BOI secretary-general Therdsteerasukdi.
BANGKOK: Thailand is certainly wasting no time in bolstering its repute as the "Detroit of the East" into the electric age.
It wants to maintain its automotive leadership in the region for the EV era as well as position itself in the industries of the future, involving innovation, high technology, and the production and use of new and renewable energy.
In a follow up to its new five-year strategy released last month, the Thailand Board of Investment (BOI) announced on Nov 4 new incentive packages including, for the first time, a set of special privileges to support expansion by long standing investors, a comprehensive relocation program covering headquarters as well as research and manufacturing facilities, and a first package for investment in sustainable activities such as the manufacturing of hydrogen vehicles and the setup of electric vehicle (EV) battery swapping stations.
Aiming to be the solution, not the problem
The measures, approved at a meeting of the BOI board held on Nov 3, also include premium incentives for industries involving innovation and high technology such as biotech, nanotech, and advanced materials, support measures for the research and production of novel food, the addition of new economic corridors, or special investment zones, in four regions of Thailand, and the introduction of a special mechanism to improve the ease of doing business by addressing pain points flagged by investors.
"The incentive measures all reflect the strategy's aim to upgrade our industrial capacity with a focus on high technology and innovation, to build the industrial base of the future and to make Thailand the centre of international business and the technology hub of the region," said BOI secretary-general Narit Therdsteerasukdi.
"At this critical juncture when the world is facing multiple crisis, we want to highlight Thailand's strengths to help address some of these issues, such as food security, the search for renewable energy, and supply chain resilience."
The 2023-2027 Investment Promotion Strategy announced in October aims to help restructure the country's economy and ensure Thailand is innovative, competitive, and inclusive as it competes in the post Covid-19 world.
The strategy also sets five sectors of strategic importance to industrial development as priority industries, namely the bio-circular-green (BCG) sector, the EV supply chain, electronics manufacturing, the digital economy, and creative industries.
Incentives - some of them
Long-term investors will receive special incentives including an additional corporate income tax (CIT) exemption for up to 3 years or a 50% CIT reduction for up to five years, depending on the type of activity.
The relocation program will grant an additional CIT exemption for 5 years to companies relocating all their activities, meaning regional headquarters, research and development (R&D) center, and manufacturing facilities to Thailand.
The companies relocating their manufacturing and regional headquarters will receive additional 3 years of CIT exemption while those moving their manufacturing and R&D centre will additionally receive between 1 and 5 years of CIT exemption, depending on the industry. All the CIT exemptions apply only to revenue from the relocated manufacturing activities.
The board also approved the designation of new economic corridors as special investment zones in four regions of Thailand, covering a total of 16 provinces. Investments in such areas receive a wide range of incentives.
The four areas, namely the Northern Economic Corridor, North-Eastern Economic Corridor, Central-Western Economic Corridor, and Southern Economic Corridor, will add to the existing industrial and high-tech development area known as the Eastern Economic Corridor.
The board also approved the setup of a Sub-Committee on the Resolution of Obstacles and Facilitation of Investment, which, in cooperation with the Prime Minister's Office and other state agencies, will serve as a special mechanism to further improve the ease of doing business by addressing specific pain points flagged by investors.
The new incentives will be effective from January 2023.
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