To address both U.S. tariffs and boost Thailand's competitive advantage, BOI has announced new privileges for the local content requirement and SME promotion, effective 1 August 2025.
The local content (LC) refers to the proportion of goods, services, labor and other resources sourced within a specific geographic area, often a country or region, in a project or industry. The latest LC requirements are 40 - 45 % of EV and Electrical Appliances Industries. The certificate of origin must be issued to verify where the goods were produced, manufactured, or processed. The industries identified as potentially affected by high U.S. tariffs are hot-rolled steel sheet, long steel products, solar cells, etc. The major privilege of this regime is the additional 50% corporate income tax reduction for 2 years.
Promoting SME to boost competitive advantage allows investors to gain more tax benefits from the investor’s know-how transfer. Examples of the policies are hiring more than 70% local staff in the business, and hiring foreign high-skilled labor with high salaries. Other policies will be provided on a case-by-case basis. The major privilege of this regime is 5 5-year tax exemption with 100% efficiency improvement instead of 3 years and 50%.
Both sample industries mentioned above enable investors to forecast the output, minimising oversupply and slow-moving inventory. The tax refund will normally be in cash to the exporter, ensuring strong investor liquidity.
Reference/Citation
Thailand BOI Approves 28.6 Billion Baht in New Investments; Adds Incentives for the Use of Local Content in Electric Vehicle and E&E Manufacturing | Thailand Board of Investment
BOI unveils new incentives to counter US tariffs and protect Thailand’s industry | The Nation
https://www.nationthailand.com/business/investment/40052516