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Our legal comments in Thailand Special Economic Zones SEZs H&P Corporate lawyers in Bangkok

Based on our international legal practice advising clients to do business overseas, the regulations that applies to special economic zones in other countries are very clear and attract a large number of investors every single year. However, as Thailand is regarded, there is still a lot of confusion and misunderstanding on the Special Economic Zones and its applicable laws. H&P Corporate lawyers in Bangkok, have prepared a summary of the key legal aspects on special economic zones in Thailand and the benefits that can bring to foreign investors.

By definition, special economic zones are typically geographical areas in the borders of Thailand, meaning areas next to Myanmar, Laos, Cambodia and Malaysia in the south of the country. As these areas are strategic for obvious reasons such as cross border trade and access to natural resources, there are a wider number of incentives that the foreign investor can obtain in the designated areas.

We are referring to Kanchanaburi, Nakhon Phanom, Chiang Rai, Narathiwat, Nong Khai, Songkhla, Mukdahan, Trat, Sa Kaeo and Tak.

Under Thailand Board of Investment, based on the announcement No. 2/2557, the investor can obtain CIT exemptions (8 years corporate income tax Exemption and an additional 50% reduction on corporate income tax for 5 years), exemption of duties to import machinery, deductions for electricity and water supply or the possibility to bring skilled employees regardless nationality.

Thailand Board of Investment targets certain group of activities in the Special Economic Zones such as:

1) Agro-industry, fishery industry, and related activities
2) Manufacture of ceramics, Metal products and Materials
3) Textile and garment industries, and manufacture of leather products
4) Manufacture of furniture
5) Manufacture of gems and jewelry or parts
6) Manufacture of engine and vehicle parts, and manufacture of machinery, equipment, and parts
7) Electronics and electrical appliances industries
8) Production of plastic and pulp products
9) Manufacturing of medical products and services
10) Service business
11) Utilities
12) Industrial zones / industrial estates
13) Tourism promotion service and activities to support tourism

In case of SMEs, that are not promoted under BOI, these companies still can obtain interesting tax benefits (CIT reduction to 10% of the company’s net profits for 10 years).

Although the special economic zones were mainly for export businesses with exemption from import duties and VAT. In 2024, Thailand announced that the country will establish a new special economic zone for clean energy development aiming to support the emerging electric vehicle industry.

To base and grow your business within a special Economic Zone in Thailand can enhance you more competitive and be able to enjoy more incentives and privileges, therefore we recommend consulting with a law firm such as H&P with experience in foreign investment in Thailand, so our international lawyers can structure a plan for your business based on the existing regulations and laws.

If you need to receive legal advice on your investment in Special Economic Zones in Thailand, please contact our corporate law firm at [email protected]

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