With a focus on promoting investment and upgrading the local economy, Thailand has recently introduced a new set of incentives. These incentives were issued as a follow-up to Thailand’s Five-Year Investment Promotion Strategy and align with their aim of boosting high-tech industries.
The incentives, which were released on the 4th of November by Thailand’s Board of Investment include a host of factors surrounding the economy. Specifically, there has been a key focus on investment zones, tax exemptions, investor retention, etc. As such, this article will be focused on the scope and aim of these recent incentives.
Retention & Expansion
As a benefit aimed towards long-standing investors, companies which have been granted investment benefits over the past 15 years will receive special incentives. The incentives include an exemption of 50% for up to five years or a three-year exemption from corporate income tax. This is dependent on the specific type of activity the company is involved in. If a firm has received benefits for at least 3 projects with a combined investment value of over $265 million, these incentives will be assigned.
Ease of Doing Business
While no concrete guidelines have been released in this regard, the board has initiated a Sub Committee for ease of business. This will be under the Resolution of Obstacles and Facilitation of Investments which will work in coordination with the PMO to focus on pain points provided by investors. Working to address these pain points by acting as a special mechanism, this sub-committee is directed to improve the ease of doing business in the country.
Special Investment Zones (SEZs)
As Special Investment Zones have shown to be a great source of revival and growth for business, more will be set up under the incentives. Specifically, across 16 provinces in the country, four areas will be set up as SEZs. They will be as follow:
- Northern Economic Corridor
- North-Eastern Economic Corridor
- Central-Western Economic Corridor
- Southern Economic Corridor
With the aim of attracting companies to relocate to Thailand, a new relocation program has been introduced under the recent incentives. This program will allow a corporate income tax exemption of between one and five years to companies who relocate their activities to the country. That being said, the exemption amount is based on the number/type of activities relocated. The activities specified are:
- Regional Headquarters
- Research And Development Centres
- Manufacturing Facilities
For companies shifting all three to Thailand, a five-year exemption will be allowed. On the other hand, if the R&D centre is not relocated, the exemption will only be for three years. Meanwhile, if the regional HQ is not shifted, the exemption will be anywhere between one and five years depending on the field of business.
New Industry Categories
To promote the overall growth of the economy, new industry categories will be introduced. Approved by the board, this step is specifically focused on sustainable activities providing them with special incentives. Some of the key new industry categories defined by the incentives are:
- Manufacturing Of Hydrogen Vehicles
- The Setup Of Electric Vehicle (Ev) Battery Swapping Stations
- Novel Food
- Organic Food
- Hydrogen Production
Apart from these, activities related to some of these industries such as steam generation from hydrogen, green ammonia, etc. have also been introduced.
With the introduction of these and many other incentives this year, Thailand has taken a step forward in their Five-Year Investment Promotion Strategy. Focusing on advanced and green technologies, the board has released these incentives in an attempt to aptly restructure the economy. So, Thailand is becoming an ideal location to set up shop for advanced and green businesses.
If you plan on taking advantage of these incentives or want to understand how, you can contact the Seamless team of experts today!