BANGKOK, Aug. 8 (Xinhua) -- Thailand has approved a package of incentives aimed at promoting joint ventures between Thai and foreign companies to manufacture automotive parts for vehicles using all types of propulsion systems, the Board of Investment said on Thursday.
The incentives, applicable to both new and existing projects, are designed to strengthen the Southeast Asian nation's position as an automotive production hub, upgrade the local parts industry and create more business opportunities for Thai entrepreneurs, the board said in a statement.
New joint ventures must invest at least 100 million baht (about 2.83 million U.S. dollars) in the manufacturing of auto parts and comprise a foreign and local company, with a Thai side required to be at least 60 percent Thai-owned and hold no less than 30 percent of the new entity's registered capital, the board said.
Both new projects and existing parts manufacturers currently enjoying promotion privileges but transforming into a joint venture are eligible for two years of additional tax exemption, capped at eight years, on the condition that they apply before the end of 2025, it said.
Last month, the board unveiled incentives for manufacturers of hybrid vehicles, targeting to attract 50 billion baht (about 1.41 billion dollars) in new investments.
To benefit from reduced excise tax rates, hybrid vehicle makers must invest at least 3 billion baht (about 84.93 million dollars) in the next four years, while vehicles are required to use locally produced key parts and be equipped with advanced driver assistance systems.
Thailand has long been a regional automotive manufacturing and export hub. The government's initiatives to boost investments, particularly in the electric vehicle sector, are attracting major companies with various incentives. ■
