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Business Times
19-05-2025
- Business
- Business Times
Thailand unveils measures to shield firms from trade war fallout
[BANGKOK] Thailand will offer bigger tax incentives to small and medium businesses at risk of being squeezed by US tariff threats, as the South-east Asian nation unveiled a raft of measures to minimise the blow to its economy from the trade war. Small and medium enterprises backed by Thailand's Board of Investment will now be eligible for a corporate income tax waiver equal to as much as 100 per cent of their investment in capability enhancement for a five-year period. That's up from a three-year exemption capped at 50 per cent of investment previously, the board said in a statement on Monday (May 19). A meeting of the board chaired by Finance Minister Pichai Chunhavajira also decided to suspend investment promotion for certain sectors that carry oversupply risks or negative environmental impact. The affected sectors include solar cell and panel manufacturing, certain vehicle parts production, steel pipes, hot-rolled and long steel production, it said. Trade-reliant Thailand, which faces a threat of 36 per cent tariffs on exports to the US, will also ensure greater scrutiny of new investment proposals to ensure that 'essential production processes' actually happen in the country. Prospective investors also face tighter criteria and screening regarding the ratio of foreign personnel to local workforce and foreigners' minimum remuneration. The moves are seen as efforts to address US concerns of Thailand being used as a transshipment hub by foreign companies trying to circumvent higher tariffs. They were announced hours after the nation's planning agency slashed the growth forecast this year by a 1 percentage point, citing the impact of the trade war on private investment and exports. Prime Minister Paetongtarn Shinawatra has ordered officials to tighten the criteria for issuance of certificates of origin as the country prepares for talks with Trump administration to avert the steep tariff. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up This package of measures 'aims to encourage Thai entrepreneurs to improve their potential and efficiency, increase their competitiveness amid intense competition and global trade tensions resulting from the impact of the US trade policies, and support the entrepreneurs involved in some of the most vulnerable sectors,' the board said. The suspension of incentives for several solar and steel products will be welcomed by local producers, who have been hit by an influx of cheap imports and surplus capacity. The US set a duty of 375.2 per cent on solar imports from Thailand last month, part of a sweeping crackdown on cheap imports from South-east Asia. The board also greenlit investment proposals worth a combined US$3 billion in data centres and renewable energy. The agency said it was tightening the criteria for incentives in the data centre industry by requiring foreign direct investments to bring higher technology and contribute more benefits to the domestic economy. To get the highest level of tax benefits – corporate income tax exemption for eight years – projects will need to meet power usage effectiveness standards, and offer data hosting using advanced computing capabilities such as graphic processing units, the board said. Tax benefits offered to other projects, not matching these requirements, will be capped at five years. The board also approved tax benefits to promote tourism infrastructure in about 55 so-called second-tier provinces, in line with government plans to develop new tourist attractions. Investments in hotel businesses in these provinces will receive a five-year corporate income tax exemption, up from three years previously, the board said. BLOOMBERG
Express Tribune
16-05-2025
- Business
- Express Tribune
Centre-province ties urged for business ease
Listen to article A significant high-level meeting was held on Thursday at the Board of Investment (BOI) Karachi, chaired by Federal Minister for Investment Qaiser Ahmed Sheikh. The purpose of the meeting was to review the ongoing reforms under the Pakistan Regulatory Modernisation Initiative (PRMI) aimed at improving the business environment in Pakistan. The meeting began with welcome remarks from the additional secretary of BOI, who appreciated the participation of key stakeholders. Attendees included the CEO of the Pakistan Business Council, special secretary for industry from Punjab, secretary of the Sindh Investment and Trade Department and representatives from the Sindh Investment Board. Representatives from Punjab and Sindh provided detailed briefings on the ongoing efforts to promote regulatory reforms and ease of doing business in their respective provinces. The secretary for investment from Sindh highlighted the "One-Stop Service" initiative launched in the province, which is proving to be a milestone in providing swift and integrated facilities to the business community. The meeting focused on improving coordination between the federal and provincial governments, enhancing the effectiveness of digital platforms, supporting small and medium enterprises and developing skills. Participants emphasised that a strong and sustainable business environment can only be established through harmonised laws and partnerships. Federal Minister Qaiser Ahmed Sheikh appreciated the efforts of all relevant institutions and stated that the government is committed to keeping the reform process integrated and making decisions through continuous consultation with all stakeholders. He added that such meetings play a vital role in restoring the confidence of the business community and promoting investment.
Business Times
08-05-2025
- Business
- Business Times
Thailand braces for ‘temporary' investment freeze as US tariffs remain uncertain
[BANGKOK] Thailand may see a slowdown in new foreign direct investments due to global trade uncertainties, while the South-east Asian country seeks to negotiate with Washington to soften the blow from the threat of a 36 per cent tariff. New foreign investment applications could be frozen temporarily, at least while the tariff situation remains unclear during US President Donald Trump's 90-day pause on higher tariffs, according to Narit Therdsteerasukdi, secretary-general of the Board of Investment. Some companies that have already pledged investments in Thailand may also wait out the uncertainties before going ahead, he said. 'The slowdown could probably happen temporarily in the short term,' Narit told reporters late on Wednesday (May 7). 'Some investment projects that export mainly to the US, they may wait and see. It's a normal situation under uncertainties.' Such a scenario may be a damper to Thailand's investment boom over recent months, with applications soaring to a 10-year high of 1.14 trillion baht (S$45 billion) in 2024. Applications nearly doubled to 431 billion baht in the first quarter of 2025 compared to a year earlier, boosted by foreign pledges in digital infrastructure and data centres, the Board of Investment reported last week. Still, Narit said he was not too concerned as Thailand has 'good momentum' and investment pledges this year are expected to ultimately top last year's. Most companies believe in Thailand's long-term potential to play a bigger role in the global supply chain, and many foreign companies whose businesses focus on the domestic Thai market or export to countries other than the US will have 'no reason to stop' their investments in the South-east Asian country, he said. The Thai government is still seeking to lock down talks with US authorities, after it said an initial appointment slated for late April was deferred pending a thorough review of some key issues. Thailand has since pledged to liaise with the US Customs and Border Protection to set new guidelines and monitor any false claims of origin by firms exporting goods out of the country. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Bangkok has also indicated a willingness to reduce a US$46 billion trade gap with the US, its largest export market last year, by importing more American natural gas and farm commodities including corn and soybean meal. It's also encouraging Thai firms to invest more in the US to help ward off Trump's planned tariffs. A delegation consisting of big Thai corporations and business groups will attend the annual Select USA Investment Summit in Maryland next week, Narit said. Narit himself had just returned from a roadshow in Seattle and Washington DC, where he met with US technology companies and industry groups. Thailand is still seen as a strategic hub for supply chain diversification and the companies remain confident and interested in investing in the country, he said. 'The Thai government is now working hard to prepare the position and proposal for the discussion with the US administration. And I hope that the result will be favourable for the investors,' Narit said. 'We don't need to rush or to go first. We are waiting for the right timing.' BLOOMBERG
Bloomberg
08-05-2025
- Business
- Bloomberg
Thailand Braces For ‘Temporary' Investment Freeze As US Tariffs Remain Uncertain
Thailand may see a slowdown in new foreign direct investments due to global trade uncertainties, while the Southeast Asian country seeks to negotiate with Washington to soften the blow from the threat of a 36% tariff. New foreign investment applications could be frozen temporarily, at least while the tariff situation remains unclear during US President Donald Trump's 90-day pause on higher tariffs, according to Narit Therdsteerasukdi, secretary-general of the Board of Investment. Some companies that have already pledged investments in Thailand may also wait out the uncertainties before going ahead, he said.
Express Tribune
25-04-2025
- Business
- Express Tribune
Govt eyes Gwadar for China industry relocation
Listen to article Pakistan has initiated efforts to devise a roadmap aimed at attracting Chinese industries for potential relocation to the country in wake of the ongoing tariff dispute between China and the United States. Since US President Donald Trump took office, a series of high tariffs have been imposed on Chinese products in a bid to revive domestic American manufacturing. Pakistan views this escalating trade conflict as an opening to position itself as an attractive destination for Chinese businesses seeking new bases of operation. To support this ambition, Pakistan is preparing a strategic framework to offer incentives designed to lure Chinese industries to Gwadar, the deep-sea port city at the heart of the China-Pakistan Economic Corridor (CPEC). In parallel, the government is implementing several additional measures to rejuvenate economic activity in the area. Sources told The Express Tribune that the Cabinet Committee on Chinese Investment Projects (CCoCIP), in a recent session, tasked the Board of Investment (BOI) and the Ministry of Industries & Production to jointly deliver a roadmap within five days. This plan will outline steps to identify and attract Chinese industries willing to relocate operations to Pakistan in light of the US-China tariff battle. The CCoCIP also reviewed a summary from the Ministry of Maritime Affairs titled "Review/Compliance of decisions taken during previous CCoCIP meetings." The committee noted the ministry's report and made several strategic decisions to advance Pakistan's position as a relocation hub. Among the key directives was an order to the Ministry of Commerce to immediately issue a Statutory Regulatory Order (SRO) that would allow the export of Potassium Sulphate fertiliser from Gwadar Port, overriding current restrictions under the Export Policy Order. This move had already been approved by the Economic Coordination Committee (ECC) and ratified by the federal cabinet but had not yet been formally notified. In another decision, the CCoCIP directed the Ministry of Planning, Development and Special Initiatives to convene a high-level meeting involving representatives from the Ministry of Finance, Ministry of Commerce, Ministry of Industries & Production, the Board of Investment, and the State Bank of Pakistan. This meeting, scheduled for the coming week, will explore the implementation of Foreign Currency Facilitation as a pilot project within the Gwadar Free Zone. The Finance Division has been tasked with preparing a one-page briefing for the session. The committee also urged the Ministry of Maritime Affairs to engage in meaningful dialogue with local fishermen to enable international seafood transshipment through Gwadar Port. A report on the outcomes of these consultations is to be submitted for review at the committee's next meeting. In regard to the Karachi Comprehensive Coastal Development Zone (KCCDZ), the committee directed the Ministry of Planning, Development and Special Initiatives to form a committee comprising the ministers of Planning, BOI, and Maritime Affairs. This team will engage with the Sindh chief minister of Sindh to address outstanding issues related to the KCCDZ and work towards a viable resolution. Addressing infrastructure challenges, the committee instructed the Power Division to coordinate with Naval Authorities to ensure electricity supply to the Gwadar Desalination Plant from the Naval Grid. This interim arrangement is necessary due to the temporary suspension of power imports from Iran. Additionally, the Power Division was directed to work with the Gwadar Port Authority to link the plant to the National Grid via an extension of the power distribution line from Panjgur and present their proposal at the next CCoCIP meeting. The committee further called on the Power Division, in collaboration with the National Electric Power Regulatory Authority (NEPRA), to accelerate the implementation of a cabinet decision concerning the electricity supply mechanism for the Rashakai Special Economic Zone (SEZ). An implementation report is to be submitted at the upcoming committee meeting, while NEPRA has been instructed to expedite its processes in this regard. Lastly, the Board of Investment has been ordered to act on all pending CCoCIP decisions without delay and provide a comprehensive progress report for review at the committee's next session.
