list of shareholders as of the annual general meeting of shareholders to the Registrar within 1 month from the annual general meeting of shareholders.

Clarification on Tax Exemption for Purchasing Educational and Sport Supplies
On January 28, 2020, the Revenue Department clarified the tax exemption of up to THB 15,000 for individuals purchasing educational and sporting supplies between May 1, 2019 and June 30, 2019. Educational and sporting supplies under Ministerial Regulation No. 345 (B.E. 2562) and the Ministerial Regulation No. 347 (B.E. 2562) include:
• Educational equipment (excluding electronic appliances)
• School uniforms
• Sports equipment
• Sports uniforms

For taxpayers that purchase any of the items as mentioned above including books for a total exceeding THB 15,000, such taxpayers are able to claim for the tax exemption under Ministerial Regulation No. 345 (B.E. 2562) in the amount of THB 15,000. When the exemption under No. 345 exceeds THB 15,000, taxpayers can also claim spending on books not exceeding THB 15,000 for an exemption in the part of e-Books under Ministerial Regulation No. 347 (B.E. 2562).

Immigration Update
Section 37 Exemptions
Effective January 28, 2020, a new Regulation from the National Police Bureau was issued to revise the reporting requirements for Section 37 of the Immigration Act of 1979. While Section 38 and its TM30 reporting are the responsibility of the property owner and landlord, Section 37 reporting is the sole responsibility of all foreigners in Thailand. Section 37, Subsection 3 states that a foreigner must register a TM 28 report with the local police where they reside within 24 hours from their time of arrival and must also register a change of residence within 24 hours. Subsection 4 states that if a foreigner travels outside of their registered home province for over 24 hours, they must register a TM 28 with the local police in that area within 48 hours from time of arrival. In theory, this meant that if a foreigner living in Bangkok went to Pattaya for the weekend and stayed at a hotel, there would be two reporting requirements. First, the hotel would need to file a TM 30 in order to be compliant with Section 38. Second, the foreigner would need to go to the local police station near where they were staying in Pattaya and file a TM28 and then when they returned to Bangkok, would need to file another TM28 with the local police. The Immigration Bureau released a statement in September 2019 detailing the exemptions to the TM 28 reporting requirements.

This new Regulation added more categories of foreigners who are exempted from the TM 28 reporting requirements for Section 37, subsections 3 & 4. The first 1-12 items are the old 12 categories. The new additional categories are items 13 – 22. The new categories include missionaries and the holders of retirement visas, Thai spousal visas, and guardian visas, and journalists.

1. Diplomatic or consular missions
2. Performance of official duties
3. Tourists
4. Sporting
5. Business
6. Investment
7. Promoted Investment as per BOI Act
8. Transit
9. Crew of conveyance entering to a port, station or locality in the country
10. Education and study
11. Scientific research
12. Skilled workers
13. Mass Media
14. Missionary work under the conveyance of the relevant ministry and department
15. Parent, spouse or child under patronage and being a part of a household of a foreigner who stays in Thailand for the purposes of 1 , 2, 5 , 6, 7, 10, 11, 12, 13 and 14 or private servant of a foreigner under Section 15 (7) of Immigration Act, B.E.2522
16. Person who is a parent, spouse or child under patronage and being a part of a household of Thai national or Thai permanent resident, and stays in the Kingdom supporting or receiving support from the said Thai national or Thai permanent resident.
17. Performing duties for state enterprises or public charitable organizations
18. Elderly persons entering for retirement purpose
19. Persons who used to have Thai nationality entering for visiting relatives or returning to stay in the Kingdom
20. Aliens entering to receive medical treatment
21. Trainers entering for training athletes as requested by the government
22. Litigants and witnesses entering for court proceedings

 

Notification of the Department of Business Development regarding Measures to Support the Outbreak of Coronavirus Disease 2019 or COVID-19 which may impact convening Meetings of Juristic Entities B.E. 2563 (2020)

Whereas, the Ministry of Public Health has announced that Coronavirus Disease 2019 (COVID-19) shall be a dangerous communicable disease pursuant to the Communicable Disease ACT B.E. 2558 (2015), the Notification of the Ministry of Public Health on the Name and Important Symptoms of Diseases (No. 3) B.E. 2563 (2020) [Royal Gazette No. 137, Chapter 48D (Ngor), dated February 29, B.E. 2563 (2020)], including the continuation reports about the outbreak situation of the said disease spreading rapidly and widely around the world, which may result in interruptions for holding meetings of juristic persons.

The Department of Business Development (the “DBD”), as the regulator which is responsible for and supervises business registrations under the Civil and Commercial Code on Partnerships and Companies; the Public Limited Companies Act B.E. 2535 (1992); the Trade Associations Act B.E. 2509 (1966); and the Chambers of Commerce Act B.E. 2509 (1966), including supervision of the preparation of accounting and submission of financial statements under the Accounting Act B.E. 2543 (2000), hereby clarifies as follows:

Any limited company, public limited company, trade association, or chamber of commerce (“Juristic Entities”), which faces an impact from the said situation that results in a Juristic Entity being unable to convene the meetings or having to delay in holding the meetings within the prescribed legal period of time, after holding such meeting, the Juristic Entities shall submit a clarification letter with the reasons for not convening the meeting within the prescribed legal period of time to the Registrar, on a case-by-case basis.

 

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.

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