The Board of Investment (BOI) of Thailand approved a series of stimulus packages on December 21, 2020. BOI did this to encourage local and foreign direct investment in Thailand.
The government seeks to accelerate Thailand’s economic recovery from the COVID-19 pandemic effect. The BOI will encourage additional investment incentives in 2021. This will include a range of sector and project-specific stimulus initiatives.
Tax Benefits for Large-scale Projects
This benefit is for investment in projects worth a minimum of THB 1 billion (approximately US$33 million).
Foreign companies must complete the process of investment within a span of 12 months. This duration is from the date of issuance of the Promotion Certificate from BOI. The BOI declared such ventures eligible for a Corporate Income Tax (CIT) deduction of an additional 50% for a period of 5 years.
This relaxation is going to top up the regular 5-8 years CIT exemptions as declared in the normal Board of Investment tax-incentive scheme. Eligible and qualified projects must submit their applications for special tax incentive within December 30, 2021.
Special Package for Software Industry and Digital Economy
This announcement was for projects involving digital technology. Most likely, it involved activities such as software integration, machine learning, artificial intelligence or big data analytics. Largely, it included digital platforms for business and commercialization.
Consequently, BOI declared such projects eligible for CIT exemption of 50% on profits generated from the existing BOI projects for an additional period of 3 years.
Simultaneously, such eligible project must submit their applications by the end of 2022.
Application Deadline Extensions
In fact, BOI announced an extension in the application deadlines for additional incentives for projects located in special economic zones. The board extended the deadlines up to the end of 2022.
Furthermore, BOI extended the application deadlines for both tax and non-tax incentives. This extension is applicable for textiles, agriculture, home furniture, jewellery industries.
Along with that, the 10 special economic zones covered under this part of the stimulus package are located in the border areas of Thailand. They are Chiang Rai, Kanchanaburi, Mukdahan, Nakhon Phanom, Narathiwat, Nong Khai, Sa Kaeo, Songkhla, Tak, and Trat.
Announcement of New Special Economic Zones
BOI Thailand has identified Genomics Technology as a potential field. This segment can yield THB 70 billion (US$2.35 billion) worth of overall growth per year.
You must know that this technology is related to the enablement of advanced methodologies like In-Vitro Fertilization (IVF). Secondly, it includes accurate cancer detection as well. And most importantly, this technology includes the development of innovative medicines, vaccines and biological products.
In addition, the BOI has granted the Genomics Thailand Project to Burapha University. The board did this after identifying the importance and growth value of the same.
It is in the Eastern Economic Corridor (EEC) and equivalent status to other EEC zones. This recognition is equivalent to the status of EEC of Innovation, Digital Park of Thailand and the EECA.
Similarly, according to the announcement, additional tax incentives will be implied for this new Genomics economic zone. It will be under the guidelines of the BOI like other EEC investment projects.
Final Thoughts
To reaccelerate economic growth and development from the setback due to COVID-19 market factors, the BOI is focusing on the BCG Model.
However, out of the four important industries of the BCG Economy, Clinical and Medical Facilities is one of them. So, you can assume that the announcement of the BOI related to Genomics Technology is having some BCG influence.
But, irrespective of the influence, the BOI aims to attract local and foreign direct investment in Thailand for strategically important industries.
So, are you willing to invest in Thailand?
Along with that, is your idea related to any of the industries or locations discussed in this article?
Then, please feel free to communicate with us at [email protected]
