BOI sets special strategy to boost auto-capital markets

In order to stimulate investment in the capital market, the BOI board also agreed companies with investment privileges would be completely exempt from corporate income tax regardless of the amount of profit. The exemption period will last as long as the period of investment incentives granted by the investment-promoting agency. To be eligible, applications must be submitted by 2012.

At present, listed companies on the Stock Exchange of Thailand (SET) are entitled to a 25-per-cent corporate income tax rate for an initial net profit of Bt300 million.

Secretary-general Atchaka Sibunruang Brimble said this would help strengthen and increase the market value of the SET and Market for Alternative Investment.

"We expect to lure giant carmakers to move their production base to Thailand and stir up stagnant automotive investment. We also expect the listing-oriented measure to persuade foreign investors to invest more in the country's capital market and support the fund mobilisation for expanding their investment in the future, too," she said.

Auto-industry promotion will focus on types of vehicles that have never been manufactured in Thailand. To win the incentives, the project must produce at least 100,000 units per year within the first five years of operations.

The manufacturer must also invest in a new assembly line. The investment, excluding land cost and circulated capital, must be more than Bt10 billion. The vehicles must use new technology such as hybrid electric vehicles or alternative-fuel vehicles. Applicants must submit an investment plan by the end of next year.

At yesterday's meeting, the BOI also revised its criteria for promoting the construction of small houses, with a selling price of not more than Bt1 million per unit. It previously granted incentives for housing projects in which the selling price per unit was not more than Bt600,000.

The measure was approved because of rising construction costs and higher demand for low- and medium-priced homes.