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Home \ Exports \ Country Profile \ Foreign Investment Guide

Foreign Investment

Industrial Estates Focus

Thailand has created a network of Industrial Estates, which operate almost as free trade zones, in order to promote exports, foreign investment and economic decentralization from Bangkok. The Industrial Estate Authority of Thailand (IEAT), which is attached to the Ministry of Industry and whose objective is to ensure orderly planned industrialization, administrates the numerous estates in the kingdom.

There are mainly two categories of estates with the first being General Industrial Zone (GIZ), which is the area reserved for the location of industries manufacturing for domestic and/or export consumption. The other is Export Processing Zone (EPZ), which is the area reserved for location of industries manufacturing for export only.

Firms located in an EPZ or GIZ receive benefits that include:

 • Corporate tax exemptions
 • Reduction or exemption of import duties on machinery or materials used in factory manufacturing.
 • Permission to own land
 • Permission to use foreign consultants, skilled technicians and experts
 • EPZ’s will usually contain a customs clearing house for fast clearance of goods

The extent of the benefits granted to a company operating in an EPZ or GIZ depends upon the area of the country it is located in. Thailand’s Board of Investment (BOI) created three Investment Promotion Zones in the country with projects in each zone receiving additional incentives, tax and duty reductions as well as allowances for infrastructure investments

Zone 1: includes Bangkok, Samut Prakan, Samut Sakhon, Nakhon Pathom, Nonthaburi and Pathum Thani (Bangkok and 5 provinces)

Zone 2: includes Samut Songkhram, Ratchaburi, Kanchanaburi, Suphanburi, Angthong, Ayutthaya, Saraburi, Nakhon Nayok, Chachoengsao, and Chonburi (10 provinces)

Zone 3: encompasses the remaining 61 provinces plus Laem Chabang Industrial Estate

For projects in Zone 1:

 • No tax exemption or reduction on machinery, except projects which export not less than 80% of total sales or locate their factories in industrial estates or promoted industrial zones. Such projects will receive a 50% import duty reduction on machinery which is not included in the tariff reduction notification of the Ministry of Finance (Notification C 13/2533) and which is subject to import duty greater than or equal to 10%.
 • No corporate income tax exemption, except for projects which export not less than 80% of total sales and locate their factories in industrial estates or promoted industrial zones, in which case a three-year exemption will be granted.
 • Exemption from import duties on raw or essential materials used in export products for a period of one year.

For projects in Zone 2:

 • 50% import duty reduction on machinery, which is not included in the tariff reduction notification of the Ministry of Finance (Notification No. C 13/2533) and which is subject to import duty greater than or equal to 10%.
 • Corporate income tax exemption is given for 3 years, extendable up to 7 years, for projects, which locate their factories in industrial estates or promoted industrial Zones.
 • Exemption from import duties paid on raw or essential materials used in export products for a period of one year.

For projects in Zone 3:

 • Exemption from import duties paid on machinery.
 • Corporate income tax exemption for 8 years.
 • Exemption from import duties on raw or essential materials used in export products for a period of 5 years.
 • 75% reduction of import duty on raw and essential materials used in production for domestic sales for 5 years, renewable on an annual basis, provided that raw or essential materials comparable in quality are not being produced or do not originate within the Kingdom in sufficient quantity to be acquired for use in such activity.

Special privileges are granted as follows:

 • A reduction in corporate income taxes paid by 50%, available for 5 years after the exemption period.
 • Double deduction from the taxable income of water, electricity, and transport costs for 10 years from the date of first sales.
 • Deduction from net profit of 25% of the costs of installation or construction of the project's infrastructure facilities is given.

 

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