The Thailand Board of Investment (BOI) has approved a package of incentives to promote joint venture investment between Thai and foreign companies in manufacturing automotive parts for vehicles using all types of propulsion systems.

According to BOI, the new package of incentives aims to provide more business opportunities for Thai entrepreneurs operating in the automotive parts sector. It will also help upgrade the production technology of automotive parts, so that Thailand will be able to keep pace with the changing automotive industry. Thailand has positioned itself as a global hub for automotive manufacturing.

The incentives will apply to the manufacturing of parts for internal combustion engines, hybrids, and electric vehicles. To qualify for the incentives, a new joint venture will be required to invest not less than 100 million baht in the manufacturing of auto parts and to be formed between a foreign company and a Thai company, whereby the Thai side must hold no less than 30 percent of the new entity’s registered capital.

The Thai company entering the joint venture will be required to have been established for at least three years prior to the application with BOI, and to be at least 60 percent Thai-owned. 

Both new projects and existing parts manufacturers already enjoying BOI promotion privileges but transforming into a joint venture along the same criteria, will be eligible for two years of additional tax exemption on the condition that their total tax exemption period does not exceed eight years in total.

Applications for investment promotion under this package must be submitted to BOI by the end of 2025.

BOI Secretary General Narit Therdsteerasukdi said that the opening up of more business opportunities for Thai and foreign joint venture investment in automotive parts production would lead to technology transfer, personnel development, and the use of more raw materials in the country, and it would enhance the competitiveness of Thai manufacturers of automotive parts in moving toward becoming a global supply chain in the future.