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Thailand: Agencies to lure SMEs to border SEZs
With large-scale industries reluctant to invest in the border special economic zones (SEZs), Deputy Prime Minister Somkid Jatusripitak has assigned government agencies to come up with more measures and incentives to draw investment from small and medium-sized enterprises (SMEs).
Mr Somkid said the Board of Investment (BoI), the Industry Ministry and the National Economic and Social Development Council (NESDC) have been told to study how to entice more investment from SMEs after large-scale ventures have been tepid about border SEZs.
The military-led government announced the formation of 10 SEZs in 2015 in Tak, Sa Kaeo, Mukdahan, Trat, Songkhla, Nong Khai, Nakhon Phanom, Kanchanaburi, Narathiwat and Chiang Rai.
The government allocated a budget worth a combined 53.1 billion baht to finance the infrastructure and facilities projects covering logistics, customs offices and industrial estates between 2016 and 2019.
The BoI has offered privileges including a corporate income tax exemption for eight years plus a 50% reduction in the tax rate for five years once the tax holiday lapses.
The Finance Ministry has also offered a corporate income tax reduction of 10% for 10 years for investment categories that are not entitled to the BoI’s privileges.
In August 2018, the BoI extended the promotional privileges to industrial categories established in 10 SEZs until Dec 30, 2020, as opposed to the previous schedule in 2018.
The NESDC reported that the establishment of a one-stop service for labour in 10 provinces is complete, with 277,363 foreign labourers working in the 10 SEZs.
According to the NESDC’s report, as of July 12 this year, there were 66 projects worth 10.8 billion baht in investment applications in 10 SEZs.
The Tak SEZ ranked first, drawing applications for 30 projects worth 3.87 billion baht, followed by Songkhla with nine projects worth 2.46 billion baht.
Sa Kaeo had six projects worth 1.88 billion baht, and Mukdahan had five projects worth 851 million.
The Kanchanaburi SEZ has lured four projects worth 755.98 million baht.
The NESDC reported that there were 3,407 new companies with total registered capital of 6.7 billion baht established between January 2015 and July 12 this year to do business in the 10 SEZs.
In September last year, Prime Minister Prayut Chan-o-cha mandated the National Economic and Social Development Board (later Council) and the BoI to jointly revise the investment target for 10 SEZs to make them more attractive to investors.
The two agencies were also told to complete a feasibility study for the SEZs to promote investment.
Source: https://www.bangkokpost.com/business/1716591/agencies-to-lure-smes-to-border-sezs