27 Sept 2017
Regulatory Environment in Thailand
Thailand’s political environment has undergone significant change in the last five years, with the military coup in May 2014 resulting in the military-led government. In the last 12 months, the political situation has somewhat stabilised with the smooth succession of the new King in December 2016 and the finalisation of the new Constitution in April 2017. While the 20-year National Strategy will govern the framework for economic development over the next two decades, the general elections expected in 2018 will determine the future stability of the Thai government.
Despite the military coups and changes in Thai Constitution, Thailand’s basic political structure remains unchanged, with the King acting as head of state with the federal government composed of three branches of power:
- Executive – The Prime Minister, as head of the executive branch, is the leader of the Cabinet of Thailand, which is responsible for the formulation and execution of government policies. There are various ministries, including the Ministry of Finance (revenue and customs), the Ministry of Industry (development and implementation of manufacturing and industrial policies) and the Ministry of Commerce (regulation of external and internal trade).
- Legislative – Legislative power is currently vested in an unelected, unicameral National Legislative Assembly (NLA) established according to the 2014 Constitution after the military coup, which abolished the bicameral structure composed of the Senate and House of Representatives. All NLA members are selected by the military government and are primarily military generals or officers. Under the 2017 Constitution, a bicameral National Assembly of Thailand (NAT) will be formed, prior to which the NLA will remain in place before the NAT formation.
- Judiciary – Composed of four main systems: Court of Justice; Administrative Court; Constitutional Court; and Military Court. Since the 2014 coup, Military Courts have been tasked to be responsible for some cases that are normally under the Civilian Courts.
The main legislative frameworks relevant for Hong Kong companies setting up in Thailand are:
- Foreign Business Act (FBA) (1999) – sets out the rights and limitations on foreigners doing business in Thailand.
- Investment Promotion Act (1977) – regulates who may apply for and be granted investment promotions within Thailand.
Other legislative frameworks of interest to Hong Kong companies are included in the following sections.
- Regulatory Environment
- Establishing a Presence
- Intellectual Property Protection
- Staff Recruitment
- Tax Considerations
- Import/Export Procedures
- Further Information