The government has pledged to amend laws and regulations deemed obstacles to foreign companies in a bid to upgrade Thailand as a regional centre for trade and investment.
Indian ambassador H.E. Harsh Vardhan Shringla (left) pays a courtesy call on Deputy Prime Minister MR Pridiyathorn Devakula yesterday. CHANUT KATANYU
Many foreign companies have established production bases in Thailand, but just a handful have set up regional operating headquarters (ROH) here, according to Deputy Prime Minister MR Pridiyathorn Devakula, who oversees economic affairs.
"The government is accelerating amending laws and regulations as well as creating packages to be on par with those of Hong Kong and Singapore," he said.
The new packages will include not only tax perks but also infrastructure and other measures that facilitate visa and work permit procedures.
The Board of Investment (BoI) and Finance Ministry have been tasked with studying amendments to relevant laws and regulations and coming up with more measures and incentives for foreign firms setting up ROH in Thailand.
The BoI has been instructed to conduct an in-depth study on specific industries that the government should promote as special categories, especially for the farm sector.
MR Pridiyathorn said Thailand had the potential to become a regional trade and investment hub if better measures are in place.
Under the current ROH scheme, companies are entitled to privileges including corporate income tax at a rate of 10% of net profit on income derived from services provided to the ROH’s foreign branches or associated enterprises.
Corporate income tax is also charged at 10% of net profit from royalties derived from the ROH's foreign branches or associated enterprises for research and development done by the ROH in Thailand, or on net profit and interest received from the ROH’s foreign branches or associated enterprises for loans granted, provided such loans come from other sources and are extended to the ROH’s branches or associated enterprises.
An ROH is also eligible for tax exemption for dividends received from associated enterprises and for dividends paid out of its concessionary profits to shareholders without any business in Thailand.
Since Thailand is the production base for many export-orientated industries, MR Pridiyathorn said, the BoI should play a more active role supporting overseas investment to expand the market of these industries.