The Thai Securities and Exchange Commission has launched 22 mutual funds to support the country’s environmental, social, and governance (ESG) goals.
The funds, known as Thailand ESG (TESG) funds, aim to attract around 10 billion baht ($280 million) in investment by the end of the year. These funds will invest in Thai bonds or the stocks of companies that meet emissions disclosure and reduction requirements or have strong environmental sustainability performance.
Tax incentives up to 100,000 baht per year
The Cabinet has approved tax incentive measures to encourage sustainable investment in Thailand for a 10-year tax period (2023-2032). Individuals with taxable income can benefit from a tax deduction of up to 30 percent of their assessable income, with a maximum limit of 100,000 baht per tax year.
This deduction can be applied when purchasing units of any Thai ESG Funds, provided that the investment units are held for a minimum of eight years from the date of purchase. It is important to note that Thai ESG Funds primarily invest in domestic assets, such as stocks or debt securities, with a focus on environmental protection and sustainability themes.
The launch of these funds follows the approval of new criteria for TESG funds by the SEC. Investors in the funds can benefit from tax deductions and exemptions from capital gains tax. The SEC secretary-general highlighted the importance of attracting young investors to these funds. Thailand has pledged to become carbon neutral by 2050 and achieve net-zero greenhouse gas emissions by 2065.
The SEC has approved the establishment of 22 Thai ESG Funds, and more are expected in the future. The initiative is seen as a key mechanism in driving the integration of ESG factors into business operations and strengthening the resilience of the Thai economy. The Thai ESG Funds will also help individuals build sufficient retirement savings.
See more at thailandesg.com
