The economic cabinet on Friday approved the Thailand Plus incentive package to woo foreign firms looking to relocate production amid the snowballing Sino-US trade war.
The package covers tax incentives, special investment zones for individual countries and plans to change the foreign business law to facilitate foreign investment.
Kobsak Pootrakool, deputy secretary-general to Prime Minister Prayut Chan-o-cha for political affairs, said the package would go before the cabinet for final approval at a weekly meeting next Tuesday.
“The new investment stimulus package will hone our incentive advantage,” said Mr Kobsak. “Under the new package, Thailand can compete with other countries in Asia for foreign investment, especially to attract advanced technology firms who want to move production to Thailand.”
He said the next economic ministers’ meeting is expected to consider measures to stimulate exports and tourism.
Duangjai Asawachintachit, secretary-general of the Board of Investment (BoI), said projects that have investment applications submitted to the BoI by 2020 can enjoy additional privileges with a 50% reduction in corporate income tax for five years.
Vietnam's standard corporate tax rate is 20%, but targeted firms will be offered a 10% tax rate for 15 years, a tax exemption for four years and a 50% tax reduction for nine years.
The BoI usually offers a maximum exemption from corporate income tax for eight years. The government offers firms in the Eastern Economic Corridor an exemption of up to 13 years and a 50% tax reduction for up to five years. The current corporate income tax rate is 20%.
“About 100 categories of businesses will be entitled to the new investment privileges no matter where they establish their factories in the country,” she said. “The only condition is investment projects are required to have real investment value of 1 billion baht by 2021.”
Ms Duangjai said the BoI would team up with related units to conduct proactive marketing and roadshows in countries, focusing on China, Japan, Taiwan and South Korea.
"Thailand's economic development policy is similar to South Korea's New Southern Policy, China's Belt and Road Initiative and India's Look East Policy. Thailand has also a geographic advantage to link with Acmecs (Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy) scheme and Cambodia, Laos, Myanmar and Vietnam," she said.