OSOS and OSSC Revisited
More than two years ago Thailand decided to concentrate several governmental services for foreign investors at one place in Bangkok. In the meantime, Thailand has gone through ups and downs. Therefore, it is justified to make a judgement in 2012 whether the formation of this one-shop-solution has been accepted and adopted by foreign investors.
In November 2009 the ”One Start One Stop Investment Center“ opened at Chamchuri Square Tower near Chulalonkorn University with the intent to provide the direct access to a broad array of governmental agencies. The OSOS is separated by just one corridor from the “One Stop Service Center“, which was established in 1997.
Both facilities have the same objective to provide principally foreign investors with a centralized contact point. However, for the majority of visitors of the OSOS the doors to the OSSC remain barred. This article explains the background of this and its consequences and gives a resumé after two years of services.
Which agencies attend
The OSOS brings together various departments from ten Thai ministries. It provides services for Thai or foreign companies, big or small, BOI-promoted or not. However, the OSSC is responsible only for BOI promoted and other companies with similar legal privileges. This distinction is important and in practice an obstructive differentiation.
The investment services provided by the OSOS cover the registration of a Thai company and the application for a Foreign Business License. For this it acts on behalf of the Department of Business Development of the Ministry of Commerce.
The Ministry of Finance is represented by the Revenue Department, the Customs Department and the Excise Department. This enables the application for a Tax ID, and registration services for VAT and Specific Business Tax. The Board of Investment and three other departments of the Ministry of Industry make it possible to obtain advice on investment promotion privileges and then to apply for BOI privileges. There are certain other departments and ministries for additional investment services, which cannot be listed here in full.
What is possible – and what not
The scope of services provided by the OSOS can be broken down to four categories. First of all the OSOS provides comprehensive information on establishing business operations in Thailand. Secondly, it receives applications for the company registrations and registration for tax purposes. The third area covers applications for BOI promotion, for a Foreign Business License and other purposes – even for an Environmental Impact Assessment certificate. The fourth service relates public utility companies, so that the electricity and water supply contracts can be concluded as well.
When entering the OSOS, your attention will be drawn to various office cubicles, separated by blinds. Each cubicle is provided for a single ministerial department, which is manned with one or two public officials. Typically, the officials have a good command of the English language which is a great advantage in comparison to dealing with the headquarters of the ministries
Autonomous decision making power, however, is limited in the OSOS, as the first on-road tests show. Major matters – for example with respect of a BOI promotion – remain the discretion of the BOI board decision. As a result, the official channels have been extended and the distance to the decision maker increased.
Where is the Gap in the Offer
Even a short-time scheduling and negotiations related to a foreign direct investment requires the alien to first obtain a work permit. Surely no one will ask a foreign applicant for his work permit when visiting the OSOS. However, an unpleasant apprehension might remain. On the other side of the corridor there is the OSSC which does grant work permits on short notice. However, this agency is typically not in charge of new foreign investors and can not assist on this matter.
During the last two years there are internal discussions between OSOS and OSSC whether a work permit for urgent cases (Form Tor Thor 11) might be granted despite this legal hurdle. A pragmatic approach may ease this legal problem in the future.
How to proceed meaningful
The OSOS asks for an advance notice for meetings for at least one day. This indicates that this central contact point is not overrun by visitors. This situation might change in the future, when the specific advantages of the OSOS are more obvious to the public.
Thai business law frequently provides that legal issues and approvals have to be decided by more than one agency. In these cases the centralization of the offices at the OSOS provides an obvious advantage. Round table meetings enable a quick and mutual solution and a binding decision. In this regard it is important to have the relevant decision makers participate in the discussion and come to the OSOS meeting.
During the last two years, experiences show that for a foreign investor, traveling to Thailand for a short business trip, it is very cost efficient and time saving to take advantage of the OSOS. He can find an English speaking contact person and avoid often annoying trips within Bangkok.
A visit at the OSOS reveals a spirit of optimism and initial enthusiasm on the part of the governmental officers. To forego for this benefit would mean to enter into the investment in Thailand with less than optimal foresight. Therefore, after gaining good results in the last two years, a praise of the One Start One Stop Investment Center is definitely justified.
ABOUT THE AUTHOR: Dr. Ulrich Eder, Managing Director
Pugnatorius is a fully licensed international law office based in Bangkok. We provide corporations, investors and law firms with premium legal and tax services relating to Thailand, Southeast Asia and offshore jurisdictions.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.