Thailand is encouraging foreign investors to relocate to Thailand, according to recent announcements of new investment incentives by the Thai government and the Board of Investment. Against the backdrop of the ongoing US-China trade war, Thailand’s economic ministers recently announced the “Thailand Plus” package of investment incentives, which aims to attract more foreign investment, and in particular, expedite investments from companies seeking to relocate to Thailand as a result of the US-China trade war.
The package aims to enhance Thailand’s attractiveness as an investment location by:
- Investment acceleration incentives e.g. additional incentives if invest by 2021.
- Promotion of STEM (science, technology, engineering, and mathematics) manpower development.
- De-regulation of restrictive legislation relating to foreign investment.
- Improvement of pre-and post-investment services.
Together with measures announced by the Thailand’s Board of Investment in support of the Thailand Plus package, the main measures are:
1. Enhanced investment incentives of BOI
The BOI will grant an additional five years of 50% reduction of corporate income tax to projects that:
- apply for investment promotion by the end of 2020; and
- have in place actual investment worth at least THB 1 billion (around USD 32.26 million) by end of 2021.
2. Establishing a one stop service to service investors, and delegation of authority to the Office of the Board of Investment to help facilitate foreign investors to invest in and relocate to Thailand.
3. Measures to promote manpower development:
The BOI will allow 200% of actual expenses related to providing employees with advanced STEM training to be included in the calculation of the corporate income tax exemption cap. Furthermore, employers will be eligible to make special deductions for:
- Training expenses related to advanced technology; and
- Expenses spent hiring new highly skilled manpower, in fields of science and technology.
4. Automation investment support: Investments in automation systems will be entitled to additional deductions in order to further strengthen and accelerate transformation of Thailand’s industries.
The BOI is expected to announce the relevant regulations soon.