The Thai Cabinet recently approved amendments to the Investment Promotion Act 1977 and the country's Competitiveness Enhancement Act to enhance national competitiveness and make Thailand a more attractive investment destination in Asia.
The amendment of the Investment Promotion Act 1977 is designed to make Thailand more attractive by extending corporate income tax (CIT) exemption period from currently up to 8 years to 13 years. The 50 percent tax reduction will also be extended to up to 10 years. The incentives, however, are limited to projects that use high technology, high innovation, and R&D in the production.
The law also included an exemption on import duties of products that are imported for R&D purposes.
Under the Country's Competitiveness Enhancement Act, there will be a board to consider and screen projects that are eligible to obtain financial support from the one trillion baht fund. The board can provide CIT exemptions for up to 15 years and grant capital to support investments with specific criteria.
Both Acts have passed the Cabinet and the Council of State and are now in the process of approval from the National Legislative Assembly.
Since 2015, the Board of Investment (BOI) in Thailand has been focusing on promoting investments that use advanced technology and innovation, as well as promoting investments under the Policy to Promote Science, Technology, and Innovation which had the highest number of project applications from January - July 2016.
For the first seven months of 2016, the Digital Economy had 143 project applications with a total investment value of 3.68 billion baht. This is an 85.7 percent increase for the project applications and a 237.6 percent increase for the investment value from the same period last year.
Under the Policy to Promote Science, Technology, and Innovation, there were 133 project applications with a total investment value of 32.17 billion baht. This is a 160.7% increase for the project applications and a 409.8% increase in the investment value when the period of seven months of 2015 and 2016 are compared.
"Considering the positive sign in the economic situation, we see an optimistic investment trend in the last trimester of this year. The BOI's new investment tools will work as the catalysts to encourage investors to make a decision faster,” said Hirunya Suchinai, Secretary General of the Board of Investment.
In addition, BOI is working closely with other concerned organizations in further enhancing investment climate, such as Foreign Chamber of Commerce in educating investors of rules and regulations to make them feel assured in ease of doing business in Thailand.