Thailand’s Automotive Industry: Opportunities and Incentives
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Thailand offers great investment potential as a leading automotive production base in the Association of Southeast Asian Nations (ASEAN) – a fast developing region for automotive manufacturing. Over a period of 50 years, the country has developed from an assembler of auto components into a top automotive manufacturing and export hub.
With shipments bound for more than 100 countries, Thailand is the 13th largest automotive parts exporter and the sixth largest commercial vehicle manufacturer in the world, and the largest in ASEAN. By 2020, Thailand aims to manufacture over 3500000 units of vehicles to become one of the top performers in the global automotive market.
The country has an established presence of virtually all of the world’s leading automakers, assemblers and component manufacturers. Companies such as Toyota, Isuzu, Honda, Mitsubishi, Nissan, and BMW together account for a lion’s share of the approximately two million vehicles produced in the country each year. Most of these manufacturers and parts suppliers are located in the central provinces of Bangkok, Ayutthaya, Pathum Thani, Samutprakarn, Prachinburi, Chachoengsao, Chonburi, and Rayong, offering easy access into leading markets of ASEAN, China, and India.
Opportunities for Foreign Investors
Board of Investment’s (BOI) investment promotion scheme
One of the key factors that give a competitive edge to Thailand’s automotive industry is its supportive government policies. The Thai government offers substantial backing in the form of tax and non-tax incentives to encourage foreign investment in the industry. Some of the general benefits available to foreign investors include the following:
- Corporate Income Tax (CIT) exemption for up to eight years
- Import duty exemption on machinery
- Import duty exemption on raw materials used in manufacturing export products
- Permit to bring skilled workers and experts to work in investment promoted activities
- Permit to own land
- Permit to take out or remit money in foreign currency
There are additional benefits available to companies investing in the supercluster automotive zones in Pathum Thani, Ayutthaya, Nakhon Ratchasima, Prachin Buri, Chachoengsao, Chonburi, and Rayong. These include reduced CIT – 50% of the normal rate – for five years, in addition to the tax-exempt period of up to 8 years under the general BOI promotion scheme; possibility to extend to 10-15 year CIT exemption; personal income tax for specialists both Thai and Foreign; and possibility to get a permanent residence permit.
To read the full article, complete with infographics and more information on Thailand’s Automotive potential, please click the link below.