BANGKOK – Thailand’s government announced a package of incentives for companies to relocate production to Thailand from China. Including a 50% tax break, to lure companies affected by the China-US trade war.
To qualify for the incentives, companies must invest ($32.7 million) or more in the country and carry out the investment by 2021.
Approved investors in Thailand will see their corporate tax obligations reduced by half for five years.
The incentives show Thailand jockeying for foreign investment against neighbors like Vietnam. Thailand is seeking to move its manufacturing sector into higher-value activities.
Forty-eight multinationals including U.S. chip-maker Western Digital are considering relocating to Thailand from China. Thailand’s Office of the National Economic and Social Development Council has reported.
Ten of these companies are strong candidates for investment in Thailand, Kobsak Pootrakool, an official in the prime minister’s office, said.
Labor Rules Eased of Skilled foreigners work in Thailand
“Under the new tax break, Thailand can compete with other countries in Asia for foreign investment. To attract advanced technology firms that want to move production to Thailand.”
Beyond offering a tax break, the government also will create a portal to help companies file their applications.
Thailand’s labor rules will also be eased to help skilled foreigners work in Thailand.
Companies leaving China, including manufacturers of electronics; apparel and electrical equipment; are heading to neighboring Vietnam, Taiwan and Thailand in droves.
It’s not just foreign companies that are leaving China. Local ones are leaving, too.
Some companies, like Lite-On Technology, have cited the trade as reason for leaving China.
The Chinese economy is expected to slow even further – especially if the trade war drags on.
Source: Nikkei Asian Review