Trade & Investment Committee: What's Next For Investment in Thailand? An open discussion with the Secretary General of BOI

On February 24, to over 100 attendees, AMCHAM Thailand’s Trade & Investment Committee hosted its first discussion event of 2021 with Ms. Duangjai Asawachintachit, Secretary General of the Thailand Board of Investment (BOI), on the latest investment privileges / incentives and how the BOI can assist businesses during the recovery process. David Nardone, AMCHAM Governor and Group Executive of WHA Industrial, introduced guest speaker Ms. Duangjai Asawachintachit.

Ms. Duangjai began her presentation with a recap of how the BOI has converted from a location-orientation to an activity-oriented approach, covering both manufacturing and services. As a result, tax incentives are given at multiple levels for various industries ranging up to full tax exemptions on CIT for 10 years. The criteria used in designing the tax incentive schemes depends on the type/level of technology, row of activity in the supply chain and considerations in regard to the environment. On top of the standard tax incentives mentioned earlier, BOI has also proposed additional incentives such as merit-based (R&D, educational support, HR development), area-based (EEC, special economic zones, industrial estates), and agenda-based scheme.

Diving further into agenda-based schemes, firstly BOI has issued special measures for companies that are interested in relocating to Thailand by offering additional tax incentives to projects that have at least 1 billion Baht in investment within 12 months of getting the BOI certificate. With this, the company would receive the basic reduction as per their industries and an additional 50 per cent CIT deduction for another five years on top of it. Secondly, productivity enhancement incentives are proving to become an essential part of the BOI, where they have decided to grant tax incentives to investments that are aimed at enhancing the productivity of companies in Thailand with five sub-categories: machinery for energy conservation, production efficiency improvement through machinery upgrade, advanced engineering designs, implementation of international sustainability standards and digital technology adoption. Lastly are the incentives for grassroot economy development in which companies participate in helping village enterprises or local authorities. This measure has been expanded to cover activities such as water resources management systems, agricultural products, and community-based tourism.

Over the past few months, the BOI has thrown together several new activities that are eligible for their scheme, including electric vehicles, battery manufacturers, clinical research, senior hospitals, senior housing, international procurement offices and plant factories. Some of the newly proposed categories overlap with their previous schemes, but they have adjusted make it more attractive and dynamic to the changing situation.

Finally, the Secretary General covered other BOI supporting services that were not related to tax incentives but are equally important to the development of the Kingdom. She talked about how they hope to attract more talents to Thailand by making use of their smart visa system and are considering the revision of the criteria to expand into more categories and industries, as well as relaxing the educational qualifications for top executives.

She also touched briefly on the different types of quarantine facilities provided by the Thai government and whether it is possible for top executives to travel into Thailand without 14- days quarantine through limited quarantine, which the individual would still stay in an Alternative State Quarantine (ASQ) but has the ability to go out on a fixed route.

Ms. Duangjai finished off her presentation with the BOI’s plan for the near future to continue improving their implemented schemes on digital activities and technologies and BOI’s service improvement. The session ended with a Questions and Answers session, moderated by AMCHAM Executive Director, Heidi Gallant. AMCHAM members questioned the Secretary General on topics ranging from investment incentives around tourist destinations, the government’s view on promoting Thailand as a regional headquarter for FDI, inflow of businesses from China due to the Trump’s administration and the mentioned ‘limited quarantine’.