Thailand unveils new incentives for investor relocation, retention and high-tech industries
The Board of Investment (BOI) has unveiled nine measures as part of its five-year (2023-2027) investment-promotion strategy, including support for high-tech industries and tax breaks for companies relocating to Thailand.
The BOI’s latest incentive package is part of the “Thailand 4.0” strategy to shift away from an export-driven economy dependent on low labour costs and natural resources to sustainable, high-tech industries.
The strategy includes new measures as well as the extension of existing measures.
The nine measures are:
1. New industries:
Tax, land, and hiring incentives for businesses related to electric vehicles, new energy, so-called future food, and the space industry.
2. Research and development:
Up to 13 years of tax exemption on R&D costs from 1%, to increase Thailand’s competitiveness. Five years tax exemption for companies setting up education/training institutions for high technology skills.
3. Retention & expansion:
Special incentives for companies that have been granted BOI investment benefits for at least three projects in the past 15 years with a combined value of at least 10 billion baht, and are seeking approval for a new project or project expansion worth 500 million baht-plus. The incentives include exemption from corporate income tax (CIT) for up to three years or 50% CIT reduction for up to five years depending on the type of activity.
4. Relocation programme:
CIT exemption for five years for companies that relocate factories, regional headquarters and R&D centres to Thailand. Those that relocate just their regional headquarters and factories will receive a three-year CIT exemption.
Companies that relocate just their R&D centres and factories will receive a CIT exemption between one and five years, depending on the industry.
5. Investment for economic recovery:
Large projects investing 1 billion baht or more over 12 months to receive 50% CIT reduction for five years.
6. Smart & sustainable industry:
New 4.0 industrial projects including automation to receive CIT reduction of 50-100% depending on business type.
7. SME promotion:
CIT exemption for 3-8 years depending on business type. To qualify, firms must invest at least 500,000 baht (down from 1 million baht), have debt-to-capital ratio not exceeding 4:1, and invest in machinery worth at least 10 million baht, 50% of which must be new.
8. New special investment zones:
Numerous incentives for investment in four regional economic corridors (16 provinces), border special economic zones (10 provinces), southern border zones (four provinces), low-income per capita provinces (20), promoted industrial estates, and science and technology zones.
9. Community and social development:
Three-year CIT exemption on up to 200% of investment for non-BOI projects or an additional 200% exemption for existing BOI projects.