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Sun Legal Update: Thailand’s 12-Hour Flip-Flop on Arresting Cannabis Sellers

Sun Legal Sunbelt Update

In a rollercoaster ride of announcements last week, the Public Health  Ministry directed police to arrest anyone selling marijuana “without permission” before, hours later, revoking the order because no such permission exists.

Cannabis was decriminalized on June 9 without the supporting regulatory laws in place. Thus, there is no permit or license needed – or available – to sell cannabis products, even rolled marijuana cigarettes ready for consumption.

The Traditional and Alternative Medicine Department will be working with the Public Health Ministry to design a new certificate. One cannabis activist reported that after the announcement was made, they visited the ministry and were given a generic form to fill out and asked to pay 3,020 baht for a license to be issued by the Department of Traditional and Alternative Medicine, which has authority over cannabis.

The activist was told that a license would be issued within two weeks, but cannabis sales could be continued. However, no government regulations have yet been announced regarding a license. Sun Legal will continue to follow this story and report on any changes required for the sale of cannabis products.

VAT Exemption for Digital Assets

The government announced a Value Added Tax exemption on the transfer of digital assets, including cryptocurrencies and digital tokens, made through an authorized exchange from April 1 this year until Dec. 31, 2023.

Transactions made outside an authorized exchange or before April 1 may be subject to VAT at the rate of 7%. If the revenue derived from such transfer transactions exceeds 1.8 million baht a year, then it will be subject to VAT.

Fruit Exports Rise

Fruit exports to China reached 92 billion baht in value in the first half of 2022 as exports from the country continue to climb.

The first half of the year saw 12.7% year-on-year growth, with a value more than US$149 billion (5.5 trillion baht), exceeding the original target of 4%-5%.

Agricultural products and agro-industrial products were more than $26.5 billion last month alone. Durian, coconut, mangosteen, longan, rambutan and pomelo were the most exported fruits to China.

The government recently signed a series of miniature free-trade agreements as the country sees its exports to secondary markets grow faster than to the primary markets of the United States, European Union, China, Japan and much of Southeast Asia.

Exports to secondary markets grew 13.2% year-on-year in June, led by shipments to South Asia (49.5% growth), Australia (4.9%), the Middle East (24%), Africa (12.1%) and Latin America (17.2%). Exports to primary markets showed 11.9% growth year-on-year in the same period.

More Mini FTAs to Come

Mini-FTAs are between the government and cities or states in other countries. Recently the government signed one with the state of Telangana in India and is looking to sign additional agreements in India in states such as Karnataka, Maharashtra, Kerala, Gujarat and Assam.

The five top exports to India are fat and plant and animal-based cooking oils (up 309% year-on-year), plastic pallets (up 41%), chemicals (up 61%), gemstones and jewelry (up 150%) and iron, steel and related products (up 18%).

Opening an export-only business in Thailand can allow for full foreign ownership so long as there is 2 million baht in registered capital for each work permit. It is recommended to also explore obtaining Board of Investment licensing when applicable as this offers not only huge tax benefits but also benefits in regard to work permits, visas and other legal services.

Sun Legal’s legal advisors can walk you through the process of setting up an export only business and BOI promotion to see if it works for you. Use the form below for more information.

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