Thailand cuts taxes to lure foreign business
Corporate tax in Thailand is likely to be cut to 10% from 30% to encourage foreign companies to establish their regional offices in Thailand. Secretary-general of Thailand’s Board of Investment (BoI) Chakramon Phasukvanich, said the proposed tax reduction was intended to compete with Singapore where corporate tax is also 10%.
The BoI can offer foreign companies various inducements including a five-year tax waiver on setting up regional offices. However, the firms are required to meet certain conditions. These include already having overseas branches and subsidiaries in no fewer than five countries. They must also provide personnel development programmes with training centres. Annual operating expenses for the regional office must not exceed US$1.2 million and the company is required to invest at least US$900,000 in the premises within two years of receiving the privileges.
Very few foreign companies have regional offices in Thailand. Those not eligible for Board of Investment (BoI) privileges have opted for other countries in the region, claiming that tax and non-tax barriers in Thailand are too high.
