BANGKOK, July 4, 2023 /PRNewswire/ -- The National Innovation Agency (Public Organization), or NIA, is working to stimulate innovative business investments in Thailand. Recently, NIA has opened a channel to endorse innovative startups who want to receive corporate income tax exemptions. Interested parties can submit the document and apply for the endorsement consideration through https://www.nia.or.th/service/Capital-Gains-Tax starting from today. It is expected that in the year 2023, NIA will certify no less than 20-30 startups, particularly those in the innovation and the deep tech sectors.
Dr Pun-Arj Chairatana, Executive Director NIA
Dr. Pun-Arj Chairatana, Executive Director of the NIA, said that Thailand's drive to become an "Innovation Nation" has made it an important destination for foreign nationals interested in living and conducting business as a country that offers affordable business operating costs, provides a moderate cost of living and with a range of interesting economic growth initiatives, particularly the policy of exempting capital gains tax (personal and corporate income tax payments on profits from selling shares which invest in Thai startups) for both Thai and foreigners who invest in targeted industries. This policy is crucial for motivating and attracting highly-skilled individuals from abroad to work or invest in the country.
"The capital gains tax exemption measure is a collaborative effort between the Revenue Department the Digital Economy and Society Council of Thailand, the National Innovation Agency (Public Organization), and partner agencies. The objective is to support Thai and foreign startups operating in target industries and who are certified by the National Innovation Agency (Public Organization) (NIA), the National Science and Technology Development Agency (NSTDA) or the Digital Economy Promotion Agency (Public Organization) (depa).
"This has resulted in increased funding from investors, promoting economic growth in the country. It is estimated that this tax measure will result in increased investment in Thai startups by at least 300 billion baht by 2025, along with the creation of at least 500,000 jobs, both directly and indirectly," he added.
Dr. Pun-Arj also said that the NIA is another agency that can provide certification for startups seeking to avail themselves of corporate income tax exemptions. To qualify for these benefits, investors must invest in businesses that incorporate technology in their production or service processes, generating at least 80% of their revenue.
"The shares must be held for a minimum of 24 months and cover 14 industries including next-generation automotive, smart electronics, affluent medical and wellness tourism, agriculture and biotechnology, food for future, automation and robotics, aviation and logistics, biofuels and biochemicals, digital, medical hub, defense, circular economy, human resources development and R&D for targeted industries, and alternative dispute resolution. This policy has been approved by the Policy Committee and will be enforced for a period of 10 years from the date of the announcement until June 30, 2032", he said.
Regarding the tax benefits that investors will receive, if it is a direct investment in Thai startups, they will be exempted from capital gains tax on profits from stock transfers. This exemption applies to both individuals and corporate investors. If the investment is made through a company participating in a joint investment with a company that operates using Corporate Venture Capital (CVC) or is holding units in a Private Equity (PE) Trust, they will also receive the same tax exemptions.
"In the year 2023, it is expected that at least 20-30 startups, especially those in the innovation and deep tech fields such as AI, robotics, virtual reality, and the ARITECH group in the medical innovation sector, will submit promotion applications to the NIA. Currently, the NIA impel to receive the investment promotion from the Board of Investment (BOI) under the Yothi Medical Innovation District", he added.
Dr. Pun-Arj said that the NIA anticipates that deep technology startups will be a group that applies for startup endorsement to receive the capital gains tax exemption, since it is a trend that investors around the world pay attention to, and which has a high growth potential. Although Thailand currently has a limited number of deep tech startups, there are gaps and opportunities that allow companies and investors to do business. In addition to capital gains tax exemptions, the NIA also has projects that facilitate and provide incentives to highly-skilled individuals and foreign investors to work or invest in the country's target industries, such as the SMART Visa project, a special type of visa which is a collaboration between NIA and BOI to make it easier for investors or entrepreneurs to do business in Thailand.
The establishment of a "Global Startup Hub" as a global-level center is aimed at aiding and convenience to both Thai and foreign entrepreneurs and startups as a "One-Stop Service". This includes promoting technological innovation partnerships with innovation diplomacy, he said.
Startups that are interested in applying can download and complete the application form and submit it along with the required documents to the email address: cgt@nia.or.th from 1st - 10th of each month. The company endorsement will be published within 30 daysfrom the day the complete document is received. For further information, please visit https://www.nia.or.th/service/Capital-Gains-Tax, inquiries can be made via email at cgt@nia.or.th or by calling +66 (0)2 017 5555, extensions 303, 563-564.
