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Technology Transfer Plans in Thailand
Foreign investors looking to establish a business venture in Thailand must be aware of the regulations set forth by the Foreign Business Act. To operate a business undertaking restricted activities under this act, investors can apply for a Foreign Business License. However, submitting a technology transfer plan is an important requirement for obtaining this license. This condition often causes confusion and serves as a stumbling block for investors uncertain about what the term “technology” includes and the specific details the plan must entail.
Key points
- Foreign investors must submit a technology transfer plan to obtain a Foreign Business License in Thailand.
- Technology transfer does not involve disclosing trade secrets but instead transferring knowledge and skills.
- Foreign investors benefit from technology transfer through government support, increased competitiveness, and an improved corporate image and reputation.
Do you need a Technology Transfer Plan to get a Foreign Business Licence?
According to Section 5 of the Foreign Business Act, the granting of a license to a foreigner to operate a business restricted by the act is reliant upon the transfer of technology. Therefore, applicants must prepare a technology transfer certificate, which must be submitted along with the rest of the application. The technology transfer plan is very important when determining the approval for issuing a Foreign Business License.
What is a Technology Transfer?
It is important to note that the technology transfer requirement does not refer to the disclosure of trade secrets. Instead, it relates to transferring science, skills, experience, or methods that enable the recipient to utilize the transferred “technology”.
What is a Technology Transfer Plan?
When preparing a technology transfer plan, investors should keep several key considerations in mind and include in the plan. These factors will help ensure a successful transfer and compliance with the requirements set forth by the Foreign Business Act:
Identifying the Technology to Transfer
The first step in developing a technology transfer plan is identifying the specific technology that will be transferred. This can include scientific knowledge, technical skills, manufacturing processes, or any other relevant expertise that the recipient can use to gain knowledge or skills.
Assessing the Recipient’s Capabilities
Before transferring technology, it is important to assess the recipient’s capabilities and determine their readiness to receive and effectively utilize the transferred knowledge. This assessment will help identify any gaps that need to be addressed and establish a suitable training or support program to facilitate the technology transfer.
Defining the Transfer Mechanism
The next aspect of the technology transfer plan is determining the most effective mechanism for transferring the identified technology. This can include training programs, joint ventures, licensing agreements, or collaborative research and development projects. The chosen mechanism should align with the transferor’s and recipient’s specific needs and capabilities.
Setting Transfer Objectives and Timeline
To ensure a structured and successful technology transfer, it is essential to establish clear objectives and timelines. These objectives should outline what the transferor aims to achieve through the transfer and the expected outcomes for the recipient. Additionally, a timeline should be established to guide the transfer process, ensuring that it is completed within a reasonable timeframe.
Addressing Intellectual Property Rights
When engaging in technology transfer, applicants must address the issue of intellectual property rights. Both the transferor and the recipient should clearly understand their rights and obligations regarding the transferred technology. This can be achieved by establishing licensing agreements, confidentiality clauses, or other legal mechanisms to protect the intellectual property involved.
Implementing Monitoring and Evaluation Mechanisms
To ensure the effectiveness of the technology transfer plan, it is important to implement monitoring and evaluation mechanisms. These mechanisms will allow both the transferor and the recipient to assess the progress of the transfer, identify any challenges or areas for improvement, and make necessary adjustments to ensure a successful outcome.
How can Belaws help?
For more information about starting a technology transfer and foreign business licences in Thailand, why not talk to one of our experts now?
Please note that this article is for information purposes only and does not constitute legal advice.
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Frequently asked questions
What are the advantages of starting a fintech business in Thailand?
Starting a fintech business in Thailand offers several advantages, including government support, a growing user base, and a robust startup ecosystem. The Thai government promotes fintech through funding channels, mentorship initiatives, and startup incubation programs.
How does the Thai government support the fintech industry?
The Thai government supports the fintech industry through various initiatives, including funding for research and development, mentorship programs, and startup incubation. It also launched the Thailand 4.0 initiative, which includes tax advantages, funding support, and special economic zones to encourage investment and innovation in specific sectors.
What incentives are available to fintech companies in Thailand?
Fintech companies in Thailand can qualify for incentives offered by the Board of Investment (BOI), such as 100% foreign ownership, reduced hiring restrictions, land ownership permits, and streamlined visa and work permit processes. Tax incentives, including exemptions or reductions of import duties and income tax, may also be available.
How can I apply for a promotion under Section 8.1 of the BOI for my fintech business?
To apply for a promotion under Section 8.1 of the BOI, fintech businesses must meet specific requirements, including a minimum annual investment capital, a minimum capital investment, and involvement in the development of software, digital platforms, or digital content in Thailand. Detailed information about the application process can be found in the article.
What types of fintech businesses are promoted by the BOI in Thailand?
The BOI actively encourages and supports investments in various segments of the fintech sector. Promoted business categories within fintech include digital payments and e-wallets, peer-to-peer (P2P) lending platforms, and companies leveraging blockchain technology for applications like supply chain management and identity verification.
Are there any restrictions on foreign ownership for fintech companies in Thailand?
Fintech companies promoted by the BOI in Thailand can enjoy 100% foreign ownership, which is different from regular Thai Limited companies that are typically limited to 49.9% foreign ownership due to the Foreign Business Act.
What are the business license requirements for fintech companies in Thailand?
Fintech companies in Thailand may be subject to specific business license requirements depending on their activities. For example, an e-wallet business would require a payment gateway business license. These licenses are issued by either the Bank of Thailand or the Securities and Exchange Commission, and it’s important to obtain the correct license to avoid penalties.
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