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THAILAND SPECIAL Economic Zones 1 2 THAILAND SPECIAL Economic Zones Table of Contents What Are Special Economic Zones? 1 THAILAND SPECIAL Economic Zones 1 2 THAILAND SPECIAL Economic Zones Table of Contents What Are Special Economic Zones? 1 Special Economic Zones: Upgrading the Potential of the Border Economy 2 Investment Incentives and Privileges in Special Economic Zones 3 Incentives and Privileges Obtained from the Board of Investment for 3 Targeted Businesses Located in the Special Economic Zones Incentives and Privileges from Measures of the Revenue Department; 4 Businesses That Are Not Promoted by the BOI Monetary Measures 5 Incentives and Privileges from the Customs Department 5 Measures Concerning Privileges of the Industrial Estate Authority of Thailand 5 The Rates of Work Fees Charged on Foreigners, Other Than Those Who 6 Work as Household Helpers or as Labourers The Rates of Land Rent in the Special Economic Zones 6 Types of Businesses Which Are Promoted in Terms of Investment 7 Businesses That Are Supported in Their Investment in the Provinces 8 Located in the Special Economic Zones, Phase 1 Businesses That Are Supported in Their Investment in the Provinces 9 Located in the Special Economic Zones, Phase 2 The One Stop Service Centre: OSS 10 Infrastructure and Customs Checkpoints Urgent Development Plan 2015-2016 11 Registration for Establishing Businesses in Thailand 12 Company Limited 12 Ordinary Partnership and Limited Partnership 15 Public Company Limited 17 Establishing a Factory 18 List of Documents to Be Consideration in Granting Permission to Business Operations 18 12 Types of Factories That Have to Undergo Risk Assessment 22 Thai Financial System Structure 23 Number and Asset Size of Financial Institutions as of year end 2014 Gross NPLS and Net NPLS outstanding loan classified 23 by financial Institutions Group 24 International Reserves 24 Rates of Exchange of Commercial Banks 25 Operating Expenses 26 Electricity Rates 26 Piped-Water Rates in Areas across the Country 27 Payment Rates 28 THAILAND SPECIAL Economic Zones 3 Work Units That Support the Investment in the Special Economic Zones 29 In the Capital 29 In Provinces 30 The Special Economic Zones, Phase 1 31 Tak 32 Sa Kaeo 36 Mukdahan 40 Songkhla 44 Trat 48 The Special Economic Zones, Phase 2 51 Nong Khai 52 Chiang Rai 56 Nakhon Phanom 62 Kanchanaburi 66 Narathiwat 70 Annex 1 List of the 13 Targeted Business Groups in the Special Economic Zones 73 Section 1 Agricultural and Fishery Industry Including Related Businesses 73 Section 2 Ceramic Products Manufacture 74 Section 3 A Light Industry, Textile, Clothing and Leather Industry 74 Section 4 Household Furniture Manufacture 75 Section 5 Jewellery and Accessories Industry 75 Section 6 Medical Equipment Manufacture 75 Section 7 Motor Vehicles, Machinery and Parts Industry 75 Section 8 Electrical Appliances and Electronics Industry 75 Section 9 Chemical Substances and Plastics 76 Section 10 Medicine Manufacture 77 Section 11 Logistics Business 77 Section 12 Industrial Estates or Zones 77 Section 13 Activities That Promote and Support Tourism 78 Annex 2 List of the 10 Targeted Business Groups in the Special Economic Zones 80 Section 1 Agriculture and Agricultural Products 80 Section 2 Minerals, Ceramics and Basic Metals 80 Section 4 Metal Products, Machinery and Transport Equipment 80 Section 6 Chemical Substances, Plastics and Paper 81 Section 7 Service and Infrastructure Businesses 82 4 THAILAND SPECIAL Economic Zones What are Special Economic Zones With the Thai Government’s serious intent of implementing its development policies to upgrade people’s quality of life, to disseminate progress to regional? areas as well as to be well- prepared for Thailand’s becoming part of the ASEAN Community on December 31st, 2015, “the Special Economic Zone Policy” was established as the Government’s project for the development of important border areas. The aim was to elevate the country’s regional economic development, together with developing connections between Thailand and its neighbouring countries and the Region under the vision of “A Single Market and Production Base of ASEAN”. “Special Economic Zones” are specified by the Policy Committee for Special Economic Zones (PCSEZ) as zones which are to be supported with investment because they will be granted with special privileges for business enterprises promoted by the Government. Investors will be facilitated in their investments via contact with the One Stop Service Centre (OSS) and they will be offered tax incentives, financial measures, management of the daily commute of foreign labour to work and the allocation of rented areas. Also, the Government will develop the infrastructure to cater for such investment. THAILAND SPECIAL Economic Zones 1 Special Economic Zones: Upgrading the Potential of the Border Economy Along the Thai border, which covers a distance of more than 5,656 kilometres, there are 93 international checkpoints and a number of natural passes that are used as a way of connecting the Thai people who live on the borders with people in the neighhbouring countries. In the past decade (2014- 1994), the amount of trade on the border between Thailand and its neighbouring countries has consistently increased. In 1997, the border trade value with the Lao PDR, Cambodia, Myanmar and Malaysia was 377,000 million Baht and by 2015, it had increased to 1,001,204.52 million Baht, or three times as much. In addition, the rate of border trade has increased from %5 to %7 of the trade value between Thailand and other countries in the world. This demonstrates that trading partners all over the Asian Region have carried out more trade transactions and this has resulted in border trade becoming a significant element in the country’s regional economy. Border trade is also an important trade channel for the exportation and importation of Thai merchandise to other countries in the Region, be it to Singapore, Vietnam or Southern China. So, the “Special Economic Zones” are parts of an important policy that supports the elevation of border trade and wishes to develop the communication and transport system that connects Thailand with the Region. The advantage of the geographical location of Thailand is that it is in the central part that connects all parts of the Region, by land, air and sea. Moreover this promotes Thailand to play an important role in trading and investing with the neighbouring countries and the Region via the Greater Mekong Sub-region Economic Corridor that connects this Region which is located on the North-South Economic Corridor (NSEC), the East-West Economic Corridor (EWEC), the Southern Economic Corridor and the Sub-Coastal Economic Corridor. In future developed areas in the Special Economic Zones will be upgraded to become Thailand’s Economic Gateway that will have the potential to create economic value in the border areas in the future. 2 THAILAND SPECIAL Economic Zones Investment Incentives and Privileges in Special Economic Zones Incentives and privileges have been specially granted to businesses that are supported by the Government, making it easier for investors to conduct their business transactions at the One Stop Service Centre (OSS), offering tax incentives, allowing the employment of foreign labour and allocating areas for rent. Incentives and Privileges Obtained from the Board of Investment (BOI) In the Case of Targeted Businesses Located in the Special Economic Zones Targeted Businesses according to Incentives and Privileges* General Businesses the Consent of the Committee on the Special Economic Zone Policy** Exemption of corporate Exemption for an additional 8-year exemption of the income tax 3 years but not exceeding investment capital, excluding the 8 years in total land price and rotating capital Reduction of corporate 50% for 5 years for businesses of 50% for 5 years income tax on the net profit the A1 and the A2 types that made from the investment have already been granted with (Starting from the day that the the 8-year exemption of income exemption of corporate tax on a juristic person income tax finishes) Reduction of transport, electricity Twice the amount of 10 years, starting Twice the amount of 10 years, starting and piped-water fees from the first day of income earning from the first day of income earning Reduction of investment capital 25% of the investment capital 25% of the investment capital in the installation or building of (in addition to the regular reduction (in addition to the regular reduction facilities of depreciated value) of depreciated value) Exemption of import duty for Exemption Exemption machinery Exemption of import duty for raw Exemption for 5 years Exemption for 5 years materials or necessary articles for the production of items to be exported Permission to use foreign labour Unskilled foreign labour Unskilled foreign labour Privileges that are not in the form To be granted To be granted of taxes *The BOI’s announcement, no.4/2557, dated Dec.18th, 2014; **The BOI’s announcement, nos.1-5/2558, dated Apr.23rd, 2015 Note: Type A business refers to an industry related to the knowledge base industry and the preparation of R&D to increase the country’s competitiveness. Type A2 business refers to a basic structure business for the development of the country and advanced technological businesses. THAILAND SPECIAL Economic Zones 3 The Government is also aware of the importance of raising the development capacity of small and medium Thai entrepreneurs (SMEs) by relaxing the conditions for the application for support of Thai SMEs investment in the following ways: The minimum investment capital of each project must be not less than 500,000 Baht, excluding land rental fees and rotating funds. It is permissible to bring used machinery into the country, whose cost is not over 10 million Baht, to use in a project. The cost of the used machines in Thailand will be computed according to their list value. The investor is required to invest in the main machinery to the level of no less than 50% of the cost of all the machines used in the project.
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