How far are Special Economic Zones suitable for starting a company in Thailand?
In 2014, in order to improve trade and investment and improve the quality of life, Thai government had launched a pilot project to establish six Special Economic Zones in 5 provinces; Tak, Mukdahan, Sa Kaeo, Songkhla and Trat. Later, 5 more provinces were added to the list, namely Chiang Rai, Nhong Khai, Nakhon Phanom, Kanchanaburi and Narathiwat.
These Special Economic Zones are mostly located near the borders. Hence, the proximity to the neighbouring countries is advantageous for the companies who want to start businesses involving the import of goods including raw materials from the neighbouring countries. Distribution centers and labour intensive industries are also interested in investing in these areas. Special Economic Zones are also beneficial to the companies that require border trading. Close propinquity to the borders and neighbouring countries can also be advantageous for tourism supporting businesses.
Thai government had special plans for establishing these Special Economic Zones. They already had targeted certain industries in their minds for these zones such as light industries, automotive, electronics, agriculture, fisheries, medical equipment, pharmaceuticals, logistics, industrial estate and tourism. In fact, companies that are part of any of the above-mentioned industries are eligible for maximum incentives from the Board of Investment. These companies will also be eligible for some more privileges.
- These companies will be free from eight-year corporate tax.
- They will enjoy a double deduction from electricity, power supplies, and transportation bills.
- They will get an additional 50 percent reduction in corporate income tax for five years.
- In case of investment costs on the installation of the facilities used, these companies will enjoy a 25 percent discount.
- They will also be free of import duty on machinery.
- They also do not have to pay import duty on raw materials used for production.
- These companies also have the liberty to own the land.
- They are also allowed to bring in experts and technical staff along with their family members to help the industries grow better.
- In fact, they are also allowed to employ unskilled foreign workers but as per the conditions laid by the Board of Investment.
The Thai Government is making serious and successful attempts to develop the infrastructure in the Special Economic Zones. By introducing policies and tools and supporting infrastructures, the Social Economic Zones can contribute to bringing significant economic benefits. This, as a result, will create a strong ground for other businesses to establish their firms in these areas. The government is taking necessary measures to establish basic infrastructure as well as supporting infrastructure in these areas for future industries to develop.
The Thai government also adopted certain policies to attract more investors. They are undertaking policies for allocating lands for rent. They are also considering introducing One Stop Service Center (OSS) to facilitate investors in these zones.Tags : Special Economic Zone, starting company thailand, Thailand SEZ,