JTEPA or Japan-Thailand Economic Partnership Agreement is a form of free trade agreement signed between the countries of Thailand and Japan on 3rd of April 2007. During the last decades the economic relationship between Thailand and Japan has been strong. However, the private sector still encountered some major trade difficulties especially on the tariff or regulatory barriers. These obstacles were a huge challenge for all investors and disrupted trade flow among the two countries. JTEPA, therefore, was intended to eliminate those challenges to support economic integration and strengthen the trade relationship between Thailand and Japan.
JTEPA covers a wide range of trade-related matters such as investment, intellectual property rights, competition policy, and other legal aspects which directly and indirectly impact on trade liberalization. H&P Lawyers have been helping Japanese investors to enjoy the fundamental business privileges in Thailand including tariff reduction and permission to operate the restricted business for the foreign investor.
Upon the implementation of the JTEPA, Thailand has reduced and eliminated customs duties on an extensive range of goods originated from Japan, mainly for automotive products, car parts, and industrial products. Some are immediately reduced or exempted from tariffs.
However, to receive preferential treatment under the JTEPA, the importer must comply with rules of origin under the JTEPA. These rules are applied to determine whether the products manufactured in the territory of one or both contracting parties or whether it is used some materials produced elsewhere other than the contracting party’s territory.
PERMISSION TO OPERATE RESTRICTED BUSINESS FOR THE JAPANESE INVESTOR
Under Thai Foreign Business Law, the foreigner generally is not allowed to do restricted business. Nevertheless, the nationals from the country being a party of the free trade agreement with Thailand would not be subject to such restriction according to section 10 of the Foreign Business Act B.E. 2542(1999), provided the investor meets the certain requirement of the Department of Business Development (DBD) as follow.
A) Being limited company incorporated in Thailand. The partnership or limited partnership is eligible to only some business activities. B) Having foreign shareholders less than 50%, except for some business activity that would not be subject to shareholder structural restriction. The company shareholder must include Japanese individuals or companies.
Also, this exemption under the JTEPA is only limited to some businesses such as advertising, hotel, restaurant, or management consulting service. In this case H&P Lawyers in Bangkok can assist the Japanese investor who qualifies for the above initial requirement to apply for a certificate under JTEPA at the Office of the Secretary of the Aliens Business Operations Committee, Department of Business Development. The consideration process would take around one month.
If you need legal assistance with the Japan-Thailand Economic Partnership Agreement, please contact our lawyers in Thailand at [email protected]