Introduction to Thailand's key industries, foreign trade, import and export regulations, and investment regulations

Thailand's key characteristic industries

agriculture

Agriculture is a traditional industry in Thailand and occupies an important position in the national economy, accounting for about 8.6% of GDP. The cultivated land area in Thailand is about 15 million hectares, accounting for 31% of the total land area. Agricultural products are one of Thailand's important export commodities. The main varieties include: rice, natural rubber, cassava, corn, sugarcane, and tropical fruits. In 2023, Thailand's agricultural product exports will reach US$26.8 billion, of which exports to China account for about 40%. In 2023, Thailand exported US$5.1 billion in rice and US$3.7 billion in cassava products. The main agricultural products exported to China are tropical fruits and cassava.

industry

Export-oriented industry accounts for about 33% of GDP. Important categories include electronics, plastics, food processing, textiles, toys, automobile assembly, building materials, petrochemicals, tires, etc. Thailand has a good automobile production base and a complete industrial chain. Japanese companies such as Honda, Toyota, Mazda, Nissan, and Mitsubishi are major investors in Thailand's automobile industry. In recent years, Chinese automakers such as SAIC, Great Wall Motors, BYD, and Changan have invested in and set up factories in Thailand. Electronic equipment manufacturing is also a characteristic industry in Thailand. Many electronic companies from Japan, the United States, and Taiwan have settled in Thailand.

Tourism

Thailand is rich in tourism resources, with major tourist destinations including Bangkok, Phuket, Pattaya, Chiang Mai, Ayutthaya, Krabi, Hua Hin, and Samui. Tourism is the pillar industry of Thailand's service industry. According to data from the Thai Ministry of Tourism and Sports, 28.09 million foreign tourists visited Thailand in 2023, generating revenue of 1.2 trillion baht. In the first half of 2024, 17.5 million foreign tourists visited Thailand, close to the pre-epidemic level, an increase of 35% year-on-year, with Chinese tourists ranking first, totaling 3.43 million.

Large companies in various industries

Agriculture: CP Group, Mitr Phol Group, etc.

Industry: Gulf, PTT Group, Siam Cement Group,

Weihua Group (WHA), TCC Group, AMATA GROUP, etc.

Service industry: Central Group, CP Group, SAHAPAT Group

GROUP) etc.

Thailand's foreign trade

Thailand is a formal member of the World Trade Organization (WTO). So far, it has signed 15 multilateral and bilateral free trade agreements with foreign countries, involving 19 countries, including the ASEAN Free Trade Agreement, bilateral free trade agreements with Australia, New Zealand, Japan, India, Peru, Chile, and Sri Lanka, as well as free trade agreements with China, South Korea, Japan, India, Australia and New Zealand, Hong Kong, China, and other countries (regions) as an ASEAN member country, and the Regional Comprehensive Economic Partnership.

The RCEP is a global agreement on the development of the global economy and the world's second largest economy.

On May 23, 2022, Thailand announced that it would join the Indo-Pacific Economic Framework (IPEF) initiated by the United States, and became a founding member of the IPEF together with the United States, South Korea, Japan, India, Australia, New Zealand, Indonesia, Malaysia, the Philippines, Singapore, Vietnam and Brunei.

Thailand's export commodities enjoy GSP treatment from the United States, Switzerland, Norway, Russia and CIS countries, among which the United States is the main destination for GSP exports. Although the United States canceled the GSP treatment for some Thai export commodities twice in 2020, Thailand still has 644 important commodities enjoying GSP benefits.

Goods trade

According to statistics from the Thai Ministry of Commerce, Thailand's total import and export of goods in 2023 was US$574.3 billion, of which exports were US$284.6 billion and imports were US$289.7 billion, resulting in a trade deficit of US$5.1 billion.

Thailand's main trading partners in 2023

(Unit: Millions of US dollars)

Ranking	Country (Region)	Trade volume	Thailand Export	Imported from Thailand
1	China	105000	34173	70827
2	USA	67660	48353	19307
3	Japan	55789	24594	31195
4	Malaysia	25083	11965	13118
5	Taiwan	21417	4814	16603
6	United Arab Emirates	19062	3315	15747
7	Australia	19054	12215	6840
8	Vietnam	18955	11217	7738
9	Indonesia	18371	10092	8278
10	Singapore	18368	10240	8128

Source: Ministry of Commerce of Thailand

Thailand's main import products in 2023

(Unit: Millions of US dollars)

Ranking	Product categories	Imports
1	crude	32179
2	Electrical appliances and parts	21567
3	Machinery and parts	21236
4	Integrated Circuit Board	19587
5	Chemicals	17817
6	Steel and its products	13168
7	Gold and Silver Jewelry	11924
8	natural gas	11519
9	Other metal ores, scrap metals and products	11230
10	Computers and parts	9977

Source: Ministry of Commerce of Thailand

Thailand's main export products in 2023

(Unit: Millions of US dollars)

Ranking	Product categories	Imports
1	Automobiles and parts	32184
2	Automatic data processing equipment and parts	17820
3	Jewelry	14787
4	Rubber products	13237
5	Refined oil	10194
6	Integrated Circuit Board	9701
7	Ethylene and propylene polymers in primary forms	8877
8	Machinery and parts	8791
9	Chemicals	8056
10	Steel and its products	6953

Source: Ministry of Commerce of Thailand

Trade in Services

Thailand is a country with relatively developed service trade among ASEAN member states. Affected by the COVID-19 pandemic, Thailand's service trade, which is mainly based on tourism, suffered a heavy blow from 2020 to 2021, ending nearly 10 years of surplus and turning into a deficit. At the same time, the proportion of service trade in GDP continued to decline, falling to 16.5% in 2021. After the epidemic, it began to recover, and exports achieved substantial growth in 2023.

According to data from the United Nations Conference on Trade and Development (UNCTAD), in 2023, Thailand's total import and export of services was US$128 billion, a year-on-year increase of 25%. Among them, exports were US$63 billion, a year-on-year increase of 62%; imports were US$65 billion, a year-on-year increase of 4.2%; and the trade deficit was US$2 billion, a year-on-year decrease of 93%.

In 2023, the tourism industry's annual exports will be US$29.708 billion, accounting for 30% of Thailand's service exports. Due to the rapid recovery of international tourists after the epidemic, the amount increased by 99% year-on-year. The transportation industry's annual exports will be US$6.056 billion, a year-on-year decrease of 9%. The annual exports of other service industries will be US$20.898 billion, a year-on-year increase of 19%.

In 2023, the transport industry was Thailand's largest service trade import item, with an annual import value of US$21.746 billion, a year-on-year decrease of 22%, accounting for 33% of Thailand's service imports. The tourism industry's annual import value was US$11.568 billion, a year-on-year increase of 65%.

The total import value of other services was US$16.848 billion, up 11% year-on-year, accounting for 25% of Thailand's total service import value. So far, Thailand has not released data on its service trade partners, but judging from the import and export status of service trade items, its partners are mainly other ASEAN member states, the EU, the United States, Japan, China, South Korea, etc.

Thailand Trade Regulations and Policies

Trade authorities

The government department in charge of trade in Thailand is the Ministry of Commerce, which has two main responsibilities: internally, it is responsible for promoting enterprise development, promoting the development of domestic commodity trade and service trade, regulating commodity prices, safeguarding consumer rights and protecting intellectual property rights, etc.; externally, it is responsible for participating in WTO and various multilateral and bilateral trade negotiations, promoting the healthy development of international trade, etc. The departments in charge of external business of the Ministry of Commerce of Thailand include the Trade Negotiation Department, the International Trade Promotion Department and the Foreign Trade Department, and the departments in charge of domestic business include the Business Development Department, the Domestic Trade Department, the Intellectual Property Department, etc.

Trade regulations

The main trade-related laws in Thailand include the Export and Import Commodities Act of 1979 and its amendment (2015), the Anti-dumping and Countervailing Act of 1999 and the Import Surge Safeguard Act of 2007. For relevant laws, please refer to the website of the Department of Foreign Trade of the Ministry of Commerce: https://www.dft.go.th/en-us/Legal-Translation.

Trade management regulations

According to Thai customs regulations, items prohibited from import and export in Thailand include but are not limited to: drugs; obscene items; items that counterfeit other people's trademarks and infringe intellectual property rights; counterfeit banknotes; protected animals and endangered wild animals and plants, etc. In addition, the import and export of some other commodities are subject to special control and require a license issued by the competent authorities. The relevant commodities include but are not limited to:

【Import Management】

Thailand implements a free import policy for most commodities, and any importer who opens a letter of credit can engage in import business. Thailand only implements management measures such as import ban, tariff quota and import license for some products.

【Export Management】

Most products from Thailand can be exported freely, except for those controlled by export registration, licenses, quotas, export taxes, export bans or other restrictive measures.

【Government Procurement】

Thailand has not yet joined the WTO Government Procurement Agreement. Government procurement activities are mainly based on the 2017 Public Procurement and Supply Supervision Act, and the General Audit Office (CGD) of the Ministry of Finance is responsible for supervising the implementation of the law. Thailand's government procurement is a decentralized system, and each department conducts procurement in accordance with its authority. Foreign suppliers cannot directly participate in government procurement and must apply for registration with the CGD. Registered companies must be Thai legal persons, must have offices in Thailand, and more than half of the directors must be Thai. Government procurement must give preferential treatment to Thai suppliers in government-supported areas, such as agricultural production, farmers' cooperatives, small and medium-sized enterprises, vulnerable groups, educational institutions, etc. Preferential treatment is usually achieved through specific procurement methods. The 2017 Public Procurement and Supply Supervision Act abolished the price preference provisions.

Import and export commodity inspection and quarantine

The main laws related to commodity inspection in Thailand include the National Standardization Act (2008), the Industrial Products Standards Act (1968) and its amendment (2019), the Food Act (1979), the Agricultural Standards Act (2018), the Animal Disease Act (2015), the Animal Feed Quality Control Act (2015), the Plant Quarantine Act (2008), the Plant Act (2007), and the Plant Import Quarantine Regulations.

The Thai Industrial Standards Institute (TISI) under the Ministry of Industry is responsible for standards and technical regulations. Other relevant departments include the Ministry of Commerce, the National Metrology Bureau and the Office of the National Standardization Committee. Thailand has mandatory standards for 144 industrial products, including civil construction materials, consumer products, electronic engineering, hydraulic engineering, food, heat exchange engineering, medicine, paint volatiles, mechanical engineering and vehicles, chemicals, etc. For details, please see https://www.tisi.go.th/list-tisi.

Thailand's animal and plant and food inspection and quarantine laws include the classification of food into four categories according to risk level, which need to meet different registration, labeling and assurance requirements. Relevant regulatory agencies include the National Agricultural Products and Food Standards Agency (ACFS) under the Ministry of Agriculture and Cooperatives, the Department of Agriculture, the Department of Animal Husbandry, the Department of Fisheries and the Food and Drug Administration under the Ministry of Public Health.

Customs management rules and regulations

The Customs Act is the fundamental legal system for implementing customs management in Thailand. The latest revision was in 2018. The Customs Act and related regulations of Thailand can be found on the website of the Thai Customs at www.customs.go.th.

Imported goods are usually subject to tariffs and value-added tax (VAT). The tariff calculation method is generally based on price, and some goods are taxed according to a specific unit tax rate. In general, the tariff amount of imported goods is calculated by multiplying the CIF price of the goods by the import tax rate of the goods. The import tariff rate of most goods is between 0-80%; the VAT calculation formula is the total value of the imported goods after paying tariffs and consumption taxes (some goods are required to pay) multiplied by 7%.

Tariff rates for major commodities

Product Name	HS Code	General tariff rate
crude	2709	25%
integrated circuit	8542	35%
Parts of office machines such as typewriters	8473	40%
Motorcycle Parts	8708	60%
Solid media storage media such as CDs, tapes, memory cards, etc. that do not have recorded content (except film)	8523	60%
Finished Oil	2710	The tax rate for tax code 27101211~39 is 2.91 baht/liter, and the rest is taxed at a rate of 30%
Natural gas and other gaseous fuels	2711	A specific unit tax rate of 0.001 baht/kg is applied
Unprocessed refined copper and copper alloys	7403	6%
Automatic data processing equipment	8471	40%
Unprocessed gold, gold powder	7108	35%

Source: Thai Customs

In addition to the ordinary tax rates, most imported products can enjoy different preferential tax rates based on free trade agreements, specific industries, etc. The tariff rates and concessions for specific commodities can be checked on the customs website.

Foreign investment regulations

Investment Regulatory Department

The main departments responsible for investment promotion in Thailand are the Department of Business Development (DBD) under the Ministry of Commerce and the Thailand Board of Investment (BOI).

The main responsibilities of the DBD are to manage the registration or filing of business organizations, approve foreign investment access permits for restricted industries, investigate and punish violations of foreign investment access restrictions, etc. in accordance with the Civil and Commercial Code, the Foreign Business Law and related regulations. In July 2024, the DBD announced that it would revise the new version of the Foreign Business Law as soon as possible and planned to make the entire enterprise registration system online.

The BOI is responsible for formulating investment-related policies in accordance with the Investment Promotion Law. The Office of the Board of Investment is responsible for implementing the relevant policies of the Board, including approving investment preferential projects, providing investment consulting and services, etc.

Foreign Investment Regulations

Thailand's laws and regulations related to foreign investment are the Alien Business Act, which was promulgated in 1999.

and its revision (2013).

Preferential policies for foreign investment

Thailand's Investment Promotion Act (the "BOI Act") and the Eastern Economic Corridor Act (the "EEC Act") encourage local and foreign investment activities in Thailand and provide tax and non-tax incentives for promotion projects. Tax incentives include: (1) exemption of corporate income tax (CIT) and import taxes for 5 to 8 years; (2) a 50% reduction in corporate income tax and import taxes for up to 5 years. Non-tax incentives include: (1) foreign investors holding more than 49% of the shares of the promotion enterprise can obtain land ownership; (2) the right to employ foreign employees on a long-term basis, with fewer visa and work permit requirements; (3) foreign investors have the right to acquire more than 49% of the shares of the promotion enterprise.

The Thailand Board of Investment (BOI) is a government agency that takes the lead in formulating and implementing Thailand's investment promotion policies.

The chairman of the committee is the Prime Minister of Thailand. In October 2022, BOI approved the five-year (2023-2027) New Investment Promotion Strategic Framework. Currently, BOI has three offices in Beijing, Shanghai and Guangzhou, China.

The Eastern Economic Corridor (EEC) covers three provinces on the east coast of Thailand: Chachoengsao, Chonburi and Rayong. Investment projects approved in the EEC will receive special tax and non-tax incentives. Investment projects approved in the EEC will receive more favorable policies than general BOI projects. For example, foreign investors can hold 100% of the shares of the company investing in the EEC; they can obtain land ownership; and they can obtain a 50-year land lease, which can be renewed for another 49 years.

Investment Industry Regulations

According to the relevant provisions of Thailand's Foreign Business Act, Thailand restricts foreign investment in the following three industries:

[Industries where foreign investment is prohibited for special reasons]

Including: newspapers, radio stations, television stations; rice planting, dryland planting, orchard planting; animal husbandry; forestry, log processing; fishing in Thai territorial waters and Thailand's exclusive economic zone; Thai medicinal material preparation; operation and auction of Thai antiques or cultural relics of historical value; production or casting of Buddha statues and alms bowls; land transactions, etc.

[Industries requiring approval from the Minister of Commerce]

Including: Investment businesses that involve national security and stability or have adverse effects on art and culture, customs and habits, folk handicrafts, natural resources, and ecological environment. Foreign investors may only engage in industries that require approval from the Minister of Commerce based on the decision of the Cabinet:

(1) Investment businesses involving national security and stability, including the production, sale, and repair of firearms, bullets, gunpowder, explosives, and their related accessories, weapons, military ships, aircraft, vehicles, and all parts and accessories of war equipment;

Domestic land, water, air and other transportation industries, including domestic aviation industry.

(2) Investment businesses that have adverse effects on art and culture, customs and habits, folk handicrafts, natural resources, and the ecological environment, including the sale and purchase of antiques and artworks related to traditional Thai handicrafts, wood carving, sericulture, Thai silk production, Thai silk weaving, Thai silk pattern printing, Thai folk musical instrument manufacturing, gold, silver, black silver inlaid objects, stone inlaid gold objects, lacquerware manufacturing, and the manufacturing of plates, bowls, and pottery involving traditional Thai crafts.

(3) Investment businesses that have adverse effects on natural resources and the ecological environment, including sugarcane production, sea salt, mineral salt production, rock salt production, mining, stone blasting or stone crushing, furniture, wood processing, etc.

[Investment business in which domestic nationals are not able to compete with foreigners]

Foreigners must obtain approval from the Foreigners Business Committee and a license issued by the Director of the Department of Business Development, Ministry of Commerce before they can engage in the following industries: rice milling, rice flour and other plant flour processing; aquaculture; development and operation of forestry; manufacturing of plywood, veneer, planed wood, hardwood; lime production; accounting, legal, architectural, engineering services; engineering construction, but does not include:

(1) Construction of public infrastructure with a minimum investment of THB 500 million by foreigners, construction of public facilities using new machinery and equipment, special technology and professional management, and construction of transportation facilities.

(2) Other engineering construction projects specified in ministerial regulations; intermediary or agency business, but excluding:

① Securities trading intermediary or agency, agricultural product futures trading, and securities trading business;

② Provide intermediary or agency services for the production and service needs of the joint ventures, such as buying, selling, purchasing, and seeking services;

③ Providing intermediary or agency services for buying, selling, purchasing, promoting, and seeking domestic and foreign markets for international trading enterprises that sell domestic or imported products and have a minimum capital of more than 100 million baht invested by foreigners; auction industry, but excluding: a) international auction industry, where the auction objects do not involve the auction of antiques, antiques, and works of art with traditional Thai crafts, archaeological or historical value; b) other auctions specified in ministerial regulations; international trade involving local specialties or agricultural products that is not expressly prohibited by law; department stores with a minimum capital of less than 100 million baht, stores with a minimum capital of less than 25 million baht; commodity wholesale industry with a minimum capital of less than 1 million baht; advertising industry; hotel industry, excluding hotel management; tourism industry; catering industry; development of new plant varieties and variety improvement; other service industries except those specified in ministerial regulations, etc.

In addition to obtaining approval from the Minister of Commerce based on a resolution of the Cabinet, foreigners must also meet the following two conditions before they can engage in the industries specified in the second category above: first, the shares held by Thai nationals or non-foreign legal persons as specified in this Law must be no less than 40% of the capital of the foreign legal company (unless there are appropriate reasons, the Minister of Commerce may relax the above shareholding ratio based on the approval of the Cabinet, but the minimum must not be less than 25%); second, at least 2/5 of the director positions must be held by Thais.

For the above-mentioned second and third categories of industries that require permission to invest as stipulated in the Foreign Business Enterprise Law, the minimum investment amount for foreigners to start business operations in Thailand shall not be less than 3 million baht, and the minimum investment amount for other industries shall not be less than 2 million baht, and shall not be less than 25% of the estimated average annual operating expenses in the first three years after starting business operations. The minimum investment amount refers to the registered capital for legal persons registered in Thailand, and to foreign investors or legal persons not registered in Thailand, it refers to the foreign exchange remitted from business in Thailand. If foreigners are investors who can enjoy investment incentives or obtain business licenses according to the Investment Promotion Law, Industrial Park Management Regulations or other relevant laws, they can engage in certain industries specified in the second and third categories.

【Qualification Management】

According to the relevant provisions of Thailand's Investment Promotion Act, enterprises that receive investment incentives in Thailand and whose investment amount is more than 10 million baht (excluding land fees and working capital) must obtain ISO9000 or ISO14000 international quality standards or other equivalent international standards certification within 2 years from the date of commencement of production and operation, otherwise their corporate income tax exemption period will be reduced by 1 year. The specific approval standards are as follows:

(1) For projects with an investment amount not exceeding THB 500 million (excluding land fees and working capital), the product added value must not be less than 20% of the sales revenue, except for electronic products and their accessories, agricultural product processing and projects specially approved by the Board of Investment; the debt-to-registered capital ratio of new investment projects shall not exceed 3:1; investment projects must use advanced production technology and new machinery and equipment. If old machinery is required, its efficiency must be verified by an authoritative organization and approved by the Board of Investment; there must be sufficient environmental protection measures. For projects that have adverse effects on the environment, the Board of Investment will focus on reviewing the location of the factory and its pollution treatment methods.

(2) Projects with an investment of more than THB 750 million (excluding land fees and working capital) shall, in addition to the above provisions, be required to submit a project feasibility report in accordance with the regulations of the Board of Investment.

[Equity Restrictions]

For investments in the following industries, the shareholding ratio of Thai investors shall not be less than 51%: agriculture, animal husbandry, fishery, exploration and mining, and the service industry in the first category of the appendix to the Foreigners Business Act promulgated in 1999. On January 9, 2006, the Thai government cabinet meeting approved in principle the draft amendment to the Foreigners Business Act submitted by the Ministry of Commerce of Thailand, and decided to send it to the Legislative Affairs Committee for further revision of certain clauses. The draft amendment has three main points:

(1) Regarding the definition of “foreign legal person”, in addition to the previous provision that a company is deemed to be a foreign legal person if its shareholding ratio is more than 50%, it is now stipulated that even if the shareholding ratio of foreigners is less than 50%, but the proportion of foreigners’ voting rights is more than 50%, it is also deemed to be a “foreign legal person”;

(2) Amend the penalty provisions to increase the amount of penalties for foreign-invested enterprises that operate businesses restricted to foreign investors without approval or foreign-invested enterprises whose shares are held by Thai persons;

(3) Adjust the list of the third category of industries in the annex to the Foreigners’ Business Act (i.e. industries where Thai enterprises are not yet able to compete with foreign enterprises and foreigners must obtain approval from the Foreigners’ Business Committee and a license issued by the Director of the Department of Business Development of the Ministry of Commerce before they can operate in such industries). Industries that already have other special laws and regulations (such as tourism, finance, securities, etc.) will no longer be included in the third category.

The draft amendment to the Foreigners' Business Act provides a grace period for existing foreign-invested enterprises that do not comply with the above new regulations. Foreign-invested enterprises that have not obtained approval or use Thai agents to hold shares in the first category of industries (industries that foreigners are prohibited from operating for special reasons, such as newspapers, radio stations, television stations, land transactions, etc.) and the second category of industries (industries related to national security and culture and art, such as weapons, cultural relics and artworks, etc.) must report to the Ministry of Commerce within 90 days and make corrections within 1 year; foreign-invested enterprises in which foreigners hold no more than 50% of the shares but have more than half of the voting rights must notify the Ministry of Commerce within 1 year and reduce the voting rights to less than 50% within two years. Foreign-invested enterprises in the third category of industries must report their foreign shareholding status and the proportion of voting rights they hold to the Ministry of Commerce within 90 days and 1 year respectively, and then they can continue to operate without reducing the proportion of foreign shareholding and voting rights, because these industries are not related to national security and are not prohibited for foreigners. Enterprises established after the amendment to the Foreigners' Business Act is passed must comply with the new legal provisions.

[Regulations on foreign investment in local agricultural investment cooperation]

Thailand strictly prohibits foreign investment in the agricultural investment sector and does not allow foreign investment to obtain ownership and contract management rights of agricultural land.

[Regulations on foreign investment in local forestry investment and cooperation]

Thailand strictly prohibits foreign investment in the forestry investment sector and does not allow foreign investment to obtain ownership and contract management rights of forestry land.

[Regulations on foreign companies participating in local securities trading]

Thailand does not have any special regulations regarding foreign companies participating in local securities trading. Foreign companies registered in Thailand enjoy the same treatment as local companies in participating in securities trading.

【Local laws and regulations on intellectual property protection】

Thailand's laws on intellectual property protection mainly involve three parts: the Patent Law (1979), the Trademark Law (1991) and the Copyright Law (1994). The three laws clearly stipulate the definitions, types, applications, use and protection of patents, trademarks and copyrights.

[Related Penalties for Intellectual Property Infringement]

According to the relevant provisions of the Thai Patent Act (1979), those who do not have the rights stipulated in this Act shall not use "Thai patent right", "Thai utility model patent right", or other foreign words with the same meaning, or other words with the same meaning, on product containers, product packaging, or in the promotion of inventions and designs. No one shall use "patent pending" or "utility model patent pending" or other words with the same meaning (but this does not apply to patent applications or utility model patent applications that are under review) on product containers, product packaging, or in the promotion of inventions and designs. If there is any violation, the offender may be sentenced to imprisonment of not more than one year or a fine of not more than 200,000 baht, or both. Anyone who uses a patent for a product, technology or design owned by the patent owner (but this does not apply to the use of the design patent for teaching and research) without the permission of the patent owner may be sentenced to imprisonment of not more than two years, or a fine of not more than 400,000 baht, or both. Anyone who infringes the right to use a utility model patent without the permission of the utility model patent owner may be sentenced to imprisonment of not more than two years, or a fine of not more than 400,000 baht, or both. Anyone who violates the rights of others may be sentenced to imprisonment of not more than one year, or fined not more than 200,000 Baht, or both. Anyone who provides false materials to the enforcement staff when applying for an invention patent, design patent or utility model patent in order to obtain a patent certificate or utility model certificate may be sentenced to imprisonment of not more than six months, or fined not more than 5,000 Baht, or both. If the person punished for violating this Law is a legal person, its legal person executor or legal person representative shall be subject to the corresponding punishment prescribed by the law, unless the legal person's behavior can be proved to have nothing to do with the person himself or has not been recognized by the person himself.

Thailand's Trademark Act (1991) and Copyright Act (1994) do not provide for penalties for violations.

Investment method regulations

【Equity investment】

There are two ways for foreigners to conduct investment and business activities in Thailand: one is to register as a legal entity in Thailand in accordance with Thai law, such as sole proprietorship, partnership, private limited company and public limited company; the other is to establish a joint venture, which usually refers to an entity formed by some natural persons or legal persons according to an agreement to engage in a certain business activity. According to the Thai Civil and Commercial Code, a joint venture is not a legal entity, but according to the Tax Code, a joint venture is regarded as a single entity when paying corporate income tax.

[Listing]

Thai law stipulates that only public limited companies are eligible to apply for registration and join the stock exchange market. According to the relevant provisions of the Public Limited Company Act promulgated in 1992, a limited company can be converted into a public limited company. Thailand has no special restrictions on foreign companies listing in Thailand. Public limited companies registered in Thailand can apply for listing if they meet the relevant regulations of the Securities and Exchange Commission of Thailand (SEC) and the Stock Exchange of Thailand (SET).

【Acquisition】

Thailand does not have special laws and regulations on cross-border mergers and acquisitions. The laws and regulations governing acquisitions include the Civil and Commercial Code, the Public Limited Company Act, and the Securities and Exchange Act promulgated in 1992. Acquisitions usually take the form of wholly-owned acquisitions, stock acquisitions, and asset acquisitions. The acquisition of a private limited company must comply with the relevant provisions of the Civil and Commercial Code. The acquisition of a listed company must comply with the Securities and Exchange Act and the relevant provisions of the Securities and Exchange Commission of Thailand.

【M&A Process】

According to Thai law, the main procedures for foreign investment in Thailand to conduct acquisitions and mergers are as follows:

(1) Obtaining preliminary information (understanding the company's equity structure and assets and liabilities in the early stage, assessing the price of the stocks or assets to be acquired, the company's employment situation, ownership of various licenses, etc.);

(2) Issue a letter of intent to purchase (the main points of which include stating the price of the stocks or assets to be acquired and requiring due diligence in terms of legal, financial, tax, production, etc.);

(3) Legal due diligence (including basic information of the enterprise, employee information, assets and liabilities, various licenses, environmental protection, intellectual property rights, disputes and litigation, etc.);

(4) Understand the key points of equity or asset mergers and acquisitions (such as the arrangement of equity and shareholders after the acquisition, details of stock transfer, restrictive provisions on foreign ownership of land in asset mergers and acquisitions, etc.);

(5) Signing of equity or asset acquisition agreement. Consulting agencies for foreign investment mergers and acquisitions in Thailand include the Thailand Board of Investment (BOI), the Thailand Securities and Exchange Commission (SEC), and various professional law firms and accounting firms.

【Security Review】

Thailand does not have any specific legal provisions regarding security review of foreign investment mergers and acquisitions and investment and mergers and acquisitions by state-owned enterprises. As long as foreign investors do not violate the relevant provisions of Thailand's Foreign Business Act that prohibit or restrict foreign investment, they can conduct investment and mergers and acquisitions in Thailand in accordance with the relevant provisions of the Civil and Commercial Code, the Public Limited Company Act and the Securities Exchange Act.

【Antitrust Investigation】

Thailand's law on anti-monopoly and concentration of operators is the Trade Competition Act (TCA). The law was officially promulgated and implemented in 1999, replacing the Price Fixing and Anti-Monopoly Act enacted in 1979. The law consists of 7 chapters and 57 articles, mainly making legal provisions on restricting market monopoly, encouraging free competition and many other aspects. According to the law, Thailand established the Trade Competition Commission (TCC), which is responsible for formulating standards for constituting market monopoly and detailed rules for the implementation of the Anti-Monopoly Law, handling various anti-monopoly complaints and conducting anti-monopoly investigations.

The committee must be approved by the Cabinet and will be chaired by the Minister of Commerce, with the Permanent Undersecretary of Commerce as Vice-Chairman and the Permanent Undersecretary of Finance as Secretary-General. It will have no fewer than eight members but no more than 12 members.

The main categories include:

(1) Abuse of dominant market position;

(2) Concentration of operators;

(3) Establishing private agreements or collective unified actions to restrict free market competition;

(4) Monopolizing commodity import channels and damaging consumers’ right to import directly;

(5) Excluding or restricting competitors through unfair competition.

The law also stipulates that the TCC has the right to require companies with a market share of more than 75% to stop increasing or reducing their market share.

According to practice, if a company is judged to have market dominance, it should be subject to antitrust investigation. TCC further clarifies that the criteria for judging companies that constitute market dominance are:

(1) Occupy a market share of more than 33%;

(2) Annual sales exceeding 1 billion baht. Of course, this standard can be adjusted according to different industries. In 2003, the TCC submitted a new proposal to the Cabinet. One of the proposals was to expand the definition of "dominant market enterprise" from a single enterprise to a community of multiple internally related enterprises, and the other was to formulate specific standards for judging market dominance for different industries.

The law exempts individual organizations from investigation for their monopolistic behavior:

(1) Public administration departments;

(2) State-owned enterprises included in the fiscal budget;

(3) Farmers' groups or cooperatives established in accordance with the law;

(4) Other enterprises exempted from investigation according to the regulations of relevant departments.

The law stipulates that the punishment measures for monopolistic behavior include: criminal prosecution; administrative penalties; compensation for losses.

Introduction to Thailand’s Special Economic Zones

Eastern Economic Corridor Special Zone

The Thai government proposed the Eastern Economic Corridor (EEC) plan in 2015. In May 2018, the Eastern Economic Zone Act was officially promulgated and implemented. The Thai government regards it as a flagship project of the "Thailand 4.0" strategy and an important part of Thailand's 20-year national strategic plan. The EEC covers the three provinces of Chachoengsao, Chonburi and Rayong on the eastern coast of Thailand, with a total area of ​​13,285 square kilometers. It aims to attract foreign investment through the vigorous development of infrastructure and a series of preferential policies, thus becoming a new engine for the development of Thailand's economy. The twelve major target industries that the EEC vigorously develops are new automobiles, smart electronics, agriculture and biotechnology, food processing, high-quality tourism and health care, automation, aviation and logistics, integrated medical care, biofuels and chemical industries, digital economy, defense industry, and human resources education.

At present, the construction of infrastructure and industrial clusters under the Eastern Economic Corridor is progressing steadily. Among them, the sea, land and air infrastructure such as Laem Chabang Port, U-Tapao Airport and Map Ta Phut Port have been upgraded and interconnected, which is promoting the effective integration of the industrial chain and supply chain in the region, and further promoting the connectivity between Thailand's economic center cities and neighboring countries.

Other Economic Corridor Zones

In order to promote investment and development in various regions in accordance with local conditions, in 2022, the Thai government approved the addition of four special economic corridors.

Northern Economic Corridor (NEC) : includes the four provinces of Chiang Rai, Chiang Mai, Lamphun and Lampang, focusing on the development of agriculture, food processing, digital industry, creative industry, and health and wellness tourism, and developing the local area into a creative economic base in a sustainable manner.

Northeast Economic Corridor (NeEC) : including the four provinces of Khon Kaen, Udon Thani, Nakhon Ratchasima and Nong Khai, it focuses on the development of agriculture, food processing and bioeconomy, and develops the local area into a new type of bio-industry base.

Central Western Economic Corridor (CWEC) : It includes the four provinces of Ayutthaya, Nakhon Pathom, Suphan Buri and Kanchanaburi, focusing on the development of agriculture, food processing, tourism and high technology, and connecting the capital Bangkok and the Eastern Economic Corridor region. It will enhance the capacity of existing and future industries, while promoting the development of world heritage, historical tourism and protected areas.

Southern Economic Corridor (SEC) : includes the four provinces of Chumphon, Ranong, Surat Thani and Nakhon Si Thammarat, focusing on improving the quality and standards of tourism, developing the bio-industry and high-value agricultural processing, building a trade and logistics center in the southern region, and becoming a channel connecting India, Sri Lanka, Bangladesh and other countries along the Andaman Sea and the Gulf of Thailand.

Border Special Economic Zone

To further promote trade and investment with neighboring countries, the Thai government established the Special Economic Zone Policy Committee in 2014. The committee was established to promote the overall growth of the country's economy and stimulate economic activities by establishing Special Economic Zones (SEZs) in 10 border provinces across the country. The 10 border economic zones are: Tak, Songkhla, Sa Kaeo, Trat, Nong Khai, Nakhon Phanom, Mukdahan, Chiang Rai, Kanchanaburi and Narathiwat. The 13 main target industries in the border economic zone are: 1. Agriculture, fisheries and related businesses; 2. Production of medical products and services; 3. Production of automobiles, machinery and parts; 4. Production of electrical and electronic products; 5. Production of ceramics, metal and material products; 6. Production of plastic and pulp products; 7. Public utility businesses; 8. Industrial parks or industrial zones; 9. Production of textiles, clothing and leather products; 10. Production of jewelry and accessories; 11. Furniture production; 12. Tourism support businesses; 13. Service industries.

The border special economic zones that have taken shape include:

Mae Suk Border Economic Zone in Western Tak Province : bordering Myanmar, with a total area of ​​886,872 rai (1,419 square kilometers).

Northeastern Mudahan Border Special Economic Zone : connected to Laos, with a total area of ​​361,542 rai (578.5 square kilometers), the main industry is the electronic industrial production base and product wholesale center. It can deepen the development of industrial production and establish a product distribution center, warehousing base and logistics center.

Aranyaprathet Special Economic Zone in Sa Kaeo Province in the east : adjacent to Cambodia, with a total area of ​​207,500 rai (332 square kilometers), it is a famous wholesale and retail market and agricultural product processing base in Thailand, and can be developed into an international warehousing center in the future.

Eastern Trat Border Economic Zone : bordering Cambodia, with a total area of ​​31,375 rai (50.2 square kilometers), it is a well-known tourist area in Thailand. In the future, it may set up a border duty-free zone, establish a product distribution center and a logistics center.

Sadao Border Economic Zone in Songkhla Province in the south : It is located on the border with Malaysia and has a total area of ​​345,187 rai (552.3 square kilometers).