21 Dec ASEAN Today – Regional Legal and Business News – November 2020
ASEAN Today – Regional Legal and Business News for November 2020 including an Immigration Update on the new Revenue Department and Immigration Bureau Data System Linkage for Tax Documents and an overview of the New Relaxations by the Bank of Thailand on Investment in Foreign Securities for Retail InvestorsDownload PDF
ASEAN Economic Community News
ASEAN States Sign Regional Comprehensive Economic Partnership (RCEP)
On November 15, 2020, at the 37th ASEAN Summit, the 10 ASEAN member states and China, Japan, South Korea, Australia, and New Zealand signed the world’s biggest trade pact, the Regional Comprehensive Economic Partnership (RCEP), which will come into effect after it has been ratified by at least 6 ASEAN and 3 non-ASEAN signatories. The RCEP will cover a market of 2.2 billion people, 30% of the world’s population, with a combined GDP of US$26.2 trillion (30% of global GDP) and will account for 28% of global trade. Experts believe that the RCEP will add US$200 billion to world incomes and US$500 billion to world trade by 2030 and that it will offset global losses from the US-China trade war and make the economies in North and Southeast Asia more efficient and link their strengths in technology, manufacturing, agriculture, and natural resources. The RCEP will improve market access by eliminating tariffs and quotas for over 65% of goods and its common rules of origin and transparent regulations will help attract foreign investment into the region, build supply chains and services, and create jobs. The RCEP also covers intellectual property, electronic commerce, competition, economic and technical cooperation, small and medium enterprises, and government procurement.
A report released by a global management consulting firm this month maintains that if the ASEAN member states went green, it could bring up to US$1 trillion in annual economic benefits to ASEAN by 2030. However, the authors say that at present, Southeast Asia has not kept pace with the rest of world in developing its green economy and is at an inflection point, but that the region has untapped potential and still has time to act. Increased investments in renewable energy, reduced consumption and better waste management, less damaging crop-growing practices and improved urban planning are among the areas that could create new growth opportunities for economies and greater efficiencies and savings.
Central Bank of Myanmar
The Central Bank of Myanmar (CBM) launched CBM-NET 2 this month, an updated version of its payment and settlement system. The previous system provided the financial sector with a real-time gross settlement system, but still required some procedures needing paper documents. The updated system is all electronic and can also be used for inter-bank transactions in Myanmar kyat and handle large payrolls and utility bills. The system will help Myanmar in its transition from a cash-based society to an electronic payment system.
Online Investment Application
Myanmar’s Directorate of Investment and Company Administration (DICA) announced that it will launch a new Online Investment Application function that will allow companies to carry out the process for proposed investments online and no longer have to physically appear at the DICA offices. The DICA believes this should encourage more investment as travel into Myanmar is restricted due to COVID-19. The Online Investment Application will allow potential investors to make enquiries, register, apply, and request necessary information and coordinate with government departments for all needed documentation.
New Gambling and Casino Law
Cambodia’s Law on the Management of Integrated Resorts and Commercial Gambling (LMCG) came into effect on November 14, 2020. The new law replaces the country’s previous obsolete casino industry regulatory framework and will establish a clear regulatory framework and facilitate anti-money laundering audits and identity verifications. The law establishes areas where gambling will be permitted and areas where it is completely prohibited. Cambodia shuttered its online gambling industry last year and hopes the new law will encourage tourism and boost economic growth. The new law will also boost government revenues by levying a 4% tax on VIP gaming and a 7% tax on recreational vertical gambling.
The Monetary Authority of Singapore (MAS) announced that it will allow eligible non-bank financial institutions to have direct access to the banking system’s real-time retail payments infrastructure starting in February 2021. Non-bank institutions that are major payment institutions will have access to Singapore’s continuous electronic funds transfer service that allow participating entities to facilitate instant transfers of Singapore dollar funds between customers. The MAS says this will level the playing field for non-bank e-wallet players that meet the necessary risk-management standards.
Chinese Tariffs Removed
On December 1, 2020, under China’s Least Developed Countries initiative, the Preferential Tariff Program will remove tariffs from 97% of Lao goods exported to China. With almost all exports to China being duty free, this will allow Laos, as a small economy, to take advantage of the mainland Chinese market. However, critics say that the new trade rules only benefit China and that unfair trade practices will still give Chinese companies advantages over Lao companies. 90% of Lao products exported to China are agricultural and many of these products are produced by Chinese companies who lease land and grow crops for direct export to China.
New IP Regulation
On November 23, 2020, the Intellectual Property Office of Vietnam (VNIPO) issued Notice No. 13822/TB-SHTT (Notice 13822), which tightens the requirements for legal representatives of IP applicants/owners to sign documents on their behalf. This is part of Vietnam’s continuing efforts to develop a more comprehensive IP system and it will impact both local and foreign applicants. Notice 13822 implements a more rigid system in the definition of representative to ensure greater validity in all submitted documents. For individuals, previously, only a signatory Power of Attorney was needed, now, the POA must be signed by the applicant and their representative must comply with the implementing regulations of the IP Law. For organizations, if the signatory is not a director, president, or chairman of the board of directors, the applicants must provide supporting evidence that the signatories are eligible to represent them.
THAILAND LEGAL REVIEW
Revenue Department and Immigration Bureau Data System Linkage
On November 18, 2020, the Revenue Department launched a new service to directly share the tax information listed below with the Immigration Bureau. The objective is to reduce paperwork and shorten the processing time for visa holders and companies to obtain official certified copies of tax documents.
Background: When filing long-term visa extension applications, official certified copies of the below tax documents are mandatory to support the visa application. The Revenue Department wanted to help minimize the complexity of the process of obtaining official certified copies of tax documents by launching a new service that will allow the Immigration Bureau to be able to access tax data and the status of the visa holder and company in order to verify that the taxes listed below are correctly filed and valid at the Revenue Department. The types of tax documents that the Immigration Bureau can now verify under the new “e-Revenue Filing system” with the conditions and process in brief are as follows:
Types of tax documents the Immigration can verify:
1. Annual Personal Income Tax Return (PND.90 & 91) – tax document for visa holder
2. Monthly Salary Withholding Tax (PND.1) – tax document for company (employer)
3. Monthly Value Added Tax (PP.30) – tax document for company (employer)
1. The visa holder / company must file the taxes through the Revenue Department “e-Revenue Filing system.” Note: If filing by hard copy at the counter of the Revenue Dept, this process cannot be implemented.
2. The information must belong to the Tax Payer (visa holder / company)
How to proceed:
1. The Tax Payer applies for a Consent ID or Consent Card from the “Data Linkage between the Revenue Department and Immigration Bureau system.”
2. The Tax Payer brings their Consent ID or Consent Card to the Immigration Bureau when submitting the visa renewal application at the Immigration Bureau.
3. The Immigration Bureau uses the Consent ID or Consent Card to access the Revenue Department system and review the applicant’s tax information.
1. The Consent ID or Consent Card will be valid for 15 days upon receipt from the system.
2. Initially, the tax items that can be verified under this system will only have a 2-year window from the launch of the system. This means the tax items that the Tax Payer can request for verification cannot predate November 2018. This may change in the future.
1. As of now, we understand that only the Immigration Bureau in Bangkok will use the new system launched by the Revenue Department. This means that only visa extension applications filed at the Immigration Bureau in Bangkok will be eligible. However, at this time, the Immigration officers’ ability to access the new system is very limited. We highly recommend that clients continue to provide the official certified copies of the tax documents when filing visa extensions until the Immigration officers can fully access and use the new system.
2. The Immigration Office at the One Stop Service Center and other provinces have not yet started to use this method. We understand that they need to have the proper training to use the Revenue Department system and need to receive the necessary equipment. We will monitor and advise if and when this method will be implemented countrywide.
Corporate Law News
New Relaxations by the BOT on Investment in Foreign Securities for Retail Investors
According to Notification No. 81/2563, dated November 20, 2020, the Bank of Thailand (“BOT”) will relax certain restrictions for retail investors who wish to invest in offshore securities. A summary of the relaxations is as follows:
• Increase of the annual cap from not exceeding US$200,000 to US$5 million that retail investors can invest abroad.
• In case of retail investors investing abroad through an investment agent regulated under the Securities and Exchange Commission (“SEC”), the limitation on Financial Investment Amount (“FIA”) which is allocated to investors for investing in offshore securities will no longer apply. Currently, the FIA cap is not exceeding US$150 million.
Remark: Investment agents regulated under the SEC include:
• Mutual Funds (excluding Private Funds);
• Provident Funds;
• Securities Company as licensed under Thai law; or
• Derivatives dealer as licensed under the Derivatives Act B.E. 2546.
Guidelines for Considering Unfair Trade Practices between Digital Platform Operators for Food Delivery and Restaurant Operators
From December 23, 2020, the Announcement of the Trade Competition Commission regarding the guidelines for considering unfair trade practices between digital platform operators for food delivery and restaurant operators will come into force. The following actions by digital platform operators for food delivery which result in damages to any restaurant operators may be considered unfair trade practices and can lead to claims and administrative punishments with fines of not more than 10 percent of the turnover in the year of the offence.
1. Charging for expenses, considerations, or other benefits in an unfair or discriminatory manner, for instance:
• Charging Commission Fee or Gross Profit (GP) at higher rates without reasonable cause or at different rates among the restaurant operators with the same products by taking into account the quantities, sale values, cost values, number of branches, and qualities without reasonable cause;
• Charging Advertising Fees for both advertising rates and electronic advertising space without reasonable cause;
• Charging for sales promotions due to special events marketing without reasonable cause; and
• Other charges which have never been charged before without reasonable cause.
The digital platform operators for food delivery shall give prior notice to restaurant operators with the reasons and necessity for any changes within a reasonable time period.
2. Prescribing any trade conditions that may restrict or hinder the operations of other restaurant operators, e.g., exclusive dealing: prohibiting the restaurant operators from sales on other platforms without reasonable cause, that may lead to trade punishments for such restaurant operators in case of any violation.
3. Utilizing superior marketing power or superior bargaining power unfairly, e.g., intervening or restricting a restaurant operator’s freedom in setting prices without reasonable cause.
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.