Legal Services

Dr. Gunter Denk

President and Partner

Dej Bupawon

Partner

Sneha Chawla

Senior Business Lawyer

M. L. Sujira Ngomrath

Lawyer

Chavalit Chansomboon

Lawyer

Sawake Kornkasem

Lawyer

Suthep Viraarchakul

Lawyer

Company Establishment

The cornerstone for successful business operations is a well-defined legal structure that is tailored to the company’s business objectives.

Trading and service providing companies deserve special attention, as their activities being conducted by non-nationals are subject to strict regulations and restrictions under the “Foreign Business Act”.

The Company Limited as a 100% Daughter Company

The Company Limited is the most common legal form in Thailand and more or less corresponds to a German GmbH. It may be established as a “Wholly Foreign Owned Enterprise (WFOE)” with 100 % foreign shareholders. Incorporation is straightforward, requires three initial shareholders and is quickly set up.

It is expected that 100 % foreign companies have a minimum capital of 2 million THB. Nonetheless, sound legal advice is required since foreign invested companies are restricted in their activities.

One should have a look at this at the time of incorporation.

Producing in Thailand

What not many people know: Foreigners are permitted to have production facilities almost without restriction as 100% foreign owned entity in Thailand. Foreigners may even obtain land ownership if the manufacturing plant is located in a certified industrial site.

Of course, there are some rules to follow in Thailand as well. Land use regulations do not permit production facilities in all areas. Usually, a “Factory License” is required, which depends, among other factors, on the technical equipment and the number of employees.

For those who would also like to take advantage of the attractive tax benefits offered by the Board of Investment (BOI), Sanet’s attorneys will be happy to advise on the extensive incentive schemes and their conditions.

The Representative Office (RO)

The RO must not “accept purchase orders, make sales offers or conduct business negotiations with any person”. It is also not permitted to have its own revenue; instead, the parent company directly and entirely bears all of the office’s expenses.

The Representative Office is thus a foreign company’s “beachhead” in Thailand and is limited to procuring products, inspecting them for quality, observing and reporting about the state of the market, and – to a certain extent – supporting contracted distributors or importers.
As a “Sales Office” it is in violation of the law and the persons responsible, both national and foreign, are subject to criminal and tax consequences.

Investment Consulting

As a Thai-German Law Firm, Sanet Legal in Bangkok provides professional advice on more than just the proper set-up of your company.  More importantly, for almost 20 years, we have also been handling the comprehensive incentives that Thailand provides to Foreign Investors. 

Sanet has guided enterprises from all over industries and countries, amongst them numerous machine builders, automotive suppliers, chemical manufacturers, plastics processors, electronic assemblers, IT- and service providers.  

Mostly, Sanet supported them from the development of a business plan to the investment approval by the Thai Board of Investment (BOI).

The Board of Investment (BOI) Incentive Scheme.

Thailand offers its investors extensive tax and non-tax incentives. Among these are long-standing tax waivers and exemption from import duties on machinery and materials. In addition, it grants the right to own land and facilitates the employment of foreign experts.

The incentives are classified by numerous industries and technologies, which receive varying degrees of support.
Extra benefits, for example in the form of special depreciation allowances or extended tax exemptions, are granted to investors who earn special “Merits”, such as in education of their workforce or in cooperation with local universities.

Manufacturers Benefit Most from BOI Promotion

The BOI support focuses on Foreign Direct Investment (FDI). Investors in modern industries providing a professional Business Plan may be exempted from corporate taxes entirely for up to 8 years and 50% for an additional 5 years. Customs duties on components, machinery and equipment may be eliminated.

In sum, investors in Thailand can thus import machinery and components duty-free, operate tax-free and cost-effective, and then also export their products duty-free to 16 countries including China, Korea and Japan.

The Trade & Investment Service Office (TISO) under the BOI.

The activities of the BOI-promoted TISO focus on technical services provided by foreign manufacturers directly to their Thai companies. Thus, it gives a straightforward exemption from the ban on providing technical and business services by foreigners, as it is stated in the “Foreign Business Act”.

The best benefit of the TISO is for manufacturers of machinery, equipment and tools. They can legally carry out, for example, maintenance, repair and calibration of the machines supplied, along with installation and assembly, and they can also charge to Thai customers. The permission to import and resell to wholesalers is another important part of the TISO promotion.

Among the conditions for setting up a TISO are an investment of at least 1 Mio. Thai Baht, a paid-in capital of at least three Million THB and annual sales and administrative costs of at least 10 Mio. THB.

The International Business Center (IBC) under BOI as a “Bridgehead”

The IBC under BOI promotion is permitted to provide comprehensive services to affiliated companies in and outside of Thailand. These services – among others – include business and sales planning, marketing and sales promotion.

Again, it is essential to remember that direct sales negotiations with end customers must not be part of the scope of an IBC. Nevertheless, it still can become very beneficial to the sales efforts to set up that kind of “bridgehead” in Thailand.

The IBC may also carry out installation, repair, and maintenance for the parent company’s products. However, these services may not be commissioned and paid for by the Thai customer, but only by the parent company.

The IBC requires an investment of about 1 Million THB and a paid-up capital of the Company Limited of 10 Million THB. At least 10 qualified and knowledgeable employees must be hired for the services to be provided.

Without Sanet’s excellent networking with local authorities, banks, suppliers and industrial parks, SGF would not have experienced such a smooth project flow of our foreign Direct Investment in Thailand.

Michael Weikert

Managing Director Suddeutsche Gelenkscheibenfabrik

Corporate Law

A well elaborated Memorandum of Association is the best assurance to avoid conflicts within the company or to at least resolve them in a neat way and without any legal disputes.

In principle, this applies to any business, but particularly to Joint Ventures and corporations with more than one strategic partner.

Sanet Legal’s attorneys in Bangkok possess decades of experience in how conflicts may arise and may be resolved. Matters such as management and control, funding rules, dividends, quorums for corporate resolutions, minority rights, share sale and purchase rights, and succession and compensation rules, as well as numerous considerations of interests, must be handled with entrepreneurial farsightedness.

Sanet Legal’s strength in this field is again the connection between legal knowledge and entrepreneurial mindset.

Labor Law

The number one objective of Sanet’s Labor Law attorneys is to prevent conflicts.

In Thailand, employee rights are well protected by law. The Labor Department monitors compliance and can be called upon by employees for assistance at any time. Each company is required to publish its “Labor Rules”. Working hours, maternity protection and layoffs are strictly regulated.

Sanet drafts those rules and regulations reliably in Thai and English. In addition, we draft and review our clients’ employment contracts and advise on a reasonable balance of interests in the event of any dispute. In this process, we also proactively coordinate with the “Labor Department”.

Labor harmony and the operational functioning of the company are central to our work, while the legitimate interests of the employer are never compromised.

Again, Sanet Legal’s strength is the combination of legal expertise and an entrepreneurial mindset.

We assist with work (NON-B) or Family Related (NON-O) visas and residence visas, visa extensions and visa changes, permanent or temporary work permits, and all issues related to immigration law.

Visa & Work Permit

Thailands Ausländerrecht ist streng und strafbewehrt. Aufenthalt oder gar wirtschaftliche Betätigung ohne oder mit falschem Visum werden mit schneller Ausweisung oder noch härteren Strafen geahndet.

Oberstes Ziel der Sanet Legal Rechtsanwälte ist es, jedem Ausländer bei der Beschaffung des richtigen Visums und einer Arbeitserlaubnis nicht nur zu beraten, sondern ihn durch die manchmal sehr besonderen Verwaltungsverfahren zu begleiten.

Dazu gehört auch, dass wir auf Wunsch Meldepflichten und Fristabläufe überwachen und wir natürlich stets auch mit einer veränderten Rechtslage vertraut bleiben.

Wir unterstützen bei Arbeits- und Familienvisa, Visaverlängerungen und Visawechsel, dauerhaften oder temporären Arbeitsgenehmigungen und alle Fragen rund um das Ausländerrecht.