The Cabinet approved revised tax incentives for sustainable investments in Thailand through Thai ESG funds, increasing the investment limit and shortening the unitholding period. SEC is amending regulations to broaden investment scope and strengthen fiduciary duty of AMCs.
Bangkok, 30 July 2024 – The Cabinet, at its meeting convened today, has passed a resolution approving the revision to the tax incentive measures for promoting sustainable investment in Thailand through Thai ESG funds, as proposed by the Ministry of Finance.
According to the revised measures, the investment limit eligible for tax exemption is increased to 300,000 baht per person per year and the unitholding period is shortened to five years for the purchases made between 1 January 2024 to 31 December 2026. These measures aim to promote the Thai capital market’s growth as well as build trust and confidence and promote long-term investments in the capital market via Thai ESG funds. The Ministry of Finance will evaluate the outcomes of these tax benefit measures at the end of the next three years.
In this regard, the Securities and Exchange Commission (SEC) is amending the relevant regulations to support the aforementioned tax benefit measures. These amendments broaden the investment scope of Thai ESG funds and strengthen the fiduciary duty of asset management companies (AMCs) to ensure responsible investment.
Mrs. Pornanong Budsaratragoon, SEC Secretary-General, said: “The Capital Market Supervisory Board (CMSB), at its meeting No. 7/2567 convened on 16 July 2024, passed a resolution approving in principle the proposed amendments to the Thai ESG regulations to accommodate the government’s savings and investment promotion initiatives. The proposed amendments address two important matters, as follows:
1. To Broaden the investment scope by: (1) Allowing Thai ESG funds to invest in shares of listed companies that have been evaluated by ESG ratings/scores providers other than SET (SET ESG ratings). This change aims to offer AMCs more diverse reference alternatives when making investment decisions. However, these ESG ratings/scores providers must have internationally recognized evaluation standards;
(2) Providing Thai ESG funds with more investment alternatives in shares of listed companies that demonstrate corporate governance excellence. These companies must disclose their goals and corporate value-up plans, provide updated reports on the execution of these plans, and have an environmental action plan in place. Additionally, they must communicate progress on these matters to investors according to specified criteria.
