Foreign e-commerce firms told to open Thai offices

Requirement is among measures being taken to come to grips with flood of cheap imports

Foreign e-commerce operators will be required to set up registered offices in Thailand under the digital platform service law, according to the Electronic Transactions Development Agency (ETDA).

The agency plans to issue the required notification after consulting with the Department of Trade Negotiations to ensure it does not breach any trade pacts, said executive director Chaichana Mitrpant.

The ETDA is one of a number of state agencies taking action against the flood of cheap products from China flowing into the country, available via e-commerce platforms operating in Thailand.

The digital platform service law requires operators of a certain specified size seeking to do business in Thailand to provide key information to the ETDA before they can start operating.

The agency plans to add a clause to the law obliging them to register in Thailand.

Mr Chaichana said the Chinese e-commerce behemoth Temu already had its subsidiary in Singapore register with the ETDA as a digital platform operator.

More than 1,400 digital platform service operators have complied with the law.

Visanu Vongsinsirikul, secretary-general of the Trade Competition Commission of Thailand, said the commission is monitoring business conduct and risky business behaviour.

If any business is found to have engaged in risky or unfair trade practices, such as predatory pricing or selling products for less than cost, the agency will take action against them, he said.

If a violation is determined, business may face both criminal and administrative penalties, including imprisonment for up to two years, fines of up to 10% of annual revenue, or both.

Pawoot Pongvitayapanu, a local e-commerce pioneer, said the Thai government should carry out in-depth assessments on the impact from cheap imported items.

In addition, he said policymakers should utilise the Traffy Fondue city management platform to allow citizens to report problems concerning the influx of cheap imported items, tracking the progress of how the problems are solved.

Mr Pawoot said the flood of cheap items was a serious issue that requires an impact evaluation, comparing conditions before and after measures are implemented.

The cabinet recently decided to revoke the value-added tax (VAT) exemption for imported goods valued at less than 1,500 baht, starting from July 5.

The goal was to create tax equity between imported goods, especially those imported from China, and domestically produced goods, particularly from small and medium-sized enterprises.

Thanawat Malabuppa, honorary president of the Thai E-Commerce Association, said it would now be up to policymakers to enforce the rule by making e-commerce operators collect the tax.

Kulthirath Pakawachkrilers, president of the association, said the government should prioritise supporting Thai products and local sellers.

“While we remain open to foreign investment, we advocate for fair competition and the promotion of Thai products, both domestically and globally,” she said.

“This approach will help support and sustain Thai products on the international stage.”