The COVID-19 pandemic has created a great impact on the global economic growth and development patterns and Thailand is also not any exemption. Leading economies of the world has witnessed setbacks and are in the quest of gaining avenues to recover from the loss. Interestingly, the Thailand Board of Investment adopted a brilliant strategy of promoting the BCG Economy for the recovery process creating new scopes of business in Thailand and attracting greater FDI.
This January, the honorable Prime Minister of Thailand, Mr. Prayut Chan-o-cha approved a five-year strategic plan for promoting Bio Circular Green (BCG) economy. The major purpose behind this initiative was to boost the economic growth and development of Thailand which sunk significantly during the COVID-19 period. Significant growth in the number of applications for approval of BCG projects is already on the tables of the Thai Government from foreign investors and it is this zeal that has aroused them to escalate the campaigns associated with the same.
It has been declared by the Board of Investment of Thailand that the first nine months of 2020 have recorded the application of more than 300 BCG projects worth US$1.7 billion. Listing of such projects is a very clear and positive indicator of the fact that people across the globe are getting aware of the benefits of a BCG Economy and are readily investing in BCG or related ventures. Apart from making Nature, the concept is making businesspersons and houses happy as well.
The BCG model of the Royal Thai Government encompasses sectors that promote equitable and balanced development while reducing waste, emissions, and dependence on limited resources. Along with that, the government in association with the Board of Investment of Thailand frequently announces schemes that promptly gather attention of foreign investors in Thailand. As a part of their announcements made for the 5-years strategic plan for BCG economy promotion, the following were the most lucrative one to attract foreign investment:
- Tax Incentives for BCG Projects
- Corporate Tax exemption for 3-10 years
- Exemption or reduction in import duties on machinery
- Reduction on import duties for raw materials
- Exemption on import duties for research and development materials
- Double deduction for cost of transport electricity and water
- 25% deduction on installation or construction of facilities
- Exemption of import duty on raw materials used in production for exports
- Non-tax Incentives for BCG Projects
- Permit for foreign nationals to enter Thailand and study investment opportunities
- Permit to bring in skilled workers and experts to work in investment-promoted activities
- Permit for foreigners to own land
- Permit to remit money abroad in foreign currencies
- No obligation or mandate for local content
- No specific requirement for exports
- No restriction on foreign currencies
- Visa facilitation
Starting from the permission of visit up to the exemption in taxes, the Board of Investment of Thailand is always ready to facilitate trade options for foreign businesses in Thailand. Special patterns of exemptions, returns and incentives are planned for businesses which focus on innovation, research and development as part of the BCG projects.
Numerous tax deductions for businesses developing green and renewable industries have drawn investors ranging from major multinational corporations to domestic and foreign start-ups. Renewable smart visas enable foreign talent and investors from major industries to work and remain in Thailand for up to four years, are among the non-tax incentives. Board of Investment, Thailand also facilitates industrial collaboration, local supplier procurement, and business matching.
Four major industries which the Royal Thai Government has focused to be an active contributor and participant of the BCG Economy model are –
- Farm and Food
- Healthcare and Medical Services
- Energy and Biochemicals
- Tourism and Creative Economy
Concentrating on these four industries, the Royal Thai Government focuses on achieving the following goals –
- Make the BCG Economy 25% of the GDP of the nation.
- In 2024, the food sector is expected to contribute 5% of GDP.
- Increase the total economic value of the focused industries by 30% within 2025.
- Generate up to 6.5 trillion baht in income by 2030.
- Total investment in BCG is expected to reach 750 billion baht in 2026, with public investment accounting for 150 billion (20%) and private investment accounting for 600 billion (80 percent).
Kitipong Promwong, director of the Office of National Higher Education, Science, Research and Innovation Policy Council, said, “The government is adamant about moving BCG to improve Thailand’s economy, which is battered by the Covid-19 outbreak.”
He also spoke, “The Thai economy is too reliant on external factors, and BCG appears to be the best option for driving economic growth fueled by domestic factors.”
The 5-year strategic plan targeting the BCG industries are having schemes, policies and strategies to attract, retain and sustain foreign business in Thailand. As Thailand is now intending to recover from the economic crisis imposed upon the economy by the coronavirus pandemic; it is readily extending hands for foreign collaboration and promote foreign business in the country.
If you are planning to invest and start a business in Thailand, you must have proper legal guidance which can extend a hassle-free medium of doing so. For proper legal and company formation help, feel free to shoot a mail to [email protected]
