|
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 |
|
|
EPZs
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. Thailands
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. |
Back
to Top
|
