08 Sep Dej-Udom & Associate Business and Legal Update – August 2013Download PDF
The Dej-Udom & Associates monthly business and legal update for Thailand and the ASEAN region for August 2013
COUNTDOWN 2015 – ASEAN Economic Community |
Vocational Standards Cooperation –
Thailand, Laos and Vietnam are cooperating to set mutual standards for vocational education. The plan is to prepare students who are able to work in any of the ASEAN countries once there is free flow of labor between countries. One problem facing the program is the lack of qualified teachers and appropriate teaching techniques.
Single Accounting Standard
Different accounting standards pose a roadblock to ASEAN integration. Experts say that adopting the International Financial Reporting Standards (IFRS) will help. Brunei will adopt the standard in January 2014, at first for institutions with public accountability such as banks, financial institutions and insurance companies.
Business Travel Card Proposal
At a recent ASEAN Business Advisory Council meeting, members agreed that the creation of an ASEAN Business Travel Card would assist the free flow of business between member countries. Details about the card remain undecided.
Foreign Investment Restrictions Relaxed
Vietnam plans to raise the limit on foreign holding of voting shares in companies to 60% from the current 49%. In addition, for restricted industries, overseas investors would be permitted to buy an additional 10% of non-voting shares. What constitutes a restricted industry has not been specified.
The first meeting of the Thailand-Malaysia Business Council (TMBC) was recently held in Bangkok. The goal of the organization is to double bilateral trade by 2015. Malaysia’s aim to become the world’s largest exporter of halal food requires cooperation between the two countries.
Border Points Open
Myanmar will allow foreigners to enter the country via six different channels including three land border crossings. In addition to Yangon, air travel to Mandalay and Nay Pyi Taw is permitted. The three border crossings from Thailand are Mae Sai in Chiang Rai, Mae Sot in Tak, and the Muang district in Ranong. Previously off-limit sites in remote areas are also being opened to tourists.
US Gems Ban
The US has extended its ban on the import of rubies and jadeite from Myanmar. The ban is intended to stop the funding of the military elite who control the gem trade. Most of the gems come from minority areas of Myanmar that have experienced civil unrest.
Thailand ranks fourth in the list of countries investing in Myanmar. According to statistics, China is the largest investor in the country followed by Hong Kong and Korea. French firms are also showing strong interest in investing in Myanmar after President Thein Sein made an official visit to France and a French foreign trade mission traveled to Myanmar at the end of July.
Changes to Foreign Investment Law
Myanmar’s Ministry of National Planning and Economic Developments is working on plans to consolidate investment laws so that there will be more equality. At present, the nation has two investment laws, one for local and the other for foreign businesses. The law for locals offers extra protection against taxes and other special rights.
Unequal Pay Causes Dissention
Myanmar workers are complaining about unequal pay systems at the Dawei Special Economic Zone. Locals receive much lower salaries than Thais for the same type of work. They also complain about not receiving the same benefits as Thai workers. Currently, there are an estimated 2,000 Myanmar workers and 1,000 Thai workers at the Dawei Special Economic Zone project.
Visa Issuance Problems
Thailand’s Ministry of Foreign Affairs has reported that 300 visa labels are missing from the Thai Embassy in Malaysia and another 2,000 went missing in transit when being sent to the Thai Embassy in The Hague. As a result, there could be delays in obtaining visas at the related Thai embassies. Passports of Thai visa holders are now being more carefully scrutinized by Thailand’s immigration officers.
New Passport Visa Transfer Rules
The Immigration Bureau has issued new regulations concerning the duration period of visas in the case that a passport is expiring. Long term employment visas will only be extended to the date that the work permit holder’s passport expires. Dependent visas for family members of the work permit holder will match the date of the work permit holder’s visa. Visas will no longer be automatically transferred into the new passport. Once a new passport has been obtained, the visa holder and all dependants will need to reapply for a new visa by submitting all the required documents for long-term visa extension and pay all related fees as if making a new application.
Thailand is planning to require visa applicants to obtain compulsory travel insurance due to the large amount of unpaid hospital bills left by tourists. The plan is for foreign tourists to buy a 500-baht insurance policy. No decision has been made about those who can enter Thailand without a visa.
Landlords and Websites Targeted
The Intellectual Property Department is considering measures to punish both landlords and websites that are involved with the trade of counterfeit goods. The proposed law would require landlords to cooperate with officials in monitoring their buildings and to expel illegal traders. Internet service providers would be required to monitor their websites as well to stop the sale of counterfeit brand-name goods.
Income Tax Revision Approved
The Cabinet has approved a draft bill that would revise the tax rate for both personal and business income tax. The proposal which has been sent to the House for consideration would reduce corporate tax to a rate of 20%. Personal income tax will also be reduced based on a sliding income scale. The maximum personal income tax will be 35% for those earning four million baht and above. The new income tax rates will apply to tax returns filed in 2014 for the 2013 income tax year.
Proposed Alcohol Tax Increase
The Cabinet has approved a proposal to increase the tax on alcoholic beverages. The new rate would be 2,000 baht per liter of 100% alcohol content which is significantly higher than the present rate of 100 baht per liter of 100% alcohol. In addition, the ministry proposed changing the method for calculating excise tax on alcoholic beverages. The retail or wholesale price would be used as the basis for calculation instead of ex-factory prices. The proposed changes are expected to draw opposition for the local alcohol industry.
Faster Completion of FTA
Thailand plans to resume the suspended free-trade negotiations with the European Free Trade Association. The Commerce Ministry has decided to speed up completing free-trade agreements so that Thailand will not be left behind other countries. Thailand is in the process of negotiating with Turkey, Poland, Bahrain, the United Arab Emirates, and Canada. A Thai-Chilean FTA will be signed in October. Participation in the Trans-Pacific Partnership is also being studied.
Exim Bank to Support Foreign Ventures
The Export-Import Bank of Thailand announced that it plans to provide support to Thai businesses seeking to invest in providing goods and services in neighboring countries. Support would be provided in the form of insurance coverage for risks associated with investment.