Unlocking Innovation: Expedite Your Thai Patent Approval for Competitive Advantage

Innovation is the fundamental pillar of achievement in the rapidly evolving business landscape. It is essential for both emerging entrepreneurs and established industry players to safeguard their intellectual property to sustain a competitive advantage. However, the patent application process in Thailand, like many other countries, involves a variety of examination and review phases. Although its purpose is to verify the validity and integrity of patents, this procedure can be lengthy and cumbersome. Time is unfortunately of the essence in the fast-paced business environment of today. Delayed patent approvals may result in missed opportunities, thereby enabling competitors to seize advantages of similar ideas or technologies. The examination and issuance of a Thai patent typically take up to ten years, commencing from the date of filing until the patent is finally granted. The Department of Intellectual Property Thailand (DIP) received around 13,000 patent applications by 2022, comprising both domestic and foreign submissions. This volume of applications results in a backlog of patent applications that are yet to be examined in Thailand.

Fortunately, there are ways to expedite the examination and grant of a Thai patent, allowing inventors to enjoy the benefits of their invention sooner. In this article, we will explore the steps to expedite the patent application process in Thailand.

In order to expedite the examination and issuance of a Thai patent, applicants may utilize a variety of mechanisms and strategies. Steps for expediting the approval of a Thai patent are as follows:

1.  Submitting a letter requesting for expedited examination of a patent application directly to the DIP

Directly addressing the DIP with a letter requesting for expedited examination of a patent application speeds up the approval process in a straightforward and direct manner. By employing this approach, applicants can formally convey their desire for expedited evaluation and furnish rationales for why their application merits priority review.

2.  Adjustment of the existing Thai specification and claims to align with the corresponding foreign patent

Applicants may submit copies of letters patent, search reports, and substantive examination reports from corresponding foreign patents (e.g., those from the United States, European Patent Organization, United Kingdom, Australia, Japan, and China) to expedite a Thai patent application. This procedure entails adjusting the existing specifications and claims of the Thai patent to align with the chosen foreign jurisdictions. Applicants can utilize the examination results and legal standards that have already been established in these nations to expedite the approval process in Thailand. Implementing this approach not only expedites the evaluation procedure but also improves the likelihood of obtaining patent approval by ensuring compliance with internationally recognized patent standards

3.  Requesting for the external examination with Thai Patent Office

Applicants may request an accelerated examination procedure from external entities, such as the Australian Patent Office, specialized agencies, or agreed Thai University for a novelty search at the applicant’s expense. This method may expedite the issuance of exclusive rights to an invention beyond the timeframe permitted by standard procedure. In order to justify the acceleration, the request typically involves providing compelling reasons, such as impending commercialization or potential market competition. Furthermore, it may be necessary for the petitioner to furnish extensive documentation and evidence that substantiates the invention’s novelty and inventiveness. Upon approval, the external examination process proceeds swiftly, potentially reducing the time typically required for patent approval and enabling the inventor to bring their innovation to market more quickly.

4.  Patent Acceleration Programs

Patent acceleration programs are strategic endeavors implemented by patent offices and affiliated organizations with the aim of accelerating the examination of patent applications. The primary objectives of these programs are to promote innovation, reduce redundancy, improve the efficacy of the patent system, and decrease the backlog of pending patent applications.

i)  ASEAN Patent Examination Cooperation (ASPEC)

The ASPEC program was launched on 15 June 2009. The ASPEC is the first regional patent work-sharing initiative comprised of the IP Offices of nine ASEAN Member States (AMS): Vietnam, Brunei, Cambodia, Indonesia, Lao, Malaysia, Philippines, Singapore, and Thailand.

This program aims to facilitate the expeditious and more efficient acquisition of corresponding patents by applicants residing in participating countries by exchanging search and examination results among participating offices. By eliminating redundant tasks during the search and examination process, the program has the potential to reduce work and accelerate turnaround time.

Request for the ASPEC program is provided with no cost to the applicant. However, local search and examination fees will continue to apply at the AMS IP office.

As of 27 August 2019, two initiatives under the ASPEC have been introduced:

a) ASPEC Acceleration for Industry 4.0 Infrastructure and Manufacturing (ASPEC-AIM)

This initiative operates within the framework of the ASPEC program. Its primary objective is to facilitate the advancement of Industry 4.0 technologies in the ASEAN region by prioritizing Industry 4.0 patent applications. These encompass progressions in sectors such as hardware, software and connectivity. The ASPEC-AIM endeavors to accelerate the commercialization of groundbreaking Industry 4.0 solutions and foster economic expansion in the ASEAN region by supporting innovators to receive a patent more quickly and reduce Time to Market (TTM) with a committed turnaround time of 6 months to receive the first office action.

Application submitted under this program will be evaluated based on search and examination results report issued by another participating AMS IP Office on the corresponding application. This program has a capacity of 50 applicants per year.

b) Patent Cooperation Treaty-ASEAN Patent Examination Cooperation (PCT-ASPEC)

This collaborative program between the World Intellectual Property Organization (WIPO) and AMS has combined the benefits of the PCT and the ASPEC program.

Under the PCT-ASPEC program, patent applicants may register a single international patent application through the PCT system. The application will be evaluated by using a PCT reports/written opinions established by ASEAN International Searching Authority or International Preliminary Examination Authority (ISA/IPEA). These reports subsequently facilitate the examination process in other AMS IP offices. Through the utilization of the ASPEC program’s collaboration among ASEAN patent offices and the PCT system’s international filing process, the PCT-ASPEC framework serves to optimize operations, diminish administrative obstacles, and elevate the standard of patent evaluation throughout the ASEAN area. This platform offers a streamlined and economical method for enterprises and inventors to pursue patent protection in numerous ASEAN nations, thus promoting economic expansion and facilitating innovation in the area. The program has a capacity of up to 100 applications per year.

Both programs have been extended for an additional 2-3 years until 26 August 2025.

ii) JPO-DIP Patent Prosecution Highway (PPH)

The JPO-DIP PPH is the cooperation program between the DIP and the Japanese Patent Office (JPO) to speed up the patent application by requesting urgent patent inspection.

The objective of the PPH Pilot Program is to optimize the efficacy of patent applicants in both nations and streamline the patent examination procedure. Patent applicants who receive a patent inspection result of the first patent office (DIP/JPO) are eligible to request expedited examination of their corresponding patent applications submitted at the second patent office (DIP/JPO). This enables applicants to potentially accelerate the overall patent grant process by using examination results obtained in one jurisdiction to streamline the examination process in the other. As a result, duplication of efforts is reduced. The PPH program promotes international cooperation in the preservation of intellectual property rights while enhancing the quality and efficiency of patent examination through the facilitation of information exchange and the utilization of each other’s examination results. The pilot program functions as a significant mechanism for enhancing the bilateral relationship between Japan and Thailand with regards to intellectual property, while also promoting economic growth and innovation in both nations.

PPH program is projected to end in December 31, 2025 with possible extension.

iii)  Target Patent Fast-Track

In order to address burgeoning public health and food security concerns that have reached unprecedented magnitudes, the DIP has launched Target Patent Fast-Track: Medical Sciences, Public Health since 2022, and newly added Target Patent Fast-Track: Future Food since 2024. This fast-track program aims to expedites patent and petty patent application relating to Medical Sciences, Public Health and Future Food. Applications will be selected by the DIP for the participation in the program. Selected application will receive urgent patent examination and announce the results within 12 months for patent and 6 months for petty patent after the commencement date of participation in the program.

In conclusion, the examination and issuance of a Thai patent can be accelerated in a number of ways, including by utilizing the results of foreign examinations, submitting convincing justifications, and participating in patent acceleration programs. By exploring these alternatives and maneuvering the patent application process strategically, applicants can expedite the endorsement of their patents and gain a competitive advantage in the market.

This article was authored by Mr. Panudeth Juengwiwattanakitti, a Patent Specialist at ILCT. For specific legal advice on this matter, please contact us at ipgroup@ilct.co.th

Unlocking Innovation: Expedite Your Thai Patent Approval for Competitive Advantage [please download]

Cabinet-Approved Personal Income Tax Measures for Investment Tokens

On March 12, 2024, the Cabinet made significant strides in fiscal policy by endorsing tax measures designed to stimulate fundraising activities utilizing digital tokens for investment purposes, termed Investment Tokens. This legal article provides a comprehensive examination of the ratified tax measures, elucidating their ramifications and objectives within the framework of nurturing the digital economy in consonance with governmental directives.

The individual investors who receive share of profits (dividend) or any benefits of a similar nature from holding or possessing investment tokens may elect to pay personal income tax at the rate of 15% equal to withholding tax amount, instead of including the share of profits (dividend) or any benefits for personal income tax calculation and paying tax at progressive rates up to 35% of the net income, provided the investors do not claim for a refund or use withholding tax amount as a tax credit, whether in wholly or partially.

These tax measures become enforceable from January 1, 2024, onwards, symbolizing their immediate applicability in the fiscal landscape.

In conclusion, the Cabinet’s endorsement of tax measures on March 12, 2024, signifies a seminal progression towards nurturing the growth and maturation of the digital economy within the nation. By incentivizing investment through digital tokens and aligning oversight standards akin to those governing securities, the government underscores its commitment to harnessing technology for economic advancement. The delineated tax benefits serve to incentivize individual participation in tokenized investment ventures while ensuring compliance with pertinent tax statutes. Overall, these measures epitomize the government’s proactive stance towards promoting and cultivating the digital economy, positioning the nation for sustained prosperity and innovation in the digital age.

As always, it is recommended that you seek professional legal advice regarding this matter to ensure accurate information. Please contact law@ilct.co.th for more information concerning this.

Cabinet-Approved Personal Income Tax Measures for Investment Tokens [please download]

Empowering the Future: Cabinet Extends Tax Relief Measures for Digital Assets Trading

Empowering the Future: Cabinet Extends Tax Relief Measures for Digital Assets Trading

In a notable development on February 6, 2024, the Cabinet announced its resolution to extend tax relief measures for digital asset trading, providing a lifeline for individuals and juristic entities involved in the realm of cryptocurrencies (“Cryptos”) and utility tokens. The Value Added Tax (VAT) exemption for transfers of Cryptos and utility tokens has been extended from December 2023 to January 1, 2024, onwards.

“Cryptocurrency” means an electronic data unit built on an electronic system or network created for the purpose of being a medium of exchange for the acquisition of goods, services, or other rights, including the exchange between Digital Assets. “Digital Tokens” consist of:

  • “Investment Token” means an electronic data unit created on an electronic system or network which is issued for the purpose of specifying the right of a person to participate in an investment in any project or business.
  • “Utility Tokens” means an electronic data unit created on an electronic system or network which is issued for the purpose of specifying the right of a person to acquire specific goods, specific service, or any specific other right under an agreement between the issuer and the holder, and shall include any other electronic data units of right as specified in the notification of the Securities and Exchange Commission.

VAT exemption for individuals and juristic entities on Transfers of Cryptos and Utility Tokens:

  1. Transfer Crypto or Utility Tokens traded on the Digital Asset Exchange under the Digital Assets Business Law
  2. Transfer Cryptos or Utility Tokens traded through Digital Asset brokers under the Digital Assets Business Law
  3. Transfer Cryptos or Utility Tokens to Digital Asset Dealers (“Buyers”) under the Digital Assets Business Law
  4. Transfer Cryptos or Utility Tokens by Digital Asset Dealers (“Sellers”) under the Digital Assets Business Law.

The Cabinet’s decision to extend tax relief measures for Cryptos and Utility Token trading signifies a strategic move to bolster the burgeoning Digital Assets market. By providing VAT exemptions for a range of transactions, the government aims to stimulate growth, encourage innovation, and create a favorable environment for both individuals and juristic entities.

It’s important to note that transfers of investment tokens in the primary market and secondary market have been exempt from VAT since May 14, 2018, under Royal Decree No. 779.

As with all legal related matters, it is advised that you consult a professional legal advisor for expert opinion. Please reach out to us at law@ilct.co.th.

Empowering the Future: Cabinet Extends Tax Relief Measures for Digital Assets Trading [please download][

SEC Enhances Digital Asset Regulations to Promote Growth and Protect Investors

On March 2, 2023, the Securities and Exchange Commission (SEC) of Thailand took a significant step forward by approving amendments to the regulatory framework governing digital assets during its Board Meeting No. 5/2566. These amendments, which update regulations for the initial coin offering (ICO) of investment tokens, digital asset custodial wallet providers, and other digital asset business operations, came into effect on January 16, 2024. Aimed at strengthening oversight mechanisms, enhancing investor protection, and encouraging the use of digital technology in fundraising, these changes mark a pivotal development in Thailand’s approach to national development and the digital economy.

Purpose Behind the Amendments:

The SEC’s regulatory adjustments aim to strike a balance between the potential of technological innovation in the capital market and the necessity of investor protection amid the rapidly evolving landscape of digital assets. By addressing the distinct risks linked to digital assets, the SEC aims to promote responsible innovation and the utilization of digital technology for fundraising purposes.

Public Engagement and Notifications:

In line with the board’s resolution, the SEC conducted public hearings in September 2023, seeking feedback on the proposed amendments. The substantial support from respondents highlights a widespread consensus within the community on the need for balanced and effective digital asset regulation.

Following this engagement, the SEC issued two crucial notifications, effective from January 16, 2024, to implement these amendments:

  • Notification No. Kor Jor. 2/2567 Re: Public Offering of Digital Tokens (No. 9) dated January 2, 2024, outlines the updated framework for the public offering of digital tokens, broadening investment opportunities by relaxing the restrictions on investment amounts for retail investors
  • Notification No. Kor Thor. 1/2567 Re: Rules, Conditions, and Procedures for Undertaking of Digital Asset Businesses (No. 21) dated January 2, 2024, sets out comprehensive regulations for digital asset business operations, including requirements for ancillary business activities, governance to prevent conflicts of interest, and criteria for digital asset custodial services.

Key Amendments:

  1. Revocation of Investment Limits: The SEC has lifted the investment cap for retail investors in real-estate backed ICOs and infra-backed ICOs, previously capped at 300,000 baht per individual. This change aligns investment opportunities with product risks and promotes the use of digital technology in fundraising.
  2. Support for Digital Asset Custodial Wallet Providers: Regulation revisions to facilitate support for custodial wallet providers, enabling listed companies or subsidiaries with the necessary expertise, experience, and risk management capabilities to serve related digital asset business operators, provided they meet the SEC’s independence criteria.
  3. Regulation of Business Expansion: Digital asset business operators wishing to diversify their operations must now secure approval from the SEC. This requirement underscores the SEC’s commitment to maintaining close oversight of digital asset business activities.
  4. Service Standards Enhancement: The amendments prohibit digital asset business operators from offering services through illegal entities, aiming to uplift the overall quality and credibility of the digital asset market in Thailand.


The SEC’s recent regulatory amendments testify to Thailand’s dedication to cultivating an environment that fosters innovation in digital assets while prioritizing investor protection. These changes, promoting a transparent and secure digital asset market, mark a substantial step towards sustainable growth in Thailand’s digital economy.

For additional inquiries on this topic, please contact us at law@ilct.co.th

SEC Enhances Digital Asset Regulations to Promote Growth and Protect Investors [please download]

Cabinet Approval of Alcoholic Beverage Tax Reductions and Exemption for Tourism Enhancement: An Examination of Excise and Customs Tax Revisions

On the 2nd of January 2024, the cabinet granted its approval for substantial tax reductions and exemptions on alcoholic beverages, marking a strategic initiative to fortify the tourism sector. These tax amendments, expected to take effect shortly, include alterations to both Excise Tax and Customs Tax frameworks. This article provides a thorough analysis of the endorsed modifications and their ramifications for various categories of alcoholic beverages.

Excise Tax Amendments: The approved changes in Excise Tax encompass a transition from tax collection based on price tiers to a unitary rate system, aimed at optimizing the tax collection process. Below is a concise overview of the prevailing Excise Tax rates vis-à-vis the rates sanctioned by the cabinet:

  1. Wine and Sparkling Wine Made from Grapes:
  • Existing:

Recommended retail price not exceeding THB 1,000 (inclusive of VAT): Value Tax Rate 0% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 1,500

Recommended retail price exceeding THB 1,000 (inclusive of VAT): Value Tax Rate 10% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 1,500

  • Cabinet’s Approval:

Value Tax Rate 5% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 1,000

  1. Grape-Infused Liquor or Grape Wine:
  • Existing:

Recommended retail price not exceeding THB 1,000 (inclusive of VAT): Value Tax Rate 0% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 900

Recommended retail price exceeding THB 1,000 (inclusive of VAT): Value Tax Rate 10% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 900

  • Cabinet’s Approval:

Value Tax Rate 0% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 900

  1. Other Types Except for Beer, Wine, Sparkling Wine Made from Grapes, and Grape-Infused Liquor:

(1) Paddy wine, rice wine, palm wine, other native fermented liquor, and fermented liquor made from rice with alcohol not exceeding 7 degrees

  • Existing: Value Tax Rate 10% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 150
  • Cabinet’s Approval: Value Tax Rate 1% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 150

(2) Fermented liquor mixed with distilled liquor with alcohol exceeding 7 degrees

  • Existing: Value Tax Rate 10% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 150
  • Cabinet’s Approval: Value Tax Rate 1% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 255

(3) Other fermented liquor except for (1) and (2) – the Tax Rate for this remains the same as outlined below

  • Existing: Value Tax Rate 10% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 150
  • Cabinet’s Approval: Value Tax Rate 10% and Tax Rate by Volume (Baht per liter of pure alcohol) Baht 150

Customs Tax Amendment: In tandem with Excise Tax amendment, the cabinet has granted exemptions from import duty for specific wines categorized under Tariff Code 22.04 and 22.05. The exempted wines comprise:

  1. Wine of Fresh Grapes, Including Fortified Wines (Tariff Code: 22.04)
  2. Vermouth and Other Wine of Fresh Grapes Flavored with Plants or Aromatic Substances (Tariff Code: 22.05)

To conclude, the cabinet’s endorsement of tax reductions and exemptions on alcoholic beverages, coupled with the recalibration of Excise and Customs Taxes, underscores a targeted effort to invigorate the tourism sector. Stakeholders within the alcohol industry should vigilantly monitor the execution of these amendments and tailor their strategies accordingly.

For expert legal and tax advice concerning this issue, please feel free to contact us at law@ilct.co.th

Cabinet Approval of Alcoholic Beverage Tax Reductions and Exemption for Tourism Enhancement: An Examination of Excise and Customs Tax Revisions [please download]

Overview of Long-Term Residency (LTR) Visas in Thailand by ILCT & BOI (Latest regulations Dec 2023)

ILCT is delighted to have partnered with a distinguished representative from the Board of Investment in producing an informative and insightful video that explains Thailand’s new Long-Term Residency program. We express our sincere gratitude to Khun Dhinapa Apaivongse, Senior Investment Promotion Officer from the BOI LTR division, for generously sharing her expertise with us.

This video aims to be a valuable resource for individuals who are exploring the nuances of Long-Term Residency. It is strongly recommended to seek professional legal counsel for personalized guidance in specific cases.

Overview of Long-Term Residency (LTR) Visas in Thailand by ILCT & BOI (Latest regulations Dec 2023) [please download]

Personal Income Tax on foreign-sourced income brought into Thailand by Thai tax residents

The Revenue Department has recently announced changes to the taxation of foreign-sourced income brought into Thailand by Thai tax residents. Previously, Thai tax residents who earned income abroad would not be subject to personal income tax if the taxable income was not brought in within the same tax year that it was earned.

Effective from 1 January 2024 onwards, foreign-sourced income brought into Thailand in any tax year will therefrom be subject to Thai personal income tax. Additionally, personal income tax on foreign-sourced income shall be applied for the foreign-sourced income incurred from this date onwards. Simply put, this means that only income generated and brought into Thailand from the start of 2024 will be subject to Thai personal income. If the income was generated before 2024 and brought into Thailand in 2024, or later years, it will not be subject to Thai personal income tax.

Key Points of the Revenue Department Order:

A Thai tax resident is defined as an individual residing up to 180 days or more in Thailand within a tax year. Under the new regulations, Thai tax residents who earned foreign-sourced income in the same tax year are required to include foreign-sourced income in their Thai Personal Income Tax calculations in the tax year in which the taxable income was brought into Thailand.

This includes income from employment, foreign business activities, or foreign property ownership brought into Thailand in the tax year. The combined income, including foreign sourced income, is subject to Thai Personal Income Tax at progressive rate of 0-35% of the net income.

Those who have experienced tax deductions or payments on their foreign-sourced income in another nation may have the opportunity to use these tax deductions or payments as tax credit against their Thai Personal Income Tax in Thailand or exemption, as the case may be. This option is available in accordance with the rules prescribed in the applicable Double Tax Treaties between Thailand and the respective foreign country.

These modifications represent a considerable transformation in the taxation of foreign-sourced income brought into Thailand, requiring thoughtful deliberation from individuals impacted by the updated regulations.

Seeking guidance from tax professionals is advisable to ensure proper compliance and tax optimization. Please reach out to law@ilct.co.th for any specific legal enquiries.

Personal Income Tax on foreign-sourced income brought into Thailand by Thai tax residents [please download]

Amendment to the “HOTEL” definition and criteria to accommodate operators with small unique accommodations

In a significant legal development, the Minister of Interior, acting on the recommendations of the Hotel Business Promotion and Control Committee, has issued the “Ministerial Regulation on Hotel Business Types and Criteria (No. 2) B.E. 2566 (2023),” hereinafter referred to as the “New Regulation.” Published in the Royal Gazette on 30th August 2023.  This New Regulation is set to become effective on 29th October 2023, marking an amendment to the “Ministerial Regulation on Hotel Business Types and Criteria B.E. 2551 (2008).”

This article outlines the New Regulation’s three key provisions and their implications for the Thai hotel industry:

  1. Revision of non-hotel accommodation criteria: The New Regulation broadens the definition of ‘Non-Hotel Accommodations’ from those with up to 4 rooms and 20 guests to those with up to 8 rooms and 30 guests. This change will mean that over 50,000 previously recognized small hotels will now be excluded from the Hotel Act classification (Section 4(3)). The amendment aims to preserve unique architectural and cultural characteristics in local community accommodations, which often exceed 4 rooms. These changes will reduce the burden on communities to conform to Building Control Regulations to obtain a Hotel Business License, preventing adjustments that could diminish cultural building uniqueness.

The New Regulation not only reclassifies many small hotels but also encourages community accommodations for tourism home stays. It mandates property owners (recognized in this context by the Ministry of Interior as individuals as opposed to companies or other juristic persons) intending such use to notify the hotel registrar. The registrar conducts inspections and, if compliant, issues a notification. Owners must inform the registrar if they cease such usage. This increases supervision of Non-Hotel Accommodations, complementing existing hotel regulations.

  1. Revisions to Hotel Types: The revised hotel regulations introduce changes to the categorization of hotels. Under the previous regulations, ‘Type 1 hotels’ were defined as establishments with up to 50 rooms, while ‘Type 2 hotels’ were those offering guest rooms as well as a canteen room. This required hotel operators planning to construct hotels with more than 50 rooms to include a canteen room. However, the New Regulation redefines ‘Type 1 hotels’ as those with up to 50 rooms and ‘Type 2 hotels’ as those with more than 50 rooms or those with a canteen room. This modification effectively eliminates the requirement for hotels with over 50 rooms, that solely provide accommodations, to include a canteen room in their facilities. Notably, this modification complements the great demand for local street food in Thailand, making it unnecessary for hotels to provide a canteen room. Nevertheless, Type 3 and 4 hotels have remained the same.
  1. Revisions to Buildings with Special Characteristics: The New Regulation is connected to the “Ministerial Regulation on Building Control Criteria and Security Systems for Hotel Businesses B.E. 2566 (2023),” having also been published on the same day. This regulation sets out specific rules for unique hotel buildings to be able to apply for construction certificates, which is the most significant qualification for the hotel operation license application
    According to the regulation, unique hotel buildings that can now operate as hotels include raft or boat hotels, tent hotels, modified wreck vehicles, container hotels, and hanging hotels with heights exceeding 2 meters from the ground, such as tree houses. The regulation sets specific requirements for these unique hotel buildings. For example, it acknowledges that these buildings cannot easily meet the standard hotel building requirements related to building structure and fire resistance materials. Therefore, the regulation removes these obstacles to preserve the distinctive character of each special hotel building.

Nevertheless, the regulation continues to ensure the safety of these unique hotel buildings. For instance, it mandates that each permitted unique hotel building must have one portable fire extinguisher for every 112 square meters of the hotel area. In essence, these buildings can now meet the criteria to apply for construction certificates, enabling hotel operators and potential investors to open these distinctive buildings as hotels.

As a result of the notable changes in these laws, it is advised that hotels seek legal guidance for specific queries. Reach out to law@ilct.co.th for any support.

Amendment to the “HOTEL” definition and criteria to accommodate operators with small unique accommodations (please download)

Digital Tax Ecosystem: Thailand’s Steps to Tax Compliance and Preventing Fraud

Digital Tax Ecosystem: Thailand’s Steps to Tax Compliance and Preventing Fraud

In pursuit of fully leveraging the Digital Tax Ecosystem by 2028, Thailand’s Revenue Department has rolled out regulations related to digital systems. The latest development in this endeavor is the release of Notification No. 438 by the Director-General on Income Tax, focusing on Tax Returns Concerning Withholding Tax at Source for Individuals, dated September 21, 2023.

This notification serves several pivotal objectives:

  1. Simplifying Taxation for Individuals: The primary aim of this notification is to streamline the tax filing process for individual taxpayers. It enables them to conveniently access their income information through the “My Tax Account” platform while filing their personal income tax returns.
  2. Preventing Tax Refund Fraud: A key focus of these regulations is to deter fraudulent claims for tax refunds by individuals.
  3. Combatting False Expenses: The notification also seeks to prevent juristic persons or individuals, from fabricating expenses, thereby ensuring the accuracy and integrity of financial reporting related to taxes.

Notification No. 438 outlines specific provisions that employers and payers are obligated to adhere to:

Digital Filing Requirements: Employers and payers are required to submit their withholding tax returns, specifically P.N.D. 1 and P.N.D. 1 Kor, exclusively through designated digital channels. These channels include e-filing, e-withholding tax, and other digital media channels i.e., SWC user interface program.

Non-Digital Filing: In situations where employers or payers encounter challenges in filing tax returns via digital channels, they are required to formally notify the Director-General in writing. This notification must include a comprehensive explanation of the obstacles preventing the use of digital channels for tax return submissions.

Submission of Notification Letter: The notification letter, explaining the incapability to file digitally, must be submitted alongside the tax return to the Revenue Officer at the Area Revenue branch office.

Understanding P.N.D. 1 and P.N.D. 1 Kor:

  • N.D. 1: Effective from the tax month of October 2023 onwards, employers shall file the monthly tax return for employees’ income via digital systems on a monthly basis by the 15th day of the following month. It encompasses various income sources, including salary, wage, per diem, bonus, pension, and house rent allowance. Moreover, it also encompasses income derived from a post or performance of work paid to individuals, such as commissions, subsidies, and meeting allowances.
  • N.D. 1 Kor: Effective from the tax year of 2023 onwards, this annual tax return is utilized to consolidate income from employment and income from a post or performance of work over the course of a year.

As Thailand continues its transition toward full digital integration in taxation, stakeholders are urged to remain vigilant and well-informed about these evolving regulations to ensure compliance with the law. For specific inquiries, please contact law@ilct.co.th.

Digital Tax Ecosystem: Thailand’s Steps to Tax Compliance and Preventing Fraud

Investing in Thailand: A Legal Overview for Japanese Outbound Investors


Thailand maintains its position as a popular destination for foreign investment, with a stable economy, favorable investment climate, and strategic location in Southeast Asia. In 2022, foreign investment increased by 56% to 129 billion baht. With 151 investors (or 26% of the overall foreign investors) investing a total amount of 39.5 billion Baht, Japan is the leading foreign investor in Thailand. For Japanese investors, Thailand offers a range of investment opportunities across various sectors, from manufacturing and electronics to tourism and renewable energy.

In this article, we will provide an in-depth guide to investing in Thailand for Japanese outbound investors. We will discuss the legal and regulatory framework governing foreign investment in Thailand, the industries and sectors that offer the most promising investment opportunities for Japanese investors, and the investment strategies and structures that are most effective in the Thai market.

By the end of this article, readers should have a fairly good understanding of the Thai investment landscape and the key considerations for Japanese investors looking to invest in the country. Whether you are a seasoned investor or new to the Thai market, this article will provide you with the insights and knowledge you need to make informed investment decisions and maximize your chances of success in Thailand.

Section 1: Understanding Thailand’s Legal and Regulatory Framework

Foreign investors need to seek advice on Thailand’s legal and regulatory framework prior to investing in Thailand for there are various investment structures available to be considered, from branches of overseas parents to subsidiaries and unincorporated joint ventures (popularly chosen for construction or fixed-term projects). Each structure has its own advantages and disadvantages, and it is important to carefully consider the specific needs and goals of the investment before deciding on a structure.

The country has a range of laws and regulations that govern foreign greenfield investments, including the Foreign Business Act and the Investment Promotion Act. In this regard, understanding Thailand’s legal and regulatory framework is crucial for foreign investors looking to invest in the country. By navigating these laws and regulations carefully, foreign investors can unlock the full potential of Thailand’s economy and maximize their chances of success in the country.

The Foreign Business Act (FBA), B.E. 2542 (1999) is the primary law regulating foreign investment in Thailand. It sets out the rules and procedures for foreign businesses operating in the country and defines the types of businesses that are restricted or prohibited from foreign ownership. Under the FBA, foreign ownership is restricted or prohibited in certain sectors, such as banking, telecommunications, and media. However, foreign investors may be allowed to invest in these sectors through incorporated joint ventures with Thai investors or by obtaining special permission from the relevant government agencies. The FBA also governs the establishment of foreign representative and regional offices in Thailand. While these procedures are optional, they can be beneficial for limited “non-trading” activities such as market surveys, quality control work, and the search for Thai products to be exported. However, if a foreign company engages in such activities, it will be required to obtain a Foreign Business License from the Department of Business Development, Ministry of Commerce. This process typically takes around three months, and if approved, the company will be entitled to receive up to two visas and work permits for a representative office and five for a regional office for its expatriate managers. Foreign banks, securities companies, and finance companies may establish representative offices under separate regulations.

The Foreign Business License (FBL) allows foreigners to own 100% of a company incorporated under Thai law, the FBL is required for all foreign-owned businesses operating in Thailand, except for those that are exempt under the FBA or the Investment Promotion Act (IPA). The application process for the FBL requires detailed information about the proposed business activities and shareholding structure and the key to successfully obtaining the FBL is to show that such foreigner can transfer knowledge and technology to the Thai people, including hiring Thai people. Once the FBL is obtained, the next step is to register the business with the Department of Business Development and obtain a company registration number. Foreign-owned companies must also obtain various licenses and permits, such as tax identification numbers, VAT registration, and work permits for foreign employees.

The IPA is another key piece of legislation that encourages and regulates foreign investment in Thailand. The IPA provides various incentives to foreign investors, such as tax holidays, exemptions on import duties, and permission to own land. The incentives offered by the IPA are intended to attract foreign investment to certain targeted industries and regions.

Section 2: Factors to be considered when establishing a business organization in Thailand

When establishing a business organization in Thailand, there are several factors to consider, including non-tax considerations and tax considerations. From a non-tax perspective, it may be advantageous to form a Thai limited company instead of a branch of a foreign corporation, as the former allows for more flexibility in terms of ownership, and may be easier to obtain registrations and licenses. When dealing with the Thai government, it is also generally advantageous to be a company incorporated in Thailand, as this may lead to the granting of certain privileges and permissions.

On the tax front, all companies incorporated under Thai law or incorporated under foreign law and carrying out business in Thailand are subject to Thai corporate income tax on net profit. However, net profits of branches operating business abroad will be subject to Thai corporate income tax if the head office is incorporated under Thai Law. The activities of representative offices and regional offices may not incur a corporate income tax liability if they are limited to some specific one. Dividends paid to foreign parent companies or shareholders are subject to a withholding tax. The withholding tax may be exempted under the mentioned IPA. The remittance of profits by a branch to the head office is also subject to a withholding tax. Interest, fees, and other amounts remitted to foreign corporate shareholders are subject to a withholding tax, but payments of such amounts by a branch to its head office may be treated as a taxable remittance of profit.

Foreign tax credits may be available in some cases. Moreover, double taxation may be eliminated with the methods specified in the Avoidance of Double Taxation Agreement between Thailand and relevant countries, i.e., underlying tax credit and tax sparing credit. It is recommended to consult with tax counsel to determine the availability of double taxation elimination agreements and the impact of any applicable treaties.

Section 3: Opportunities in Thailand’s Investment Landscape

The Japan-Thailand Economic Partnership Agreement (JTEPA) is a key factor that makes Thailand an attractive destination for Japanese investors. The JTEPA is a bilateral free trade agreement that was signed in 2007 and aimed at strengthening economic ties between Japan and Thailand. The agreement offers various benefits for Japanese investors, including reduced tariffs on goods and services, streamlined customs procedures, and protections for intellectual property rights. Consequently, the manufacturing sector offers attractive investment opportunities for Japanese investors, also considering that most manufacturing businesses are not on the restricted list and can be 100% Japanese-owned. Thailand offers a skilled workforce, a strategic location in Southeast Asia, and a favorable investment climate. It has a well-established manufacturing industry, with a strong focus on food processing, electronics, and automotive. Japanese companies, historically, have been among the largest investors in Thailand’s manufacturing sector, with a particular focus on automotive production and assembly. In addition, the Industrial Estate Authority Act also provides the benefit of allowing foreign investors to own a land provided that certain conditions are met.

Another sector that offers significant potential for Japanese investors is renewable energy. Thailand has set ambitious targets for renewable energy development, aiming to increase the share of renewable energy in its total energy mix to 30% by 2037. The country offers a range of incentives for renewable energy development, including tax incentives, feed-in tariffs, and soft loans. Japanese companies have already made significant investments in Thailand’s renewable energy sector, with projects in solar, wind, and biomass energy.

Tourism-related businesses also offer potential investment opportunities for Japanese investors. Tourism industry accounts for a significant share of the country’s GDP and Japan is one of the top sources of foreign tourists in Thailand, with millions of Japanese visitors traveling to the country each year. Several Japanese companies invested, subject to the FBA, in Thailand’s tourism sector, with projects in hotel and resort development, entertainment, and leisure. In the past few years, and with more strength after the Covid-19 pandemic, the Thai government has launched various initiatives to promote tourism all over the world, such as the “Amazing Thailand” campaign, which aims to boost the number of international visitors to the country.


Thailand offers a promising investment destination for Japanese outbound investors, thanks to its strategic location, skilled workforce, and business-friendly environment. However, investing in Thailand requires a thorough understanding of the legal and regulatory framework, as well as the cultural nuances of doing business in the country.

It is important for Japanese investors to work with experienced legal counsel and seek out professional advice to maximize their chances of success in Thailand. By carefully evaluating potential investment opportunities, negotiating contracts effectively, understanding cultural differences, and selecting the appropriate investment structure, Japanese investors can successfully navigate the Thai market and realize significant returns on their investments.

We encourage readers to explore potential investment opportunities in Thailand and seek out the expertise of ILCT professionals to guide them through the investment process.


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Legal overview for Japanese investment in Thailand-download

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