The Eastern Economic Corridor (EEC), covering the Rayong, Chonburi, and Chachoengsao provinces, is part of the Thai government's Area-Based Development Policy and is intended to implement the Thailand 4.0 policy. The goal is to make the EEC ASEAN's leading centre for trade, investment, and logistics. To achieve this, the Board of Investment (BOI), established under the Investment Promotion Act (1977), encourages both foreign and domestic investment through tax and non-tax incentives. The EEC Bill was approved by the NLA on February 14 2018 and will soon be enacted as an Act.
Tax Incentive Packages
The BOI, seeking to leverage the significant investment already present in the EEC, ($6.345 billion in 2016 and $9.449 billion in 2017), announced three new incentive packages that came into force on 1 January 2018. The incentive packages are in addition to the regular incentives currently available. The application period for the incentive packages is 1 January 2018 – 30 December 2018.
Special Industry Promotion Zones
Investments in the Eastern Airport City (U-Tapao Airport), the Eastern Economic Corridor of Innovation (EECi) and the Digital Park Thailand (EECd) received two additional incentives. First, investments are exempt from corporate income tax (CIT) for two additional years. When combined with other available activity-based incentives, the exemption can extend to eight years or longer. Second, investments will receive a 50% CIT reduction lasting five years when their applicable exemption expires.
Target Industry Promotion Zones
Investments whose aim is to support specific target industries within the EEC will receive a five year 50% CIT reduction after their CIT exemption expires.
Industrial Estates or BOI-promoted Industrial Zones
Investments in industrial estates and promoted industrial zones are eligible for a three year 50% CIT reduction after their CIT exemption expires.
Market for Alternative Investment
The BOI encourages small and medium-sized enterprises (SMEs) to list themselves on the Market for Alternative Investment (MIA). Listing on the exchange increases SMEs' access to funds, which opens access to international markets. For example, the BOI permits a CIT exemption of 200% of a projects total investment for MIA listed companies. This measure is effective from 1 January 2018 – December 30 2018. Conclusion
These tax incentives, coupled with non-tax incentives such as a five year business visa, 99-year land lease (50+49) and a fast track environmental impact assessment demonstrate the Thai government is taking the necessary steps to make the EEC the premier investment opportunity among ASEAN nations.
The World Bank in 2017 ranked Thailand in 26th place among 190 economies in ease of doing business, up from 48th place in 2016. It recognized Thailand as one of the top 10 economies that improved most in the ease of doing business in the last year worldwide.
|Albert T. Chandler||Benjamin Folarin|