Integrity Legal - Law Firm in Bangkok | Bangkok Lawyer | Legal Services Thailand Back to
Integrity Legal

Legal.co.th - Resources 

Research & gain insights into Thai, American, and International Law.

 

Contact us: +66 2-266 3698

info@integrity-legal.com

ResourcesThailand Real Estate & Property LawJurisprudenceThailand's Eastern Special Economic Zone Act

Thailand's Eastern Special Economic Zone Act

Transcript of the above video:

Today, we're going to be talking about the EEZ or the Eastern Economic Zone. Recently, there was some legislation that was promulgated back in April 2017 with respect to what was called the Eastern Special Economic Zone Act that was approved by the Thai Cabinet back at that point. And just a few highlights from this, I just wanted to kind of go over this video.

So there's going to be exemption from corporate income taxes that's already in existence. There are certain exemptions under the Board of Investment that already exist, certain other exemptions under specific industrial estates. But under this new Act, exemption from corporate income tax could be provided for a period of up to 15 years. That exceeds the current eight year maximum in most any other of the legal frameworks that we've seen previously, I should say.

Personal income tax rates could be capped out at 17 percent for certain types of management investors, expert consultants, things like that add on that are going to be operating in the eastern economic corridor zone. In the past, this so-called public private partnership certification processes could take a significant amount of time and in fact it could be something of a quagmire in certain circumstances because it's very difficult to understand exactly how the old legal framework worked. It would appear that under the new Act there's going to be a 90 day processing time frame with respect to that stuff so that's interesting.

There's also going to be expedited environmental impact assessments, how expedited remains to be seen. it also would appear that within the zone itself, it seems that conducting certain types of business directly in foreign currency without the need to convert into Thai Baht is going to be a possibility. Again, how that operates on a practical level remains to be seen.

And then also, real property leases which could extend for as long as 50 years as opposed to the current maximum duration of 30 years could also be something that comes out of this Eastern economic zone proposition. And then finally, there's going to be the possibility of a five-year business visa with respect to those who are doing business within the zone. 

Now again, we haven't seen any of this stuff coming about as a practical matter but I think it's fairly safe to say that the current government and the powers that be are very keen on seeing this happen. I also think that frankly, in other ways as we've seen with the BOI where they're trying to attract more diversified industry into Thailand because Thailand's economy is so export based and so tourism based, and in a lot of ways agricultural based that lack of diversity can be something of a trap, if you will, because in the event that say exports you know go into the doldrums, agricultural output people are you know don't want to buy as much rice as they once did abroad, things like tourism take a hit due to a number of factors which can occur.

I think that the economic thinking behind this is let's go ahead and get the economy diversified so we don't have to be so dependent on a few key specific areas to drive the overall economy. I think the EEZ proposition is, moving part and parcel with that overall policy, I think we're going to see some significant benefits to foreign nationals and foreign business entities wishing to go ahead and invest in the region and within the zone. And I think it is logical to presume that in the future, it may be significantly easier to do business with in these specific frameworks and as a result, it could be a mutually beneficial proposition not only for foreign nationals but for Thailand as well.