Recent Government Incentives and Programs for the Enhancement of Investment Climate and Opportunity

The Thai government has initiated many investment incentives and programs to spur investment and enhance investment climate in Thailand.

(1) Matching Fund: Investment partnership between foreign investors and the Thai government.  The government will invest up to 25 percent of the matching fund.

1.1 Cerberus Asia Capital Management and the Thai Government have agreed to establish a US$ 500 million co-investment fund of which the MOU has already been signed between the counter-parties. The Thai Government in collaboration with Krung Thai Bank, IFCT and the SET have contributed US$100 million while the Cerberus has committed US$ 400 million.  The fund will be invested mainly in companies under the supervision of Thai Asset Management Corporation (TAMC). 1.2 The Thai and Bahrain Government have signed an MOU on US$ 500 million jointed investment fund of which US$ 100 million comes from the Thai government while the Bahrain government has committed US$ 400 million.  The fund will be invested in Thai securities and big project financing. 1.3 The Thai and British authorities are in a process of negotiation for the possibility of establishing a co-investment fund.

(2) Thailand Recovery Fund: The fund is a joint investment between ADB, JBIC, State Street Golbal and KfW.  The fund is worth US$ 100 million and will be invested in medium-sized enterprises in Thailand.

(3) Thailand Equity Fund: The fund is a US$ 250 million co-investment between Thai government, Thai private sector, CalPERS, IFC and ADB.  The fund will be invested in restructuring companies with good business potential.

(4) Thailand Opportunity Fund: The fund is a jointed investment between Thai Government Pension Fund, KrungThai Bank and Stock Exchange of Thailand.  The fund is worth 30 billion baht.  The objective of the fund is to inject more investment capital into the capital market as well as to create new investment opportunity.

(5) SMEs Financing: The Thai government has put up one billion baht for the development of SMEs business.

(6) Private Venture Capital Incentives: The government is in a process of implementing new tax incentives such s tax exemptions on dividend and capital gains for the encouragement of venture capital financing.

(7) Regional Operating Headquarters: Foreign regional headquarters establish in Thailand will receive a reduction in corporate income tax from 30 percent to 10 percent while personal income tax will be diluted to 15 percent.

(8) Tariff Reform: The government is undertaking a comprehensive tariff reform to enhance the competitiveness of the overall economy.  The new reform will focus on the promotion of efficiency and cost reduction of investment tax policy.