BDO LLP | INTERNATIONAL TECH HUBS THIRD EDITION
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One incentive relates to ownership. Where typically, foreigners don’t have the right to own a business based in Thailand outright, in the tech space businesses can be owned 100% by foreigners. There are significant tax breaks too. Typically there’s no tax to pay at all for the first five or six years of doing business, depending on the nature of your tech activity. Another interesting factor is an imminent change to VAT on digital services, which will mean that companies have to pay VAT on customers in Thailand even if they are not based in the country. This is likely to incentivise more businesses to establish a presence in Thailand, in order to be able to claim back their VAT. This development can be seen as part of a wider Government push to encourage big international businesses and tech giants to consider setting up a regional HQ here, especially as rival regions like Singapore become more expensive. THE INVESTOR ANGLE The Thai Stock Exchange is part of ASEAN, which is a relatively liquid market for the raising of capital. But typically, new businesses are powered by foreign direct investment, sometimes with PE funding or funding from another jurisdiction to invest in infrastructure in Thailand. Thailand enjoys long-standing investor relationships with the US, Japan and especially China, much of it in the automotive space, for example in the area of EVs and driverless vehicles. Thailand has also picked up some of the foreign investment that China has lost in the wake of COVID-19. It is also currently very focused on attracting greater investment from the EU. With its infrastructure, connectivity, people and incentives, Thailand really is set up for tech businesses to succeed.
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