The Eastern Economic Corridor Act came into force on 15 May 2018, a further step towards realisation of the Thai Government's plans for the development of the so-called Eastern Economic Corridor (EEC) on Thailand's eastern seaboard.
The Act serves to promote economic development and investment initially in the 3 eastern provinces of Chachoengsao, Chonburi and Rayong, which together cover a total area of 13,000 square kilometers.
The EEC will be developed in line with the policies of the “Thailand 4.0” economic model, which aims to create a value-based economy that is driven by innovation, technology and creativity.
The Thailand 4.0 policy has highlighted opportunities and investment trends in 10 targeted industries, divided into two broad categories:
First 5 S-Curve industries: Next-Generation Automotive, Intelligent Electronics, Advance Agriculture and Biotechnology, Food Processing and High Wealth and Medical Tourism. These industries will enhance the competitiveness of the country's current strengths through technology innovation.
5 New S-Curve industries: Digital, Robotics and Automation, Aviation and Logistics, Biofuels and Biochemicals and Comprehensive Healthcare. The aim is to develop these five additional industries to be the alternative driving force for the Thai economy in the future.
The Act provide for the creation of Special Economic Promotion Zones (“SEPZ”) in which the 10 targeted industries can enjoy both tax and non-tax privileges, including:
- The right for foreign business investors to own land in the SEPZ. Foreigner investors can also own condominium units in the SEPZ for both business and residential purposes. The foreign ownership restrictions under the Condominium Act that typically limit foreign ownership to 49% of a condominium's total floor area will not apply.
- The lease of land and other immovable property in the SEPZ can be for a period up to 99 years (being a 50 year lease period plus option to renew for up to 49 years). Currently leases are restricted to 30 years plus a 30 year renewal option.
- Skilled labors, executives and specialists working for businesses in the SEPZ and their family members can obtain visas from the EEC Secretary-General.
- Skilled labors, executives and specialists working for businesses in the SEPZ can work in Thailand without a work permit, upon receiving a permit from the EEC Secretary-General.
- An exemption or reduction of taxes for businesses located in the SEPZ not exceeding the rights specified in the Investment Promotion Act or the National Competitive Enhancement Act for targeted industries.
- An exemption from compliance to all or part of the customs law.
- An exemption from any or all of the exchange control regulations. Foreign currencies can be used for payment of goods and services in the SEPZ.
- Licensed foreign professionals can practice in the SEPZ subject to criteria set by the EEC Policy Committee.
- Other rights and privileges under the investment promotion law and the law on enhancement of competitiveness for targeted industries can be granted to investors and professionals by the EEC Policy Committee on a case-by-case basis.
- The authority to grant license under several laws e.g. building control law, factory law, immigration law etc would be transferred to the EEC Policy Committee to avoid the restrictions on foreign investment.
The Thai government is set to accelerate the readiness of the 3 eastern provinces to support all aspects of investment and economic growth, and fully expects that the EEC will be an important area for trade, investment, regional transportation, and a strategic gateway to Asia.
Please click here for further information about the EEC incentives offered to investors.