The government has launched measures to boost Thailand’s economic growth through the development of the Eastern Economic Corridor or EEC. These measures will undoubtedly lead to major investments in infrastructure and utility projects.
It’s a misconception that the EEC development project targets foremost foreign or large investments. As a matter of fact, Thai small and medium-sized enterprises (SMEs) can as well benefit from the establishment of the EEC project. There are various potential SME- businesses that can support large-scale industries targeted by the country, such as manufacturing of industrial parts and components.
Currently, there are numerous agencies ready to help increasing SMEs’ competitiveness and production skills, in order to meet the market’s high demand on industrial parts and components. Relevant agencies are ready to promote technology development, innovation, and implementation of research and development for commercial use.
The key role of the Board of Investment or BOI is not limited to promoting investment in Thailand or Thai investment overseas but the BOI’s framework also covers the promotion and support of SMEs through investment promotion measures. The BOI’s conditions for SMEs have been eased e.g. the minimum investment capital has been set at 500,000 THB, which is significantly lower than the usual minimum investment capital requirement of 1 million THB for other promoted projects. This relaxed requirement of minimum investment capital for SMEs will give an opportunity for SMEs to easily apply for investment promotion incentives.
The newly announced measure will allow SMEs in over 300 business activities to enjoy up to 8 years corporate income tax exemption with corporate income tax exemption cap not exceeding 200 percent of the investment capital (excluding cost of land and working capital). If investments are made for the purpose of improving SMEs’ competitiveness, e.g. investments in research and development, innovation, advanced-technology training, products and packaging designs etc., the minimum amount of such investments will be reduced to half of the usual required investment amount. SMEs are greatly encouraged to improve their competitiveness and get the maximum benefit out of this measure.
In the case that SMEs invest in the 20 low-income provinces (including, Kalasin, Chaiyaphum, Nakhon Panom, Nan, Bueng Kan, Burirum, Prae, Mahasarakam, Mukdahan, Maehongson, Yasothon, Roi-Et, Sakon Nakorn, Sakaew, Sukhothai, Surin, Nongbualampu, Ubonratchathani and Amnat Charoen), additional incentives will be granted e.g. corporate income tax exemption for three years on top of the regular tax exemption period or a 50% reduction in corporate income tax for an additional five years after the tax holiday.
Moreover, domestically used machines worth up to 10 million THB are allowed in SMEs’ promoted projects.
BOI has branches in different parts of the country, such as in Chiang Mai, Phitsanulok, Nakhon Ratchasima, Khon Kaen, Chonburi, Songkhla and Surat Thani. BOI also organizes plenty of activities to widen the market opportunities for investors and connect the domestic and international value chain. BOI has been continuously organizing numerous events in Thailand and overseas, e.g. parts and components trading events, match-making events and industrial fairs etc. Moreover, BOI has been holding different types of seminars to promote investment promotion measures and to share knowledge with SMEs.
However, the concern for SMEs is principally their skill to manage and apply modern technology in production processes, in order to reduce costs and expand the market. The BOI has a great determination to be the main force to develop and improve the overall potential of the SMEs.
|SMEs’ measure under the BOI
|Measure to enhance SMEs’ competitiveness
(SMEs must have accumulated fixed assets or investment not exceeding 200 million THB (excluding cost of land and working capital))
1. Coverage over 300 business activities
2. Minimum investment capital only 500,000 THB (excluding cost of land and working capital)
3. Corporate income tax exemption up to 8 years
4. Corporate income tax exemption for activities in Group A with corporate income tax exemption cap not exceeding 200 percent of the investment capital
5. Domestically used machinery (with accumulated value up to 10 million THB) is allowed in promoted projects