With the objective of supporting the Thai economy, since the 1980s, the Thai government has promoted the establishment of businesses in so-called „“Industrial Estates“, which are state-managed industrial parks. Foreign investors are offered various incentives for choosing such location for their business.
There are about 36 Industrial Estates in Thailand. The legal basis for these facilities is the „Industrial Estates Authority Act“ (IEAA) from 1979. This Act defines two different kinds of zones: The „General Industrial Zone“ and the „I-EA-T Free Zone“ (before „Export Processing Zone“).
a) General Industrial Zones are areas, which incentivizes settlement of foreign industries which are worth to promote. Mainly they are expected bring technical know-how to Thailand. But there are no incentives related to the import or export of products. The investors rather benefit from the general facilities provided by the Industrial Estates:
• The possibility of land purchase for foreigners within the Industrial Estates, under the discretion of the IEAT.
• Easy process for work permit applications.
• Facilitation of international funds transfer.
b) The I-EA-T Free Zones mainly serve the establishment of employment and promotion of the production of export products. The state of Thailand grants significant tax breaks, which are beneficial for foreign and Thai investors.
In addition to such legal and tax benefits, also the excellent infrastructure makes industrial estates a very attractive choice as a location.