Thailand Issues New Incentives for EEC
- In December 2019, Thailand’s Board of Investment (BOI) issued a new incentive package to attract more investments into the Eastern Economic Corridor (EEC).
- Under this package, businesses are eligible for tax reductions and holidays if they engage in human resource development activities.
- The incentives also now cover more business categories than previously.
In late December 2019, Thailand’s Board of Investment (BOI), the government agency responsible for foreign investment promotion, issued new incentives to attract investments in the country’s Eastern Economic Corridor (EEC).
The EEC is a special development zone (SEZ) established in 2017 and straddles three eastern provinces of Thailand – Chonburi, Rayong, and Chachoengsao – spanning a total of 13,285 square kilometers. The government aims to complete the EEC by 2021 and turn it into a hub for technological manufacturing and services.This latest incentive package will include tax reductions and holidays as well as an expansion on the type of activities that will be eligible for these incentives. The BOI is accepting applications from January 2, 2020, to the last working day of 2021.
Foreign investors should seek the help of local advisors to seek a base understanding of the schemes available.
There are tax incentives in the form of three years of 50 percent corporate income tax (CIT) reduction and a two-year tax holiday for corporations that are engaged in targeted activities in the EEC.
These specific activities must involve human resource development programs, such as work-integrated learning activities and dual and cooperative education programs.
Additionally, two years of 50 percent CIT reduction or a one-year tax holiday is applicable for investments in the four promoted zones (EECi, EECd, EECa, and EEDmd) in Thailand. These zones aim to facilitate the development of targeted industries, ranging from healthcare to research and development to transport.
List of eligible business activities
The business activities eligible for these additional incentives now cover all business categories that are entitled to five years of tax holidays. The full list can be found on the BOI’s investment booklet.
Other available incentives
Foreign investors should be aware of other incentives offered by the Thai government.In September 2019, the Thailand Plus stimulus package was issued, which covers seven key points – offering tax incentives, deductions, as well as reforms designed to improve the ease of doing business and attract businesses affected by the US-China trade war.
The package consists of:
- Five years of 50 percent CIT reductions, if investors commit to at least Thai Bhat 1 billion (US$32 million), provided the investment is realized by the end of 2021. This is in addition to the 13 years and 50 percent CIT reduction already in place;
- CIT deductions of 200 percent for training expenses or employing personnel in the fields of science, technology, engineering, and mathematics (STEM);
- CIT reduction of 200 percent for businesses looking to engage in automation systems and robotics;
- Amendment to the Foreign Business Act to be better integrated with regulations issued by the BOI;
- The government to establish an investment and steering committee, which will be chaired by the Prime Minister. This committee will help facilitate the larger foreign investments into the country;
- Expansion of the country’s free trade network; and
- The development of special economic zones for companies from individual countries, namely South Korea, Japan, China, and the US.