Businesses in "superclusters" will enjoy an 8-year tax holiday and another five years of 50% taxable income deductions.
The cabinet on Tuesday approved the Industry Ministry's proposal on incentives for clusters, a type of special economic zones.
The superclusters involve industries using high technology such as automobiles and parts; electrical appliances; telecom equipment, and petrochemicals and environmentally friendly chemical products.
They are in Ayutthaya, Pathum Thani, Chon Buri, Rayong, Chachoengsao, Prachin Buri, Nakhon Ratchasima Chiang Mai and Phuket.
They also include "industries of the future" such as digital, which will enjoy corporate income tax exemption for as long as 10-15 years.
Other incentives for supercluster businesses are machinery import tax exemption, personal income tax break for Thai and international specialists working in the areas. International experts will also get permanent residence.
As well, foreigners will be allowed to own land for promoted projects.
Clusters are formed in areas where there is already a concentration of a certain industry. They will be linked with education institutions or research centres, raw materials sources, labour pools and SMEs in the same areas, said Industry Minister Atchaka Sibunruang after the cabinet meeting.
The government has the policy of developing two types of special economic zones. The first involves SEZs in border provinces for labour-intensive industries or those using raw materials from neighbouring countries.
The other type is inland clusters, which use higher technology and less manual labour or calls for research and development (R&D).
Investment promotion privileges for clusters are categorised into three groups.
Apart from superclusters, they are "target clusters" (farm processing, textiles and garments) and support operations in each cluster (knowledge base, logistics and upstream products).
For target clusters, tax exemption will be for 3-8 years and an additional five years of 50% taxable income deductions.
Like superclusters, they also enjoy a machinery import duty waiver, permanent residence for experts and land ownership.
The condition for all types of clusters is that all projects eligible for the benefits will have to cooperate with education institutions, research centres or the "Center of Excellence" of each cluster.
Project owners must apply for the privileges by the end of 2016 and begin operation by 2017.