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Cannabis Legal History in Thailand Thailand has a long and complex relationship with cannabis. Historically, cannabis (ganja) was widely used for medical, culinary, and cultural purposes. For centuries, Thai traditional medicine employed cannabis extracts as remedies for pain relief, appetite stimulation, and treatment of various ailments. However, under the Narcotics Act B.E. 2522 (1979), cannabis was classified as a Category 5 narcotic, rendering its cultivation, possession, and use strictly illegal. Penalties for violations included imprisonment and heavy fines, and the substance became stigmatized as part of wider international anti-drug campaigns. The turning point began in the late 2010s, when global shifts toward decriminalization and medical legalization influenced Thailand’s domestic policy. In 2018, Thailand became the first country in Southeast Asia to legalize cannabis for medical and research purposes (Narcotics Act (No. 7) B.E. 2562 (2019)), allowing limited use of cannabis oil, extracts, and research-based cultivation. At that time, operators were required to work closely with public agencies, such as universities or government hospitals, to cultivate and extract cannabis. In June 2022, cannabis was officially decriminalized through its removal from the Narcotics List under the Ministerial Notification of the Ministry of Public Health (No. 8) B.E. 2565 (2022). This sparked a rapid proliferation of cannabis-related businesses—from dispensaries and cafes to wellness centers and agricultural ventures. Nevertheless, the swift liberalization also triggered regulatory uncertainty and social debates. The lack of comprehensive oversight, concerns about recreational misuse, and rising public health risks pushed policymakers to reintroduce tighter controls, culminating in the Cannabis and Hemp Control Act (Draft Bill, 2024–2025) and ministerial notifications that now aim to balance economic opportunity with public health and social order.  New Approach of Legal Laws and Regulations in Thailand 2.1 Current Legal Framework Following decriminalization in June 2022, cannabis entered a “grey zone” of regulation. Businesses mushroomed quickly, taking advantage of unclear restrictions, especially regarding recreational use. However, by mid-2025, the Thai government introduced new legislation and ministerial regulations to formally control cannabis cultivation, distribution, marketing, and consumption. Key provisions include: Cultivation Standards: Cultivation of cannabis and hemp requires compliance with Thai GACP (Good Agricultural and Collection Practices) standards, ensuring both quality and traceability of cannabis flowers. Licensing Requirements: Cultivation, import/export, sales, and processing of cannabis require specific licenses issued by the Food and Drug Administration (FDA) and relevant ministries under the Public Health Act B.E. 2535 (1992) and ministerial notifications. Medical-Only Orientation: Cannabis is recognized as a controlled plant for medical and health purposes. Recreational use remains outside the scope of the law and is implicitly prohibited. Doctor’s Prescription Requirement: Any sale of cannabis flowers intended for smoking or direct consumption must be tied to medical use, supported by a prescription from a licensed physician (Ministerial Notification on Controlled Cannabis Products B.E. 2566 (2023)). Any cannabis distillate, extract, or oil with THC exceeding 0.2% w/w is classified as a controlled substance under the Narcotics Act and may only be dispensed upon a doctor’s prescription. Extracts with THC not exceeding 0.2% w/w may be incorporated into cosmetics, herbal, or food supplements, subject to FDA product registration, quality controls, and labeling requirements. Usage Restrictions: Smoking cannabis in public places remains subject to penalties under the Public Health Act on public nuisance. Marketing and advertising are prohibited from promoting recreational consumption or targeting minors (Ministerial Regulation on Cannabis Advertising B.E. 2566 (2023)). Import & Export Controls: Cross-border trade of cannabis or hemp requires pre-approval from the Ministry of Public Health, in line with Thailand’s obligations under the Single Convention on Narcotic Drugs 1961 and domestic legislation. 2.2 Impact on Businesses These rules have reshaped the cannabis landscape. Dispensaries and recreational-style outlets face heightened scrutiny, while medical clinics, licensed manufacturing plants, pharmaceutical companies, and wellness enterprises benefit from clearer compliance pathways. Notably, businesses engaged in the sale of cannabis flowers or high-THC distillates (>0.2% THC w/w) must operate strictly as medical establishments, employing licensed doctors authorized to prescribe cannabis products. This effectively transforms retail-style models into clinically regulated practices, raising compliance and operational costs. Foreign investment in cannabis remains restricted under the Foreign Business Act B.E. 2542 (1999), which caps foreign ownership in agricultural and service sectors unless exemptions are granted. While the Board of Investment (BOI) offers privileges for certain high-value industries, cannabis has not yet been included in BOI-promoted activities. In practice, without a permanent Cannabis Act, obtaining BOI promotion for cannabis businesses is unlikely. Additionally, intellectual property (IP) protections for cannabis strains, cultivation techniques, and extraction processes are increasingly important, as licensing agreements and IP filings help safeguard competitiveness in a regulated market. The Future of Cannabis Business in Thailand and Risk Assessment 3.1 Opportunities and Policy Direction Despite regulatory tightening, the government continues to view cannabis as a sector with high potential in: Medical tourism and integrative health services. Pharmaceutical production with EU-GMP certification for cannabis-derived medicines. Agriculture, with cannabis and hemp positioned as high-value crops under Thai GACP. Industrial hemp exports, including textiles, food supplements, and construction materials. While rumors persist that the government may re-criminalize cannabis, such a move would face strong resistance—including potential class actions from over one million licensed cannabis operators. More realistically, cannabis will remain regulated for medical, industrial, and research purposes, rather than being reclassified as a narcotic. 3.2 Risks in Cannabis Business Regulatory Uncertainty Laws remain in flux. Political changes or international obligations may prompt abrupt policy reversals. Example: The 2022–2023 decriminalization wave was quickly followed by 2024–2025 restrictive reforms. Criminal Liability Unauthorized possession, sale, or use outside medical purposes may trigger penalties under the Narcotics Act B.E. 2522 (1979) or ministerial cannabis regulations. High risk: Dispensing cannabis flowers or >0.2% THC distillates without a prescription may result in imprisonment, fines, and license revocation. Public Health and Social Concerns Businesses risk reputational damage if linked to recreational misuse, underage sales, or public nuisance. Such events may also lead to license suspension by the FDA. Foreign Investor Restrictions The Foreign Business Act limits foreign participation in agriculture and cannabis-related services, unless exemptions are granted. Banking and Financing Risks Cannabis remains a “no-bank” sector in Thailand. Commercial banks typically refuse financing, credit facilities, or lending to cannabis operators due to compliance risks and reputational concerns. Cross-Border Legal Conflicts Exporting cannabis products without authorization can violate ASEAN neighbors’ narcotics laws, leading to severe penalties. Exporters must hold FDA export licenses, while importers must obtain permits from the destination country. Compliance and Licensing Costs Meeting Thai GACP and GMP standards requires significant investment. Smaller operators may be priced out, resulting in consolidation favoring larger, well-capitalized firms. 3.3 Risk Mitigation Strategies Robust Legal Due Diligence: Review licensing requirements, corporate structure, and contracts with qualified legal counsel. Strict Prescription Protocols: Employ licensed doctors and establish patient consultation systems for prescribing cannabis flowers and high-THC distillates. Regulatory Monitoring: Retain compliance teams or external counsel to monitor ministerial notifications and regulatory changes. Corporate Structuring: Form vetted joint ventures with reliable Thai partners. Conduct strict due diligence to avoid fraudulent actors in the market. Product & Marketing Compliance: Adhere to THC content limits, labeling rules, and advertising restrictions. Avoid recreational branding. Risk Management & Insurance: Obtain liability insurance and adopt strong corporate governance policies. Diversification: Focus on industrial hemp, medical cannabis, and pharmaceutical-grade extracts, which carry fewer political and legal risks. Cross-Border Legal Review: Secure legal opinions in both Thailand and destination countries to ensure compliance with international drug control treaties. Conclusion The cannabis industry in Thailand represents both opportunity and risk. Thailand stands as a pioneer in Southeast Asia, opening pathways for medical, wellness, and industrial cannabis. Yet the regulatory environment remains fluid, and businesses face legal, financial, and reputational challenges. Of particular importance is the strict requirement that cannabis flowers and all cannabis distillates with more than 0.2% THC w/w can only be sold with a doctor’s prescription. Violations in this area carry serious criminal and civil liabilities and will be a central enforcement priority going forward. For investors and operators, success depends on rigorous compliance, sound structuring, and proactive legal strategy. By aligning with Thailand’s evolving regulatory framework, businesses can capture opportunities while minimizing risk. At ILAWASIA CO., LTD., we provide comprehensive legal support for cannabis operators. Our Partner, Tanadee Pantumkomon, is one of the most experienced counsels in Thailand on cannabis cultivation, extraction, and cannabis product manufacturing. Our services cover FDA licensing and permits, corporate structuring, tax planning, dispute resolution, and cross-border advisory—ensuring that our clients’ investments are secure and compliant.

Thailand generally prohibits foreign nationals from owning land. However, there are notable exceptions that allow land ownership under specific conditions. For instance, a foreigner may acquire land for residential purposes if they invest a legally prescribed minimum amount. Additionally, land ownership may be granted under special laws, such as those related to investment promotion privileges. When it comes to companies, the Land Code sets clear rules for determining whether a company qualifies as "foreign", which in turn affects its eligibility to own land. According to Sections 97 and 98 of the Land Code, a company will be classified as a foreign entity if: Foreign shareholders hold more than 49% of the company’s registered capital; or More than half of the total number of shareholders are foreigners. To verify a company’s landholding rights, authorities examine the full chain of shareholding to ensure compliance. If a company meets either of the above criteria, it is deemed foreign and, as such, is restricted from land ownership under Thai law. Example of shareholding structure of foreign companies according to the Land Code of Thailand Due to the legal restrictions on foreign land ownership in Thailand, any Thai company with foreign shareholders is subject to close scrutiny by the Land Office during land registration processes. Land officers (referred to as “officers”) are required to carefully examine whether the company's shareholding structure complies with Sections 97 and 98 of the Land Code. Specifically, they assess whether foreign shareholders hold no more than 49% of the registered capital and whether the number of foreign shareholders does not exceed half of the total shareholders. This scrutiny doesn't end at the time of land acquisition. Each year, typically in June, the Land Office conducts a follow-up review of Thai companies that own land and have foreign shareholders or directors. A list of such companies is sent to the Business Information Service Office or the Department of Business Development (DBD) to verify whether any of them have transitioned into foreign companies under the Land Code. If any company is found to have become a foreign entity through changes in its shareholding or structure, the consequences are serious. Under Thai law, all land held by such a company must be forcibly sold. The Checking Guidelines for Preventing Holding Land for the Benefit of Foreigners To safeguard against circumvention of Thailand’s restrictions on foreign land ownership, the Land Department has issued strict guidelines for land officers when dealing with companies that may be acting on behalf of foreign interests. Under Section 74 of the Land Code, land officers have the authority to investigate all parties involved in a land transaction. This includes summoning individuals to provide statements and requiring the submission of relevant documents and evidence. Based on these findings, the officer must proceed according to the case’s specific circumstances, following the Ministry of Interior’s investigative guidelines. These guidelines direct officers to closely examine certain red flags that may indicate a company is holding land for the benefit of foreigners. These include: Foreigners who are authorized signatories for the company; Foreign nationals listed as company promoters; Foreigners holding preferred shares with superior voting rights; Foreign shareholders partnered with Thai nationals who are lawyers or brokers—potentially serving as nominee shareholders. The officer must verify facts as follows: Investigate the income of Thai shareholders: by verifying their occupation and monthly income with supporting evidence. Investigate the source of the funds that Thai shareholders brought to pay for shares: Thai shareholders must provide evidence of the source of the funds to confirm that they were not received from foreign investors. Investigate the source of the funds used by a company to purchase land: in case a price of land higher than the registered capital, without registering a land mortgage. If there is a case where it is believed that the application for registration of rights and legal transactions will avoid the law or it is believed that the said Thai company purchased the land to hold the land on behalf of foreigner, the officer shall request an order from the Minister, and the Minister’s order shall be final. Penalties for Holding Land for the Benefit of Foreigners In the event that a land ownership registration, the officer finds that there is a behavior of holding land on behalf of a foreigner from the above investigation, the punishment according to the offenses under the Land Code as follows: Foreigners, under Section 111 of the Land Code for illegally acquiring land, punishable by a fine not exceeding 20,000 Baht or imprisonment not exceeding 2 years, or both. Company, under Section 112 of the Land Code, punishable by a fine not exceeding 50,000 Thai nominees, under Section 113 of the Land Code for acquiring land as a representative of foreigner or foreign company, punishable by a fine not exceeding 20,000 Baht or imprisonment not exceeding 2 years, or both. Conclusion Land ownership by a Thai company with foreign shareholders is subject to rigorous scrutiny to ensure compliance with the Land Code. Authorities carefully assess whether such companies are, in fact, foreign entities or if the land acquisition is being carried out for the indirect benefit of foreigners. If a violation is found, the company may face serious legal consequences, including forced sale of the land, fines, and even imprisonment. At ILAWASIA, we provide expert legal counsel on land ownership compliance for companies with foreign shareholders. Our team is well-versed in navigating Thailand’s complex regulatory framework and can assist with incident reporting, filing complaints, and all related legal processes. AUTHOR Tanadee Pantumkomon, Partner Sasima Jantarajit, Associate Kamintra Piriyayon, Associate They can be reached at [email protected]

IN BRIEF Developers or breeders who invest in the plant variety development process should be legally protected. Under Thai law, protection is provided through the registration of new plant varieties (“NPV”) under the Plant Variety Protection Act, B.E. 2542 (1999) (“PVPA”). This aligns with the objectives of the PVPA, which aims to create an incentive by granting legal rights and protection to NPV. KEY TAKEAWAYS A. Registration of NPV To register an NPV, an applicant must be a qualified breeder with the characteristic prescribed by law such as: 1) being of Thai nationality or being a juristic person with headquarter located in Thailand, 2) being of the nationality of a country that allows a Thai national or juristic person with headquarter located in Thailand to apply for protection within that country, 3) being of the nationality of a country which is a party to an international convention or agreement on plant variety protection to which Thailand is also a party, or 4) currently residing or having proper industrial or commercial enterprise in Thailand or in a country which is a party to an international convention or agreement on plant variety protection to which Thailand is also a party[1]. Also, the registrable NPV must have the characteristics as specified by law, such as[2]: No. Criterion Details 1.      Being NPV It has not been exploited by sale, trade, or any other means, within or outside the Kingdom of Thailand, by the breeder or with their consent for more than 1 year before the application date for registration. 2.      Distinctive It is distinguishable from other recognized plant varieties (“PV”) as of the application date, including distinctions related to cultivation, consumption, pharmaceutical use, production, or processing, including the distinctions from the following PVs: (a)  PV registered within or outside the Kingdom of Thailand before the application date; or (b)  PV submitted for registration in the Kingdom of Thailand that are subsequently registered. Once all qualifications are met, an application must be submitted to the Department of Agriculture (“Department”), Ministry of Agriculture and Cooperatives, which will be reviewed and processed by the officer. Thereafter, it will be published by the Director-General of the Department of Agriculture. After the publication, any person who believes that, they have a superior right to the NPV application, or that the registration fails to meet legal requirements may file an objection with an official within 90 days from the publication date. Please note that the entire registration process, without objections, may take around 30-34 months, as planting the NPV is also part of the registration process.[3] B. Protection of Rights of Holders of Certificate of a NPV Registration After approval of the NPV, the Director-General will announce the name of the NPV that has been registered[4]. An applicant will receive a certificate of a NPV registration[5] and shall be the right holder of such NPV[6]. By that, right holder is eligible for the following actions; No. Rights Details 1.      Exclusive Rights[7] The right holder will have the exclusive right to produce, sell, trade, import, export, or possess its seeds and propagating material for these purposes.   Anyone acting without the right holder's consent shall face up to 2 years’ imprisonment, a fine of up to 400,000 Baht, or both[8]. 2.      Permitting Rights[9] The right holder may authorize any person to exercise his rights or transfer the rights to other persons. The transfer of rights must be made in writing and registered. 3.      Right to damages[10] The court may order the violator of the exclusive rights to compensate the right holder in an amount the court deems appropriate, considering the nature of the damage, loss of interests, and enforcement costs.  C. Duration of protection The Certificate of a NPV registration shall be valid for the following periods[11]: No. Types Duration 1.      NPV which bears fruits after being cultivated for less than 2 years   12 years 2.      NPV which bears fruits after being cultivated for over 2 years   17 years 3.      NPV which its parts can be used after being cultivated for over 2 years   27 years CONCLUSION In summary, developers, or breeders of a protected NPV under the PVPA will have the exclusive rights over its production, sale, trade, and distribution. In an event of act of unlawful production, sell, trade, importation, exportation, or possession, the right holder of the NPV may exercise the legal rights to the courts to stop the violator and to compensate for the damages and losses. The violator may also be subject to penalty of up to 2 years' imprisonment, a fine of up to 400,000 Baht, or both. At ILAWASIA CO., LTD., we have over 17 years of expertise in plant variety protection, litigation and enforcement in Thailand, Myanmar, Cambodia, and Laos. With our extensive experience, we are well-equipped to assist your business in achieving its goals while minimizing legal risks relating to this NPV protection and enforcement. We are committed to helping you succeed. AUTHOR Tanadee Pantumkomon, Partner, Corporate & Commercial Department. Kornkod Suk-aram, Associate, Corporate & Commercial Department. Footnotes [1] Plants Variety Protection Act, B.E. 2542, Section 15. [2] Plants Variety Protection Act, B.E. 2542, Section 12. [3] Manual on the Registration of new plant varieties under the Plant Varieties Protection Act B.E. 2542. (n.d.). Information Center for Contacting Government Officials. Retrieved February 20, 2025, from https://bit.ly/417KW7X [4] Plants Variety Protection Act, B.E. 2542, Section 30. [5] Plants Variety Protection Act, B.E. 2542, Section 29. [6] Plants Variety Protection Act, B.E. 2542, Section 29 Paragraph 1. [7] Plants Variety Protection Act, B.E. 2542, Section 33. [8] Plants Variety Protection Act, B.E. 2542, Section 64. [9] Plants Variety Protection Act, B.E. 2542, Section 32. [10] Plants Variety Protection Act, B.E. 2542, Section 61. [11] Plants Variety Protection Act, B.E. 2542, Section 31.

IN BRIEF The Ministry of Energy has announced a new 25th bid-round of applications for petroleum exploration and production rights, focusing on onshore blocks, offering exciting opportunities for both domestic and international investors, covering 9 exploration blocks across the Northeastern and Central regions of Thailand, spanning approximately 33,000 square kilometers. KEY TAKEAWAYS A. Bid Blocks Overview The petroleum exploration blocks are located in two main regions of Thailand: Northeastern Region (7 Blocks) – Covering approximately 25,000 km. in 14 provinces, including Nong Bua Lam Phu, Udon Thani, Khon Kaen, Sakon Nakhon, Kalasin, Maha Sarakham, Nakhon Phanom, Mukdahan, Yasothon, Amnat Charoen, Chaiyaphum, Nakhon Ratchasima, Buriram, Roi Et and Surin. Central Region (2 Blocks) – Covering approximately 7,900 km. in 6 provinces, including Phetchabun, Chaiyaphum, Lopburi, Ratchaburi, Kanchanaburi, Nakhon Pathom and Suphanburi. B. Qualifications for Applicants Company Qualification Legally registered company with petroleum exploration and production as company objective. None history of concession abandonment in Thailand, and their directors, shareholders, and authorized signatories must not be blacklisted from previous concessions. Financial & Technical Capabilities Qualification Company must demonstrate financial stability with minimum shareholder's equity of 100 million Baht and a current ratio of at least 1.0 for two out of the past three years, along with proven technical expertise and equipment from the past 5 years. If a company lacks these qualifications, the company must be partner with a government-approved company that can guarantee financial and technical support. For joint applications, each participating company must meet all Company Qualification, Financial & Technical Capabilities Qualification requirements. C. Applicant’s Financial Requirements The application process requires two types of financial obligations: Application fee: A non-refundable fee of 50,000 Baht per application, payable in cash on the submission date. Bid Bond: 3,000,000 Baht is required, provided as an unconditional and irrevocable bank guarantee from a commercial bank operating in Thailand. The bond must be valid for 1 year which will be returned upon application rejection or successful concession signing. D. Selection Criteria Applicants for petroleum exploration and production rights must meet specified qualifications and submit a petroleum exploration project proposal. Evaluation will be based on: Work and Financial Commitment Obligations (80 points) Assessed from proposals during both exploration commitment periods, considering alignment with the geological rationale of the exploration block and the appropriateness of the budget. Special Benefits Offered to the State (20 points) Assessed from proposals of special benefits that comply with specified conditions. The applicant with the highest total score will be granted concession rights. In cases where only one applicant meets the criteria, the authorities reserve the right to cancel or grant/deny rights.  E. Bidding Days Applications will be accepted from July 9, 2025 to July 16, 2025 (or until further amendments) during official working hours. F. Contractual Right & Obligations Petroleum concession holders get a 6-year exploration period, extendable once for 3 years (9 years total), followed by a 20-year production period, extendable once for 10 years (30 years total). All extensions require compliance and 6-month advance notice. Concessionaires must comply with all laws and regulations regarding the use of government-owned land and cannot claim any expenses or damages if unable to access exploration areas or production sites on government property. This bidding round presents a significant opportunity for petroleum industry investors to secure exploration and production rights in Thailand. CONCLUSION With extensive experience in regulatory compliance, cross-border energy transactions, and sector-specific legal frameworks, ILAW ASIA provides expert legal counsel to navigate the complexities of Thailand’s petroleum laws and licensing processes. Our team has a deep understanding of upstream and downstream energy operations, covering areas such as concession agreements, production-sharing contracts, environmental compliance, and negotiations with government authorities. Leveraging our strong regional presence and industry expertise, we assist clients in mitigating risks, ensuring regulatory adherence, and optimizing investment strategies for successful participation in Thailand’s energy sector.   AUTHOR Tanadee Pantumkomon, Partner, Power, Energy, and Major Projects Department; Wachinorot Siladet, Associate, Corporate & Commercial Department and Anantamet Senpan, Paralegal, Corporate & Commercial Department.

IN BRIEF The Personal Data Protection Act B.E. 2562 (2019) ("PDPA") exempted small enterprises from the obligation to create, record, and retain a Record of Processing Activities ("RoPA") under Sections 39 and 40.This exemption applied to both data controllers and data processors. However, while the main law has been enacted, the specific criteria for qualifying for this exemption have not yet been clearly defined in detailed regulations. On January 8, 2025, the Personal Data Protection Committee ("PDPC") issued guidelines clarifying the specific characteristics of the Small Enterprises eligible for the exemption. These guidelines are outlined in: The Notification of the PDPC on the Exemption from the Creation and Retention of a RoPA for Small Enterprises Data Processors B.E. 2567 (2024); and The Notification of the PDPC on the Exemption from Recording of a RoPA for the Small Enterprises Data Controllers B.E. 2567 (2024). The notification for Small Enterprises Data Processors took effect on January 9, 2025, while the notification for Small Enterprises Data Controllers will take effect on April 8, 2025 (90 days after its publication in the Royal Thai Government Gazette), collectively referred to as the “RoPA Exemption for Small Enterprises”. KEY PROVISIONS Key Provisions under the RoPA Exemption for Small Enterprises: A. Characteristics of Small Enterprises The RoPA Exemption for Small Enterprises defines eligible entities as: Small and Medium Enterprises (SMEs) under the law on SME Promotion. Community Enterprises or Community Enterprise Networks under the law on Community Enterprise Promotion. Social Enterprise or Group of Social Enterprise under the law on Social Enterprise Promotion. Cooperatives, Cooperative Unions, or Farmer Groups under the law on Foundations, Associations, Religious Organizations, or Non-profit Private Organizations. Juristic Condominium Entities or Housing Estate Juristic Entities under the laws governing condominiums and housing estates. Household Businesses. Sole businesses operated by individual data controllers. For example, the definition of SMEs is as follows: Manufacturing businesses with no more than 200 employees or annual revenue not exceeding THB 500 million. Service, wholesale, or retail businesses with no more than 100 employees or annual revenue not exceeding THB 300 million. If an enterprise's employee count does not exceed the criteria but its revenue does, revenue will be the primary consideration. However, small enterprises will not qualify for the exemption if they are required by law to appoint a Data Protection Officer (DPO) as per section 41 of PDPA. This requirement applies to: Government Agencies. Businesses Engaged in Core Activities of Personal Data Processing. Organizations Handling Sensitive Personal Data (SPI). Examples include hospitals, banks, credit service providers, schools, law firms, and audit firms. (These examples of business types are for illustrative purposes only.) B. Exemptions Not Applicable in Certain Cases Even if an entity qualifies as a small enterprise, certain circumstances may still necessitate the creation, recording, and retention of a RoPA if collection, use, or disclosure of personal data involves: Personal data with high risks to the rights and freedoms of data subjects; or Personal data as a regular business activity; or Processing sensitive personal data as defined by section 26 of PDPA (such as health data, religious beliefs, biometric data) CONCLUSION Understanding the exemptions from the Record of Processing Activities (RoPA) obligations is crucial for small enterprises to ensure compliance with Thailand’s Personal Data Protection Act (PDPA) while effectively managing their legal responsibilities. Although exemptions may apply in certain cases, businesses must carefully evaluate their data processing activities to avoid unintended non-compliance. It is important to note that exemptions do not apply universally. Organizations processing high-risk personal data or engaging in regular personal data processing activities may still be required to comply with RoPA obligations. While these guidelines provide relief for many small enterprises, a thorough assessment is necessary to determine whether the exemption criteria are genuinely met. At ILAWASIA, we offer expert legal counsel on PDPA compliance, helping businesses navigate their regulatory obligations with confidence. If you require guidance on RoPA exemptions or any other PDPA-related matters, please feel free to contact us for further consultation. AUTHOR Somphob Rodboon, Managing Partner; Nannapas Phatcharakeatkanok, Senior Associate; Wachinorot Siladet, Associate.

IN BRIEF On January 8, 2025, the Minister of Finance proposed the Emergency Decree on Top-up Tax, B.E. 2567 (2024) (“Top-up Tax Decree”) to Parliament for consideration and affirmation of the Cabinet’s approval.This proposal follows the legislative process required for parliamentary affirmation. The Parliament subsequently affirmed the decree as proposed. The Top-up Tax Decree has been in effect since January 1, 2025. It establishes a mechanism to ensure that Multi-National Enterprises (“MNEs”) with consolidated financial statement revenues of at least €750 million are subject to an effective tax rate of at least 15%. This rate applies to income in each jurisdiction where constituent entities of an MNE group operate. This measure aligns with the Inclusive Framework on Base Erosion and Profit Shifting (BEPS), an international initiative addressing tax base erosion and profit shifting, of which Thailand became a member following the Cabinet’s resolution on May 16, 2017. KEY TAKEAWAYS The key provisions under the Top-up Tax Decree are summarized below: Tax imposed under the Top-up Tax Decree Constituent entities of an MNE group operating in Thailand must pay a top-up tax if their effective tax rate is below 15%. This applies regardless of whether the low-tax constituent entities operate domestically or in foreign jurisdictions, under the following principles: 1.1. Domestic Top-up Tax Constituent entities of an MNE group operating in Thailand with an effective tax rate below 15% (“Low-Tax Constituent Entities”) are required to pay a top-up tax in Thailand to bring their effective tax rate up to 15%. Example: If Companies A, B, and C operate businesses in Thailand and collectively have an effective tax rate below 15%, a coordinated tax charge will be imposed by Thailand to ensure the 15% minimum rate is met. 1.2. Foreign Top-up Tax If constituent entities of an MNE group operating in foreign jurisdictions have an effective tax rate below 15% (“Low-Tax Constituent Entities”), the constituent entity of the MNE group in Thailand must pay the top-up tax under the following circumstances: If the Thai entity is the Ultimate Parent Entity (UPE), Intermediate Parent Entity, or Partially-Owned Parent Entity, it will be responsible for the top-up tax of Low-Tax Constituent Entities to meet the 15% threshold under the Income Inclusion Rule. Any unallocated amount of top-up tax after the Income Inclusion Rule will be assigned under the Undertaxed Payment Rule. Example: If Super Company operates in Thailand and its Companies A, B, and C operate in a country without a domestic top-up tax, causing Companies A, B, and C to have an effective tax rate below 15%, then Super Company (as the UPE) must pay the top-up tax for these entities in Thailand.   Example Calculation for Top-up Tax: The MNE group has an Ultimate Parent Entity named Super Company. (Number of income is for the purpose of easing calculation only)   Constituent Entity GloBE Income (Baht) GloBE Net Income (Baht) Effective Tax Rate Top-up Tax Calculation (Baht) Company A 500,000 1,000,000  0% (500,000/1,000,000) * 150,000 = 45,000 Company B 200,000 0% (200,000/1,000,000) * 150,000 = 18,000 Company C 300,000 20% (60,000) (300,000/1,000,000) * 150,000 = 27,000   In this case, Companies A, B, and C collectively have a GloBE Income of 1,000,000 Baht and have paid a total tax of 60,000 Baht, resulting in an effective tax rate of 6%, which is below the 15% Global Minimum Tax (or 150,000). Therefore, they are liable for a top-up tax of 9% of GloBE Net Income (or 90,000), proportionally allocated as shown above. Submission of Documents and Tax Filing Constituent entities of an MNE group operating in Thailand are responsible for submitting the notification form, the GloBE information return, and filing the top-up tax with the Revenue Department within 15 months from the end of the UPE’s fiscal year. For the fiscal year 2025, the deadline is extended to 18 months. Additionally, if the total taxes paid by an MNE group reach the 15% minimum rate, constituent entities of an MNE group operating in Thailand must still submit the notification form and the GloBE information return, even if they are not required to pay the top-up tax. Measures to Encourage Foreign Investment Thailand has previously implemented tax incentives to promote investment, including corporate income tax exemptions. With the implementation of the Top-up Tax Decree, companies classified as MNEs will now be subject to the Global Minimum Tax. To mitigate the impact and maintain Thailand’s investment appeal, the government has introduced the following measures: Adjustment of Tax Incentives by the Board of Investment (BOI) Under the BOI Notification No. 1/2566 Re: Investment Promotion Measures to Mitigate the Impact of the New Taxation Regime, constituent entities of MNE groups currently receiving tax exemptions can choose to adjust their benefits from a full exemption (0%) to a 50% corporate income tax reduction. The reduction period may also be extended to double the remaining duration of the original exemption, up to a maximum of 10 years. Allocation to the National Competitiveness Enhancement Fund Revenue generated from the top-up tax will soon be allocated to the National Competitiveness Enhancement Fund, which is an upcoming policy. This fund is expected to provide financial support for investment and research activities by constituent entities of MNE groups operating in Thailand. CONCLUSION In conclusion, the Top-up Tax Decree represents a significant step in aligning Thailand’s tax regime with international standards. By enforcing the Global Minimum Tax, it addresses profit shifting while ensuring compliance with global practices. Although the decree impacts MNEs benefiting from tax incentives, the government’s measures, such as adjusted tax benefits and funding support, aim to balance compliance with maintaining Thailand’s attractiveness as an investment destination. For businesses eager to dive into this new tax obligations and legal compliance, ILAWASIA offers expert legal counsel to navigate the complex regulatory landscape. ILAWASIA is a one-stop service for legal consultation, providing a comprehensive range of services, leveraging available government measures to minimize impacts while ensuring legal compliance. AUTHORS Tanadee Pantumkomon, Partner; and Wachinosot Siladet, Associate.

IN BRIEF Since 2019, the COVID-19 pandemic has drastically reshaped traditional retail, pushing consumers toward online platforms during global lockdowns and fueling an E-commerce boom. As the world recovers, this shift in consumer behavior is here to stay, with platforms like Shopee, Lazada, and TikTok becoming integral to everyday shopping. For businesses, adapting to E-commerce isn’t just an option—it’s essential for survival and growth. In this article, The Firm will explore the taxation landscape for E-commerce in Thailand, focusing on income tax and VAT; and will outline the key legal frameworks that E-commerce operators need to navigate to thrive in this digital marketplace. KEY TAKEAWAYS A. Income Tax i. Personal Income Tax (PIT): The tax rate for individuals with E-commerce income in Thailand is calculated using both progressive and flat rates, with the method resulting in the higher tax amount being applied. Individuals must submit the personal income tax form (Por Nor Dor. 94) from July to September of the tax year and the form (Por Nor Dor. 90) between January and March of the following year. The calculation method is as follows: Progressive Tax Rates The progressive tax calculation is based on income from taxable income with deduct expenses, and deductibles under tax laws and regulations. This amount is then multiplied a progressive-tax rate as follows:   Rate of Income (THB) Tax Rate (%) 0-150,000 0 150,001-300,000 5 300,001-500,000 10 500,001-750,000 15 750,001-1,000,000 20 1,000,001-2,000,000 25 2,000,001-5,000,000 30 Over 5,000,000 35   Flat Tax Rate: The flat tax calculation is based on income without any deductions. This amount is then multiplied by a flat-tax rates as follows:   Rate of assessable Income (THB) Tax Rate (%) Up to 120,000 0 Over 120,000 0.5   ii. Corporate Income Tax (CIT): The tax rate for general companies or limited partnerships with E-commerce income in Thailand is 20% of the company's or partnership’s net profit. Therefore, companies or juristic partnerships with a 12-month accounting period are required to submit the corporate income tax return (Form Por Nor Dor. 51) within 2 months from the last day of a 6-month period, starting from the first day of the accounting period. B. Value Added Tax (VAT) A tax levied on the sale of goods and services at each stage of production and distribution. This tax applies to both domestically produced goods and services as well as those imported from abroad. In the context of E-commerce, businesses engaged in selling goods and services on online platforms are subject to VAT. This means that E-commerce operators must ensure compliance with VAT regulations as part of their business operations which detail as follows; VAT Registration: In case E-commerce business has a revenue of more than 1.8 million Baht per year, it is necessary to register for VAT within 30 days after the revenue exceeds this threshold. VAT registration can be done at the local Revenue Office or via the internet. VAT Rate: E-commerce business is required to collect VAT (currently at the rate of 7%) of the purchase price or service price from consumers after registering for VAT. Monthly Report: After registering for VAT, the VAT report must be filed every month by the 15th date of the following month. C. The up-coming of “Digital Economy and Taxation” According to the World Bank, the "digital economy" has represented over 15.5% of global gross domestic product (GDP) in the last 15 years, expanding at a rate 2.5 times faster than that of the overall GDP. In light of this growth, the European Commission (EC) proposed in 2018 the introduction of a Digital Service Tax (DST) set at 3% on revenues from online advertising, digital intermediary services, and the sale of user data are considered part of the E-commerce business. This initiative aims to foster fairness among businesses and utilize tax revenue for national development. While Thailand has yet to adopt a specific digital services tax, discussions regarding the taxation of digital services are actively ongoing, particularly as international standards continue to evolve. CONCLUSION In conclusion, in addition to registering other licenses related to E-commerce businesses, such as direct sales licenses, E-commerce businesses in Thailand are subject to both corporate income tax and VAT. It is crucial for businesses to understand their tax obligations, maintain accurate records, and ensure compliance with relevant regulations. For businesses eager to dive into this thriving industry, ILAWASIA offers expert legal counsel to navigate the complex regulatory landscape. ILAWASIA is a one-stop service for legal consultation, providing a comprehensive range of services tailored for the E-commerce businesses. Our expertise includes: Company Setup VAT registration Tax Planning E-Commerce Business Licenses Direct-Sale Business Licenses Contract Negotiation e.g. supply contracts, sale and purchase agreements and insurance Import and Export of Products Licenses We ensure your business stays compliant and competitive, helping you seize opportunities without legal hurdles. Partner with us, and let’s grow your business in Thailand’s dynamic and evolving E-Commerce businesses in Thailand. AUTHOR Tanadee Pantumkomon, Partner Nannapas Phatcharakeatkanok, Senior Associate Kamintra Piriyayon, Associate They can be reached at [email protected]

In today’s digital era, Data Centers are the backbone of our technology-driven world.These physical facilities house and manage vast amounts of computer systems and equipment, serving as the lifeblood of data collection, protection, and maintenance. Among the array of services they offer, Colocation Data Center services are rapidly gaining traction. But what exactly is colocation, and why is it creating a buzz in the business world? Colocation services provide companies the option to lease space within a provider’s data center to store their servers and hardware. Unlike in-house data management, colocation facilities come with fully equipped infrastructure, including power, cooling systems, security, and a dedicated technical team to ensure smooth operations. This service offers a strategic solution for businesses that require robust data management but lack the resources or space to do it themselves. The Thai Boom in Data Center Demand Thailand’s data center market is experiencing explosive growth. The surge is driven by the increasing reliance on technology in everyday life and the rapid expansion of tech-related businesses. As more companies embrace digital transformation, the need for reliable and secure data storage solutions becomes paramount. Why is Thailand becoming a hub for Data Centers? Strategic Location: Positioned at the heart of Southeast Asia, Thailand is ideally located to act as a digital gateway to the region. Stable Power Supply: Consistent and reliable electricity is crucial for data center operations, and Thailand meets this requirement effectively. Government Incentives: The Thai government, through the Board of Investment (BOI), is actively offering attractive incentives to lure businesses into this burgeoning sector. Opportunities for Entrepreneurs For entrepreneurs looking to tap into Thailand’s burgeoning data center industry, several key factors should be at the forefront of their strategy: Infrastructure: Ensuring top-notch facilities with high levels of security and efficiency. Compliance: Staying updated with Thai regulations and BOI incentives. Market Trends: Keeping a pulse on the growing tech landscape and evolving data management needs in the region. Thailand’s burgeoning role as a data center hub presents a golden opportunity for businesses looking to expand their digital footprint in Southeast Asia. With the right approach, entrepreneurs can leverage this momentum to establish themselves as key players in a thriving market For entrepreneurs to operate a Data Center in Thailand, the following key details are important to consider: Laws and Regulations 1.1 License and Permits Data Center business fall under Telecommunications Business Operation Act B.E. 2544 (“Telecommunications Act”) which is under the authority of the Office of the National Broadcasting and Telecommunications Commission (“NBTC”). According to Section 7 of Telecommunications Act, the telecommunication businesses are categorized into 3 types of licenses:   Type One license     Type Two license   Type Three license     Does not have his or her own telecommunication network   Does not have his or her own telecommunication network   Have his or her own telecommunication network[1]     Provide services on the basis of liberalization     Provide services for a limited group of people or has no significant impacts on free and fair competition or on public interest and consumers     Provide services to a large number of general public or may have significant impacts on free and fair competition or on public interest or requires special consumer protection   Since the Data Center business does not require its own telecommunications network and operates based on liberalization principles. Therefore, Data Center business is required to obtain a Type One license under the Telecommunications Act. The qualifications for obtaining a type one license shall be as follows; the applicant shall not be a bankrupt; the applicant shall never have a telecommunications business license revoked; the directors, managers, or persons in authority of the applicant shall not be a person sentenced by a final judgment for an offense committed under this Act, or under the law on telegraph and telephone, the law on radiocommunication, or the law of consumer protection during 2 years period prior to the date of submitting the application.[2] To operate the Data Center business, the owner must pay government fees to obtain and renew the business license, as well as an annual fee. The annual fee is calculated based on the yearly income before deduction expenses. For businesses with a Type One license, the fee ranges from 0.25% to 1.5%, depending on their annual income.[3] Once the business license is obtained, the business owner is required to commence operations within 1 year from the license issuance date. Additionally, the business must submit a performance report to NBTC every 3 months until services begin. Upon commencing operations, the business owner must submit an annual report, which includes key details such as start and end dates of operations, financial statements, number of customers, business plan, and other information as specified by NBTC. Furthermore, any changes to the business, such as the changes of a company name or address, the director, or shareholders that could affect the company’s status converting into a foreign-owned entity, must be promptly reported to the NBTC.[4] 1.2 Foreign Shareholder Although the Type One license does not impose specific regulations related to foreign shareholder, the company which is not Thai company is still subject to the Foreign Business Act B.E. 2542. The company that is not registered in Thailand or the company that is registered in Thailand with foreign shareholders holding 50 percent or more of the shares shall be considered as a foreign company and may fall under Foreign Business Act B.E. 2542 (“FBA”). Data Center business is classified as a “services business” under FBA, the company must obtain a Foreign Business License before operating a business. Incentives 2.1 BOI Promotion Regarding the Investment Promotion Guide 2024, Data Center business was stipulated in Investment Promotion Division 4, section 8, digital industry. Data Center business has been classified under incentive category A1. The conditions for Data Center business to apply for BOI are that the equipment and systems must ensure that their equipment and systems are fully prepared and operational. These are some key conditions that are important for entrepreneurs to consider: the project must provide complementary service for customers located in projects such as server co-location, managed service, customer’s server backup service, disaster recovery service (DRS), Data Hosting; the project must have a “Continuous Rating” generator, which is capable of supporting the entire electricity needs of the Data Center, with a backup generator that can support the need for electricity when one of the generators does not function properly; the project must be certified with ISO/IEC 27001 (data center).[5] 2.2 Benefits for A1 incentives in BOI Exemption of corporate income tax for 8 years with no cap. Exemption of import duties on machinery. Exemption of import duties on raw materials used in R&D. Non-tax incentives, for example, permit to own land or take out or remitting money abroad in foreign currency. 2.3 Other Promotion Not only the promotion provided by BOI, but there is another incentive for operating Data Business in Thailand under Royal Decree Re VAT Exempt for Data Center Service No. 759. Business owners who submit their application before November 7, 2570, are eligible for a VAT exemption for Data Center business, which has conditions as follow; it is Thai company or registered under the law of Thailand; the company that had been registered VAT; the company which has been promoted under the Competitiveness Enhancement for Target Industries Act B.E. 2560;[6] the business owner of Data Center who has not claimed the purchase tax related to the Data Center to deduct it from the sales tax in their VAT within 3 years prior to the tax payment month or submission of the application under section 2.[7] Please note if the operators apply for VAT exemption for the Data Center business, they will not be able to claim the purchase tax of VAT. Conclusion As the technology sector continues its rapid expansion, the Data Center business emerges as a compelling opportunity for entrepreneurs. With increasing data demands, businesses are turning to robust solutions like colocation services to manage their digital assets efficiently. Thailand, with its strategic location, reliable infrastructure, and attractive incentives, stands out as a promising destination for data center investments. The government's support, including income tax exemptions and VAT exemptions, further enhances the country's appeal, making it an ideal spot for entrepreneurs to establish or scale their ventures. For businesses eager to dive into this thriving industry, ILAW ASIA offers expert legal counsel to navigate the complex regulatory landscape. We are a one-stop service for legal consultation, providing a comprehensive range of services tailored to the Data Center business. Our expertise includes: Company Setup Corporate Structure Planning Joint Venture Agreements NBTC License Applications BOI and Foreign Business License Lease Agreement Reviews Data Center Colocation Service Contract Reviews Construction Contracts for Data Centers We ensure your business stays compliant and competitive, helping you seize opportunities without legal hurdles. Partner with us, and let’s grow your business in Thailand’s dynamic and evolving data center market. Authors:  Tanadee Pantumkomon, Partner; Wachinorot Siladet, Associate; and Avika Kanjanakul, Associate. Footnotes [1] Telecommunications business operation act B.E. 2544 section 4. “Telecommunication network”, means the set of telecommunications equipment which is directly connected or connected through switching equipment or any other equipment for telecommunications between defined termination points by means of any wire, radio-frequency spectrum, optical, or any other electromagnetic systems or a combination thereof; [2] Telecommunications business operation act B.E. 2544 section 8 [3] Announcement of the National Broadcasting and Telecommunications Commission (NBTC) on the Telecommunications License Fee, December 28, 2012 [4] Announcement of the National Broadcasting and Telecommunications Commission (NBTC) on the Standard Conditions for Granting Telecommunications Licenses, May 25, 2021 [5] Investment Promotion Guide 2024, page 118, 119 [6] Decree no. 759 B.E. 2565, section 4 [7] Announcement of the Director-General of the Revenue Department Regarding Value Added Tax, No. 251, May 16, 2023

According to Thailand's National Statistical Office, the country officially entered the status of an "aged society" in 2024. This aligns with a global trend highlighted in a United Nations report, which underscores the increasing size and proportion of older individuals in populations worldwide. As a prominent health and wellness hub, Thailand has experienced growing demand for health-focused services. To address this societal shift and tap into emerging opportunities, the government has introduced attractive incentives aimed at supporting the evolving needs of its aging population. These measures are designed to unlock potential in adapting to demographic changes while attracting investors to high-growth sectors such as senior and dependent care businesses. The key details of these initiatives are outlined below: 1.     Licenses Senior and dependent care businesses, including day care centers, residential homes, and nursing homes, fall under the legal definition of the “Business of Caring for the Elderly or Dependent Persons” (collectively referred to as the “Business”). Operating such businesses requires a license, as stipulated by the Health Business Establishments Act B.E. 2559 (2016) and its amendments. These businesses are further regulated under the Ministerial Regulation on the Specification of the Business of Caring for the Elderly or Dependent Persons as a Health Business Establishment B.E. 2563 (2020) (the “Ministerial Regulation”). The Ministerial Regulation classifies this Business into three distinct categories, as outlined below: No. Categories   Criterion 1. Day Care   : The business that provides day care services for the elderly or dependents, with activities to care for, promote and rehabilitate the health of the elderly or dependents without overnight stays. 2. Residential Home : The business that provides services for the elderly, including activities to promote and rehabilitate the elderly by providing a place to stay. 3. Nursing Home : The business that provides care and support of the elderly or dependents, including activities to care for, promote and rehabilitate the health of the elderly or dependent persons, with overnight stays. For each category, business owners must adhere to specific requirements, such as implementing enhanced safety measures for businesses offering overnight accommodations or residential services. Licensing costs also vary depending on the type of service provided and the size of the service area, which is calculated based on square meters. To obtain the required license, applicants must submit an application form to the Health Service Support Center under the Department of Health Service Support, Ministry of Public Health. 2.   Additional Requirements for Foreign Companies Under Thailand’s Foreign Business Act B.E. 2542 (1999) (the “FBA”), a company incorporated under a foreign law or a company incorporated under Thai law with foreign shareholders holding 50% or more of the shares is classified as a foreign company. The business of health care is categorized as a business under List 3 of the FBA, in which a foreign company must obtain authorization from the Foreign Business Administration Division, under the Department of Business Development (DBD), Ministry of Commerce (MOC). 3.     Business Incentives 3.1.Specific criteria on the Senior and Dependent Business The incentives by the Board of Investment (the “BOI”) are outlined in the Announcement of the BOI No.9/2565, setting the criteria for entities operate the senior or dependent care business, as detailed below: No. Criteria Details 1. Nationality   Must have Thai national shareholders holding 51 percent or more of its registered capital. 2. Compliance   Must be a business focused on caring for the elderly or dependent persons. 3. Capacity Must have 31 or more beds for overnight stays of admitted patient. 4. Activity Must provide care and support for senior/dependent persons by allowing overnight stays and offering rehabilitation activities* 5. License Must obtain license to operate a health business establishment before exercising the incentive, and before the full operation deadline. 6. Minimum Investment   Must have minimum capital of investment not less than 1 million Baht (excluding costs of land and working capital) 3.2. Benefits The entities being granted BOI incentives under the criteria are entitled to enjoy the benefits granted as follows: No. Categories Details 1. Corporate Income Tax An exemption on the Corporate Income Tax for 3 years. 2. Import Duties An exemption on the import of 1) machinery, 2) raw materials used in R&D, and 3) raw materials used in production for export. 3. Non-tax Incentives Such as permits for owning land, permits to bring skilled persons and experts to work, visa and work permit benefits, etc. In conclusion, as one of the world’s aging societies and a renowned global health and wellness destination, Thailand has experienced a growing demand for health-focused and well-being services. To support this trend, the government, through the Board of Investment (BOI), offers attractive incentives, including corporate income tax exemptions, reductions in import duties, and various non-tax benefits, specifically targeting high-potential sectors such as senior and dependent care businesses. While foreign companies face additional operational requirements and are currently ineligible for BOI incentives due to structural restrictions, they still have opportunities to enter this promising sector. Operators must also comply with a range of licensing and legal obligations, including obtaining health business licenses and adhering to stringent safety and waste management regulations. Despite these challenges, the senior and dependent care business sector presents significant investment potential in Thailand, underpinned by the country’s demographic trends and strong health and wellness reputation. For businesses in the senior and dependent care sector, ILAWASIA provides expert legal advice and comprehensive regulatory support to ensure compliance and help clients capitalize on emerging opportunities in this dynamic industry. Let us be your trusted partner in navigating the evolving legal landscape and driving the success of your business.   Author: Tanadee Pantumkomon, Partner; Thanaphorn Kaewsukko, Associate; & Kornkod Suk-aram, Associate.

Since 9 June 2022, cannabis and hemp are no longer classified as narcotics under the Narcotics Code,which may lead to widespread possession, consumption, and use. This situation could have significant impact on public health, economy, and society. To address these concerns and align with government policy, on 6 November 2024, the Ministry of Public Health has proposed the Cabinet, a new draft bill to regulate the cultivation, production, import, export, sale, and advertisement of cannabis, hemp, and their extracts (the “Draft Bill”). The Draft Bill is currently under review and consideration by the Cabinet. KEY PROVISIONS OF THE DRAFT BILL A. Licensing Requirements The Draft Bill establishes that the cultivation, production, import, and sale of cannabis, hemp, and their extracts require licenses from the Director-General of the Department of Thai Traditional and Alternative Medicine. The application for a license to cultivate cannabis or hemp will be categorized based on the size of the cultivation area: Small area : Not exceeding 5 rai (approximately 1.98 acres) Medium area : More than 5 rai but not exceeding 20 rai (approximately 7.91 acres) Large area : More than 20 rai but not exceeding 400 rai (approximately 158.16 acres) In addition to a general license, the import and export of cannabis, hemp, and their extracts will require a specific permit for each transaction. B. Exempt Activities The Draft Bill exempts the following activities from licensing requirements: The production, export, or sale of roots, branches, leaves, stems, or seeds of cannabis or hemp (excluding cannabis and hemp flowers). The prescription of cannabis, hemp, or their extracts for the treatment, care, alleviation of human ailments, or disease prevention by licensed medical practitioners, dentists, Thai traditional medical practitioners, applied Thai traditional medical practitioners, Chinese medicine practitioners, or folk medical practitioners, as defined under the laws on Thai traditional medical professions. C. Applicant Eligibility Applicants for the licenses must not possess any prohibited characteristics as specified in the Draft Bill. In addition, the following eligibility criteria apply: Individuals must be Thai nationals, of at least 20 years old, and residents of Thailand and has no prohibited characteristics under the law. Companies must be Thai nationality with its office in Thailand, with directors who are Thai nationals and of at least 20 years old and has no prohibited characteristics under the law. A community enterprise that is not a legal entity under the law on community enterprises with its representative who is Thai national and of at least 20 years old and has no prohibited characteristics under the law. The Thai Red Cross Society or a government agency with related responsibilities under the law. D. License Validity and Renewal Licenses are valid for 3 years from the date of issuance and must be renewed before expiration. E. Limitation on the Use of Cannabis, Hemp and Their Extracts The Draft Bill prohibits any consumption of cannabis, hemp and their extracts, except the following cases: Treatment, relieve of pain for human and prevention from diseases including the use for wellness under the control of licensed medical practitioners, dentists, Thai traditional medical practitioners, applied Thai traditional medical practitioners, Chinese medicine practitioners, or folk medical practitioners, as defined under the laws on Thai traditional medical professions; Research by government authorities, research for medical study, pharmaceutical study or science, medical pharmaceutical or science service, for the benefit of medical use, pharmaceutical use, Red-Cross use or academic use; and Production of herbal products, medical products, food products, cosmetic products or other products as specified by relevant laws and regulations. F. Fees License fees will be determined by ministerial regulations issued by the Ministry of Public Health, subject to the maximum rates outlined in the annex to the Draft Bill. Fee amounts may vary based on the cultivation area, the quantities of cannabis, hemp or their extracts, or the size of the licensee's business.  G. Advertisement The Draft Bill prohibits the advertisement or marketing communication of cannabis flowers or resin, hemp flowers or resin, extracts, and tools or equipment related to cannabis smoking. Additionally, all other advertisements concerning cannabis, hemp, or their extracts must not be false, misleading, or exaggerated, nor support or encourage illegal or immoral actions. CONCLUSION In conclusion, the new Draft Bill offers a clearer regulatory framework for the cultivation, production, import, export, sale, and advertisement of cannabis, hemp, and their extracts, addressing significant gaps in the existing legislation. While the timeline for its enactment remains uncertain, the approval process by the Cabinet and Parliament is underway, with expectations that the new law could be in place by Q2 of 2025. Once enacted, this legislation will not only enhance legal clarity but also bolster the stability and growth potential of the cannabis and hemp industries in Thailand, creating a more secure environment for investors and entrepreneurs. For businesses navigating these changes, ILAWASIA offers expert legal advice and regulatory support to help clients stay compliant and seize emerging opportunities in this dynamic sector. Let us be your trusted partner in ensuring your business thrives in the evolving legal landscape. Authors: Tanadee Pantumkomon, Wachinorot Siladet and Phoomphop Rungsri

Recent developments in Thailand’s tax laws signal a shift in how foreign income will be taxed for individuals residing in the country.These changes, driven by international tax standards and Thailand’s participation in global tax transparency initiatives, impact both current and potential foreign residents. Below is an overview of the new regulations and potential laws regarding foreign income tax: 1.Changes to Foreign Income Taxation (Effective 2024) Under Director General Orders No. Por 161/2566 and Por 162/2566, significant changes to how foreign income is taxed in Thailand will take effect starting January 1, 2024: Remittance-Based Taxation: Previously, individuals residing in Thailand for 180 days or more were only subject to tax on foreign income if it was remitted to Thailand within the same calendar year in which it was earned. Many leveraged this by deferring remittance to avoid taxation. New Rule: From January 1, 2024 onwards, foreign income brought into Thailand will be taxed in the year it is brought into Thailand, regardless of when the income was earned. This eliminates the previous tax deferral strategy, marking a shift from "Same Calendar Year Remittance" to "Remittance" basis taxation. 2. Potential New Law on Foreign Income Arising Abroad Looking further ahead, there are discussions about a more comprehensive change to Thailand's foreign income taxation: Arising Income Concept: The proposed amendments, still in early stages, could require individuals residing in Thailand for more than 180 days to pay tax on foreign income, even if that income is not brought into Thailand. This represents a shift from taxing remitted income to taxing "The Arising Income" (income earned abroad), regardless of its movement into Thailand. International Transparency: These changes are driven by Thailand’s commitment to the Global Forum on Transparency and Exchange of Information for Tax Purposes. Through automatic exchanges of financial information between member countries, Thailand’s tax authorities will have access to detailed data about financial accounts and income held abroad by its residents. While these amendments are still in the early legislative stages, if approved by Parliament, this potential law could take effect as early as 2025, impacting foreign nationals residing in Thailand as well as Thai citizens with income abroad. 3. Exemptions for Long-Term Foreign Residents Despite these upcoming changes, exemptions exist for certain long-term foreign residents in Thailand who meet specific criteria set by the Thai government. These exemptions aim to attract and retain foreigners who contribute to the country’s development, offering tax relief to qualifying individuals. 4. Planning for the Future As Thailand’s tax regime becomes more stringent, tax planning will play a critical role for individuals with foreign income. The new rules make it essential to adopt forward-looking strategies to remain compliant and mitigate tax burdens. At ILAWASIA, we have over 17 years of expertise in taxation, and we stand ready to assist clients with navigating these new tax regulations. Our services include: Expert Tax Legal Advice International Tax Planning Strategies Compliance with Foreign Income Tax Regulations If you are a foreign national living or planning to live in Thailand, or a Thai citizen with foreign income, please consider reaching out to ILAW ASIA for personalized guidance and professional support to help you stay ahead of the evolving tax landscape. Authors: Tanadee Pantumkomon and Wachinorot Siladet

On 17 September 2024, the General Department of Taxation, under the Ministry of Economy and Finance, issued an instruction on the procedure for business dissolution permanently.According to Paragraph 2 of Article 203 of the Law on Taxation 2023, “businesses must inform the tax administration within 15 days if there are changes to their address, format, name, business objective, transfer, dissolution, management structure, or the person in charge of tax affairs of the enterprise.” The Procedure of Application for Business Dissolution Permanently. Application Taxpayers can apply for business dissolution permanently with one of the following options: Option 1: file the application at www.registrationservices.gov.kh. (Taxpayers can find more about the guidelines in booklet of “How to apply for changes in registration of the company or enterprise’s information.) Option 2: Apply to the tax administration by completing the application business dissolution permanently (Form of 103) and must be signed by the governor, manager, owner, or a representative with a legal authorization letter and the required documents listed in the instructions must be attached. To choose this option, taxpayers can apply: By the Electronic Tax Administration (GDT e-Administration) program with the following steps as below: Step 1: Download the e-tax administration software by accessing to the website www.tax.gov.kh., select the e-tax services and set-up this software on the taxpayer’s computer. Step 2: Use your existing account to access other General Department of Taxation systems or programs. If you don’t have an account, click “Create a new account” to register. Step 3: Select the type of applicant as a taxpayer or tax service agent Step 4: Click on the menu “Create a new administrative letter”, then enter the information of the applicant and enter the subject “business dissolution permanently” and select “General Department of Taxation”. Step 5: Attach the administrative letter as a PDF format, check and verify the information, re-enter any details if needed, and click ‘Send’ to submit it to the General Department of Taxation. Taxpayers can print a receipt to track their documents. The officer will review the application and email approval or rejection through GDT e-Administration. Or apply directly at the General Department of Taxation or a provincial tax branch. After submitting the application, the taxpayer will receive an acceptance letter from the tax administration. For enterprises not yet registered for tax or lacking updated information of enterprises, taxpayer must apply for tax registration or apply for update information of enterprises before they can apply for business dissolution permanently. Required Documents: A letter of notification on business dissolution permanently. An application of business dissolution permanently. (An application form of 103 can be downloaded from the official website of the General Department of Taxation, tax.gov.kh) A receipt of stamp duty on legal documents on the closure of the company for 1,000,000(one million) Riels.[1] (For companies registered with the competent ministry) Obligation of Taxpayers to apply for Business Dissolution Permanently. To apply for permanent business closure, the taxpayer must first complete the accounting records, submit the monthly tax returns, and file the annual income tax return by the business’s final closure date. Once the tax administration receives the application of business dissolution permanently, the taxpayer no longer needs to file monthly or annual tax returns. The business’s electronic tax management systems or services on the enterprise will be shut down, except for tax payment and tax debt payment services. Tax certificates, such as tax patent, tax registration certificates or VAT (Value-Added Tax) certificates, incentives and/or other enterprise permits issued by the General Department of Taxation, will be suspended indefinitely. The business will also be unable to issue tax or regular invoices for any transactions, including imports and exports. Penalties for Non-Compliance under Tax Laws. Failure to register with the tax administration or to update registration information after receiving more than 2(two) warning letters from tax administration results in a penalty of 5,000,000 (five million) Riels.[2] In cases of double jeopardy under this act, shall be punished by imprisonment from 1 (one) month to 1 (one) year and a fine from 50,000,000 (fifty million) Riels to 100,000,000 (one hundred million) Riels.[3] Conclusion: In conclusion, the General Department of Taxation has established clear steps and strict requirements for permanent business closure. Businesses must apply within 15 days, either online or directly, with necessary documentation. Once approved, tax responsibilities and certifications are indefinitely suspended, ending all business transactions. The tax administration may inspect and audit the business per the tax audit guidelines, requiring full cooperation from taxpayers. Non-compliance can lead to heavy penalties and imprisonment, stressing the importance of following these rules.​ Authors: Vicheka Lay, Partner; Footnotes [1]Article 4, point 5 of PraKas No.577 សហវ.ប្រក.អពជ on Stamp Duty issued on 19/09/2024 by Ministry of Economy and Finance. [2]Article 235 point 1 of the Law on Taxation 2023. [3]Article 235 point 3 and 243 of the Law on Taxation 2023.

Overview: Article 4 of the Law on Minimum Wage, enacted on July 6, 2018, states that the minimum wage is determined by a PraKas from the Minister of Labor.On September 20, 2024, the Ministry of Labour and Vocational Training (MLVT) issued Prakas No. 221/24 ក.ប/ប្រ.ក.ខ.ល on determining the minimum wage for workers in the garment, textile, footwear, travel goods, and bag sectors, which will be effective from January 1, 2025. Any conflicting provisions of this Prakas are void. Key provisions: The previous minimum wage was $202 per month for probationary workers and $204 for regular workers, according to PraKas No. 283/23 ក.ប/ប្រ.ក.ខ.ល issued on September 29, 2023. Recently, in accordance with the Article 2 of Prakas No. 221/24 issued on September 20, 2024, by MLVT, workers in the garment, textile, footwear, travel goods, and bag sectors, will receive the following minimum wages: For probationary workers is at $206 per month. At the end of the probationary period and became a full-time worker, the minimum wage shall increase to $208 per month. For regular workers, the pay rate is based on production level. If this results in a rate above the minimum wage, workers receive the higher amount. If it falls below the minimum wage, the employer must adjust pay to meet the minimum wage ($206 per month for probationary workers and $208 per month for regular workers). Other benefits for workers in the garment, textile, footwear, travel goods and bag sectors remain unchanged, including a transportation or accommodation allowance of $7 per month, an attendance bonus of $10 per month, a meal allowance for overtime working of $0.50 or one free meal, and a seniority bonus of $2 to $11 per month for workers with 2 to 11 years of services. Penalties: Under Article 24 of the Law on Minimum Wage 2018, employers who commit any of the following violations can be fined up to 40,000,000(forty million) Riels: the wage must be at least equal to the minimum wage set by a PraKas of the Minister of Labor[1]. any agreement, written or oral, requiring wages below the legal minimum is null and void[2]. in subcontracting or wage-based work, skilled workers should earn at least the guaranteed minimum wage. Workers who paid by the quantity of product must be paid based on their actual output. If their earnings exceed the minimum wage, they receive the extra. If it’s less, the employer must top it up to meet the guaranteed minimum wage[3]. all workers covered by this law must be paid equally for the same work, skills, and conditions, regardless of origin, gender, or age[4]. Conclusion: In conclusion, Article 4 of the Law on Minimum Wage establishes that the minimum wage is determined by a PraKas from the Minister of Labor. As of September 20, 2024, the Ministry of Labour and Vocational Training has set new minimum wages for workers in the garment, textile, footwear, travel goods, and bag sectors, effective January 1, 2025. Probationary workers will earn $206 per month, increasing to $208 upon full-time status, while regular workers’ pay is based on production levels, with provisions to ensure it meets the minimum wage. Additional benefits for these workers remain unchanged, and strict penalties are imposed for violations of the minimum wage laws, emphasizing the importance of fair compensation regardless of a worker’s origin, gender, or age Footnotes [1] Article 4 of the Law on Minimum Wage 2018. [2] Ibid., Article 6 Paragraph 1. [3] Ibid., Article 7. [4] Ibid., Article 8.

Since Thailand joined the Madrid Protocol in 2017, the process for international trademark registrations (IR) has become more streamlined.However, a technical issue at the Thai Trade Mark Office (TMO) caused delays in issuing local registration certificates for IRs designating Thailand. The TMO has now resolved this issue and started issuing local registration certificates for IRs designating Thailand, marking an important development for brand owners who have been awaiting official confirmation. For years, the TMO had committed to issuing local certificates following the World Intellectual Property Organization’s (WIPO) statement of grant but provisional refusals concerning goods and services specifications caused delays. The good news is that, as of August 2024, the TMO has resolved the technical issues, and the office began issuing certificates in early September 2024. The TMO is now working through the backlog, starting with applications filed in 2017 and 2018. For IRs that did not face provisional refusals, certificates are being processed subsequently. This development provides long-awaited relief for brand owners waiting for their official registration certificates in Thailand. Looking Forward As the TMO works through the remaining backlog, brand owners are encouraged to review their portfolios, especially IR designations affected by provisional refusals. This step marks a positive shift in Thailand's trademark registration process, offering greater clarity and efficiency for international trademark applicants seeking protection in the region. We encourage brand owners to stay updated on these changes and reach out if they need support with their portfolios.  Authors Somphob Rodboon, Managing Partner Thanapha Phetkeereeskul, Senior Associate