An NVDR, or non-voting depository receipt, is a new trading instrument issued by Thai NVDR. It is a valid security as specified by SEC and is automatically regarded as a listed security by SET.
The main purpose of NVDRs is to stimulate trading activities in the Thai stock market. By investing in NVDRs, investors receive the same financial benefits (i.e., dividends, right issues or warrants), as those who invest directly in a company's ordinary shares. The only difference between investing in NVDR and company shares is in regard to voting. Unlike ordinary shareholders, NVDR holders cannot be involved in company decision-making. Both thai and foreign investors can invest in NVDRs.
Underlying securities Underlying securities may be:
- Ordinary shares
- Preferred shares
- Transferable Subscription Rights (TSR)
- Being a security authorized by the SEC in accordance with SEC notification No. GorJor. 34/2543 re : Specification of Additional Type of Securities (No.4), dated August 25, 2000.
- Being an automatically listed security in accordance with the SET announcement.
- For Internet trading account, NVDR will be displayed with "-R" suffix to the normal stock code on your "Account Balance".
Quoted of NVDR will be the same as those of local shares. Therefore, local share's price on Real Time Quote is the price of NVDR.
Investors receive all financial benefits that common shareholders do. Details are as shown below:
|Type of Investor
||Capital gains tax
||Payment instead of dividends
|Individual resident in Thailand
||- Pay 10% withholding tax, and exclude the dividends from the calculation of year-end personal income or
- Waive payment of the 10% withholding tax, and include the dividends when calculating their year-end tax (which is at a progressive rate).
|Individual non-resident in Thailand
||10% withholding tax
|Resident company and registered partnership in Thailand
||Must declare all capital gains from trading securities at SET for corporate income tax assessment at a rate of 30%
||Same as capital gains.
|Non-resident company and registered partnership in Thailand
||15% withholding tax
||10% withholding tax.
Note : Non-resident companies and registered partnerships in Thailand which have been registered in a country which has a double tax treaty with Thailand will be exempted from withholding tax.
Dividends paid to those who invest in companies promoted by the Board of Investment (BOI) are exempt from income tax on those dividends. However, Section 34 of the Investment Promotion Act (B.E. 2520), which grants this exemption, applies only to those who directly invest in the promoted firm. Since individual or juristic persons who have bought NVDR are not direct investors, they are not entitled to the exemption.
The trading procedure is similar to that for other listed securities. Investors wishing to trade NVDRs for any security can send their requests, during normal trading hours, via their brokers, and specify their trading orders as being NVDR.
In general, if investors wish to convert their securities on hand into NVDRs, they must record put-through transactions (selling the stock and buying the NVDR) with SET.
Any NVDR holder who wishes to change a holding from NVDRs to securities must process the transaction via SET’s put-through system.
Same as normal trading, Internet trading account is subjected to charge 0.15% or 0.20% of value traded depending on types of trading accounts (minimum charge of 25 baht per transaction).