Thailand BOI has recently approved a new promotional incentive package to help small and medium enterprises (SMEs) increase capabilities. The Thai BOI also approved a new promotional incentive package to help existing SMEs enhance their machinery efficiency in order to boost their competitiveness. Thus, interested companies will have to apply for the incentives before 31 December 2014.
Under this new promotional incentive package, the privileges for SME capability enhancement projects will be offered to companies with more than 51% Thai shares, a minimum investment value of Baht 500,000 (not including cost of land and working capital) and net fixed assets (not including cost of land and working capital) of no more than Baht 200 million. Successful applicants will receive an eight-year corporate tax exemption and import duty exemption on new machinery.
The promotion is offered to SMEs in 39 business categories distributed into four groups, as follows:
- Value added products businesses: agriculture sector, covering 13 businesses ranging from plants to animal breeding, bio and organic fertilizer manufacturing, food processing and rubber manufacturing, etc.
- Business in main supporting industries that require high operation skills, including 16 types encompassing producers of machinery, vehicle parts, electronics, electronic appliances, plastic manufacturing and publications, etc.
- Creative businesses, of which 7 types are specified including fabrics, clothes, jewelry and accessories, furniture, software, product design, etc.
- Services and tourism, which fall into 3 types, and includes businesses like hotels, cultural arts centers, Thai motion pictures production and related supporting services, etc.
Moreover, the BOI also approved another promotion incentive to support SMEs to enhance and improve their machinery’s efficiency. In this measure, not only BOI-promoted SMEs can apply for the promotion but also non BOI-promoted ones, by presenting their plans for improvements of this kind, such as system upgrades to ensure machinery automation, etc. Thus, promoted SMEs regardless of location will be granted import duty exemptions on machinery, and a 3-year corporate income tax exemption, which is limited at 50% of the investment value (not including cost of land and working capital). The corporate income tax exemption will be derived from earning of existing promoted project. But the privileges and benefits cannot be used at the same time as those machinery improvement privileges offered by the Revenue Department.