Published in ASEAN News on 28.10.2020
ASEAN Series: Thailand
In our series of possible alternative locations for diversified Asian business, we present different countries and their different approaches to offer a range of incentive packages designed to attract companies affected by the trade war between the US and China. On a weekly basis, we consolidate the development of the incentives of the individual countries and discuss them briefly. The developments show how the ASEAN members differ and what opportunities are available to investors seeking locations elsewhere in Asia.
Thailand introduced an economic stimulus package called "Thailand Plus" in September 2019. This short-term special measure is aimed at accelerating investment in major projects and focuses on high-tech industries that are crucial to increasing the country's competitiveness and development.
The package aims to increase Thailand's attractiveness as an investment location:
- Incentives to accelerate investment, e.g. additional incentives if investment is made by 2021.
- Support for the development of STEM (science, technology, engineering and mathematics) workforce.
- Deregulation of restrictive legislation regarding foreign investment.
- Improvement of services before and after the investment.
Together with the measures announced by the Thai Board of Investment (BOI) to support the Thailand Plus Package:
- Improved investment incentives of the BOI
The BOI grants projects a 50% reduction in corporate income tax for a further five years on condition that they
apply for investment support by the end of 2020; and
have made actual investments of at least THB 1 billion (around USD 32.26 million) by the end of 2021.
Establishment of a central point of contact for investor support and transfer of authority to the BOI office to facilitate foreign investors' investments in Thailand and their settlement in Thailand.
Measures to promote the development of the workforce:
The BOI will allow 200% of the actual expenses related to the provision of advanced STEM training for employees to be included in the calculation of the maximum limit for the corporate income tax exemption. In addition, employers will be entitled to make special deductions:
Training expenses related to advanced technology; and
Expenditure for the recruitment of new highly qualified personnel in the fields of science and technology.
- Support for investments in automation: Investments in automation systems will be eligible for additional deductions to further strengthen and accelerate the transformation of Thai industry.
Thailand will continue its efforts under Thailand Plus to expand its network of Free Trade Agreements and revitalize the Free Trade Agreement between Thailand and the EU and is expected to join the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP). In addition, special investment zones will be developed for companies from South Korea, Japan, China and the USA.