Incentives lure foreign firms
Tax incentives are attracting foreign businesses, with the government hoping more companies will choose Thailand to set up their headquarters over regional rivals such as Singapore.
The tax measures, active until 2021, reduce or waive elements of corporate and personal income taxes and should dispel the idea that the country's tax system restricts foreign investment, said government spokesman Maj Gen Sansern Kaewkamnerd.
Foreign companies that establish International Headquarters (IHQ) or International Trading Centres (ITC) here will be eligible, he said.
IHQs run managerial, technical services and financial management, while ITCs primarily buy and sell goods, according to the Board of Investment.
Singapore and Hong Kong have long been seen as ideal locations for setting up IHQs and ITCs, but with the new tax incentives, companies will consider Thailand as an alternative, Maj Gen Sansern said.
“The prime minister is monitoring these tax measures closely,” Maj Gen Sansern said, adding that the government's intention is to “build a sustainable economy”.
So far the government has granted tax incentives to 17 companies under the IHQ programme and another two under the ITC category, he added. Their privileges include corporate tax exemption on revenue from financial activities and foreign trade and personal income tax reduction of 15% for foreign employees in IHQs and ITCs for a period of 15 years, he said.