Learning your way around the Thai business culture does give you a huge advantage when making first impressions, though. The rules related to restrictive agreements and practices are primarily governed by the text of the new TCA as follows: Section 50 prohibits business operators from abusing dominant positions by: unfairly fixing or maintaining the level of the purchasing or selling price of a good or service; imposing an unfair condition for another business operator which is its trading partner in order to limit services, production, purchase, or sale of goods, or to limit an opportunity in purchasing or selling goods, receiving or providing services, or seeking credits from other business operators; suspending, reducing, or limiting service provision, production, sale, delivery, importation into the Kingdom without any appropriate reason, or destroying or damaging goods for the purpose of reducing the quantity to be lower than demand of the market; and. This book is an insider's account of Thai leadership based on ethnographic research. Shop selling drinking water, smoothies, fruit juices. 4). The first is that you shouldnt touch anybodys head in Thailand (even childrens heads) and the second is that you should always be wary of your feet. 2). Cultural Insights for Doing Business & Working in Thailand The Ministry of Natural Resources and Environment requires an environmental impact assessment (EIA) reports from parties responsible for constructing certain building types (including offices) with a height of 23 metres or more, or a total floor area of 10,000 square metres, as well as certain other projects specified in the following: Notification of the Ministry of Natural Resources and Environment Re: Determination of Categories and Sizes of Projects or Operations Requiring the Preparation of an Environmental Impact Assessment Report, and Bases, Methods, Procedures. Tt establishes extensive data retention requirements and obligations for service providers to co-operate with and assist law enforcement. Providing banking facilities for financial institutions. Labour Protection Act 1998 (as amended in 2008, No. Up to USD50 million, or its equivalent, per person per year for the purchase of real property in a foreign country. Anyone who illegally wears an official uniform, symbol or insignia or uses an official title, rank, decoration is subject to a prison term of up to one year and/or a fine of up to THB2,000. Be able to understand and speak Thai to an average standard. 2023Thomson Reuters. One of the primary laws governing environmental issues is the Enhancement and Conservation of National Environmental Quality Act B.E. Presentations should be factual and easy to understand, including facts and figures to back up your conclusions. ocal customs may be different than what you are used to, and you want to avoid committing a faux pas when you are seeking to impress new contacts. When interacting with your Thai business counterpart, be conscious of what emotions you are displaying and how they may be received. Any Thai company that is majority-owned by Thai nationals, whether directly or indirectly, is not regulated by the FBA, and can therefore engage in any business. For this type of termination, normal severance pay is required (. Administrative fines: up to THB5 million. , it is important that you understand Thailand business culture. Sanctions for committing bribery in Thailand are as follows. By accepting you will be accessing a service provided by a third-party external to https://www.commisceo-global.com/, 34 New House, 67-68 Hatton Garden, London EC1N 8JY, UK. 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However, Thailand has already seen a steady increase in consumer and product liability claims and filings are expected to continue to increase. 1. Factories Act B.E. Business dress code in Thailand is conservative. To be capable of registration, a mark must be all of the following: Not identical or similar to trade marks already registered by another person. Issue an order for a government agency, state agency, state enterprise, local agency, or private entity to clarify a fact, facilitate or assist in the NACC's duties. A foreign majority-owned company can engage in List 2 activities if Thai nationals or juristic persons hold no less than 40% of the total shares and the number of Thai directors is at least two-fifths of the total number of directors. Interest paid to foreign corporate shareholders? However, there have recently been movements to challenge the established norms of a paternalistic society by questioning the status quo and arguing for openness, transparency, and accountability. In practice, various commercial banks require copies of supporting documents for certain transactions, including both inbound and outbound transactions. Dealing with Construction Permits Like advertising, sales promotions are regulated directly or indirectly by several statutes, such as the: Consumer Protection Act 1979 (as amended in 1998, No. During a meeting, you should address the most senior person with whom you have a relationship. The most common form of business vehicle used by foreign companies is the private limited company, as it limits shareholders' liability to the remaining amount of unpaid (if any), registered capital due on the shares respectively held by them. Workmen's Compensation Act 1994 (as amended in 2018, No. The Thai culture exercises significant influence on business dealings. You can also smile and slightly nod your head as a friendly greeting to show respect when meeting someone new. Business culture in Thailand is formal, and very hierarchical. It is therefore best to avoid all public displays of emotion. Visa and work permit privileges for expatriates. Protections for both rights management data and technological measures used to prevent infringement. intervening in the business operation of others without any appropriate reason. Thailand, like most UN member countries, is a party to the UNCAC. If all incorporation documents are signed and ready, the filing and registration with the DBD can be completed within one business day. 3. Also, avoid correcting others. The typical greeting in Thailand is the wai, which involves you placing your hands together in prayer form and making a slight bow of your head. 2510 (1967), as amended. 3). A Thai parent company is only subject to tax on actual dividends paid to it by a foreign subsidiary. At a business meeting, punctuality is expected, and formal attire (suit and tie) should be worn. This is a landmark change in procedure and has the prospect of significantly improving consumer rights, but also increasing business operator liabilities. Many Danish companies have already discovered the potential and are represented in Thailand. Business In Thailand - Understanding Thai Culture Restrictions on the transfer of personal data to other countries. Certain business activities are subject to SBT, instead of VAT, at a payable rate varying between 0.1% and 3% of gross monthly receipts. 2535 (1992), as amended. Business culture. 2490 (1947), as amended. 2522 (1979), as amended. The Consumer Case Procedure Act 2008 (CCP Act) is intended to make it easier for consumers to pursue product liability and general consumer claims against business operators. However, westerners are usually not expected to know the hierarchical etiquette around how much to bow. In addition to the Copyright Act (No. If you have reason to be frustrated then try to deal with it by smiling and keeping calm. The concept of face plays an important role in business interactions as people seek to maintain the reputation of themselves, their business and others. Section 45 provides necessary steps to be taken when the offence committed is also a criminal offence. Be personable by talking about things that interest your Thai business contacts and show sincere interest in their lives. Investors in the designated areas of the EEC will be eligible to receive various incentives, including: Exemption from corporate income tax for up to 15 years. 2535 (1992), as amended. The land's people are some of the nicest you will encounter. Right to lease land for up to 50 years and a renewal for up to 49 years. Hazardous Substances Act B.E. Jun 7, 2023 If you are considering expanding your business to Thailand, starting a joint venture, or having important business meetings in the country, it is important that you understand Thailand business culture. There are no specific requirements on the notarisation and/or registration of marketing agreements. For example, the Department of Foreign Trade announces new sanctions relevant to the import and/or export of goods. A work permit from the Ministry of Labour in Thailand before starting work. In business relations, the context is very important. A unified, searchable interface answering your questions on the world's cultures and religions. Commisceo Global Consulting Ltd. 2022 All Rights Reserved. A factory is defined in Thai law as a "building, premises, or a vehicle using a machine, or machines, with total power or an equivalent of fifty horsepower or more, or which employs fifty workers or more, with or without machinery, to manufacture, produce, assemble, pack, repair, maintain, test, improve, process, convey, keep, or destroy anything in accordance with the type or kind of factory as prescribed in the Ministerial Regulations" (, In other words, the "factory" designation applies to a building, premises, or vehicle that either. Purchase new shares in proportion to the shares currently held by shareholders. Undertaking other acts under the Act or any other act directed by the Council of Ministers or the NACC. Various projects are already in the works, including the: High-Speed Railway Project, which will link three major airports in Thailand (Don Mueang International Airport, Suvarnabhumi International Airport and U Tapao Airport). Women should wear plain conservative dresses or suits. In addition, the PDPA grants data subjects various rights over data held by others that relates to them which are the rights to: Data controllers must ensure that they honour and guarantee these rights as part of their operations. However, there. Strategic location: Gateway of Asia Thailand is located between India and China. There are no specific rules regarding digital advertising, online behavioural advertising or influencer marketing. In general, the 2017 TCA establishes a dual merger control system, which involves: Subordinate legislation clarifies the criteria on market share and sale turnover of merging parties which can trigger the merger filing duties, either pre-merger approval or post-merger notification. 2535 (1992), as amended. The Foreign Agricultural Service (FAS) is part of the U.S. Department of Agriculture (USDA). Among the requirements imposed under the NEQA are environmental impact assessments. Each nationality is allowed an annual quota of 100 PR permits, and the entire process takes at least one year from the date of submission. However, when a provision of a foreign law is more favourable for the employee than the provisions prescribed under Thai labour laws, the court can consider the choice of law provision as a clear intention of the parties to be bound by the additional requirements, and will apply that foreign law provision accordingly. September 18th, 2017 For foreigners coming to Thailand to do business and build a network, there are a few key points to observe and remember. Certain changes have already come into effect, such as: A substantial reduction in tariffs on many goods originating from ASEAN member states. Introducing techniques for doing business in Thailand. - TechBullion Significant developments affecting this resource will be described below. There are no controlled foreign corporation rules in Thailand. The way Thais lead: Face as social capital. If the offence is committed by negligence or is a petty offence, it must be a case that causes the employer to incur loss or damage. A one-year visa extension can be applied for within Thailand after a work permit is obtained, subject to renewal before the expiration date. What are the Things to Avoid? The standard rate of corporate income tax is 20% and is payable on its net taxable profit earned during any given accounting period. Sale of goods or services by community enterprises and community enterprise networks registered under the Act on Community Enterprise Promotion B.E. Ethnically, this also makes the Thai people fairly homogenous. We also gather market intelligence and offer market briefs to help U.S. firms better understand the local market. In Bangkok, business attire is more formal and conservative than in other parts of the country. Customs duty exemption or reduction for imported raw materials and machinery. Shares can be issued for non-cash consideration. Alternatively, the employer can terminate the employment immediately by paying wages to the employee in lieu of the advanced notice. In accordance with that system, Thailand also has a civil law and dual court system. Reusing packaging or containers bearing another party's registered trademark in order to mislead the public into believing that the products belong the trademark owner is also deemed an infringement of a trademark. Business Etiquette in Thailand: Business Tips for Bangkok A company cannot take its own shares in pledge. Royal Decree Naming Professions Prohibited to Aliens 1979. There is no specific protection for unregistered designs. 2023 Thomson Reuters. The Investment Promotion Act B.E. Thai labour laws apply to all employees working in Thailand, regardless of their nationality or tenure. Employers must withhold income tax at the applicable progressive rates and remit the amount to the Thai tax authority no later than the seventh day of the month following the month of payment. Business cultures in Thailand are quite similar to its neighbouring countries in Asia. First, the good news: Thai people are very relaxed, friendly and laidback. Sanctions for committing a corrupt act in Thailand are. Require the following people to submit an account showing the assets and liabilities of themselves, their spouses and minor children and to inspect and disclose the results of such accounts: positions in independent governmental agencies. In addition, foreign businesses must be mindful of whether or not their contractual arrangements with Thai business partners constitute a permanent establishment from a tax law perspective, which could potentially and inadvertently expose their commercial operations to the Thai taxation regime. Saving is no longer as important as it once was. Online platforms that allow users to offer or sell their products or services by electronic means, must register with the Department of Business Development (DBD). The limit is subject to the guidelines set by the Thai Securities and Exchange Commission (SEC). 2520 (1977) sets out key provisions and regulatory framework for investment incentives granted by the BOI. Business culture in Thailand. The Kingdom of Thailand is Southeast Asia's second-largest economy with its Top 3 Fast-Growing Industries in e-Commerce, automotive and manufacturing, and infrastructure.. 2535 (1992), as amended. Business culture in Thailand - Eye on Asia 2522 (1979), as amended. Thailand has a set of specific trade sanctions in place, which can be checked with the relevant regulator for the industry in question. Section 58 prohibits business operators from carrying out a legal act or entering into a contract with a business operator in a foreign country without appropriate justification, where that action will result in a monopolistic conduct or unfair restrictions to trade, as well as cause serious harm to the economy and consumers' benefits as a whole. If you come across Buddha statues, then be respectful around them. Manufacturing represents a significant portion of Thailand's GDP, with electronics, cars and automotive components, and agricultural commodities and food products representing some of the largest industries. companies listed on the Stock Exchange of Thailand (SET). Make sure, therefore, that you clean your feet regularly as theres a great deal of dust and dirt on Thai streets and if youre wearing flip-flops or sandals then removing your shoes might become a source of embarrassment for you! This leaves little margin for error and when it comes to business can make or break a deal. 2; 1979, No. If senior officials are present at a meeting, the expectation is that they will meet with someone of a similar ranking in the other organisation, not juniors. Take note that Thais also find foreigners treating sacred Buddha statues as selfies or photo opportunities very offensive. Arrive before 1530 for parcels or letters that need to be sent on the same day. Exceptions are given under the following conditions: the Minister of Commerce with approval from the Cabinet, permits, for a reasonable cause, reduction of the Thai shareholding requirement, which cannot drop below 25% of total shares. They need to be able to trust you and relate to you. Customs duty is levied in accordance with the Harmonised Commodity Description and Coding System. Conduct an inquiry to determine if the offence has been committed. Clothing store. Dividends received from foreign companies? Criminal penalties: a fine of up to THB1 million and/or imprisonment of up to one year. Intellectual property (IP) royalties paid to foreign corporate shareholders? Appearance is very important to Thai people. Municipal tax is already included in the 7% VAT rate. At least three natural persons (promoters) are required to establish a private limited company. Conflicts should be resolved by polite discussion. Building Control Act B.E. What Is Business Culture & Social Etiquette Like in Thailand? Appointing a subcommittee to take action directed by the PACC. On the whole, the Thai culture is a lot more relaxed than in other countries. The fol lowing country chapter contains the relevant information on the systems of law, the legal forms through which 7). Claim compensation against directors for injury to the company caused by them. Hierarchy 1. Collection, use or disclosure of personal data is generally prohibited unless consent from the data subject has been obtained or unless it falls within an exemption prescribed under the PDPA. Soliciting or accepting, directly or indirectly, an undue advantage for any person working in the private sector, or for another person, to act or refrain from acting in breach of their duties. Have been working with the current company for at least one year before the application. 5; and 2019, No. Thai labour and immigration laws require that foreign persons wishing to work or physically operate a business in Thailand must obtain a work permit from the Ministry of Labour and maintain a valid non-immigrant visa while residing in Thailand.

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