#1: Approval of major legislation
In this series, Baker McKenzie will be bringing you frequent updates regarding the Thai government's Eastern Economic Corridor (EEC) scheme. Initially, Chachoengsao, Chonburi, and Rayong provinces in eastern Thailand have been chosen for the development of the EEC as traditionally they have been the hotbed of industrial development in Thailand and have ample access to the Gulf of Thailand. Currently, the EEC covers an area just over 13,000 km2.
Alongside Thailand 4.0, the government has launched measures to support and accelerate the economic growth in the EEC, for instance, actions to develop public utilities, infrastructure, transportation, logistics, and human resources. With the governments sustained impetus towards technology and innovation, the EEC will serve as a center of the government's aim to modernize Thailand and its industries. In the near future, the EEC will develop into a modern metropolis, a center of trade and investment, a regional hub for transportation and logistics, a significant market for human resources, and most importantly, the most modern gateway to the region.
Recently, on 8 February 2018, the National Legislative Assembly (the NLA) approved the Eastern Economic Corridor (EEC) Bill (the Bill). After this, the Bill will be proposed for consideration, approval and signature of His Majesty the King, and will come into force once published in the Royal Gazette. Several laws and regulations will be exempted to facilitate foreign investment with special privileges for business operators operating in the EEC area.
There are ten targeted industries for the EEC: next-generation automotive, intelligent electronics, tourism for high-income tourists and medical tourism, advanced agriculture and biotechnology, food processing, advanced robotics industry, logistics and aviation, biofuels and biochemical, digital, and holistic medical and health services.
The key benefits which will be introduced for businesses operators in the EEC include, but are not limited to:
- the right to own land to operate the approved business activities in the EEC area, without seeking approval under the Land Code, and the right to own condominiums to operate the approved business activities or to live with an exemption from the restrictions under the condominium law;
- the right to bring foreigners with certain professions or knowledge to work in Thailand;
- the right to an exemption or reduction of corporate income tax not exceeding the right as specified in the Investment Promotion Act or the National Competitive Enhancement Act for Targeted Industries;
- the right to be exempted from the exchange control law, and to use foreign currency for payment of goods and services between business operators in the EEC area;
- the right for foreigners with certain special knowledge or abilities to be considered for receiving tax deductions, and special rights regarding immigration law and other laws;
- the right to lease land in the EEC area for up to 50 years to develop and promote the target industries, whereby this lease can be renewed for 49 years afterwards;
- the right to be exempted from the customs law, partly or wholly, in imports or exports;
- qualified foreign professionals may be able to work in the EEC area in certain professions which normally require Thai nationality or licensing; and
- the authority to approve license application under several laws, such as the factory law and the building control law, being transferred to the secretary of the Eastern Economic Corridor Policy Committee to bypass legal restrictions regarding foreign investment.
Additional details regarding the benefits for businesses operators in the EEC will be determined and issued by the Eastern Economic Corridor Policy Committee.
The next volume in this series will be released soon. Stay tuned.