THANATHIP & PARTNERS
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Tax Exemption for Startup Fundraising through Venture Capital
March 2022
By Wisara Harnchonboth, Kirinee Argritarch
The Cabinet has approved tax measures to promote fundraising in Startups by providing certain tax benefits for investment, both directly and indirectly through Venture Capital, in Thai Startups that engage in certain industries. As a result of this measure, it is expected that there will be an increase in investment in (i) Thai Startups for approximately Baht 320 billion and (ii) an employment rate by 2066 as well as strengthen our economic growth.
In this connection, the Revenue Department has proposed a draft Royal Decree for certain tax exemptions, which may be summarised as follows:
- Personal and corporate income tax will be exempted for both domestic and foreign investors including foreign CVC and PE Trust for gains arising from the sale of (i) shares in Startups and CVC and (ii) trust units in Thai PE Trust and from the liquidation of CVC and Thai PE Trust, provided that each of the Thai CVC and PE Trust must invest in Startups.
- The investment must be made in Thai Startups that engage in the target industries certified by the agency announced by the Director-General of the Revenue Department such as the National Science and Technology Development Agency or the National Innovation Agency, and has income from the target industries of not less than 80% of the total income in two accounting periods before the sale of shares.
- Investors must hold shares or trust units for at least 24 months prior to their sale.
- Thai CVC and PE Trust must have a share capital of not less than Baht 20 million and registered with the Office of the Securities and Exchange Commission.
- The period for receiving tax benefits is from the date following the publication of the Royal Decree in the Government Gazette until 30 June 2032.
This document is solely intended to provide an update on recent development in Thailand legislation and is not purported to provide a legal opinion, nor a legal advice to any person.
New BOI Scheme for Startups
February 2025
On 15 July 2024, the Thailand Board of Investment ("BOI") unveiled a funding scheme under the Competitiveness Enhancement Policy Committee for Target Industries (the “Committee”) (Announcement No. 2/2567 ), aimed at accelerating the growth of high-potential startups. This newly introduced framework supersedes the previous program established under Announcement No. 2/2564 and its subsequent amendment.
Thailand’s Financial Hub Act: Key Provisions and Objectives
February 2025
The Thai Cabinet has recently approved the draft Financial Hub Act (the “Act”), with the aim to establish Thailand as a global hub for financial industries, attracting foreign investment and enhancing employment opportunities for the Thai labour force.
Legal Requirements and Key Considerations for a Merger and Amalgamation in Thailand
January 2025
In 2022, the Thai Civil and Commercial Code (the “CCC”) underwent a significant amendment, introducing the concept of a merger, which allows one merging entity to remain in existence. While this concept may not be new for other jurisdictions, it is a development for Thai private companies and is expected to impact business integration. Although this new concept is not applicable to public companies, we believe it is worthwhile exploring the key business consolidation schemes currently available under the relevant primary corporate laws and the key considerations when deciding to implement a merger and/or amalgamation.