The Thailand Board of Investment (BOI) has recently approved its “Seven-Year Investment Strategy” (from 2015 to 2021), with a focus on promoting investments that create value for Thailand and those that have a positive impact on society and the environment as well as for Thai investments overseas to enhance the country’s competitiveness and overcome the so-called middle-income trap.
The new investment promotion policy will give priority to investments that are beneficial to and supportive of the country’s overall development strategy. These industries include high-tech and creative industries, service industries that support the development of a digital economy, and industries that utilize local resources. The BOI zoning system will be abolished under the new policy, although investment projects located in 20 lower-income provinces, as well as projects in industrial estates, will be offered special incentives.
The list of eligible activities still includes most activities which are significant to the supply chain and have the potential to be strengthened. In addition, the number of such activities has not been significantly reduced as there are still more than 200. Corporate income tax privileges will be granted to 180 of them and the rest will receive non-tax incentives along with the exemption on import duties on machinery and raw materials used for export products. The list of eligible activities will be announced on the BOI website.
Eligible business activities are divided into two groups: Group A includes those that are important to support national economic restructuring whereas BOI offers corporate income tax exemption to encourage more investment and to enhance the country’s competitiveness. Group B consists of activities that do not employ high technology, but still are important to the value chain whereas BOI will offer non-tax incentives, as well as tax privileges related to machinery and raw materials.
The new policy will be effective for applications submitted from January 1, 2015.