The Capital Law Office Limited

Congratulations to Innobic (Asia) Co., Ltd. (INBA), a wholly-owned subsidiary and life-science arm of PTT Public Company Limited, for the successful acquisition of newly issues shares representing 17.65% of the total registered capital of Namwiwat Engineering (1992) Company Limited (NAM), one of the leading operator and manufacturer of medical device business in Thailand, through Innobic LL Holding Company Limited (INBL), INBA’s wholly-owned subsidiary.

Prior to June 2017, Thailand did not have transfer pricing law. The Revenue Department employed their power to adjust pricing to be at market price based on the provision of Section 65 bis (4) of the Revenue Code. That means the Revenue Department is empowered to adjust the selling price or service fee or interest rate in the case of transfer of assets, provision of service or lending of money without remuneration, fee or interest, or with remuneration, fee or interest that is lower than the market price, made without reasonable ground in accordance with the market price on the date of asset transfer, provision of service or lending of money. Besides, the Revenue Department has issued its Order No. Por 113/2545 (“Por 113/2545” or the “Guideline”) which sets out the arm’s length principles in 2002. Certain traditional transfer pricing methods were also suggested in the Guideline to help businesses determine the most appropriate price. However, Por 113/2545 is not a law. As such, it is not used to enforce against companies to get transfer pricing documentation prepared and reporting forms filed.

Potential Southeast Asian tech giant formed by the amalgamation of two major Thai telecoms operators.

In early 2022, the Ministry of Finance revealed that personal income tax on gains derived from the sale of listed shares through the Thai stock exchange may no longer be exempt. Due to certain concerns and negative impacts in the Thai capital market, an implementation of capital gains tax on individual investors is not ready and, therefore, it is lifted. Yet, according to the Ministry of Finance, the financial transaction tax on the sale of shares in the stock market is brought into consideration instead.

The Thai government has been encouraging all Thai businesses, both corporate and individual, to put more and more investment in Thailand, particularly in local startups this year in order to help boost economic growth after the COVID-19 pandemic is gone.

Effective on October 1st , 2022, the new definitions of Institutional Investor, Ultra-high Net Worth Investor and High Net Worth Investor under the Notification of the Securities and Exchange Commission No. Kor. Jor. 39/2564 re: Determination of Definitions of Institutional Investor, Ultra-high Net Worth Investor, and High Net Worth Investor, will be more consistent with the understanding of the nature and risk of the products to be invested, as well as the ability to take risks, in order to provide businesses and investors with access to a broader range of fundraising and investment channels.

On 28 February 2022, the Senate approved the Draft Public Limited Company Act (No. ....) B.E. …. (….) (the “Draft PLC Act”) for amendments of the Public Limited Company Act B.E. 2535 (A.D. 1992) (the “PLC Act”) in order to accommodate the current business operation of a public company and resolve some weak points of the PLC Act. In this regard, the Draft PLC Act shall become effective after 30 days from the date of publication of the Draft PLC Act in the Royal Gazette.

On 9 February 2022, the Securities and Exchange Commission (“SEC”) has announced to arrange a public hearing on the revisions of the rules of newly issued shares offering through a private placement (“PP”) with a purpose of streamlining the procedures, processes and documents which may be required at the time of the submission with the SEC while the investors and shareholders are still in protection.

Nowadays, consumers and merchants have opened to the use of digital assets as payment for goods or services. To facilitate such actions, the licensed digital asset operators have developed their systems to support payment on transactions made through their platform. This could result in the widespread usage of digital assets for purposes other than investment purposes. The competent authorities are concerned that the use of digital assets as means of payment for goods or services may have certain impact on stability of the country’s economic and financial system, including creating risks to consumers and merchants, for example risk from the fluctuations on value of digital asset, risk of cyber theft, risk of personal data leaking, or risk of being used as a tool for money laundering and should be regulated or monitored at certain level.