ASEAN Today – Regional Legal and Business News – June 2019

ASEAN Today – Regional Legal and Business News for June 2019 including an Immigration update on new regulations at the Samutprakarn Provincial Immigration Office, Interim provision of the Personal Data Protection Act, and a look at the new announcement from the Securities and Exchange Commission on Digital Tokens in Private Placement.

 

ASEAN Economic Community News

34th ASEAN Summit
The 34 ASEAN Summit was held in Bangkok this month and under the theme “Advancing Partnership for Sustainability” emphasized stability, security, and sustainability for ASEAN. The meeting’s focus was on enhancing regional cooperation to sustain existing initiatives and explore fresh, sustainable ones in order to preserve and promote regional sustainability. The current head of ASEAN, Thailand’s Prime Minister, reported that the Summit reaffirmed ASEAN’s commitment to building an ASEAN Community that is people-centric and people-friendly which leaves no one behind and looks to the future. Through sustainability, ASEAN will be able to respond to challenges like the 4th Industrial Revolution, climate change, and global competition.

Non-Tariff Barriers Report
The ASEAN Business Advisory Council and the EU-ASEAN Business Council released a joint report “Non-Tariff Barriers (NTBs) in ASEAN and their elimination from a business perspective.” The report warns that unless there is clearer, more sustained and tighter focus on reducing the number and scope of existing NTMs and eliminating NTBs, ASEAN will not meet its objectives in the two ASEAN Economic Community Blueprints and fail to meet its targets of reducing the cost of trade by 10% by 2020 and doubling intra-ASEAN trade by 2025. The report presented ASEAN-level recommendations to accelerate the removal of non-tariff barriers. These include creating improved systems for collecting information on non-tariff measures and barriers, developing an institution or framework to track and tackle non-tariff barriers, continued harmonization of standards, and working with the private sector to identify and eliminate non-tariff barriers.

Renewable Energy
Experts say that while large markets like China and India have increased their commitments to renewable energy development, ASEAN’s renewable energy capacity isn’t growing fast enough. The Philippines and Vietnam are making advances, but experts say that renewables in ASEAN should be at 60% by 2030 and approaching 100% by 2050. ASEAN’s current goal to generate 23% of its energy from renewable sources by 2025 is considered attainable provided better policy and investment frameworks are established.

Singapore News
Digital Banking Licenses
Singapore plans to liberalize their banking sector by issuing up to five new licenses for digital banks and will begin taking applications in August. Two digital full-bank licenses and three digital wholesale bank licenses will be available. All digital banks will have to meet the same capital requirements as local banks. A bank with a digital full bank license can provide a wide range of financial services and take deposits from retail customers. Banks with a digital wholesale bank license can serve small and medium-sized enterprises and other non-retail segments.

Vietnam Update
EU-Vietnam Free Trade Agreement
Vietnam and the European Union signed a long-anticipated free trade agreement (FTA) this month that will eliminate duties on most goods. As soon as the FTA comes into force, 71% of duties for Vietnamese imports to the EU will be eliminated with the remaining phased out over the next 7 years. 65% of the duties for European imports to Vietnam will be cut with the remaining disappearing over the next 10 years. Vietnam is the European Union’s second largest trading partner in ASEAN with trade in goods at 50 billion euros and 4 billion euros in services a year.

Myanmar Watch
Business Environment Index 2019
The Myanmar Business Environment Index 2019 (MBEI) is a diagnostic tool to help the government and private sector better understand the local business environment. The key takeaways of this year’s report are the recruitment of qualified workers is a major challenge for businesses in Myanmar, and the quality of infrastructure, especially roads and electricity, is a severe concern for businesses. The report finds that 85% of businesses in Myanmar have a least one documented proof of formalization, usually an operating license, but critical documents for business planning are often unavailable for the average business owner. Additionally, when comparing Myanmar internationally, regulations and administrative procedures are not considered burdensome by businesses.

Malaysia News
High-Income Nation
The World Bank has confirmed that even with Malaysia’s economic challenges, the country will become a high-income nation by 2024 as long as the Malaysia’s gross national income (GNI) per capita continues to grow by 4-4.5% a year. Currently, Malaysia’s GNI is at US$ 10,460 and the high-income threshold level in US$12,375.

Madrid Protocol
Malaysia acceded to the Madrid Protocol this month and the country’s Trade Descriptions (Amendment) Bill 2019 and Trademarks Bill 2019 were both passed by the legislature too. The Madrid Protocol is an international system for obtaining trademark protection using a single application. Now, trademark owners can file an international application for trademark protection in 104 countries and territories at the Intellectual Property Corporation of Malaysia. At this time, only one ASEAN member state, Myanmar, has not acceded to the Madrid Protocol.

Thailand Bulletin
Sustainable Development Goals Ranking
In the latest Sustainable Development Goals (SDGs) ranking by the United Nations, Thailand climbed 19 positions to 40th place and tops the rankings in ASEAN. The other ASEAN SDG rankings are Vietnam at 54th, Singapore at 66th, Malaysia at 68th, the Philippines at 97th, Indonesia at 102nd, Myanmar at 110th, Lao PDR at 111th, and Cambodia at 112th.

Lao News
Business Inspections
The Lao Ministry of Industry and Commerce released a new ministerial regulation that orders provincial and district industry and commerce departments to inspect the operations of foreign-owned businesses and verify that they have all the proper licenses and permits. Businesses without a business registration certificate and license will be fined US$1,150 and will have 90 days to obtain the needed documentation. Failure to comply within the 90 days will result in another fine and permanent closure of the business.

Cambodia Update
National Single Window Launched
Cambodia’s Ministry of Economy and Finance launched the country’s National Single Window (NSW) which will allow traders and logistics providers to lodge standardized information and documents at a single entry point to fulfill all import, export, and transit-related regulatory requirements. Cambodia’s General Department of Customs and Excise (GDCE) also announced that the ATIGA e-Form D can be also issued via the NSW. The ATIGA e-Form D is a certificate of origin for exports and imports used within ASEAN. It helps expedite the cargo clearance process, reduce costs and time, and enhance trade efficiency and competitiveness among ASEAN members through the ASEAN Single Window (ASW).

THAILAND LEGAL REVIEW

Personal Data Protection Act
Interim Provision
Thailand’s Personal Data Protection Act was published in the Royal Gazette on May 27, 2019 and will come into force on May 28, 2020. Under Section 95 of the Act, during the one-year grace period, private personal data held by the person/entity that collected the data prior to the enforcement of the Act may continue to be used for the same original purpose. However, the said person/entity that controls the collected data shall follow the procedures for the cancellation of consent and shall publicize that the owner of the private personal data may withdraw their consent to have their data collected and used at any time. The disclosure and other undertakings which are not the collection and use of private personal data as noted above shall be carried out according to the provision of this Act.

Immigration Update
New Regulations in Samutprakarn
As of June 2019, companies will need to comply with the new regulations and additional requirements at the Provincial Immigration Office in Samutprakarn. First, one company employee that is a Thai national is now required to be present at the time of filing the visa application with the expat employee and family. Such Thai employee’s name must be placed on the company’s monthly salary withholding tax (PND 1) which will be part of the visa application to prove that they are a current employee of the company. Any Thai person whose name appears in the PND 1 tax document is eligible to accompany the employee.

Second, all marriage and birth certificates must be certified by the Thai Ministry of Foreign Affairs (MFA) regardless of the language of the documents and this includes documents in English. This means documents must be first legalized / authenticated by following methods before the Thai MFA will certify them:
1. The documents must be officially legalized by the concerned Embassy in Thailand; or
2. The documents must be officially legalized by the Ministry of Foreign Affairs or equivalent Authority in the concerned country and subsequently authenticated by the Thai Embassy in the country where the documents were first legalized.

Third, for a first-year application, the Immigration Department will send an official to visit the company after the application has been filed regardless of the nationality of the employee. For the visit, the employee (visa applicant) should be available at the office premises for the interview / discussion in order to avoid a 2nd visit as it may cause a delay in the visa process. If a 2nd visit is needed, it is highly likely that the visa application will not be approved within the first month after filing

Fourth, for visa applicants who are nationals of “Watch List” countries, the Immigration Department will make a visit to the company after the application has been filed regardless if it is a new first year application or a renewal application. Again, when making the visit, the employee (visa applicant) should be available at the office premises for the interview / discussion in order to avoid a 2nd visit as it may cause a delay in the visa process. If a 2nd visit is needed, it is highly likely that the visa application will not be approved within the first month after filing. Current watch list national are Sri Lanka, India, Pakistan, Bangladesh, Iran, Nepal, Togo, Nigeria, Uganda, Ghana, Guinea, Gambia, Senegal, Sierra Leone, Mali, Liberia, Columbia, Chile, Bolivia, Peru, and Argentina.

At present, this only applies to the Provincial Immigration Office in Samutprakarn. However, it is highly possible that other Provincial Immigration Offices will adopt these new requirements.

Corporate Law News
Digital Tokens in Private Placement
The Security and Exchange Commission (SEC) of Thailand released the Announcement regarding the issue of offering to sell digital tokens in a Private Placement (PP) on May 10, 2019 which became effective on June 7 2019. The Announcement will apply to any issues or offers for the sale of new digital tokens or digital tokens that have already been issued for the purpose of offering to sell in a PP.

Offering the sale of digital tokens in the following is regarded as an offer to sell in a PP under this Announcement:
1. Offering to an Institutional Investor* or Ultra High Net Worth Investor** as defined by the SEC or to a joint investment juristic person or venture capital business according to the notification of SEC on the offer to sell digital tokens to the public.
2. Offering to sell to select investors in a number not exceeding 50 investors in a 12-month period provided that such investors shall be persons related to the digital token issuer in respect to business and investment, or administration and management, or a relative.
3. The total value of sale offering shall not exceed 20 million Baht in a 12-month period.

Since offering to sell digital tokens in a PP is regarded as an offer to a limited number of investors and that such investors are knowledgeable in the field of investments, so for convenience purposes, this announcement is hereby deemed as the grant of permission by the SEC to the limited company or public company established under Thai laws that undertakes activities within the scope of the Announcement and an exemption from filing the registration statement regarding digital token offerings, including the prospectus.

*Institutional Investor is defined as: (1) The Bank of Thailand; (2) Commercial banks; (3) Banks established under specific laws; (4) Finance companies; (5) Credit foncier companies; (6) Securities companies; (7) Non-life insurance companies; (8) Life insurance companies; (9) Mutual funds; (10) Private funds managed by a securities company for the investment of ultra-high net worth investors, high net worth investors or investors under (1) to (9) or (11) to (25); (11) Provident funds; (12) Government Pension Funds; (13) Social Security Funds; (14) National Savings Fund; (15) Financial Institution Development Fund; (16) Derivatives business operators under the Law on Derivatives; (17) Derivatives business operators under the Law on Agricultural Futures Trading; (18) International financial institutions; (19) Deposit Protection Agency; (20) Stock Exchange of Thailand; (21) Juristic persons in the category of statutory corporation; (22) Juristic persons whose shares are held by the investors under (1) to (21), in aggregate, exceeding 75% of the total voting shares; (23) Foreign investors having characteristics similar to the investors under (1) to (22); (24) fund managers or derivatives fund managers in accordance with the Notification of the Capital Market Supervisory Board concerning Rules on Personnel in Capital Market Business; (25) Any other investors as specified by the SEC.

**Ultra-High Net Worth Investor shall mean (1) Juristic persons having any of the following characteristics: (a) having shareholders’ equity in the amount of 200 million baht or more, according to the audited financial statements for the most recent financial year, (b) having direct investment in securities or derivatives in the amount of not less than 40 million baht, or not less than 80 million baht when combined with deposit, according to the audited financial statements for the most recent financial year; (2) Ordinary persons including the spouse having any of the following characteristics: (a) having a net asset value of 70 million baht or more, excluding the value of the property used as a permanent residence of such person, (b) having annual income of 10 million baht or more, or 7 million baht or more in case of excluding the annual income of the spouse, (c) having direct investment in securities or derivatives in the amount of not less than 25 million baht, or not less than 50 million baht when combined with deposit.

Payment of Stamp Duty for Electronic Instruments
The Notification regarding Revenue Stamp (No. 58) came into force on July 1, 2019. Under this Notification, a person liable for such stamp duty for electric instruments must submit the payment according to Form (Or.Sor.9) via (i) the Revenue Department Website or (ii) the Application Programming Interface before an instrument is executed or within 15 days from the following day of an instrument’s execution. The following electronic instruments are subject to the above stamp duty:
• Hire of work agreement
• Loan agreement or bank overdraft agreement
• Power of Attorney
• Proxy for voting at the meeting
• Suretyship contract

After the payment is made, the competent official shall issue a code and receipt with an electronic signature evidencing the payment.

 

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.

 

No Comments

Sorry, the comment form is closed at this time.