According to a recent report, Thailand is making tremendous progress towards stimulating big investments in technology-advanced targeted industries that will drive economic transformation and support investors’ success.
The “Thailand Investment Year” incentive package by the Thailand Board of Investment (BOI) has been initiated as a strategic tool to support this move.
Concurrently, new investment promotion measures have also been introduced to attract more investment in targeted activities like the rail system and digital economy development.
Thailand Investment Year: Transforming Challenges into Opportunities
In a bid to acknowledge that large investment projects which adopt advanced technology or are in knowledge-based industries are crucial to boosting economic growth and transformation, the BOI has initiated the Thailand Investment Year Package.
The Package aims to attract projects with a minimum investment value of 1,000 million baht in targeted activities that are entitled to 5-8 years of tax holiday and do not extend the project implementation deadline.
Applications will be open until 30 December 2019 and the approved projects will receive a 50% reduction of corporate income tax for three years on top of the basic package.
Targeted activities are, for example, manufacture of aircraft or aircraft parts, R&D, biotechnology, manufacture of advanced technology electrical products, manufacture of high-technology medical devices, digital services, etc.
Connectivity Enhanced by Rail System Development
Seeing as the rail system is a strategic logistics system that plays an important part in the investment ecosystem, the BOI recently introduced a new measure to attract investments in rail system development.
The new measure focuses more on engineering activities and a comprehensive range of investments related to rail systems such as train structures, passenger cabins, system control units, bogies, braking systems, electrification systems, and signalling systems as well as rails.
Applicants are open to apply till 30 December 2021. They will be eligible for 50% corporate income tax reduction for another 3-5 years (applicable in designated locations) after the expiry of 100% exemption privilege for 5-8 years.
The measure is expected to help kick-start the establishment of a rail production hub in the north-eastern region where there are several supporting factors such as existing automotive part and assembly industries, universities, and upcoming development of rail networks.
Digital Infrastructure & Start-up Ecosystem Get a Boost
Recently, the BOI approved an investment measure to support innovation and the digital ecosystem. The measure also aims to attract foreign and domestic investments in Thailand’s digital industry.
For example, the BOI approved the setup of a new innovation incubation centre which aims to ensure a concrete development and incubation area for entrepreneurs.
A new investment promotion category, (i.e., the Maker Space or Fabrication Laboratory) provides for machinery and tools necessary for making prototype products, has been added with five years of the tax holiday and import duty exemption on machinery.
In addition, a new category for Co-working Space has been included to connect local developers with the global community and encourage start-ups and venture capitals from all over the world to invest in Thailand. Promoted projects will receive a duty exemption on import machinery.
The BOI has also launched an investment incentive scheme for the Smart City initiative, which is designed to upgrade people’s quality of life with seven intelligent platforms; namely, Smart Environment, Smart Mobility, Smart People, Smart Living, Smart Economy, Smart Governance and Smart Energy.
Thailand Investment Year – What’s New?
In addition to the discussions and presentations on BOI’s comprehensive support measures and investment support from various government agencies, the annual seminar will be an investment clinic, where businesses will have the opportunity to connect with the BOI and related government agencies, including National Innovation Agency (NIA), Digital Economy Promotion Agency (DEPA), Export-Import Bank of Thailand (EXIM) and Ministry of Industry (MOI).
