12 Jul Dej-Udom & Associates Business and Legal Update – June 2013Download PDF
The Dej-Udom & Associates monthly business and legal update for Thailand and the ASEAN region for June 2013
COUNTDOWN 2015 – ASEAN Economic Community |
No Plans for a Single Currency –
At a recent meeting of ASEAN business leaders, the idea of creating one single currency among member states was dismissed. Participants pointed to the Euro financial crisis as just one of the strong reasons to not consider creating a common currency for the ASEAN region.
Land Appropriation Questioned
At a recent World Economic Forum held in Myanmar, experts concurred that many Asian countries need to revise land acquisition laws that are out of date or do not focus on the rights of farmers. In the case of Myanmar, most foreign direct investment has been for resource extraction in minority areas, and conflicts have arisen due to the locals losing their land. Thailand has one of the better records in the area of land appropriation.
Common ASEAN Smart Visa Proposed
Representatives of Cambodia, Myanmar, Philippines and Thailand have signed a letter of intent to create an Asean Common Visa that would facilitate tourist travel in the region and help boost the tourism industry by making it easier to travel to multiple destinations in neighboring countries.
Illegal Workers Expelled
The Lao government will expel illegal workers from China and Vietnam who fail to meet the criteria for obtaining a work permit. A new task force has been created to deal with the problem of illegal workers.
New Tax Breaks
The recent signing of a new government regulation is encouraging the production of eco-friendly cars in Indonesia. Green automobiles will receive a luxury-goods sales tax reduction that could run as low as zero percent.
New Legislation Passed
This month, the Myanmar Parliament is considering passing 13 new bills that cover a wide range of important business concerns. This new legislation covers communication laws, Small and Medium-Size (SME) business protection, condominium law, association formation law, special economic zone law, innovation brand law, industrial design law, intellectual property law, multi-purpose transport law, consumer protection law, competition law, Myanmar Engineer Council law and legislation to protect farmers.
Tourism Development Plan
The Myanmar government has announced a seven-year tourism master plan to help the country upgrade its tourism industry. The tourism law will also be revised to simplify the licensing of hotels, restaurants and tour guides.
Stock Exchange Listing
The launch of the Myanmar stock exchange is planned for 2015. Presently, there are restrictions on the listing of foreign companies under the Myanmar Companies Act (1914). The parliament is working on a new Security Exchange Law that is expected to be ready by July 2013.
Coca Cola is back
Coca Cola has inaugurated a new bottling plant in Myanmar. In turn, this helps emphasize new opportunities for US investors after years of being banned from doing business in the nation. The US imposed economic sanctions against Myanmar in 1988 after a junta took control.
Unpopular Licensing Rules
Internet users are protesting the new Singaporean law that that requires new websites to obtain licenses from Singapore’s government. The rule requires websites with over 50,000 Singapore visitors per month and that publish at least one local news article per week over a period of two months must obtain an annual license. The law came into effect on June 1, 2013.
Securities & Exchange
Outsourcing Rules Relaxed
Effective this month, companies dealing in securities and derivatives will be permitted to outsource related business activities such as risk management, internal audit and compliance, and information technology management. The Securities and Exchange Commission of Thailand (SEC) does not require prior approval for outsourcing to other licensed securities firms.
In order to raise its standards, the Securities and Exchange Commission (SEC) plans to introduce a new approval system which will require analysts to pass special SEC examinations. The approval period will last two years. The SEC hopes that by introducing the new system it can attract new analysts.
Donations for Historic Restoration
The cabinet has agreed that tax donations to support work undertaken by the Fine Arts Department to restore ancient sites will be eligible for tax deductions. The tax deduction can be up to two times the amount of the donation as long as a taxpayer’s total donation for fine arts combined with donations for schools and sports activities does not exceed more than 10% of the tax payer’s assessable income.
Increased Loan-Loss Provisions
At the encouragement of the Bank of Thailand (BOT), Thai commercial banks have been increasing their reserves. The increase is intended as a preparation for any unexpected economic crisis. Local banks have announced that they will increase their loss provisions to 4%.
Elite Card Re-launch
The Thailand Elite Card will be re-launched by the Tourism Authority of Thailand (TAT). If qualified, Elite cardholders will be eligible for five-year multiple entry visas and one-year stay privileges. The cost of an Elite card is 2 million Baht followed by an annual payment of 20,000 Baht for 20 years.
Deal with China
The Electricity Generating Authority of Thailand (EGAT) has signed an agreement to buy electricity from China. Thailand recently suffered electricity shortages when supplies from Myanmar were disrupted.