Understanding the Incentives Under Thailand’s Eastern Economic Corridor Initiative

Home » Understanding the Incentives Under Thailand’s Eastern Economic Corridor Initiative

The Thai government has enacted various investment promotion programs designed to attract foreign investment into Thailand. These include Board of Investment (“BOI”) promotion which provide qualified companies with lower tax rates, ability to own land, and no duties for imported CapEx machinery and other items that are to be used for creating export products. Moreover, companies promoted by the BOI are permitted to be wholly owned by foreign nationals and can hire foreign specialists without needing to adhere to the difficult procedures required for regular limited companies.

In addition to the standard BOI incentives, investing in specific industrial areas and economic zones also provide companies with additional incentive options. One such zone is the Eastern Economic Corridor (“EEC”) along Thailand’s eastern seaboard provinces of Chachoengsao, Chonburi, and Rayong. Locating operations in any of the promoted zones or industrial estates will qualify a company for additional benefits on top of their BOI incentives, which include a 50% reduction in corporate income tax, special deductions for research and development in certain areas, an income tax cap of 17%, as well as the ability to own land for both business operations and residential purposes.

The EEC was established as part of the government’s Thailand 4.0 initiative, a 20-year strategy started in 2016 that aims to make Thailand a high-earning country by 2036. The onus of the initiative is to transform Thailand from an agricultural economy with low-skilled labor into one that focuses on value-added industries and high-skilled labor that specializes in next-generation automation, robotics, smart electronics, aviation, digital services, and innovative technologies. On top of these, the government also aims to establish other sectors such as aerospace, biofuel and biochemicals, as well as food innovation.

Each promoted industrial estate is geared towards specific industries. Depending on the type of activity a company or project engages in, they will be given the option to invest in one of these industrial estates. These include the following:

  • EEC-A (Airport City) near U-Tapao International Airport which will include an aviation training center, free-trade-zone, and freight center;
  • EEC-D (Digital Park) in Sriracha, a 100 hectare development that has built infrastructure geared towards supporting digital business innovators;
  • EEC-H (High-Speed Rail) which is along the track that will connect Don Mueang, Suvarnabhumi, and U-Tapao International Airports;
  • EEC-I (Innovation Platform) in Wangchan Valley, Rayong, which is a 480 hectare development custom built for developing industrial technological innovation;
  • EEC-MD (Medical Hub) in Bang Lamung District near Pattaya, which is Thailand’s first medical hub to service medical tourists and Thailand’s aging population.

On top of the industrial estate mentioned above, there are also 21 promoted economic zones within existing industrial estates. In addition to the above-mentioned benefits, the region is also supported by acclaimed educational institutions, high speed motorways, as well as high-speed internet. Moreover, the Thai government has made considerable investments into the area’s infrastructure to further incentivize companies and projects to consider investing into the EEC. A few of these include:

  • A High-Speed Rail Link connecting the EEC to Bangkok;
  • Expansion of U-Tapao International Airport;
  • Expansion of the Inter-City Motorway that will connect the EEC to other parts of Thailand;
  • A Double-Track Railway that will pass through key industrial zones and logistic centers;
  • Expansion of Laem Chabang Port; and
  • Expansion of Ta Phut Industrial Port.

These incentives are further supplemented by the Eastern Economic Corridor Bill which was approved in 2017 to amend or suspend more than 100 regulations within the EEC to relax restrictions on foreign investment and ensure ease of doing business. The government has also started a THB 10 million competitive enhancement fund for the industries mentioned earlier.

Those interested in participating in the EEC will need to submit their application to the EEC One-Stop-Service, which will then review and approve the submission based on several aspects of Thai law including land allocation, machine registration, and commercial registration. To avoid complications in this regard, contact Silk Legal at [email protected] or using the contact form provided for guidance on how to approach the application process.


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