Thailand: One-stop centre to spur FDI in the offing

The government is establishing a new one-stop service centre to stimulate foreign direct investment and outlays on international headquarters and regional offices.

According to Narit Therdsteerasukdi, secretary-general of the Office of Board of Investment (BoI), the new centre will be instrumental in attracting investment as well as eliminating trade and investment obstacles.

A new one-stop service system to encourage investment is on the agenda at the first meeting of the subcommittee on resolving obstacles and facilitating investment, chaired by Deputy Prime Minister Supattanapong Punmeechaow, which is scheduled for the middle of December.

The government approved setting up the subcommittee earlier this month, which is expected to cooperate with the Prime Minister’s Office and other state agencies.

The new panel is meant to serve as a special mechanism to ease doing business in the country by addressing specific obstacles flagged by investors.

Foreign investors currently have to contact four government agencies –the BoI, the Revenue Department, the Business Development Department and the Bank of Thailand — in order to seek permission for their proposed investments.

The one-stop service centre reduces that contact to one, covering investment promotion applications, work permit applications, business registration and the opening of accounts for financial transactions.

Initially the centre will be jointly established by four agencies in the same area as the one-stop service centre for visas and work permits at Chamchuri Square to facilitate investors.

The new centre is expected to attract more multinational companies to set up their regional headquarters in Thailand and stimulate the usage of trade benefits offered by free trade agreements.

“The move to make investment more convenient should help in attracting foreign inflows,” said Mr Narit.

“The BoI aims to attract more investment in international business centres [IBCs], treasury centres certified by the Bank of Thailand, international trading businesses, international procurement centres, trade and investment support offices, business and digital support services, and international logistics services.”

He said if prevailing regional headquarters in Thailand were to bring more businesses into the country, it would offer an opportunity for Thais to work in international companies, helping to develop their skills.

More foreign companies in Thailand would also be useful for Thai workers in terms of self-improvement and the ability to develop startups, said Mr Narit.

He said the personal income tax rate for expatriates working in an IBC is only 15% of their gross income, along with benefits derived from their employment.

For those working in the Eastern Economic Corridor, the personal income tax is levied at a flat rate of 17% for highly skilled workers under long-term resident (LTR) visas, while they would benefit from visa and work permit facilitation via the LTR and smart visa measures under Section 24-26 of the Investment Promotion Act, said Mr Narit.

In a related development, he said the BoI would propose for approval at the board’s meeting new investment incentives aimed at attracting more upstream industries, including biotechnology, nanotech and advanced materials, which would become effective early next year.

Premium incentives would be granted to investments in upstream industries entailing innovation and high technology such as biotech, nanotech and advanced materials that involve technology transfer and cooperation with the country’s higher education institutions and research entities, said Mr Narit.

Such projects, classified as A1+ in the BoI’s nomenclature, would be eligible, depending on the activity, for 10 to 13 years of corporate income tax exemption without a cap.

Wafer fabrication has been upgraded to this category and would be eligible for 13 years of corporate income tax exemption, up from 10 years previously.