Thailand is drawing the entire new generation seeking reliable and easy amenities within the workplace. Access to fast internet, affordability, good co-working spaces and largely excellent quality of life make Thailand a lucrative business hub for foreign businesses. By providing business-friendly policies, like easy work permits, the Thai government hopes that the innovators would choose to stay and form a permanent footprint in Thailand.
Thailand’s augmented business-friendly atmosphere is reinforced by various recent initiatives meant to escalate business opportunities in Thailand and attract corporate wishing to expand business operations in Southeast Asia and specifically in Thailand. Last year, the Thai government highlighted investment in ten target industries which would serve as the engines of growth for Thailand:
- Next-Generation Automotive,
- Smart Electronics,
- Digital Technology,
- Advanced Agriculture and Biotechnology,
- Food Processing,
- Tourism, Robotics,
- Aerospace & MRO,
- Medical Hub,
- Biochemical Industry
Investing in the ten key industries is an integral part of the Government’s “Thailand 4.0 ” initiative for revamping the country’s economy and bringing the next incarnation of Digital and business-friendly Thailand. BOI experienced a 5%-10% increase in investment application year on year and the Government is confident that the 2018 growth will be around 12%.
Smart Visa Scheme
Expats earning high salaries would be eligible for professional visas of four years starting the first quarter of 2018. From then, a program providing visas would be made available with a duration of four years at a time to the foreign nationals whose monthly earning are THB 200,000 and above.
SMART VISAs, would provide more benefits and privileges than any other visa type. The smart visa holders could remain in Thailand for a longer period and also be entitled to be accompanied by their families. Foreign nationals satisfying the requirements of Smart Visas could apply for them at the Bangkok’s Chamchuri Square’s One-Stop Service Center or Thai Embassies in their respective countries for Business Visas for Thailand or other visa types.
The objective of the program is for luring entrepreneurs and experts with technical knowledge to stay longer in the country. Unlike others who are required to check with immigration in every three months, the holders of the SMART VISA only need checking once a year. Smart Visa holders would be entitled to stay for the duration of four years instead of extensions of one year. Eligible automatically for four-year extensions are the spouses and children of the visa holders. In addition, there is no restriction of age for Smart Visas. Download the SMART VISA Brochure
The Board of Investment Thailand plans to organize a minimum of 35 international roadshows for targeting countries like China, South Korea, Japan, and Europe with the aim of acquainting investors in such markets with the Thai government’s policy on Thailand Investment opportunities. In Thailand, a minimum of 15 investors’ field trips for visiting the EEC (East Economic Corridor) would be held in cooperation between the BOI and related organizations.
Initiatives are taken by BOI to boost investment
Under the new promotion scheme, the BOI investment promotion was extended seven-fold in 2018.
- Additional business activities: December last year, the Board of Investment approved 100 additional incentives for covering more than the existing 40 business activities. The new list of 100 additional activities isn’t yet announced to the public at large. The additional activity-based incentives would depend on a business’s character as SME and several other criteria.
- Enhancements for prevailing 40 business activities: The BOI has relaxed some of the conditions for the current already promoted business activities.
- Additional tax incentives: Tax benefits would be more attractive. Tax incentives for corporates investing in the SEZs include corporate tax exemption up to 8 years and plus 50 percent tax holiday for an additional 5 years. Moreover, entrepreneurs would enjoy double deduction for electricity, transportation, and water utility cost, up to 25 percent deduction for utility construction costs, import duty exemption for raw materials used for export, import duty exemption for machinery, permission to use no-skilled labor and others such as foreign expert employment and foreign ownership of land.
- Merit-based incentives: R&D (Research and development), IP licensing fees, product and packaging design, advanced technology training and other activities that enhance competitiveness would receive expressively relaxed expense and investment conditions, moderately limited to SME.
- EEC promotion scheme: Targeted activities in the EECi (Eastern Economic Corridor of Innovation) and the EECd (Digital Park Thailand), would be eligible for special EEC tax incentives.
- Special tax holidays for human resource development: Tax holidays of two more years on top of the normal incentives and 50% CIT reduction for further five years under specific conditions in the EEC.
New opportunities for SMEs
The BOI board has approved new measures for encouraging investors to establish the Trading and Product Development Center within SEZ. Under this scheme, the center located in SEZs would be entitled to CIT (Corporate Income Tax) exemption for eight years, with a 100% cap of investment capital, barring land and revolving capital plus 50% tax reduction for further five years after the conclusion of the CIT exemption period. If the investors build a Trading and Product Development Center outside of the SEZs, the investors should also invest a minimum of one project in SEZs in parallel. In such a case, the BOI would offer CIT exemption for up to five years. The scheme is designed for encouraging large investors to help and work with the SMEs in growing their businesses.
The new measure would allow SMEs in increasing the distribution channels and expanding their marketing activities using the strategic location of every SEZ. Also, other businesses, particularly SMEs outside of the SEZ, would also gain benefits from this measure. With the supporting environment for small investors as well as large investors, the Thai government hopes to build a stronger economy with inclusive growth.
More human resource development cooperation in EEC
Additional to the existing human resource development scheme with the research institutes or educational institutes, such as Work-integrated Learning (WiL), Dual Vocational Education and Training and Cooperative Education, the BOI board has sanctioned a new scheme called Special Vocational Program in the EEC. This project emphasizes mainly human resource development and training in response to the demand from industry, particularly in the high-value-added targeted industries.
Under this scheme, participating companies would work with the educational institutions in designing curriculums and courses and recruiting new students.
The Bottom Line
The Thai government is not leaving any stone upturned, accomplishing various tasks aimed at enabling increased investments, which includes amendment of major laws. Infrastructural foundations are also laid out for supporting the Eastern Economic Corridor, which is aimed to be the economic hub of the region in the near future. Investment incentives are also revised and are more attractive in response to the economic recovery trend globally. Efforts focus on knowledge enhancement, human resources development, industrial support networks and information sharing in tandem with tax and non-tax incentives to eligible businesses. Apart from the incentives, the Thai government is ensuring that they offer world-class infrastructure and a highly-skilled workforce to entrepreneurs already doing business in Thailand or for investors.
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