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Thailand’s Ministry of Commerce has recently introduced significant changes to its e-commerce regulatory framework through the issuance of,the Notification Re: Business Regulations that Commercial Operators Must Register and Businesses that are Not Subject to the Commercial Registration Act B.E. 2567, effective from June 5, 2024.
The somewhat controversial update is supposed to facilitate a more accessible digital economy by modifying registration requirements for various entities engaged in electronic commerce.
- Private LLCs Exempted from E-Commerce License
Under the new regulations, certain legal entities are now exempt from the mandatory e-commerce registration stipulated by the Commercial Registration Act B.E. 2499 (1956). These include registered ordinary partnerships, limited partnerships, private limited companies under the Thai Civil and Commercial Code, public limited companies established under the Public Limited Companies Act B.E. 2535 (1992), foreign legal entities with branch offices in Thailand, and groups of farmers registered under the Farmer Group Royal Decree B.E. 2547 (2004).
- Registration Requirement for Natural Persons
Conversely, natural persons and specific types of partnerships, such as ordinary partnerships, groups of cooperatives, joint ventures, and similar groups engaged in commercial activities, will now be required to comply with the Commercial Registration Act B.E. 2499 (1956).
- Types of Businesses to be Registered
The Notification also outlines the types of businesses subject to commercial registration. This includes rice mills and sawmills using machinery, sales of goods exceeding a daily sales value of THB 300 or a total value of THB 10,000 (encompassing items like CDs, gemstones, and ivory), commercial agents or sales representatives handling goods with a daily sales value of THB 300 or more, and handicrafts or industries where goods produced and sold in a single day surpass THB 300 or total production exceeds THB 10,000. Additionally, e-commerce transactions involving the sale or purchase of goods or services over the Internet are subject to registration. Currently, the juristic person who registered with the Department of Business Development, Ministry of Commerce (the “DBD”) and received a commercial registration certificate (or so-called “Form PorKor.01”) is not required to apply for a commercial license as it will be equivalent to having an e-commerce license. Therefore, if business owners have registered in the form of Company Limited or Partnership Limited, it is not required to apply for an e-commerce business license again. However, a direct marketing license is still required to operate the e-commerce business legally.
- Transitional Provisions
Entities that were registered under the Commercial Registration Act B.E. 2499 (1956) prior to the Notification’s issuance will continue to adhere to existing registration requirements. Their commercial registration certificates remain valid, and no further updates are necessary unless specified by subsequent regulations.
It’s crucial to note that commercial registration certificates issued to entities such as ordinary partnerships, limited partnerships, private companies, and public companies will cease to be valid upon the publication of this Notification in the Royal Gazette. Entities falling under these categories must comply with the updated regulatory framework to ensure they remain compliant with current laws.
- Conclusion
In conclusion, Thailand’s Ministry of Commerce’s adjustment of e-commerce regulations represents a significant move towards supporting a dynamic and well-organized digital marketplace. By exempting certain entities and updating registration requirements, the government aims to streamline regulatory processes while fostering growth and innovation in the e-commerce sector. However, individuals doing business online will, from now on, face additional red tape.
Businesses operating in Thailand should stay abreast of these regulatory changes to ensure ongoing compliance and capitalize on new opportunities in the evolving digital economy.
If you have any questions regarding your business registration, taxation matters or corporate compliance matters, please contact us at [email protected] or via +66 (0)2 026 3284.
Author: Andreas Seela