Benefits of conducting business in the Industrial Estate Authority of Thailand for Foreigners
The Industrial Estate Authority of Thailand (IEAT) contributes significantly to fostering industrial growth within the country. Established under the Industrial Estate Authority of Thailand Act, the IEAT focuses on creating strategic production and service bases with top-notch infrastructure and facilities. For foreign investors, the IEAT offers a range of benefits, reinforcing Thailand’s position as an attractive investment destination.
There are two types of industrial estates under the IEAT:
1. General Industrial Zone (GIZ):
- Designated for various industrial and service activities.
- Provides essential facilities and services, including transportation and training centers.
- Allows investors to operate business within the zone.
2. IEAT Free Zone:
- Enables operators to import goods and raw materials freely and export finished goods.
- Offers tax and duty advantages, promoting a conducive business environment.
- Allows for the import of items and raw materials without production limits.
Setting up Business in an Industrial Zone:
To establish a business in an industrial estate, it is necessary to obtain permission from the Governor or an authorized person. The IEAT facilitates this process by approving industrial activities, providing privileges, incentives, and offering support services. The One Stop Service Center (OSS) assists enterprises in land acquisition and site selection for their factories.
IEAT Incentives:
1. Tax Incentives:
- Exemption from import duties, excise tax, and VAT on machinery and raw materials.
- Relief for products made for domestic use and raw material components produced domestically.
- Exemption from export duties, excise tax, and VAT on export goods.
2. Non-tax Incentives:
- Permission for foreign technicians, experts, and their dependents to stay in the country.
- Import of items and raw materials without limits for production, commerce, or service provision.
- Permission to remit foreign currency abroad.
IEAT Notifications and their Benefits:
1. Notification 1 (N1):
- Allows a foreigner’s spouse and dependents to stay in Thailand for the same duration as the foreigner.
- Approval for employment posts on industrial estates for foreigners.
2. Notification 2 (N2):
- Permission to bring materials into the IEAT Free Zone.
- Materials can be for export, use, distribution, transfer with tax advantages, or destruction.
3. Notifications 3 & 4 (N3 & N4):
- Permission for land ownership in an industrial estate for commercial operations.
- Specific allocations for factory construction, security, and environmental protection.
4. Notifications 5 & 6 (N5 & N6):
- Exemption from special fees for materials under the Law on Investment Promotion.
- Detailed criteria for materials related to production, commercial purposes, and construction.
5. Notification 7 (N7):
- Exemption from special fees in the IEAT Free Zone for materials used in manufacturing or commercial purposes.
Conclusion:
Foreign investors stand to gain significantly from the IEAT’s commitment to creating an investor-friendly environment in Thailand. With a robust framework of incentives, exemptions, and streamlined processes, the IEAT encourages foreign entrepreneurs to establish and flourish in the industrial estates of Thailand. Leveraging the expertise of legal support and adhering to IEAT guidelines can pave the way for success in incorporating 100% foreign-owned companies in Thailand. If you are interested in establishing a factory in the IEAT, conducting business there, or seeking any advice, please feel free to contact our legal team at email: info@tplaw.asia