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With investor confidence left in tatters by last year's political upheavals, the BOI is going on the offensive to tempt international capital back to Thailand
In the past, political upheavals in Thailand have in general caused only a short-term impact on the economy.
Thailand's current political situation however coincides with a global economic slowdown, proposing a far greater challenge than in the past to attract foreign investors to Thailand.
The Board of Investment (BOI), the government agency responsible for providing incentives to sitmulate investment in Thailand, has announced that its top priorties for 2009 will include new investment promotion measures, overseas road shows and the establishment of more oversea offices.
The Department of Export Promotion, the Office of th BOI, and the Tourism Authority of Thailand are planning to arrange road shows to the Middle East and Asia to restore confidence in the Thai economy and promote Thailand's tourism industry. The Prime Minister will be invited to lead the road shows, to be organized from January to April 2009
Investment Promotion
Thailand's Investment Promotion Act, overseen by the BOI, provides investment incentives in the form of guarantees, protection measures, tax incentives and permissions.
Foreign investors typically establish a Thai company if they wish to seek BOI promotion for their business. Companies that receive BOI promotion may obtain special taxation incentives for a number of years from the commencement of operations.
Depending on a project's characteristics, eligible projects may obtain tax incentives that include the following:
1. Exemption or reduction of import duties on imported machinery
2. Exemption or reduction of import duties on imported raw materials and components.
3. Exemption from corporate income tax for three to eight years with permission to carry forward losses and deduct them as expenses for up to five years after exxpiry of the tax exemption period.
4. Exclusion from taxable income of dividends received from promoted enterprises during the corporate income tax holiday.
5. 50 percent reduction of corporate income tax for five years.
6. Double deduction of transportation, electricity and water supply costs.
7. 25 percent deduction from net profit for facility installation and construction costs in addition to normal depreciation.
For foreign investors, some of the attractive non-tax incentives include:
1. The right to own land for the project which might otherwise be prevented by the foreign ownership restrictions under Land Code.
2. The ability to operate their business as a wholly foreign owned enterprise, which might otherwise be prevented by laws that prohibit foreigners from participating in specified business ativities.
3. Permission to employ foreigners and access to the One Stop Service Centre for Visas and Work Permits. |
