Introduction to the Technology Transfer Plan

Foreign investors in Thailand, who will be investing a majority of the capital in a business venture, have the option of applying for a Foreign Business License if the intended business is restricted under the Foreign Business Act of 1999. However, in order for the application to be approved, an important requirement is that the applicant must offer a technology transfer plan. The requirement of a technology transfer plan often serves as a source of confusion or a stumbling block for some investors who are uncertain as to what exactly is included by the word “technology” and what exactly the plan must entail. To begin with, a brief introduction to the technology transfer plan is as follows.

The technology transfer plan is one factor that is considered in granting the approval for the issuance of a Foreign Business License

Section 5 of the Foreign Business Act states that the granting of a license to a foreigner to operate a business restricted by the act must take into consideration the transfer of technology. Therefore, the Foreign Business Committee requires applicants to prepare a technology transfer certificate which must be submitted along with the rest of the application.

The technology transfer must offer actual benefits to the Thai people

The technology transfer requirement does not refer to the disclosure of trade secrets. It refers to the transfer of science, skills, experience, or methods so that the transferee may be able to use such “technology” in order to become self-reliant.

The transferor will receive benefits as follows:

  • Different Thai government departments, such as the Ministry of Labor, the Ministry of Science and Technology, and the Board of Investment offer benefits to foreign investors who transfer technology to Thailand. These benefits include exemption or reduction of tax liability, as well as benefits relating to the extension of visas and work permits.
  • The business activity of the foreign investor will be more competitive because the Thai employees who are recipients of the technology transfer will be able to perform their duties more efficiently according to the demands of the business.
  • The image and reputation of the company will be enhanced in the eyes of both its employees and society in general. In other words, the company will be able to generate a degree of goodwill, which carries a monetary value in and of itself.

 

Thai laws relating to foreign business investment are complex. Foreign investors interested in Thailand are advised to consult with competent Thailand lawyers before beginning business operations.

 

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Category: Administrative Law, Business in Thailand, Company Law

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