The government has established an ad hoc committee and pledged to readjust investment privileges, existing laws, regulations and work permits to facilitate and attract investment, especially in advanced technology.
Deputy Prime Minister Supattanapong Punmeechaow said the committee, headed by his personal adviser, ML Chayotid Kridakorn, the former senior country officer and managing director for JP Morgan Thailand, will be tasked with working on new investment privilege measures, aiming particularly to lure regional operating headquarters (ROHs) and 12 targeted industries.
The new packages should include not only income tax perks, but also infrastructure and other measures that facilitate visa and work permit procedures, he said.
"Existing personal and corporate income tax reduction may not be attractive enough to entice foreign companies to establish ROHs in Thailand," said Mr Supattanapong.
"Incentives should include tools to make them more competitive and the privileges offered to ROHs should make Thailand more attractive than Hong Kong, Singapore and Malaysia."
The government aims to raise investment applications topping 400 billion baht this year.
He said the new privileges should be finalised within 60 days and must be proposed to the prime minister for consideration.
Under the scheme for ROHs, companies are entitled to privileges including corporate income tax at a rate of 10% of net profit on income derived from services provided to a ROH's foreign branches or associated enterprises.
Corporate income tax is also 10% of net profit from royalties derived from the ROH's foreign branches or associated enterprises for R&D carried out 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 the loans come from other sources and are extended to the ROH's branches or associated enterprises.
An ROH is also eligible for tax exemptions for dividends received from associated enterprises and for dividends paid out of its concessionary profits to shareholders that do not have businesses in Thailand.
Duangjai Asawachintachit, secretary-general of the Board of Investment (BoI), said the BoI is scheduled to hold a meeting next Wednesday to discuss the investment target for 2021 and report 2020 results.
In 2019, the value of total investment applications filed through the BoI stood at 756 billion baht across 1,624 projects.