Determined to boost foreign investment into Thailand following the effects of COVID-19 on the Thai economy, the Office of the Board of Investment (”BOI”) has approved a list of incentives to fast-track investments into targeted industries such as electronics manufacturing, pharmaceuticals, and digital services. This move coincides with the government’s goal of accelerating the adoption of new digital technologies to propel Thailand’s digital economy forward.
According to an announcement from the Office of the BOI released in December 2020, projects with a total investment of at least THB 1 billion within 12 months of being issued a promotion certificate will be eligible for an additional 50% deduction of corporate income taxes for five years on top of the standard corporate income tax exemptions. Ms. Duangjai Asawachintachit, Secretary-General of the BOI, says that eligible projects can submit their application from 4 January 2021 until the last working day of the year. On the other hand, existing businesses of all sizes applying under the digital technology adoption program, comprising machine learning, big data, and artificial intelligence (“AI”), will have until the end of 2022 to submit their application and will be given a 50% reduction in corporate income taxes for a period of three years.
The Office of the BOI also extended the application period for projects seeking to invest in Thailand’s ten Special Economic Zones (“SEZs”) until the end of 2022.
“We expect to see faster adoption of digital technologies, including cloud computing through this incentive scheme,” said Ms. Duangjai. “[We wish to] ensure companies are ready to seize the business opportunities arising from the upcoming economic recovery,” she added.
The Eastern Economic Corridor (“EEC”) Office, mandated to promote high-value investment into the Eastern Seaboard provinces of Chonburi, Rayong, and Chachoengsao, is also moving to propose an extension of promotional privileges until 2022 in order to sustain investment momentum in the area. Like the Office of the BOI, the EEC Office also seeks to promote investments in innovative digital and technological projects, namely aviation, logistics, biofuel, digital services, and robotics; as well as key infrastructure projects such as a high-speed rail link connecting Suvarnabhumi, Don Mueang, and U-tapao airports.
If indeed authorities opt to extend the promotional privileges of projects in the EEC, both existing and upcoming projects will be able to enjoy investment incentives from both the BOI and the EEC for a longer period of time, thereby supporting Thailand’s economic recovery. Nonetheless, the process for securing BOI / EEC promotion is much more complex than forming a standard Thai company.
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