Investment/EEC’s privileges

Chatrudee Theparat

The 30 companies with a total investment of 210 billion baht are waiting for the government to approve the Eastern Economic Corridor (EEC)’s promotional privileges.

Chula Sukmanop, secretary general to Eastern Economic Corridor Office (EECO), said there are at least 30 companies with a total investment of 210 billion baht and 1,500 jobs creation are waiting for the cabinet to approve a draft of EECO’s promotional privileges.

“The agency planned to implement EEC’s new promotional privileges from early this year following the quick win policy of the government to speed up in 100 days. However, it took six months. The draft has yet to be approved by the cabinet.”

Mr Chula said the cabinet has already approved in principle for a framework of privileges for the agency to conduct a draft of promotional privileges of EECO. The agency has already completed the details of the draft.

Chula Sukmanop

The details of privileges will be proposed in the EECO Board chaired by Deputy Prime Minister and Commerce Minister Phumtham Wechayachai and later for the cabinet approval. Once the cabinet approves the draft and the announcement in the Royal Gazette, foreign investors are alternative to directly submit applications for promotional privileges to EECO.

The agency hopes the cabinet will approve EECO’s announcement by this July, and next is to allow the agency to establish a negotiation committee.

Mr Chula said the negotiation committee to investors will be chaired by EECO’s secretary general and seven experts. The seven experts will be adjusted following on their expertise, capability and each type of investment. The negotiation process will be implemented by this July if the cabinet approved the privileges draft.

The negotiation committee for privileges is responsible to negotiate with investors on privileges. Privileges will be offered to investors based on the value of the project such as supply chain and value chain, pioneer to the Thai industry, job creations to local skilled workers, a support to community, human resource development, research & development, local content, technology transfer. sustainability in business operations, reduction of emission gas.

If investors can meet 95% of the requirement, they can qualify for the highest 15 years of corporate tax exemption.

Currently, there are 30 companies to consult the agency for new privileges while they wait to submit applications for EECO’s promotional privileges. Projects are five groups of industries including and bio-circular-green (BCG) economy,
medical & wellness, smart services, digital, electronics, electrical appliances, electrical vehicles.

Mr Chula points out that a good basis of EECO’s promotional privileges which the agency can directly negotiate to investors is that EECO's is 14 related laws. Once, the settlement of the negotiation, EECO can approve immediately for construction, permission for water and electricity. Those factors support quick investment, as well as faster additional investment. The negotiation will be conducted case by case.

The negotiation committee needs to consider a significant factor on actual investment. Actual investment will relate to promotional privileges such as projects which can qualify for an exemption from corporate tax for eight years.
If investors immediately invest by this year, the committee may offer 9-10 years of corporate tax exemption to those investments.

This policy can build actual investment and boost the economy.

The negotiation committee will consider other factors including scale of investment, technology, the leader in each industry, job creation, using domestic raw material (local content).

EECO planned to attract 100 billion baht of actual investment to EEC following on the five strategies plan between 2024-2028, excluding flagship infrastructure.

Investment in EEC during the first 5 months of 2024 (January - May 2024), there were 99 foreign investors to show interest in investing in EEC, accounting for 31% of all foreign investors in Thailand, an increase of 106%. The total investment value is 1824 billion baht, accounting for 25% of total investment in the country. Among the 99 investors, 31 are from Japan (3,523 million baht), 19 from China (1,803 million baht), 11 from Hong Kong (5,005 million baht), and 38 others (7,893 million baht).