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Franchise Agreements in Thailand

Franchise Agreements in Thailand

The franchise in Thailand is one of the most appreciated and common types of businesses. Such entity performs activities according to the rules and regulations stipulated in the Thai Civil and Commercial Code which imply the privilege to use the goodwill of a well-known company. The Copyright and the Trademark Acts in Thailand protect the franchisor from inappropriate use of copyrights and trademarks. Our Thai attorneys can offer complete information about the franchise agreements available in the country and about the conditions to consider when entering in such businesses.

Essential information about the franchise agreement in Thailand

The franchise agreement between two parties contains details about the rights, privileges, and commitments as a franchisor, besides financial information. It is good to know that the Trade Secret Act protects the formulas and the private matters of a company, which need to be considered by the franchisor in Thailand. The Unfair Contract Term Act bans many important standings related to the franchise contract, and here we remind that it is illegal for the involved parties to delay the implementation of the obligations if there are no credible and important reasons. The contract cannot come to an end before the agreed date, unless something important intervened.

Taxes related to the franchise agreements in Thailand

Foreign or local entrepreneurs who want to set up a franchise in the country need to be aware of the taxes involved. For instance, the overseas franchisor is subject to a 15% withholding tax on royalties, instead of 3% as a Thai franchisor. Besides that, the VAT is settled at 7% rate. The Revenue Department in Thailand oversees the taxes for the established franchises in the country. Our lawyers in Thailand can explain the entire taxation system in the country, including details about the mandatory fees as a franchise. Furthermore, if you are interested in obtaining a residence permit in Thailand, you should know that the permanent resident may be qualified to serve as a director of a Thai public corporation. For non-Thai family members, the permanent resident will also be allowed to petition for a visa renewal and permanent resident status. If you are interested in such a residency, you are welcome to consult with our immigration lawyers.

How to register the franchise in Thailand

The Thai Ministry of Commerce approves the drafts if the qualifications related to the franchise business are as required by the law in Thailand. The business plans, the franchise conditions, and the operations will be attentively verified before approving the contract between the two parties.  

Additional details and extra information about franchise agreements in Thailand can be found if you contact our Thai law firm, who can also offer complete legal services for your company in the country.