Issue:
A large European luxury automobile manufacturer wished to apply for establishment of a Customs Free Zone (“CFZ”) in Thailand as well as operating in the CFZ, in order to enjoy the duty exemption privilege on goods imported into the CFZ and duty reduction privilege on finished vehicles sold from the CFZ.
Our solution:
We advised them from Day 1 on every process of CFZ establishment including the eligibility criteria and conditions for setting up the CFZ, application procedures, and preparing and reviewing application documents, as well as recommending optimal business schemes and an inventory control system, all of which would enable the client to efficiently utilize the duty exemption for materials imported into the CFZ and the duty reduction privilege for finished goods sold domestically.
Result
The client was able to fully comply with CFZ regulations and achieve a significant cost saving resulting from a duty reduction from 80 percent to 0 percent as well as a reduction of excise tax base for calculating excise tax on vehicles manufactured and sold from the CFZ.