Following the United States' announcement of a 36% reciprocal tariff on Thai imports, effective August 1, 2025, Thailand's Board of Investment (BOI) has accelerated its policy responses to address potential impacts on exports and investment. With the US accounting for 18% of Thailand's exports, the high tariff rate poses significant challenges for Thai competitiveness, especially compared to ASEAN peers like Vietnam, Malaysia, Indonesia, and Singapore.
The BOI's Secretary-General, NARIT THERDSTEERASUKDI, indicated that in the two months since the tariff hike was announced, the BOI held discussions with both domestic and foreign investors. As a result, it is rolling out a new policy package titled ‘Thai Enterprise Competitiveness Enhancement Measures for the New Global Era,’ focusing on enhancing operational efficiency and strengthening local supply chains.
The new initiatives comprise two main areas:
Thai SMEs will now receive increased tax incentives to invest in machinery upgrades, automation, digital technologies, and energy-saving measures. The new incentive structure includes:
Companies in the electric vehicle (EV) and electronics sectors that utilize Thai-sourced materials certified by the Federation of Thai Industries' Made in Thailand (MiT) programme will benefit from an additional two-year 50% corporate income tax deduction. Eligibility is based on specific local content thresholds:
This involves three further sub-measures:
Industries vulnerable to US trade measures, including auto parts, electrical appliances, electronics, and certain light industries, will be subjected to stringent conditions. These include requirements for a significant transformation of raw materials into finished products, necessitating a change in customs tariff classification at least at the 4-digit level.
To promote local employment, companies with over 100 employees must hire at least 70% Thai nationals. Additionally, the BOI will implement minimum income thresholds for foreign personnel benefiting from BOI-related visa and work permit privileges, mandating executives to earn a minimum of 150,000 baht per month and experts 50,000 baht.
Beyond these measures, the BOI is poised to introduce further initiatives aimed at assisting businesses potentially impacted by the US tariff. Industries identified as critical for Thai exports to the US, including food processing, automotive parts, and electrical components, will be prioritized in these additional measures.