Thailand Halts Investment Incentives for PV and Other Industries, Strengthens Review of Local Production Processes to Counter U.S. Tariffs

According to Thai media reports, the Thailand Board of Investment (BOI) held a meeting on the 19th and introduced four measures to help Thai enterprises cope with US tariffs and external challenges.

Firstly, it will cease offering investment promotion incentives to industries with a supply surplus or those vulnerable to trade restrictions imposed by the US and other countries. These include solar cell and panel manufacturing, certain automotive parts (such as lead-acid batteries, decorative parts, and other accessories that do not affect vehicle driving performance and safety), metal cutting, waste sorting outside industrial parks without recycling links, downstream steel industries like long product manufacturing, sheets & plates (including only hot-rolled coil steel and thick steel plates), and various steel pipes.

Secondly, it will strengthen the review of critical production processes in industries vulnerable to US trade measures. For industries such as automotive parts, electrical appliances, electronics, metal products, and light industry, clear conditions will be set, requiring the possession of critical production processes that fully process and transform raw materials, thereby enhancing the acceptability of Thai products in export markets and safeguarding national interests.

Thirdly, it will adjust the hiring conditions for foreign personnel. For manufacturing enterprises applying for investment promotion, if the total number of employees in the company reaches 100 or more, at least 70% of them must be Thai nationals. Foreign personnel applying for BOI visas and work permits must meet minimum salary standards, such as a monthly salary of no less than 150,000 Thai baht for senior executives and no less than 50,000 Thai baht for professional and technical personnel, to protect local employment.

Fourthly, it will support small and medium-sized enterprises (SMEs) affected by US tariffs. Thai SMEs are encouraged to invest in improving their efficiency and competitiveness, such as by replacing machinery equipment, adopting automation and digital technologies, saving energy, upgrading to international sustainability standards, and transitioning to emerging industries. The original three-year corporate income tax exemption (limited to no more than 50% of the investment amount) will be extended to five years (limited to no more than 100% of the investment amount).