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Investment privileges for industries in special economic zones

The Board of Investment announced last week it will grant a full range of privileges for businesses in 13 industries if they locate in any of five special economic zones (SEZs) located along Thailand’s borders with neighboring countries. 
 
Establishing and granting privileges for the zones are designed to support both the spread of development and economic growth to border areas, and provide opportunities for legal work to migrants from neighboring countries who might otherwise fall into the hands of human traffickers.
 
The Board of Investment (BoI) also reported that it has approved over 700 investment projects throughout the Kingdom worth more than US$3.6 billion during the first three months of this year.  The BoI is predicting that it will grant approvals for over 1,600 new investments in 2015 at a value of over $43 billion.
 
The five SEZs are located in the provinces of Tak, Sa Kaew, Trat, Mukdahan and Songkhla. Tak borders Myanmar, Mukdahan borders the Lao People’s Democratic Republic, Sa Kaew and Trat border Cambodia and Songkhla borders Malaysia.  Most migrants and trafficking victims are from Myanmar and Cambodia, with fewer, but still significant numbers from Laos.
 
The BoI is encouraging the administrations in each of the five provinces to choose which industries among the 13 they would prefer to host in order to become centers for those particular industries.  Industries tend to operate more efficiently and make better use of infrastructure and logistics when they are clustered together.
 
The 13 industries are: agriculture, fishery and related businesses; ceramics; garments, textiles and leather; home furniture; jewelry and fashion accessories; medical tools; automobiles, engines and parts; electrical appliances and electronics; plastics; medical products; logistics; industrial estates; and activities that support tourism.
 
The 13 target industries, which cover 61 sub-industries, will be eligible to receive a maximum of an eight-year corporate-income-tax exemption.  In the following five years, they can receive a 50-per-cent income-tax reduction.  Other industries that are in the BoI’s privilege list, but are not among the 13 target industries, will receive additional income-tax exemptions for three years.
 
The Finance Ministry is also looking to halve the corporate income tax from the norm of 20 percent for businesses that invest in SEZs but are not on the BoI privilege list.  This proposal has been sent to the Cabinet for approval.
 
See the original article at Thailand Focus

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