The Thailand Board of Investment (BOI), a government agency that aims to attract direct investment, recently approved a seven-year investment strategy that is expected to sustain the country’s economic growth. The new strategy will offer a mix of non-tax, merit-based incentives and tax benefits, and will remove zoning restrictions for foreign investors. The new program will run from January 2015 through December 2021.
BOI’s new investment program follows Thailand’s reduction of its corporate income tax to 20 percent, the lowest rate ever in Thailand. The country ended 2014 with a record high number of investment applications, totaling $31 billion, from foreign investors. Of the total number of applications, 74 projects were submitted by U.S. companies, including Ford Motor Company, General Motors and Seagate Technology.
“We are encouraged by the momentum we have built in terms of investments and expansions from U.S. companies, and are optimistic about continuing to grow the presence of U.S. companies in Thailand,” said Korbsiri Iamsuri, director at the Board of Investment New York office. ” Thailand has consistently been ranked as one of the top countries to do business. Our country offers a number of business advantages, including strategic location, trained workforce and government support, to companies that are looking to increase their presence in Asia.”
The BOI hopes the new investment strategy will encourage investments from companies in the high tech and creative industries, incentivize service industries that support the growth of the country’s digital economy and attract industries that will utilize local resources. It will give priority to “business activities” or investments that will support Thailand’s overall development strategy, which includes Thailand’s participation in the ASEAN Economic Community (AEC).
Under the new investment strategy, the full list of eligible “business activities” (more than 200) can be found on the BOI’s website. Essentially this list is broken down into two groups. “Group A” includes activities important to supporting national economic restructuring and will be eligible for such incentives as corporate income tax exemptions. “Group B” includes supporting industries that are highly important to the production chain.
In addition, SMEs (Small and Medium-sized Enterprises) could also be eligible for incentives, such as extended corporate tax exemptions, if they meet the criteria under the new policy.