Incentives for regional headoffices start on June 1

By The Nation

BANGKOK: -- Deputy Minister of Finance Pradit Phataraprasit today announced a package of tax and treasury benefits to encourage companies to run some of their regional operations from Thailand.

At the open forum attended by around 300 members of the business community and Prime Minister Abhisit Vejjajiva, he said the package, which will become effective as of Tuesday June 1, aims to help these companies operate more competitively, through lower taxation, and with greater convenience by eliminating or reducing paperwork and other regulatory requirements.

"Despite the enormous political challenges of the last few months, we want to show the international business community that Thailand's government can still stay focused on the needs of the business community. The proof of that is the rapid delivery of a complicated package such as this, which required the coordination and cooperation of multiple ministries and other independent authorities, including the Bank of Thailand," Pradit said.

The regional headoffices will have to pay no income tax on their earnings from the services that they provide to overseas companies, and they will pay only ten percent corporate income tax for income they receive on services that they provide to entities inside of Thailand.

For up to eight years, expatriate employees will pay only 15 per cent personal income tax.

"Thailand's offer is the most competitive incentive package in the region for such regional operating headquarters," he said. "We want to attract these regional operating headquarters because they bring a lot of economic benefit."

-- The Nation 2010-05-23

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It also needs work permits eased. Far greater english language ability by local staff will be expected as they would operate a regional / international platform. Will corporate head office's be able to partner with only 49% control, when compared with alternative regional locations that have no equivalent foreign ownership restrictions?

Automotive firms with huge assembly plants here have done this under previous ROH schemes, but this looks like it is meant to attact a more corporate / urban business demographic. It has good intentions and will attract some I expect.

Office rents and housing rents are secondary issues compared to the above.

Ace, I met with a senior person at the BOI who explained that anyone qualifying for ROH incentives from the Revenue Department would also most likely qualify for BOI promotion from which they can get to own land, have 100% foreign ownership, and have as many work permits as needed (no limit).

They have promoted this quite poorly primarily because the incentives come from two government departments (BOI and Revenue Department), all we have heard about are the incentives provided by the Revenue Department.

edit - sorry I answered my own question

Edited June 1, 201016 yr by pkrv