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Thailand and Cambodia Enact Double Tax Agreement

Transcript of the above video:

Every once in a while, I like to kind of dip into the news with respect to what's going on sort of in the regional business community and some of the legal frameworks that are happening and this was of note, this is a Bangkok Post article, it's entitled “Double tax waiver draft approved, Thai- Cambodian investment prioritized.” To quote directly from the article “The cabinet yesterday approved a draft agreement for an exemption from double taxation between Thailand and Cambodia aiming to promote investment links with the private sectors of the neighboring nations. According to the assistant minister to the Prime Minister's Office, once in effect, the deal will play a key role in enhancing Thai investment in Cambodia. Thai investment projects will be also entitled to double taxation waivers under the agreement though they already enjoyed promotional privileges from Cambodia.”

So I just want to kind of talk about this in a conceptual way and I think it's important to note that clearly as we mentioned, Thailand is somewhat poised to play a very pivotal role in the increasingly consolidating ASEAN Economic Community, the sort of Southeast Asian trade bloc. I think that this is just indicative of that fact and I think it's indicative of a theme that's going to progress even further moving forward that did this specifically, this agreement was reached so the Thai companies can expand into Cambodia and not be double taxed as a result of income gained therein. Prior to the provisions of this Agreement coming into effect basically, want you know if you heard of it income in Cambodia through a company, there were certain instances where you know Thailand would try to take a piece of that in terms of taxes as well as Cambodia but as noted, Cambodia is being very welcoming toward investors in Kingdom over there and Thailand is looking to in a lot of ways, I've noticed in talks with regard to the strengthening of the Thai Baht and with respect to investment articles I've read and this is just speculating an anecdotal.

But it's interesting to note that various Thai businesses seem quite a bit more keen right now to go ahead and invest in markets outside of Thailand. Not necessarily because the internal Thai market is saturated, for lack of a better term, but simply because there are just too many opportunities that just simply can't be passed up. I think that this is again indicative of a greater trend and I think you're going to see more and more regional integration in terms of business. And I think it's very likely that you're going to see various, more certain various other Thai or I should say tax incentives or maybe taking away disincentives from a tax point of view to cross-border business.

How will this impact foreign businesses? Well, I think in the short term not very much but it should be kept in mind the company is incorporated in the Kingdom of Thailand. However, they're incorporated are still Thai companies and so this tax waiver is going to affect you know notwithstanding you may have a foreign business, you know, foreign owned Thai company. I think that this would have a significant beneficial impact on certain types of companies operating here in Thailand that then go ahead and take on interest in the Kingdom of Cambodia. Again, it remains to be seen but I thought it was just notable and something to sort of make a video about it for no other reason that I have noticed nobody's really talked about any of this. And I think it's notable because again, I think it shows it's indicative of a greater trend toward further consolidation of various business interests throughout the Southeast Asian region.