The Thailand Board of Investment (BOI) announced new measures this June to increase investment in electric vehicle (EV) manufacture and infrastructure and smart industrial estates and systems. A total of THB 209.5 billion (USD 6.2 billion) was approved to promote growth in these sectors. Manufacturers will also benefit from reduced import duties and corporate income tax exemption.
Producers of EV and high energy density batteries will benefit from a 90% reduction of the import duty on raw and essential materials for five years in cases where the output is sold domestically. Sixteen projects were accepted and granted investment benefits from the BOI to produce EV batteries. At least three other projects were approved to produce high energy density batteries.
Figure 1. BOI enhanced investment incentives for EV battery manufacturing.
The BOI approved two similar packages, one for investment in smart industrial estates and the other for incentivizing smart upgrades to existing facilities. Eligible projects must provide intelligent system services in five areas. The four mandatory services include smart facilities, IT, energy, and economy. The fifth service may be smart living, workforce, or good corporate governance. Additionally, applicants for the smart industrial estates and zones program are only eligible if at least 51% of the shareholders are Thai. There is no similar shareholder limit for upgrading existing facilities and developing smart systems. Approved projects will be granted an 8-year corporate income tax exemption. Those approved projects in the Eastern Economic Corridor (EEC) will be granted an additional 5-year, 50% corporate income tax reduction.
Figure 2. BOI enhanced investment incentives for smart industrial estates and smart upgrades.
The BOI has also approved measures in real estates to promote the operation of foreign companies and foreign investment in Thailand. Foreign juristic persons with THB 50 million in registered, paid-up capital are permitted to own land for the establishment of offices and residential quarter for executives and foreign experts.
The Thailand Board of Investment has approved an industrial estate program to promote the electrical vehicle (EV) industry and foreign investment. This initiative shall facilitate the operation of foreign companies in Thailand by permitting foreign juristic persons to own land. This land shall be used for the purpose of industrial EV projects. Promoted foreign juristic persons with THB 50 million in registered, paid-up capital are eligible to apply.
Figure 3. A real estate initiative for the production of electrical vehicles.
The land may be used for three purposes, namely:
1. The establishment of offices;
2. Employee residences; and
3. The residences of executives and foreign experts.
Land for the construction of offices must not exceed 5 Rai, employee residential land is not to exceed 20 Rai, and the land for executive and foreign expert residences is not to exceed 10 Rai. The land may lie within or without the premises of the production plant. Lastly, the land must be sold or transferred within a year of the project’s end. Applications to the BOI are open through December 31st, 2027.