Eight-year tax break for software investors

Government promotion packages are among the major considerations for investors when looking for a new business location, and BOI secretary-general

Atchaka Sibunruang Brimble acknowledges that software is playing an important role in Thailand as a strategic industry.

To attract more investment to the industry, the BOI has amended the conditions for promotion of software development activities.

Atchaka said that in order to clarify the types of activity eligible for promotional support, the BOI had focused on measures that it believed would stimulate innovation. The specific activities and conditions for promotion fall under three main software categories: enterprise software, digital content and embedded software.

Successful projects will be classified as a priority activity and will receive exemption from machinery-import duties and corporate-income tax, with no upper limit, for a period of eight years.

The maximum privileges apply regardless of the location within Thailand for software investment.

However, software-production processes must be performed according to criteria set by the Software Industry Promotion Agency (Sipa), and projects with total investment of more than Bt10 million (excluding the cost of land and working capital) must obtain a standard certificate from Sipa, or obtain Capability Maturity Model (CMM) certification or another equivalent certification approved by Sipa.

Atchaka said foreign software investors would also be illegible for the BoI's support services, including its One-Stop Service Centre, which was designed to provide visas and work permits and to facilitate the processing of immigration documents.

The newly-approved measures target investors in motion-picture production and support services or multimedia services. As well as feature-film production, these include developers of animation, commercials and documentaries, provided that the scope of business and the machinery or equipment used in each operation complies with criteria prescribed by the BoI.

Industry observers say the incentive package offered by the BoI, coupled with the facilities available to software businesses, should make Thailand an attractive destination for overseas investors and software-business settlement.