Thailand unveils new incentives for investor relocation, retention and high-tech industries

The BOI’s latest incentive package is part of the “Thailand 4.0” strategy to shift away from an export-driven economy dependent on low labour costs and natural resources to sustainable, high-tech industries.

The strategy includes new measures as well as the extension of existing measures.

The nine measures are:

1. New industries:

Tax, land, and hiring incentives for businesses related to electric vehicles, new energy, so-called future food, and the space industry.

2. Research and development:

Up to 13 years of tax exemption on R&D costs from 1%, to increase Thailand’s competitiveness. Five years tax exemption for companies setting up education/training institutions for high technology skills.

3. Retention & expansion:

Special incentives for companies that have been granted BOI investment benefits for at least three projects in the past 15 years with a combined value of at least 10 billion baht, and are seeking approval for a new project or project expansion worth 500 million baht-plus. The incentives include exemption from corporate income tax (CIT) for up to three years or 50% CIT reduction for up to five years depending on the type of activity.

4. Relocation programme:

CIT exemption for five years for companies that relocate factories, regional headquarters and R&D centres to Thailand. Those that relocate just their regional headquarters and factories will receive a three-year CIT exemption.

Companies that relocate just their R&D centres and factories will receive a CIT exemption between one and five years, depending on the industry.

5. Investment for economic recovery:

Large projects investing 1 billion baht or more over 12 months to receive 50% CIT reduction for five years.

6. Smart & sustainable industry:

New 4.0 industrial projects including automation to receive CIT reduction of 50-100% depending on business type.

7. SME promotion:

CIT exemption for 3-8 years depending on business type. To qualify, firms must invest at least 500,000 baht (down from 1 million baht), have debt-to-capital ratio not exceeding 4:1, and invest in machinery worth at least 10 million baht, 50% of which must be new.

8. New special investment zones:

Numerous incentives for investment in four regional economic corridors (16 provinces), border special economic zones (10 provinces), southern border zones (four provinces), low-income per capita provinces (20), promoted industrial estates, and science and technology zones.

9. Community and social development:

Three-year CIT exemption on up to 200% of investment for non-BOI projects or an additional 200% exemption for existing BOI projects.

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