BoI offers maximum incentives to eligible investments in special economic zones
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EXPECTED to bring about un-paralleled privileges to investors and revive the Asean economy, special economic zones (SEZs) are the Thai government's recent plan to accelerate the trade and investment capabilities of the country through promoting economic
SEZs are a joint effort among many important government institutions – namely the Board of Investment (BoI), the Revenue Department and the Industrial Estate Authority of Thailand – to raise the country’s capacity to compete within the upcoming Asean Economic Community, scheduled for implementation at the end of this year.
According to the recently published BoI manual for investment in SEZs, the maximum incentives are provided to eligible investors in targeted industries comprising 61 business activities, including agro-industry and fisheries, logistics, tourism, and various manufacturing businesses.
The maximum incentives include exemption of corporate income tax for up to eight years, five-year 50-per-cent reductions of corporate income tax, and exemption of import duties for machinery and raw materials.
Non-tax incentives include, but are not limited to, the use of unskilled foreign labour in SEZ projects.
The current government’s policy on SEZs covers all regions of Thailand.
Northern region
Tak Special Economic Zone, bordering Myanmar: To be a centre for cross-docking warehouses and facilities for cross-border trade as it is located along the East-West Economic Corridor connecting Yangon, India and southern China.
In addition, a substantial amount of labour is available along the Myanmar border areas to facilitate the growth of manufacturing industries.
Chiang Rai Special Economic Zone, bordering Myanmar and Laos: To be promoted as a tourism destination, a production site for foods and agriculture products, with international logistics as well as multi-modal transport.
It is located along the North-South Economic Corridor and a path to southern China, both by land and sea.
Northeastern region
Mukdahan Special Economic Zone, bordering Laos: Earmarked as a distribution centre and multi-modal transport hub. Located along the East-West Economic Corridor, the Mukdahan zone has high potential to become the logistics hub of this region, especially as the key route for agriculture products and electronic-parts transport to Vietnam and southern China.
Nong Khai Special Economic Zone, bordering Laos: To be promoted as an area for international trade, tourism and multi-modal transport. It has the highest value of cross-border trade with Laos, and is the most convenient route to that
country through road and rail links.
Nakhon Phanom Special Economic Zone, bordering Laos: Designated for logistics services and cross-border trading, Nakhon Phanom is in an ideal geographic location connecting major economic zones in Laos, central and northern Vietnam, and southern China.
Eastern region
Sa Kaeo Special Economic Zone, bordering Cambodia: To be the centre of agricultural processing industries such as fruit and vegetable preserves, as well as multi-modal transport. The area has high potential for cross-border trading, both wholesale and retail, as it is situated close to Laem Chabang port and Bangkok.
Besides, Sa Kaeo is situated along the Greater Mekong Sub-region’s Southern Economic Corridor, the route heading towards Phnom Penh and southern Vietnam.
Trat Special Economic Zone, bordering Cambodia: To be a centre for wholesale, multi-modal transport, and regional tourism. It is located at the extremity of the Gulf of Thailand coast with abundant local tourism resources and easy access to Laem Chabang port, Sihanoukville port in Cambodia, and Koh Kong Special Economic Zone.
Western region
Kanchanaburi Special Economic Zone, bordering Myanmar: Designated as an area for industrial estates, conservation tourism and cross-border trading. The Kanchanaburi border provides access to Dawei Special Economic Zone and the Eastern Seaboard, and can easily be a regional hub for sea transport.
Southern region
Songkhla Special Economic Zone, bordering Malaysia: To attract processing industry for export, and multi-modal transport. Songkhla has superb economic potential, as proved by the value of border trade in Sadao and Padang Besar. Customs data showed it accounted for about 50 per cent of Thailand’s total border trade value last year.
Moreover, Songkhla is located in the area covered by the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) project, a sub-regional cooperation formed in 1993 to promote economic growth in less-developed provinces of the three countries and stimulate investment in industrial sectors and services.
Narathiwat Special Economic Zone, bordering Malaysia: To encourage cross-border trading, foods industry and multi-modal transport. It has easy access to Kuala Lumpur through three border points, air transport and rail links.
The deadline for submitting applications to the BoI is December 31, 2017. Potential investors should plan ahead to benefit fully from this new economic opportunity.
Patcharaporn Trinvuthipong, the author, is a deputy manager at PwC Thailand.
