Thailand’s government has announced a package of incentives for companies to relocate production to Thailand from China. Including a 50% tax break, to lure companies affected by the China-US trade war, Chiang Rai Times reported.
To qualify for the incentives, companies must invest US$32.7 million (1 billion baht) or more in the country and carry out the investment by 2021.
Approved investors in Thailand will see their corporate tax obligations reduced by half for five years, the report said.
Thailand is actively jockeying for foreign investment against neighbors such as Vietnam, as it seeks to move its manufacturing sector into high-value activities.
Forty-eight multinationals including US chip-maker Western Digital are considering relocating to Thailand from China, Thailand’s Office of the National Economic and Social Development Council has reported.
“Under the new package, Thailand can compete with other countries in Asia for foreign investment, especially to attract advanced technology firms that want to move production to Thailand,” Kobsak Pootrakool, an official in the prime minister’s office, said at an economic policy meeting, Nikkei Asian Review reported.
Beyond offering a tax cut, the government also will create a single portal that advises companies on their applications and allows them to file.
To encourage training of skilled workers, tax breaks will be offered to offset the cost of building training centers and providing employee development programs. Labor rules will be eased to help skilled foreigners work in Thailand.
Facilitating speedier approvals for foreign investors will be important, said Nattapol Rangsitpol, a director general in an Industry Ministry office that works closely with the Board of Investment, Channel News Asia (CNA) reported.
In seeking to attract investors affected by the trade war, “we have to understand that they are escaping death, so speed is important,” he said.
“We have to enable them to set up factories quickly, produce quickly and sell quickly,” Nattapol added.
Strict immigration and reporting rules have affected investors, who complained they were treated like criminals, he said.