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Thailand Aims to Become the Hub for Regional Operating Headquarters
Source: thailand.prd.go.th
Source Date: Monday, June 28, 2010
Country: Thailand
Created: Jul 05, 2010

Foreign companies locating their regional operating headquarters in Thailand will enjoy more tax incentives. The increase in the incentives being offered is among a number of initiatives by the Thai government to attract foreign investment.

The Government believes that the new incentives will make Thailand the most competitive country in the region and enable it to remain competitive in the global economy.

The Cabinet, during its meeting on June 2, approved a package of measures to promote the establishment of regional operating headquarters based in Thailand. The package will increase the relative attractiveness of Thailand as the hub for regional operating headquarters.

According to the package, regional operating headquarters will enjoy, for 15 years, a tax break for income earned outside Thailand and only 10 percent corporate income tax on income earned domestically. The expatriate staff of these regional operating headquarters will also benefit from a reduced personal income tax rate of 15 percent for eight years. These measures became effective on 2 June 2010.

Deputy Finance Minister Pradit Phataraprasit believes that the tax benefits will reinforce Thailand’s position as an important manufacturing and services hub in the ASEAN region. The setting up of regional operating headquarters in Thailand by large foreign companies will also provide more job opportunities for Thai people.

Prime Minister Abhisit Vejjajiva pointed out that these incentives would help restore confidence in Thailand among foreign companies and revive the country’s attractiveness. He said that Thailand would transform itself from a low-cost production base into a producer of high-technology, high-quality products. Investment incentives have already been offered for projects meeting this objective, such as research and development activities, high-technology production, and human resource development. Starting from May 2010, foreign experts and technicians working on research and development projects have been allowed to have their visas and work permits extended from two years to four years.

The Prime Minister stated that, on many levels, Thailand remains very competitive. For instance, it receives high marks for expatriate quality of life, low cost of living, overall tax burden, and for infrastructure. The airport rail link will soon be opened and the Skytrain network is continuing to expand. Regarding government services, a survey conducted by Political Economic Risk Consultancy in early June 2010 ranked Thailand third among 12 Asian nations in terms of efficiency.

He also emphasized that Thailand has always given its best effort in ensuring the continuity and safety of foreign businesses and investments in the country.
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