29 Asian Legal Business | September 2024 operators” in the market. Those include “consultation and work on corporate structures, Board of Investment promotions, distribution and consumer protection, labour relations, data protection, and trade competition,” says Pranat, while also noting a surge in business opportunities related to charging stations and electrification. Wading through the intricacies of cross-border operations, meanwhile, requires more than sound knowledge of the “letter of the law.” “One obvious challenge for all law firms is the minor differences in cultural practices and ‘modus operandi’ - usual ways of working or doing things - between Japanese, European, and American manufacturers on the one hand, and Chinese manufacturers on the other,” says Pranat. “If a law firm can internalise and manage these differences, it will undoubtedly receive opportunities from the new Chinese clients,” he adds. Price war disputes To enlarge shares in Southeast Asia’s second-largest car market, automakers have been embroiled in a brutal price war. China-made EVs, in particular, have been wooing price-sensitive customers with unmatched affordability and their widespread network of service centres. Pranat notes that the price rivalry, sometimes fraught with animosity, have not only created challenges for automakers but also for endconsumers. “Several cases regarding consumer protection have already been lodged by end-users with the Consumer Protection Board, mainly regarding price wars between EV brands and the significant and rapid drop in prices,” says Pranat. Some end-users alleged that they had lost 10 to 15 per cent of car value within just a few weeks due to these ongoing price wars, he adds. The slew of dealership closures and brand switching by dealers could also give rise to disputes relating to antitrust and trade competition. Contractual disagreements due to early closures or terminations are also matters to be considered, Pranat notes. “Relatedly, different competitors have been engaging in unspoken conflicts regarding price drops, all of which fall under the purview of the predatory pricing regulation. Some cases have already been scrutinised by the relevant authorities,” he adds. As a result, Pranat believes this is a “once-in-a-decade” opportunity for law firms in Thailand resulting from the seismic shift within the auto manufacturing landscape, as well as shifting auto-consumer preference. “The challenges are not easy to internalise and resolve, as they represent a once-in-a-decade shift in a large part of the modern economy and our lives. All law firms will be forced to adapt to and capitalise on these issues in some way,” says Pranat. Brought to you by Chandler MHM Data Centers in Thailand With the global surge in AI and cloud computing, Thailand is swiftly positioning itself as a significant hub for data centers, attracting both local and international tech companies keen to capitalize on its favorable business environment. This growth is fueled by rising demand for cloud-based applications, rapid digitalization across various industries, and the growing need for data storage. Government initiatives like the Thailand 4.0 policy further support these developments. The country’s advanced infrastructure and appealing incentives also contribute to such market’s growth, with 5G technology expansion expected to further boost demand. Challenges remain, particularly with operational costs and significant energy The BOI offers substantial tax incentives, including up to 8 years of corporate tax exemption, exemptions from machinery and raw material import duties, etc. Non-tax incentives include permits for foreign nationals to explore investment opportunities, permits for skilled workers, land ownership rights, and favorable remittance terms. Additionally, any data centers investing over 1% of revenue or over THB 200 million in research and development within the first three years will receive up to 13 years of corporate tax exemption. Thailand is launching a pilot project enabling data centers to directly purchase renewable power, recognizing the need for clean energy policies to attract investment. The government has expedited this initiative, by ordering the creation of support measures for direct power purchase agreements (“PPAs”). Direct PPAs offer benefits like stable long-term pricing and reduced carbon footprints. Addressing the absence of a policy framework for direct green power purchases is crucial, as it poses challenges to energy-intensive industries committed to decarbonization. consumption. Despite these obstacles, the outlook for Thailand’s data center market is favorable. The escalating demand for digital transformation and AI across various sectors continues to drive the need for such facilities. This transition into data centers is critical to Thailand’s strategy to modernize its industrial sector and enhance value creation. Thailand’s appeal as an investment destination for data centers and cloud services is built on five key advantages: strategic location, secure environment, high-quality infrastructure, a growing domestic market, and attractive incentives from the Board of Investment (“BOI”). The BOI has outlined eligibility criteria and investment incentives for data centers. Eligible data centers must offer complementary services like server co-location, customer data backup, data hosting, etc., while maintaining high-speed telecommunication systems and uninterrupted client service during maintenance, and ensure continuous power supply, backup systems such as UPS and cooling, 24-hour security, and ISO/IEC 27001 certification. Tip-apa Limvichai Partner tip-apa.l@mhm-global.com Chandler MHM www.chandlermhm.com
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