According to a report by Reuters on August 8, the Thailand Board of Investment (BOI) announced that the country has approved a series of incentives to strongly encourage domestic and foreign companies to form joint ventures for the production of automotive parts.
The BOI stated that new joint ventures, as well as existing parts manufacturers that are transitioning to joint ventures and are already benefiting from incentives, will be eligible for an additional two-year tax exemption if they apply by the end of 2025. However, the total tax-exempt period cannot exceed eight years.
Moreover, the BOI noted that to qualify for reduced tax rates, newly established joint ventures must invest at least 100 million Thai Baht (approximately 2.82 million USD) in the automotive parts manufacturing sector. The joint venture must consist of both a Thai company and a foreign company, with the Thai company holding at least a 60% stake and providing at least 30% of the registered capital of the joint venture.
These incentives are broadly aimed at establishing Thailand as a strategic driving force within the global automotive industry, particularly in the rapidly growing global electric vehicle market. Under this initiative, the Thai government will enhance collaboration between Thai and foreign companies in technology development to maintain Thailand's competitiveness in the Southeast Asian automotive industry.
Thailand is Southeast Asia's largest automotive production hub and serves as an export base for some of the world's top automakers. The Thai government is currently heavily promoting investment in electric vehicles and has introduced a series of incentives to attract major enterprises. In recent years, these incentives have attracted significant foreign investment, particularly from Chinese manufacturers. As the "Detroit of Asia," the Thai government plans to have 30% of its automotive production come from electric vehicles by 2030. In the past two years, investments from Chinese electric vehicle manufacturers such as BYD and Great Wall Motors have also brought new vitality to Thailand's automotive industry.
