The Thai government has identified the aviation industry as a key driver for the country’s economic growth. To spur investment in aerospace manufacturing, the government, through the Board of Investment (BOI), has introduced a number of incentives. The areas of focus include the manufacturing and repair of aircraft and aircraft components.
Most of the incentives involve tax exemptions. These include relief on corporate income tax (CIT) and import duties. Nontax incentives include the right to operate a business with a foreign-majority owned structure, work permits for expatriate workers, foreign land ownership, and permits to take or remit foreign currency abroad. A table highlighting the incentives is provided at the conclusion of this article.
Examples of merit-based incentives are as follows:
As for the zoning, the BOI used to target zoning clusters for the aerospace industry, but by virtue of a recent BOI notification issued on November 29, 2016 the BOI cancelled the target clusters for the aerospace industry, and allowed projects to be set up in any area (subject to other laws, such as building control laws, town planning laws, etc.).
In addition to the incentives, the government is establishing a specialized aerospace industrial estate at U-Tapao-Pattaya International Airport. The plan is being executed in three phases:
Thailand is taking positive measures to promote investment in aviation. If the plans come to fruition, Thailand has the potential to become a central aviation manufacturing hub in Southeast Asia. To ultimately achieve that goal, along with economic incentives, the country must invest in research and development, as well as engineering and aviation training. The BOI has recognized this fact. Hopefully the combination of the right incentives and an improvement in human resources will enable Thailand to raise its aviation sector to new heights.