ICT, Software and Electronics Industry in Thailand

The BOI will provide new incentives to SME subcontractors located in Zone 3 (22 provinces) and to existing electronics manufacturers located in Zone 1 and Zone 2 wishing to relocate to any of twenty-two Zone 3 provinces. The initiative is designed to promote development of electronics manufacturing in these provinces, which have low per capita GPP (Gross Provincial Product) rates, and to encourage companies to contract vendors in these provinces.

Criteria include:

The company must be in the electrical/electronics sector and either wish to move manufacturing to Zone 3 (22 provinces) or be an SME (small or medium-sized enterprise) subcontractor in Zone 3 (22 provinces).
Manufacturers must have a complete production line. If not, the project may apply for special approval from the BOI by certifying that it produces the majority of essential components of the finished products.
The BOI must approve manufacturing capacity.
Investments to improve machinery are considered part of the promoted project and thus must be approved by the BOI.
Electronics manufacturers and SME sub-contractors must submit a joint application and provide a recruitment plan demonstrating that at least 200 Thai employees will be employed within 3 years.
Applications for promotion must be submitted by December 31, 2008.

Relocating manufacturers are eligible to receive exemptions on import duties on machinery used for the project and 50% reductions in corporate income tax for 5 years. SME subcontractors are eligible to receive machinery import tax exemptions, an 8-year corporate income tax exemption not exceeding the investment capital (excluding cost of land and working capital), and 50% reductions in corporate income taxes for 5 years after the initial 8-year period.