Update on New Laws and Practices 2017

LAWPLUS

Kowit Somwaiya, Managing Partner

Prasantaya Bantadtan, Partner

Update on New Laws and Practices 2017

www.lawplusltd.com

Korean-Thai Chamber of Commerce

Legal Seminar

17 November 2017Holiday Inn Sukhumvit Hotel, Bangkok

LAWPLUS

The information provided in this document is general in nature and may not apply to any specific situation. Specific advice should be sought before taking any action based on the information provided. Under no circumstances shall LawPlus Ltd. or any of its directors, partners and lawyers be liable for any direct or indirect, incidental or consequential loss or damage that results fro

m the use of or the reliance upon the information contained in this document. Copyright © 2017 LawPlus Ltd.

LAWPLUS 3

•Emergency Decree on Employment Administration B.E. 2560

•NCPO Order No. 33/2560

•NCPO Order No. 21/2560 on Amendments to Laws for the Ease of Doing Business

•Computer Crimes Act (No. 2) B.E. 2560

•Act on Amendments to Laws on Criminal Liabilities of Representatives of Legal Entities B.E. 2560

•Rules of DBD on e-Registration of Companies and e-Filing of Financial Statements

•MOC Regulation on Services Not Subject to the Foreign Business Act

•Customs Act B.E. 2560

•Proposed Amendments to the Civil and Commercial Code and AOO

Presentation Topics: Update on New Laws and Practices 2017

LAWPLUS 4

Emergency Decree on Foreigner Employment Administration B.E. 2560

• Effective from 23rd June 2017

• Foreigner Employment Administration Policy Committee is established:-

- 20 members from the public sector

- 8 members from the private sector

- to prepare policy and strategy for foreigner employment administration

- to supervise their implementation

• Employer who employs or licensed employment agent who brings unskilled foreign labors under the related MOU between Thailand with other countries must:-

- obtain permission from the Department of Employment (“DOE”)

- place a guarantee with the DOE

LAWPLUS 5

Emergency Decree on Foreigner Employment Administration B.E. 2560 (“ED2560”)

• Foreigner who works in Thailand without a work permit is subject to:-

- imprisonment up to 5 years; or

- a fine up to THB100,000; or

- both (Section 101).

• Foreigner who works on a necessary and urgent work basis without notifying the DOE is subject to a fine of THB20,000 to THB100,000 (Section 119).

• Employer who hires a foreigner without a work permit or hires a foreigner to work on a prohibited or restricted work is subject to a fine between THB400,000 and THB800,000 per employee (Sections 102 and 122).

LAWPLUS 6

NCPO Order No. 33/2560 on Temporary Measures to Rectify Problems in Foreign Employment Administration

• Dated 4th July 2017

• Effective retroactively from 23rd June 2017

• Enforcement of Sections 101, 102, 119 and 122 of the ED2560 is deferred until 1st

January 2018.

• Employers and foreign employees must comply with the ED2560 before 1st

January 2018.

• Any government officer who acts or omits to act to obtain any illegitimate return

or benefit can be subject to civil, criminal or administrative liabilities.

• The Ministry of Labour must revise or amend all laws related to foreign

employment administration within 120 days from 23rd June 2017.

LAWPLUS 7

NCPO Order No. 21/2560 on Amendments to Laws for Ease of Doing Business

• Effective from 4th April 2017

• Amendments to the Civil and Commercial Code, the Public Limited Companies Act, the Labour Protection Act, the Bankruptcy Act, etc.

• Articles of Association of a company can include procedures for settlement of a dispute that cannot be solved by its directors or shareholders.

• One director can sign share certificate.

• Payment of dividends must be made within one month from the date of approval by the BOD meeting or AGM or EGM.

• Company can be dissolved by a court order if maintenance of its business operation is beyond its control.

• Employer having 10 employees or more must have a Work Rules as required by the LPA. But the Work Rules is no longer required to be filed with the Department of Welfare and Labour Protection.

LAWPLUS 8

Computer Crimes Act (No. 2) B.E. 2560

• Effective from 24th May 2017

• Amending the Computer Crimes Act B.E. 2550 (A.D. 2007)

• Ministry of Digital Economy and Society (“MDES”) is in charge of enforcement

• More offences and higher penalties

• More powers to official authorities

• Most penalties with a fine can be settled with the Settlement Committee appointed by MDES

• MDES appoints one or several Computer Data Screening Committees, each having 9 members (3 from the private sector)

LAWPLUS 9

Act on Amendments to Laws Related to Criminal Liabilities of Representatives of Legal Entities B.E. 2560

• Effective from 12th February 2017

• Directors, managers or persons responsible for company business operation are no longer presumed liable with the company under 76 laws, e.g.

- Revenue Code

- Act on Offenses of Registered Partnerships, Limited Liability Partnerships, Limited Companies, Associations and Foundations B.E. 2499

- Immigration Act B.E. 2522

- Consumer Protection Act B.E. 2522

- Factories Act B.E. 2535

- Electronic Transactions Act B.E. 2544, etc.

• Directors, managers or persons responsible for company business operation are liable with the company only if the offense of the company is committed per their instruction, act or omission.

• Non-executive director not involved with day-to-day operation of the company is liable with the company only if he is involved with the offence.

• The public prosecutor must prove in a criminal case that the director committed the offence. The burden of proof is no longer with the director.

LAWPLUS 10

Rule of DBD on Electronic Registration System B.E. 2560

• Dated 10th April 2017

• Effective from 1st May 2017

• Company name reservation, company registration, amendments of company registration particulars (directors, objectives, registered address, etc.), registration of dissolution and liquidation of company, withdrawal and disposal of company from the Companies Register can now be made by e-Registration.

• Service user, including relevant parties who are required to sign the applications (directors and promoters) must obtain a Username and a Password from DBD at www.dbd.go.th for use as a Digital Signature.

• Obtaining and using of a Username and a Password can be made by the service user or his attorney.

LAWPLUS 11

DBD Notification re: Rules and Procedures for Filing of Financial Statements (No. 2) B.E. 2560

• Dated 30th June 2017

• Person in charge of accounting preparation of Thai companies and foreign companies operating in Thailand must file audited financial statements through the DBD e-Filing

• Filing audited financial statements through the DBD e-Filing must use the Username and the Password issued to user by DBD

LAWPLUS 12

MOC Ministerial Regulation re: Service Businesses Not Required to Obtain Approval for Foreign Business Operation (No. 3) B.E. 2560

• Effective from 9th June 2017

• 11 service businesses are no longer subject to the FBA:-

1. securities business (14 types)

2. financial institution businesses (14 types)

3. derivatives businesses (3 types)

4. trustee for transactions in capital market

5. life insurance

6. non-life insurance

7. asset management

8. representative offices (5 activities)

9. regional offices (10 activities)

10.services to government sector

11. services to state enterprise entities

LAWPLUS 13

Customs Act B.E. 2560

• Effective from 13th November 2017.

• Customs Act B.E. 2469 (A.D. 1926) was repealed and replaced.

• Duty assessment must be made:-

- within 3 years from the receiving date of the import/export entry

- extension for 2 years if necessary

- another extension of 5 years if there is a ground for suspected deceptive intention.

• Post-clearance audit against declaration of imported/exported goods must be made within 5 years from the importation/exportation date.

• Duty refund application must be filed within 3 years from the importation/exportation date.

• No wilful act is required for false document declaration, smuggling of goods, and non-compliance with restrictions/prohibitions on goods.

• Goods in custody of the customs longer than 30 days is subject to a public auction sale, destruction or re-exportation.

LAWPLUS 14

Customs Act B.E. 2560

No. Offences Imprisonment up to Fine Other

1 Smuggling 10 years 4 times of duties seizure of goods

2 Evasion of duties 10 years 0.5 to 4 times of duty evaded seizure of goods

3Violation against restrictions or prohibitions on goods

10 years THB500,000 seizure of goods

• Major offences and penalties:-

• Board of Appeals must consider an appeal against assessment of duty within 180 days from the appeal filing date.

• Gratuities and rewards to whistleblowers are capped at THB5 million for each offence.

• Director, manager or authorized person of a company is liable with the company if the offence is caused from his act or omission.

No. Offences Imprisonment up to Fine Other

1 Smuggling 10 years 4 times of duties seizure of goods

2 Evasion of duties 10 years 0.5 to 4 times of duty evaded seizure of goods

3Violation against restrictions or prohibitions on goods

10 years THB500,000 seizure of goods

LAWPLUS 15

Proposed Amendments to the Civil and Commercial Code and AOO

• Drafts of amendments to (i) the Civil and Commercial Code (the “CCC”); and (ii) the Act on Offences Related to Registered Partnerships, Limited Partnerships, Limited Companies, Associations and Foundations (the “AOO”) proposed by the MOC.

• Approved by the Cabinet on 17th October 2017.

• Major amendments are:-

1. A company can sell shares to the public pursuant to the applicable provisions of the securities and exchange law (the “SEC law”).

2. A payment of the share subscription price can be set off against the company if a special resolution approving such payment is passed at a general meeting of its shareholders and if it is made in compliance with the SEC law or pursuant to a debt-equity conversion plan under the company debt restructuring.

LAWPLUS 16

Proposed Amendments to the Civil and Commercial Code and AOO

3. Preferential rights given to preference shares can be amended and preference shares can be converted to ordinary shares.

4. A company can own its shares if the purchase of the shares is approved by a special resolution of its shareholders and is made in compliance with the SEC law.

5. A company can offer its shares to its executives or employees as an ESOP (employee stock option plan) without first offering them to its existing shareholders.

6. A company can issue debentures to the public pursuant to the SEC law.

7. Offences and penalties in relation to conversion of preference shares to ordinary shares will be added to the AOO.

LAWPLUS

Unit 1401, 14th Floor, 990 Abdulrahim Place, Rama IV Road, Bangkok 10500, Thailand

Tel. +66 (0)2 636 0662, Fax +66 (0)2 636 0663

Room 517, Yangon International Hotel, No. 330 Corner of Ahlone and Pyay Roads, Dagon Township, Yangon, Myanmar

Tel. +95 9 505 6667 and Tel. +95 92 6111 7006

www.lawplusltd.com

Contacts:

Kowit Somwaiya, Managing [email protected]

Prasantaya Bantadtan, [email protected]

Naddaporn Suwanvajukkasikij, [email protected]