Since Thailand has witnessed some great trading in 2017 that totaled to 1.3 trillion Baht with Cambodia, Laos, Myanmar, and Malaysia, this year, the Ministry of Commerce is expecting the number to grow by 10% to 14%. Thailand’s border trade with these countries is likely to benefit the businesses that choose to locate in the Special Economic Zones. Well, the development of the SEZs is further divided into two phases, where the first phase is covered by the provinces of Sa Kaeo, Mukdahan, Songkhla and Tak and the other provinces include Nong Khai, Kanchanburi, Narathiwat, Nakhon Phanom and Chiang Rai.
So when exactly Thailand introduced the policy of SEZ development?
It was introduced in 2015, as a primary part of its economic plan in promotion of trade and investment opportunities in the border areas while connecting the zones with their respective bordering country in terms of economy, investment and trade.
It is because of the closeness to the border region that allows the businesses to benefit from affordable low-skilled cross-border workers plus take advantage of the easy availability of the natural resources. Additionally, the investors and businesses can take advantage of the present supply chain as well as new transport infrastructure in order to gain easy access to a developing market in Asia.
The government offers a wide range of incentives for businesses that are operating in thirteen industries situated in at operational 5 SEZs. However, each of the SEZs comes with their own target industries that are categorized by the region, where the Special Economic Zone is situated. Those 13 industries include; garments, home furniture, ceramics, fashion accessories, medical products, industrial estates, jewelry, electrical appliances and electronics and automobiles.
Incentives to derive for investing in the Special Economic Zones
- “Eight-year corporate income tax (CIT) exemption;
- An additional 50 percent reduction in CIT for five years;
- Exemption from import duty on raw materials and inputs used in the production of products;
- Reduced or waived import duty on machinery;
- Double deductions for expenses related to transportation, electricity and power supplies for 10 years;
- A 25 percent deduction of investment costs on the installation or construction of facilities used, beginning from the date in which revenue is generated;
- Permission to bring foreign experts and technical staff together with their spouses and dependents into Thailand; and
- Permission to employ foreign unskilled workers in the promoted project, according to the conditions prescribed by BOI.”
How are Eastern Economic Corridor (EEC) Special Economic Zones (SEZs) different?
Though both of them provides investment opportunities to the foreign businesses in Thailand, SEZs development is done to take advantage of the growing border trade with the neighboring counties while enhancing growth in 13 targeted industries. On the other hand, EEC has been developed in the eastern provinces of Chonburi, Chachoengsao, and Rayong in order to encourage investment into the next-generation industries, which use innovation and high technology.
