The Guide to Thailand’s Import and Export Procedures

By Dezan Shira & Associates
Editor: Harry Handley

Since the implementation of the Foreign Business Act of 1999, foreign businesses set up in a range of industries in Thailand must have a Thai majority shareholder. One line of business that is exempt from this is import/export trading. This exemption, along with developed infrastructure and a solid legal framework, have made Thailand a hub for cross-border traders. In 2015, US$212 billion of goods were exported from Thailand, the 22^nd highest value in the world. Imports in the same year totaled US$177 billion, making Thailand the world’s 25^th largest importer.

According to the World Bank, the time and cost of both importing and exporting in Thailand is significantly lower than the average for neighboring countries in the East Asia and Pacific region. In recent years, import/export procedures have been streamlined further through the implementation of the online e-Customs system. This electronic system provides a one-stop service for all stakeholders in cross-border trade. Procedures such as issuing licenses and paying duties and taxes have been made paperless and can be completed using the central e-Customs system.

Once a company has been set up in Thailand, including Value Added Tax (VAT) registration and corporate bank account establishment, the import and export processes can begin. This article will outline the procedures required when trading goods to and from Thailand.

 RELATED: International Tax Planning Services from Dezan Shira & Associates

Importing

All goods imported into Thailand must be reported to the Customs department. The steps required to meet these legal requirements are outlined below.

Step 1 – Register to use e-Customs system

As mentioned, the procedures for importing goods into Thailand have been centralized into the online e-Customs system. In order to register for the system, the importer (either as an individual or business entity) must already possess a ‘digital certificate’. The digital certificate is an electronic signature file used to confirm the identity and authenticity of the sender of electronic documents; it is essential for all companies in Thailand with any online operations, including import and export registration.

Once a digital certificate is in place, the importer may proceed to register for the e-Customs system. Companies can choose to either register with the system directly (i.e. at their own office) or through an agent. For the latter option, the agent will handle the registration. When registering to use the e-Customs system directly, the following tasks are required:

• e-Customs software must be installed on the company IT system and digital certificates verified
• The importer must register with Thai Customs at one of the following: the Registration and Customs Privileges Sub-Division; Customs Procedures and Valuation Standard Bureau; or the General Administration Division at each Customs office
• The accuracy and readiness of message exchange with e-Customs system must be tested
• Once tests are completed successfully, the Communication and IT Bureau will issue e-Customs registration ID, and the process is complete.

Step 2 – Review controlled goods

Two separate checks need to be made before goods are imported: firstly, to identify if goods require an import permit, and secondly, to ascertain if goods are considered ‘red line’.

A range of goods require import permits issued by different agencies prior to their arrival. For example, used motor vehicles and motorcycles require a permit from the Department of Foreign Trade, while imports of medicines and food supplements require permission from the Food and Drug Administration of the Ministry of Health. A rundown of goods that require a permit can be found on the Customs Department website. The government is working to integrate the permit application process into the e-Customs system; currently, around half of Thailand’s government agencies allow electronic permit applications.

The second check required is to establish if the goods to be imported are classified as ‘red line’ goods (as opposed to green line). Red line goods are those considered to be high risk or requiring extra certification and verification upon arrival, including foodstuffs, drinks, and plants. It is necessary to provide the following supporting documents when importing red line goods:

• Bill of Lading (B/L) or Air Waybill
• Invoice
• Packing List
• Import License (if required)
• Certificates of origin
• Other relevant documents (e.g. list of ingredients, technical standards certificates, etc.)

There is no definitive list of red line goods; the e-Customs system will inform the importer once the Import Declaration has been submitted (see Step 3). As such, it is important to ensure the correct paperwork is in place for all imports in order to be prepared for a shipment being flagged as red line.

Step 3 – Submission and verification of declaration

Once all documentation is in order, an Import Declaration can be submitted to the e-Customs system along with an arrival report with the information of the carrying vessel. The e-Customs system will then check and verify the submission, identifying any discrepancies and specifying whether the shipment is green line or red line.

Step 4 – Payment of duties and taxes

Thai Customs Tariff Decree B.E. 2530 states that “goods imported or brought into, exported, or taken out of the Kingdom shall be chargeable with and liable to duty”. A number of items are exempt from import duties; a list can be found on the Integrated Tariff Database.

For dutiable goods, payment can be made at the Customs Department of the port of entry or via the e-Payment section of the e-Customs system.

Step 5 – Inspection and release of cargo

The final step before the cargo is released is an inspection. For green line goods, this is simply an online screening and will take only a few minutes. For red line goods, the supporting documents will have to be presented and the cargo physically examined by customs officials.

 RELATED: The Guide to Singapore’s Import and Export Procedures

Exporting

All goods exported from Thailand require reporting to Customs and are subject to customs controls. Due to the automated nature of the e-Customs system, the export procedures are very similar to the outlined steps for importing goods.

Step 1 – Register to use e-Customs system

If companies are both importing and exporting goods from Thailand, only one registration on the e-Customs system is needed. See above for the registration process.

Step 2 – Review controlled goods

As with imports, checks need to be made for goods requiring an export permit and potential red line shipments.

Currently, around 50 goods categories require an export permit. These include goods such sugar and rice, which require a permit to maintain quality, and others including trees and seeds that require permits under other laws. The Customs Department website provides a detailed overview of restricted goods.

In terms of red line goods, extra documentation is required before the shipment can leave Thailand. The e-Customs system will flag red line goods at Step 3. The exporter should prepare the following:

• Invoice
• Export License (if required)
• Other relevant documents (e.g. Food and Drug Administration approval, destination information, etc.)

Step 3 – Submission and verification of declaration

The exporter should submit an Export Declaration, along with an invoice and cargo data to the e-Customs system. Again, provided no errors exist, the system will issue declaration and payment numbers and define whether the shipment is green or red line.

Step 4 – Payment of duties and taxes

Not all goods require a duty to be paid. See the Integrated Tariff Database for the official list of duty-exempt goods.

Export duties can be paid by three methods: payment at Customs Department of port of exit; e-Payment via the e-Customs system; and payment at a bank.

Step 5 – Inspection and release of cargo

The freight forwarder should send a cargo control report to the e-Customs system, which will automatically generate a report and alert the customs officials if the goods are green or red line. Green line goods are clear to proceed. As with imports, red line goods require a physical inspection and extra document checks before they can be cleared.

Finally, once the shipment arrives, it is the responsibility of the shipping company or agent to submit the manifest information to the e-Customs system.

Further support from Dezan Shira & Associates

The regulatory system in Thailand is fast-moving, with changes sometimes flying under the radar. It is important to keep abreast of the most up-to-date regulations in order to ensure the smooth running of operations. Specialists at Dezan Shira & Associates have years of experience supporting the establishment and growth of businesses in Thailand, and are well-placed to guide companies through the intricacies of the Thai regulatory system and help them leverage the many tariff incentives Thailand offers.

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