Thailand is attracting a whole new workforce looking for stable and accessible working amenities. Thailand is a valuable commercial hub for international companies. It is because of its fast internet, low costs, decent co-working spaces, and generally high quality of life. BOI Thailand feels that this will allow innovators to establish a permanent presence in Thailand.
Thailand’s improvement in a business-friendly environment reflects a number of recent measures aiming at the expansion of business prospects in Thailand. These are attracting companies looking to grow their operations in Southeast Asia, notably Thailand. Thailand government’s focus on investment in ten key industries would act as economic engines for the country:
- Next-Generation Automotive
- Smart Electronics
- Digital Technology
- Advanced Agriculture and Biotechnology
- Food Processing
- Tourism, Robotics
- Aerospace & MRO
- Medical Hub
- Bio-fuels
- Biochemical Industry
The government’s “Thailand 4.0” strategy is overhauling the country’s economy and ushering in the next incarnation of business. These are Digital and business-friendly Thailand including investment in the 10 major industries. BOI Thailand witnesses a 5-10% increase in investment applications year over year, and the government anticipates a 12% increase in 2021.
SMART Visa Scheme of BOI Thailand
Effective since the first quarter of 2018, ex-pats earning high salaries will be eligible for four-year professional visas. Henceforth, there will be a programme of visa issuance for a period of four years. Moreover, it will be available for foreign nationals with monthly earnings of THB 200,000 or more.
SMART VISAS offer more benefits and privileges than any other sort of visa. Smart visa holders may stay in Thailand for a longer period of time. Additionally, they may bring their families with them. Therefore, foreign nationals meeting the Smart Visa requirements can apply at the One-Stop Service Center. It is located in Bangkok’s Chamchuri Square or at Thai embassies in their home countries.
The program’s goal is to entice entrepreneurs and professionals with technological knowledge to stay in the country longer. Unlike regular visa holders, who must check with immigration every three months, SMART VISA holders only need to check once a year. Instead of one-year renewals, Smart Visas holders get permission to stay for four years. Spouses and children of visa holders are automatically eligible for four-year renewals. Furthermore, there are no age restrictions for Smart Visas.
The Board of Investment Thailand plans to hold at least 35 international roadshows in countries. For instance, China, South Korea, Japan, and Europe are a few of these nations. Moreover, they have the goal of familiarising investors in those areas with the Thai government’s stance on investment prospects in Thailand. In Thailand, the BOI and affiliated organisations will collaborate to organise a minimum of 15 investor field excursions to the EEC (East Economic Corridor).
BOI Thailand Initiatives to Boost Investment
In 2018, the BOI investment promotion was extended seven times under the new promotion programme.
Additional Business Activities
The Board of Investment approved 100 new incentives in December of last year. However, this was in addition to the existing 40 business activities. Moreover, a fresh list of 100 more activities yet awaits release in public. Determination of additional rewards on the basis of activities of a company’s SME status depends on a number of other factors. Some of the conditions for the currently promoted business activity gets relaxation by the BOI.
Additional Tax Incentives
Tax advantages are more tempting. Corporate tax exemption for up to 8 years. Additionally, there will be a 50% tax holiday for an additional 5 years are among the tax benefits available to companies that invest in SEZs. Entrepreneurs would also benefit from a double deduction for electricity, transportation, and water utility costs. Moreover, there will be a 25% deduction for utility construction costs, import duty exemption for raw materials used for export. There will be import duty exemption for machinery, the ability to use unskilled labour. Additionally, other benefits are foreign expert employment and foreign ownership of land.
Merit-based Incentives
R&D (research and development), IP licence costs, product and packaging design, advanced technology training, and other activities forms the basis of such rewards. Moreover, processes improving competitiveness would be subject to expressly lenient expense and investment criteria, with constraints on SME participation.
EEC Promotion Scheme
Special EEC Tax Incentives would be available on target operations in the EECi (Eastern Economic Corridor of Innovation) and the EECd (Digital Park Thailand).
Special Tax Holidays
In the EEC, there are two more years of tax holidays on top of the existing incentives. Additionally, there will be a 50% CIT cut for a further five years on meeting certain conditions.
BOI Thailand sets New Opportunities for SMEs
The BOI has approved new incentives for investors to set up a Trading and Product Development Center within the SEZ. Under this concept, SEZ-based centres would be eligible for CIT exemption for eight years. However, there will be a 100% ceiling on investment capital. This is excluding land and revolving capital and a 50% tax reduction for the next five years after the CIT exemption period.
If investors construct a Trading and Product Development Center outside of the SEZs, they must also invest in at least one project within the SEZs. The BOI will grant you a CIT exemption for up to 5 years in this situation. The scheme intends to attract large investors to assist and collaborate with SMEs in order to help them build their enterprises.
The new policy would assist SMEs to extend their distribution channels and marketing activities by taking advantage of each SEZ’s strategic location. Other businesses, especially SMEs outside of the SEZ, would profit from this approach as well. The Thai government aspires to establish a stronger economy with inclusive growth by providing a welcoming environment for both small and major investors.
Human Resource Development Cooperation in EEC Zone
The BOI board has approved a new scheme called Special Vocational Program in the EEC. It is in addition to the existing human resource development schemes with research institutes or educational institutes. Work-integrated Learning (WiL), Dual Vocational Education and Training, and Cooperative Education are a few such institutes. This initiative focuses primarily on human resource development and training in response to industry needs, notably in the targeted high-value-added industries.
Participating businesses would collaborate with educational institutions to develop curriculums and courses, as well as recruit new students, under this programme.
Your Take!
The Thai government is not leaving any stone unturned in completing several tasks aiming and permitting higher investment. Occasionally, it includes the revision of significant laws. Moreover, there are preparations of infrastructure foundations for the Eastern Economic Corridor. However, this can become the region’s economic core in the near future. In response to the global economic recovery trend, there are alterations in the investment incentives making it more appealing.
Knowledge upgrading, human resource development, industrial support networks, and information sharing are all part of the effort. Moreover, these have complementations on tax and non-tax incentives for eligible enterprises. Aside from the incentives, the Thai government is guaranteeing that companies already doing business in Thailand or investors have access to world-class infrastructure and a high-grade workforce.
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