Thailand’s Special Economic Zones – Opportunities for Investment
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Thailand introduced the policy of Special Economic Zone (SEZ) development in 2015, as an integral part of its expansive economic plan to promote trade and investment opportunities in border areas – connecting each zone with the respective bordering country in terms of trade, economy, and investment. Closeness to border areas enables businesses to benefit from low-cost, low-skilled cross-border migrant workers, as well as take advantage of the proximity to natural resources. In addition, investors and businesses can take advantage of the existing supply chain and new transport infrastructure to gain easy access to a growing market in Asia.
The government provides a full range of incentives for businesses operating in 13 industries located in any of the currently operational five SEZs. Each of the SEZs has its own target industries which are decided and categorized by the area where the SEZ is situated. The 13 industries are agriculture, fishery and related businesses; ceramics; garments, textiles, and leather; home furniture; jewellery and fashion accessories; medical equipment; automobiles, engines, and parts; electrical appliances and electronics; plastics; medical products; logistics; industrial estates; and activities that support tourism.
Why Invest in Thailand?
Nestled in the heart of Asia, Thailand provides investors with easy access to over 3.5 billion consumers across Southeast Asia and the upper Mekong Basin, a region with great economic potential.
The country is strategically located between the developed ASEAN economies of Malaysia, Singapore and Brunei as well as the emerging economies of Indonesia, Philippines, Cambodia, Laos, Myanmar, and Vietnam, and enjoys close economic ties with China, India, Japan as well as Australia. Not to mention that Thailand’s own domestic market accounts for about 66 million consumers.
Furthermore, the country has a resilient economy, well-developed infrastructure, skilled workforce in a number of sectors, pro-investment policies, and strong export industries.
Incentives available in Thailand’s SEZs
Businesses operating in Thailand’s SEZs enjoy a number of tax and non-tax incentives. Those running businesses in the 13 target industries can avail the following incentives from the Board of Investment (BOI) of Thailand:
- Eight-year corporate income tax (CIT) exemption;
- An additional 50 percent reduction in CIT for five years;
- Exemption from import duty on raw materials and inputs used in the production of products;
- Reduced or waived import duty on machinery;
- Double deductions for expenses related to transportation, electricity and power supplies for 10 years;
- A 25 percent deduction of investment costs on the installation or construction of facilities used, beginning from the date in which revenue is generated;
- Permission to bring foreign experts and technical staff together with their spouses and dependents into Thailand; and
- Permission to employ foreign unskilled workers in the promoted project, according to the conditions prescribed by BOI.
In addition to the above incentives, companies in SEZs can be wholly foreign-owned without the requirement to secure a foreign business license, thus, minimizing costs and timelines required for companies to carry out business activities.
To read the full article, please click the link below. Want to learn more about how to export to Thailand? Contact our ASEAN Export Specialist.