Avoiding paying duty and VAT for manufacturing equipment?

[Tungsten]

I run a small fabrication shop back in the states catering to ship repair, so running a cnc mill and lathe as well as do Tig welding.

Being that my mother is a Thai citizen, I am taking steps to get my Thai ID card later this year if all goes well. I will eventually retire here so I am taking steps to build a shop out here so that I can stay busy tinkering around.

So the question I have is that if I were to register a small manufacturing business in Thailand will I be able to avoid having to pay Duty and VAT on equipment that I want to ship in?

Another alternative is I know that I may be able to find what I want out in Singapore, is the Duty and Vat situation any better if I bring my equipment in from there?

Frankly I am not fond of the machine tools that they have to offer for sale here and the 2nd hand market in Thailand seems to be full of machines that are all well past their prime. I primarily want to start with a few Miller inverter Tig machines out here before bringing some cnc equipment but have heard horror stories about having to pay 100% duty on value of the machine and shipping in addition to VAT tax.

Also is there a good source for small business owners in Thailand to get advice on Tax, legal, banking, and financing?

[jimmybkk]

Bringing those machines in from the US will almost certainly be your most expensive option. Thailand and Singapore are both ASEAN members and so importing from Singapore would most likely result in 0% duty on the machines, however as far as I am aware there is no way to avoid paying the 7% VAT.

There are also FTAs in place between ASEAN member countries and several non-members such as China, India... and so importing from those countries would also most likely result in 0% duty.

Keep in mind that in order to take advantage of these preferential tariffs you will most likely need to obtain a Certificate of Origin from the manufacturer of the goods. You should check that they can arrange this for you before you make payment for the machines, and i would advise that you request they send you a draft copy before they issue the original so that you can get all the details checked by a local Customs Broker. If there are any mistakes on the Certificate of Origin it can invalidate it and you may then be unable to benefit from the preferential tariffs.

[innerspace]

Board of Investment is your key for this. Take a few months for application and need to bring in some money from overseas to be issued.

But once done you can apply to import equipment (new only) without import duty.

Certainly manufacturing and if I recall right boat building are on the allowed list of activities.

If interested it it pm me, my wife has a solid track record in BOI application approval (for a fee of course!)

BOI also helps with no corporate tax and easy work permits if that is of use.

[thaihome]

Not sure what your issue is with finding the equipment you need in Thailand. There is a very large fabrication business here supporting the industrial construction and manufacturing sector. Have you been to Rayong? There are literally hundreds of supply houses stocking every imaginable tool or equipment.

TH

[mike324]

Not sure what your issue is with finding the equipment you need in Thailand. There is a very large fabrication business here supporting the industrial construction and manufacturing sector. Have you been to Rayong? There are literally hundreds of supply houses stocking every imaginable tool or equipment.

TH

New machines many times are 40% to double the price compare to if you were to import in yourself. Some 2nd hand ones cost the same as a new one in other countries too. Most machines here are poorly maintained unless its from a Japanese company.

If the OP wants to buy a tig welding machine, just buy it here. Shipping and clearance won't be worth it. For large machines such as CNC, if you can put in "mold" in the description, that drops the duty down to 5%. Otherwise its over 10% I think ,not sure exactly how much could be higher. You won't be able to avoid the VAT.

[Tungsten]

Thanks for the information guys. As far as the equipment here I have not checked out what is offered at Rayong. I see a lot of welding equipment but not the newer inverter machines that offer features such as High Frequency pulse up to 300hz, Adjustable background current, and adjustable waveform for Aluminum. The TIG machines I looked at were either just for DC welding or if AC it was just adjustable up to line frequency with no A/C balance control. I think the language barrier isn't helping much either seems to be guiding me towards the wrong vendors, I know how to converse in Thai but when I have to describe something technical I don't know all the right terms to use.

JimmyBkk, good to know that there is a FTA agreement with Singapore as I've been going there over the years for our Dry Dock yard periods, so I've made some contacts out there that can help me find what I want.

Innerspace I appreciate the information on the BOI, first step is to get my Thai Residency Card setup and then I will be in touch.

Thaihome, as far as the supply houses that stock these equipment where about's are you talking of, is there a region with a better concentration of tool vendors that I should look at? Any companies that you suggest or know of that carry welding supply for TIG (torches, tungsten, filler rods, gas lens...etc)? Again the language barrier is an issue in that I may keep getting guided to these smaller shops that don't have what I am looking for, primarily I've been looking around Chang mai as this is where my family is, but if Rayong is the place I will make to trip out to see.

Mike324, will keep the "mold" business model in mind when it comes time to register, I have not done mold repair work myself yet but I do know they use these new inverter tig machines with pulse to do some micro welding for mold repair so maybe this may be an option for the welding machine as well.

I appreciate all the information that you all have provided, so looks like VAT tax is a certainty and there might be some leeway on Duty depending on which route I take.

I will be leaving tomorrow but if anyone has gone through this and set up shop in Chang Mai I would like to know, perhaps bribe you for your time with a few beers to pick your brain.

Thanks again.