2017年 03月 18日

‘Thailand 4.0 Means Opportunity Thailand’: Government taking steps to attract investments in targeted industries

The government of Thailand is taking a number of measures to shift the country from a production-based to a service-based economy, moving from producing commodities to innovative products, emphasising on promoting technology, creativity, and innovation in the industries under focus. Moving to Thailand 4.0 could help the country escape the middle-income trap and growing disparities.

National Competitive Enhancement Act for Targeted Industries

The first one is exemption from corporate income tax for qualifying firms for a maximum period of up to 15 years. The second category of incentives is non-tax benefits that already exist under Thailand’s Investment Promotion Act (IPA), including exemption of import duties for imported machinery, and visas and permits allowing foreign experts and craftsmen to work in the country. However, tax exemption and deductibles under the IPA are excluded as the Act provides separate provisions for tax waiver.

A third type of incentive is provided through subsidies from the Fund for Enhancement of Competitiveness for Targeted Industries, newly created by the Act, which has a seed money of THB10 billion (~USD 286 million) for investment in research and development or innovation and development of expertise for targeted industries.

A Board of Investment (BOI) document lists the 10 targeted industries under Thailand 4.0. They can be divided into two segments: 1) First S-curve or five existing industrial sectors (which can be developed by adding value through advanced technologies (Next-Generation Automotive, Smart Electronics, High-Income Tourism and Medical Tourism, Efficient Agriculture and Biotechnology and Food Innovation) and 2) New S-curve or five sectors which can serve as growth engines to accelerate Thailand’s future growth (Automation and Robotics, Aerospace, Bio-Energy and Bio-chemicals, Digital and Medical and Healthcare).

The BOI, which is the principal government agency for encouraging investment, has been focusing on attracting foreign investment, particularly in the high-tech sector. The total new investment value under the BOI stood at THB 144 billion (USD 4.05 billion) up to August 2016 in the 10 targeted industries under Thailand 4.0, accounting for 48% of total investment.