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August 4, 2011

Creating Incentives: Cross-Border M&A in Thailand


Recognizing the importance of foreign investment for its economic growth, Thailand has through the years relaxed restrictive investment laws and regulations, thus favorably positioning itself as a prime market for cross-border M&A activity. Continuing the trend toward investment liberalization, the Bank of Thailand and the Ministry of Finance will implement the second phase of the Financial Sector Master Plan over the course of 2010-2014, which will grant waivers on income tax, specific business tax, and stamp duty for earnings on merger and acquisition activities. However, these waivers, coupled with the driving force of increased competition, have also pressured local enterprises to consider merging with each other in order to strengthen and prevent  takeovers by foreign firms. Nevertheless, Thailand remains a highly viable option for foreign investment, and M&A activity is expected to play a prominent role in the Thai marketplace.