Sheraton Grande Sukhumvit

Starwood Privilege Sheraton Grande is an exclusive membership aimed to enhance members' privileges and benefits at one of the world's finest hotels. Each member is offered exclusive discounts and advantages at our award-winning restaurants and privileged pricing for accommodation and much more.

The long awaited legislation regarding the revised conditions and benefits for Regional Operating Headquarters (ROH) was finally published in the Royal Gazette on November 8, 2010 and is now law.  Companies can choose whether to register under the previous regime for ROH’s or the new regime described below.

An ROH is a company established under Thai law to provide management, technical or support services to its associated enterprises or branches located within or outside Thailand.  To qualify as an ROH the company must have fully paid-up registered capital of at least Baht 10,000,000 and must provide services to affiliated companies located in at least three different countries.  Under the new regulations the ROH must provide services to an affiliate in one country in the first year, two countries within three years and three countries within five years.  

A company is “affiliated” with the ROH through shareholding if either entity holds at least 25% of the equity of the other or if there is a common shareholder which holds at least 25% of the equity of both entities.  A company is affiliated with the ROH through control if either entity has voting control of the other or if if a third party controls the voting of both entities.

The new regulations have abolished the previous requirement that at least 50% of the income of the ROH be generated from services rendered to affiliated companies to be eligible for the reduced corporate income tax rate.  Under the new regulations revenues from qualified services are subject to 0% corporate income tax if rendered to an affiliate outside of Thailand and 10% if rendered to an affiliate inside Thailand.  Other income of the ROH will be taxed at the normal rate of 30%.  

The ROH will be eligible for these reduced corporate income tax rates for ten years provided that it fulfills the following conditions:

• minimum expenditures of 15,000,000 THB per fiscal year or capital expenditure within Thailand of at least 30,000,000 THB in a fiscal year (excluding investment in securities)
• maintains a physical presence and operates a real business in Thailand;
• services affiliates in at least three counties within five years and meets the requirements for employment of experts and employees as notified by the Revenue Department;
• applies to the Revenue Department for registration as a ROH within 5 years from November 15, 2010; and
• by the end of the third year at least 75% of the employees have graduated from secondary school, primary vocational institute or equivalent and at least 5 people have an average annual salary of Baht 2,500,000.

If in addition to meeting the requirements above, the ROH generates more than 50% of its income from qualifying services charged to foreign entities it will also be entitled to the following benefits:

• corporate income tax and withholding tax exemption on dividends received from and paid to foreign affiliates for 10 years;
• a reduction of corporate income tax on the interest on loans from 30% to 10% for 10 years;
• reduction of corporate income tax on royalties from 30% to 10% for 10 years;
• a reduction of personal income tax for high level management expatriate employees working in Thailand from a progressive tax rate to a flat rate of 15% for 8 years; and
• an exemption from personal income tax for high level management expatriate employees working overseas.

Few companies will be eligible to register as ROH’s but those which are will be entitled to substantial incentives.