On 28 August 2019, a new ministerial regulation clarifying the provisions regarding the minimum capital requirements set out in the Foreign Business Act B.E. 2542 (1999) ("FBA") took effect. Specifically, the ministerial regulation clarifies the minimum capital required of companies that intend to avail themselves of the privileges provided for in treaties and agreements such as the US-Thai Treaty of Amity and Economic Relations.
Companies which are established in Thailand that avail themselves of the privileges under the treaties and agreements must meet the applicable minimum capital requirements by 29 August 2029, regardless of whether they have commenced their businesses before or after 29 August 2019.
The ministerial regulation repealed and replaced previous regulations relating to the minimum capital requirements for foreign companies, and consolidated these requirements into one law. The provisions in the regulation that apply to companies which do not avail themselves of the privileges set out in the treaties or agreements remain unchanged.
- THB 2 million minimum capital – applicable to a foreign company that is not conducting a restricted business under the FBA. The minimum capital must be fully paid up before the commencement of business operations.
- THB 3 million minimum capital or 25% of the average estimated expenses for three years of operations, whichever is higher – applicable to a foreign company which is subject to the FBA restrictions. The minimum capital must be fully paid up within three years after the license to operate business is granted.
Thailand's Trade Competition Commission ("Commission") continues to publish new guidelines and regulations to implement the Trade Competition Act ("TCA"). A snapshot of some of the latest developments are set out below.
- On 19 August 2019, the Office of the Trade Competition Commission ("OTCC") published a draft Notification of the Trade Competition Commission Re: Guideline for Consideration of Unfair Trade Practices in Franchising Business B.E. ("Draft Notification") for public consultation. The Draft Notification provides, among others, the definitions of "Franchise", 'Franchisor", and "Franchisee", the obligations of the Franchisor, as well as the factors to be considered in determining whether a franchisor's trade practices may cause damage to its franchisees. The Draft Notification was open for public consultation from 19 August to 20 September 2019.
- On 23 July 2019, OTCC published the Notification of the Trade Competition Commission Re: Criteria, Procedures and Conditions for Imposing the Settlement Fine B.E. 2562 (2019) ("2019 Notification") to repeal and replace the Notification of the Trade Competition Commission Re: Criteria, Procedures and Conditions for Imposing the Settlement Fine B.E. 2561 (2018). The 2019 Notification provides that the competent officials may not enter into a settlement of a case relating to the violation of the TCA where it appears that the offender repeatedly committed such an offense (i.e. more than three times), or the commission of such an offense effectively affected free and fair competition.
- On 19 July 2019, OTCC published the Notification of the Trade Competition Commission Re: Guidelines for Determining Unfair Trade Practices between Wholesale/Retail Business Operators and Manufacturers or Distributors B.E. 2562 (2019). The notification sets out the criteria for determining trade practices of wholesale/retail business operators which could constitute conduct unfairly resulting in damage to other business operators, specifically to manufacturers and distributors.
