New wave of business opportunities in Thailand with the EEC
The government is positioning the EEC as the main engine of growth for Thai industry going forward
Three provinces have been chosen to pilot the EEC: Rayong, Chonburi, and Chachoengsao, with plans to build on their current strength as a major hub for technology-based manufacturing
Thanks to the region’s existing strength in industry and its location, the government is positioning the EEC as the main engine of growth for Thai industry going forward.
Three provinces have been chosen to pilot the EEC: Rayong, Chonburi, and Chachoengsao, with plans to build on their current strength as a major hub for technology-based manufacturing, such as cars, electronics, and petrochemicals.
Strategically located, the area has high potential and will be able to draw investments in other industries as well. In the long run, the government hopes that the EEC will lead to sustainable growth for the Thai economy.
The government is pushing hard for The Eastern Economic Corridor (EEC) through support for transport infrastructure development and incentives for investors in 10 targeted industries.
These include 5 First S-Curve and 5 New S-Curve industries. Sixty percent of the latter stand to benefit from premium incentives, particularly the aviation and digital industries.
EIC sees high potential in the following new S-Curve industries: aircraft maintenance, repair, and overhaul (MRO), environmental-friendly polymer production, and data centers thanks to existing markets and basic support factors in the region.
In the first phase, investment in transport infrastructure is expected to total around THB 500 billion, directly boosting construction and construction material businesses.
In the middle term the real estate sector, such as industrial estates and residential developers, as well as retail, transport, and logistics businesses stand to benefit from investment in targeted industries.
Development of transport infrastructure and investment incentives are key to the government’s plan to attract investments in the 10 targeted industries.
Transport is at the heart of the business.
For this reason, the government has plans to develop full-scale transport infrastructure to boost efficiency in passenger and goods transport.
The modes of transport covered include land: a double-track railway route covering Chachoengsao-Khlong 19-Kaeng Khoi, the Bangkok-Rayong high-speed rail link, and the Pattaya-Map Ta Phut motorway; air: U-Tapao Airport; and water: Laem Chabang, Map Ta Phut, and Sattahip commercial ports.
When completed, these infrastructure projects will greatly enhance sea exports and domestic transport, particularly the distribution of goods from eastern Thailand to the northeastern provinces by rail.
Better tax incentives
The government is also planning to roll out better tax incentives compared to neighboring countries (Figure 1) and other measures including one-stop service for the approval and issuance of permits, the establishment of a tax-free zone, and work permits and visas for international experts.
Still, a World Economic Forum survey shows that other factors affecting investor decisions that the government can work on include assurances of policy stability, innovation capacity, and development of skilled labor.
The 10 targeted industries consist of 5 First S-Curve industries (59 businesses) and 5 New S-Curve industries (35 businesses).1
First S-Curve industries with high potential include Next-generation automotive (11 businesses), Smart electronics (24 businesses), Affluent, Medical and wellness tourism (10 businesses), Food for the future (3 businesses), and Agriculture and biotechnology (11 businesses). Currently around 80% of investments benefiting from BOI measures are concentrated in First S-Curve industries, particularly cars and electronics.
The 5 New S-Curve industries targeted for turbo-charging the Thai economic growth include Automation and Robotics (3 businesses), Aviation and logistics (8 businesses), Bio chemicals and eco-friendly petrochemical (7 businesses), Digital (11 businesses), and Medical hub (6 businesses). The New S-Curve group will push forward with advanced technology and innovation, lifting Thailand’s competitiveness in the long run. Sixty percent of businesses in this group are eligible for premium incentives (A1 and A2) from the BOI, particularly the digital and aviation…
Author: Kanchanok Bunsupaporn