There have been several recent legislative developments designed to facilitate establishing and doing business, and taking security interests in Thailand.
Signing of the 20th constitution
On April 6 2017 HM the King signed the 20th constitution, setting in motion a process for the next general election, which is expected late next year.
Investment Promotion Act
The Investment Promotion Act was amended effective January 25 2017, prescribing 10 additional incentives to certain categories of promoted companies: advanced technology and innovation and research and development. This is in addition to the seven-year investment promotion strategy (2015 to 2021) announced on December 3 2014, which introduced new incentives for investments both within Thailand and overseas. There have been recent notifications regarding the promotion of investment in Thailand 4.0 and the Eastern Economic Corridor (EEC).
Thailand's 4.0 policy
Thailand's 4.0 policy is a government development plan following earlier economic models: Thailand 1.0 (focused on the agricultural sector), Thailand 2.0 (focused on the benefits of cheap labour/domestic production), and Thailand 3.0 (focused on complex industries, attracting foreign investment and Thailand as a production hub for exports). These models enhanced Thailand's economy, but also resulted in challenges: coping with the effects of the 'middle income trap,' income inequality, and an increase in imbalanced development. The 4.0 policy aims to overcome these challenges by: 1) transforming Thailand into an innovation-driven economy; and, 2) achieving upper-income status, supported by a stronger and more balanced economic foundation. Thailand 4.0 focuses on: 1) upgrading five existing industries: agriculture and food, tourism, automotives, electrical and electronics, petrochemicals; and, 2) developing five other industries: automation and robotics, aerospace, digital, bio-energy and bio-chemicals, and medical and healthcare.
Eastern Economic Corridor (under the Eastern Special Economic Zone Act)
The EEC is a flagship government policy for driving growth and supporting Thailand's economy. It aims to attract more foreign investors to Thailand, and accommodate 10 targeted industries. The EEC spans 30,000 rai (4,800 hectares) in Chon Buri, Rayong and Chachoengsao provinces. The EEC, which is still pending full government endorsement, can be characterised as follows:
- a major industrial area, with a strong focus on industries where Thailand is a leading global player: the petrochemical, automotive and electronics sectors;
- a region offering modern and efficient infrastructures, including deep sea ports, an airport, rail systems, highways, and industrial estates;
- a leading location for tourism; and,
- a provider of benefits from an incentive promotion package to enhance the existing Board of Investment (BoI) privileges.
Competitive Enhancement Act
This new law under the BoI's responsibility will grant additional incentives to projects in target industries. These incentives include company income tax exemption for 15 years, and the possibility of obtaining grants or subsidies from a new government fund.
|Albert T Chandler|
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