This content is from: Local Insights

Thailand: Thailand’s regulatory guillotine project

A subject of interest for chambers of commerce in Thailand at the moment is the regulatory guillotine project.

In 2017, the government initiated a programme to cut down on red tape, licences and permits, to encourage economic growth. Phase 1 focused on a programme to reduce and amend certain regulations in order to improve Thailand's World Bank 'ease of doing business' ranking. Phase 2 will focus on reviewing national licence and permit requirements, with the aim of eliminating redundant licences, and streamlining complex procedures for starting new businesses. The private sector is being asked to suggest priority issues to be addressed.

Initial steps did lead to a higher World Bank ease of doing business ranking for Thailand. The country ranked 26th out of 190 economies in 2018, up from 48th place the previous year. The World Bank report recognises Thailand as one of the top 10 economies that have improved most in terms of ease of doing business in the last year. In addition to new laws approved by Parliament, section 44 of the Constitution was invoked by the Prime Minister in an effort to improve the regulatory framework, which was considered an obstacle.

Examples include:

  • abolishing the requirement for a company seal;
  • eliminating the need for approval of work rules by the labour department;
  • introducing an automatic risk-based system for selecting companies for a tax audit;
  • reducing the property transfer tax rate;
  • adopting the Business Collateral Act, broadening the scope of assets that can be used as collateral; and
  • introducing on-line filings in a number of departments.

The government also supported the development of a comprehensive 'doing business' portal to be launched in 2019 to provide easier and faster services for business owners.

The Thailand Institute of Justice (TIJ) has been active in publicising the project. It has sponsored seminars on the subject of 'Thailand's Journey on the Regulatory Guillotine', which highlight the roadmap of Thailand's legal reforms, and point out certain outdated, oppressive and complicated laws that require revision to further promote development. Thailand is a civil law jurisdiction, with more than 650 laws, and over 100,000 regulations and orders, many of which are out-of-date. The outdated laws limit access to quality government services, and obstruct and delay doing business. The TIJ believes the revision and amendment of the laws is of extreme importance, as this would uplift and improve the people's quality of life.

The Eastern Special Development Zone Act, BE 2561 (EEC Act) was published on May 14 2018. It prescribes a number of incentives for private investment, and complements and builds upon the board of investment's (BOI) regime. It provides for the establishment of a one-stop service to facilitate the issuing of permits and licences under a large number of laws, to new businesses in special economic zones (SEZs) announced in the eastern part of Thailand (sections 29 to 38, and 43 to 46).


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