Utilizing the Thailand-Australia Free Trade Agreement (Continuation…)

What criteria must companies fulfill in order to be eligible to use the TAFTA?

Thailand-Australia Free Trade Agreement

In order to enjoy the special privileges enabled by the TAFTA, the company in question must be eligible to apply for a Business Operations Certificate Section 10 of the Foreign Business Act. Within Section 10 is an outline for the criteria mainly relating to the nationality of the shareholders. The criteria are as follows:

  • Must be a juristic person established according to Thailand’s law as a registered ordinary partnership or limited partnership, or a company limited.
    • A juristic person meaning a limited company or public limited company with over 50% ownership by foreigner(s), a partnership with over 50% capital investment by foreigner(s) or a partnership with a foreigner as the managing partner or manager.
  • The authorized directors must be Thai or Australian people and in the case that the juristic person is a registered ordinary partnership or limited partnership, the manager or managing partner must be Thai
  • The juristic person’s shareholders must be:
    • All of them must be Australian or Thai people.
    • The juristic person established according to Australian law must have more than 50% Australian shareholders.
  • Persons who request the certificate must have a ratio of debt to equity of no more than 3:1.

Which types of businesses are permitted to request a Business Operations Certificate?

The following industries are outlined by the TAFTA and are promoted for Australians to engage in:

  • Mining operations
  • Distribution services
  • Construction services
  • Management consulting services
  • Major restaurants or hotels
  • Tertiary education institutes
  • Maritime cargo services
  • General service businesses, general consulting service, meeting halls, international product
  • exhibition centre, and certain wholesale and retail services
  • Fun park and zoo services
  • Aquatic animal park service
  • Pier and Anchor service for tourism ships

The following businesses need not apply for such a certificate given that they must remain Thai owned:

  • Retail and wholesale sale of telecommunication equipment
  • Other categories of consulting services; telecommunication consulting services, leasing service of telecommunication station equipment, database access services and domestic very small aperture terminals.

If an Australian company fulfills the above criteria, what process must they follow in accordance with TAFTA?

There are certain guidelines in place which must be followed if an Australian wishes to reap the benefits of TAFTA. The following information must be collated and issued to the Ministry of Commerce in order to successfully request a Business Operations Certificate pursuant to Section 10 of the Foreign Business Act under the TAFTA:

  1. A form to request the certificate.
  2. An explanation of the type of business that will be engaged in Thailand.
  3. Evidence of the juristic person registered in Thailand, showing names, capital, objective, location, as well as name and nationality of directors and authorized directors.
  4. A letter which demonstrates the proportion of shareholding between the Thai and foreign owners, the number of shares and the type of shares that the people of Australian nationality hold.
  5. In case that the shareholders or major partners who request for the certificate are juristic person, they shall submit evidence or documents for proof of juristic persons, demonstrating name, capital, objective, location, name and nationality of directors and authorized directors, and name and nationalities of shareholders or details of partners.
  6. Nationality certificate of the persons who request for the certificate in order to ask for the right from the Embassy of the country that is party.
  7. A copy of their passport or ID card.
  8. A map of business their proposed business locations in Thailand.
  9. A letter of power of attorney in the case of needing other persons to perform duties.

The issuing of the certificate will be done within 30 days of the date that the Ministry of Commerce obtains the above information.


We appreciate you for sharing our post:

Tags: , , , , , , ,

Category: Business in Thailand, Company Law, Company Registration, Thailand BOI


About the Author (Author Profile)

Inline Feedbacks
View all comments