An individual person who is subject to personal income tax must obtain a tax identification card from the Revenue Department within 60 days from the date of having income. A business, which is subject to corporate income tax, must obtain a tax identification card from the Revenue Department within 60 days after its incorporation or registration.
All business entities whose annual turnover exceeds THB1.8 million must register for value added tax (VAT) within 30 days after the annual turnover has exceeded that amount, unless specifically exempted. The application for VAT registration before the date of commencing business is also allowed under the conditions specified by the Director-General of the Revenue Department.
Licensing a Factory
Under the Factory Act B.E. 2535 (1992) factories are separated into three groups according to the gravity of impact of the factory operations on the public or the environment, as follows:
Group 1 – Factories that can operate immediately without prior government permission.
Group 2 – Factories that require prior notification of the pertinent government authority before the business starts operations.
Group 3 – Factories that require the application for a factory license before the establishment of the factory.
Before the establishment of a factory classified under Group 3, the operator must obtain a factory license from the Department of Industrial Works, Ministry of Industry. Application for a license entails completing an official form, submitting drawings and particulars of the factory, machinery, and acceptable effluent treatment system, and attaching a set of documents stipulated on the form. These additional documents include statements of the amount of investment in the factory establishment and operation, number and grades of factory employees, details of production, construction period for the factory, and the blueprints of the structures and the machinery that will be installed. The factory must be established in accordance with the approved plan and specifications.
The operator of a Group 3 factory must notify the competent authority at least 15 days before a factory test-run commences, and again 15 days before actual manufacturing operations start. The factory license is valid up to the last day of the fifth calendar year from the year of commencement, and is renewable. An application for renewal of the factory license must be filed to the authority prior to the expiration of that license. While the factory license is valid, the licensee must pay an annual fee for the said license. Licensees must also obtain prior permission from the Ministry of Industry for any factory expansion, transfer of machinery to other sites, or transfer of factory site. Permission is likewise required in order to transfer, lease, assign, or sell a factory operation.
A company, which wishes to issue shares or debt securities to the public, must comply with the regulations of the Securities Exchange Commission (SEC) and the Stock Exchange of Thailand (SET). A description of the activities of these bodies is outlined below.
Securities Exchange Commission
The SEC has regulatory control of the securities industry. The objectives of the SEC are as follows:
To provide a single legal framework for the development of Thailand’s capital markets. The SEC is responsible for overseeing the issuance by private companies of debt securities to the public and the review and approval of prospect uses.
To improve the level of investor protection. The SEC is responsible for the requirements, insider trading and takeover.
To develop Thailand’s capital markets. For example, the SEC has sanctioned the establishment of foreign-backed mutual funds.
Stock Exchange of Thailand
Under the Securities and Exchange Act 1992, the SET operates under the SEC. A board elected from the SEC and the member brokers operate the new SET. In short, the SET is responsible for the operating side of the exchange, while the SEC is responsible for enforcement. The SET is responsible for determining which companies will be allowed to list on the stock exchange. The SET has authority to approve a company’s listing.