Bangkok: The Board of Investment (BOI) has approved measures to assist investors affected by the situation on the Thai-Cambodian border, including exemptions from import duties on used machinery from Cambodia and support for investors relocating their production bases to Thailand. The board also noted that border issues are impacting international logistics costs and key industrial supply chains. Furthermore, the board has approved four investment projects worth over 26 billion baht.
According to Thai News Agency, Mr. Narit Therdsteerasak, Secretary-General of the Board of Investment (BOI), revealed that the BOI board meeting, chaired by Deputy Prime Minister and Minister of Finance Pichai Chunhavajira, approved “investment promotion measures for impacts on the Thai-Cambodian border situation.” These measures aim to assist both Thai and foreign investors affected by the closure of the Thai-Cambodian border checkpoint, which has disrupted freight transport routes and forced them to change their routes or modes of transport, significantly increasing transportation times and costs for operators.
Recently, the Board of Investment (BOI) has held discussions with investors affected by the Thai-Cambodian situation. Several companies have established supply chains connecting the two countries. For example, factories in Thailand send raw materials to Cambodia for partial assembly, then return them to Thailand for complex parts production or finished goods, which are inspected and packaged before being shipped to domestic and international customers through distribution centers in Thailand. Border closures have impacted the transportation of raw materials and goods, forcing them to switch to transport via Vietnam and Laos, or to sea or air transport, which are highly limited, time-consuming, costly, and burdensome for managing raw material and goods inventory in a highly uncertain environment. This has had a ripple effect on other key industries that rely on parts from these factories, particularly the automotive, electronics, and electrical appliance industries. Consequently, many investors have informed t
he BOI of the need to plan for the rapid relocation of some production bases or machinery back to Thailand.
The BOI has therefore proposed investment promotion measures to address the impact of the Thai-Cambodian border situation. This measure aims to support investors seeking to relocate their production bases from Cambodia to Thailand, ensuring the continued operation of their primary production bases in Thailand. Import duties will be exempt from import duties on used machinery in all cases, and investments in used machinery no older than 10 years will be eligible for a 100% corporate income tax exemption. Other benefits will be in accordance with general criteria.
In the case of relocating some machinery to be used in conjunction with an existing investment promotion project, if the import period for the original machinery has expired, the BOI will permit the import of only machinery relocated from Cambodia for one year from the date of application for project amendment. However, investors must submit a plan for relocating their production base from Cambodia and submit the application by the end of 2026.
“The closure of the Thai-Cambodian border has resulted in obstacles to the transport of raw materials and parts, particularly for investors with production bases linked to the two countries. These individuals face significantly higher logistics costs, significantly lengthening transportation times, and cascading impacts on production in other industries. The Board of Investment (BOI) is therefore expediting measures to enable businesses to relocate their production bases from Cambodia to Thailand. This will ensure supply chain continuity and promote Thailand as a key regional production base,” said Mr. Narit.
In addition, the BOI board meeting also approved investment promotion for four major projects with a total investment value of 26,891 million baht, including:
Perfect Companion Group Co., Ltd. operates a pet food manufacturing business, such as cat food, under the brands SmartHeart and Me-O. Located in the industrial estate of M. Thai Estate Co., Ltd. in Samut Prakan Province, the company has an investment value of 3.536 billion baht.
Vayu Power Co., Ltd., a wind power producer located in Chaiyaphum Province, has an investment value of 3,834 million baht and sells 78 megawatts of electricity to EGAT.
Isan Clean Energy Co., Ltd., a wind power producer located in Mukdahan Province, has an investment value of 6.504 billion baht and sells 90 megawatts of electricity to the Electricity Generating Authority of Thailand (EGAT).
Xingda Steel Cord (Thailand) Co., Ltd., a producer of high-tensile steel wire (Ultimate Tensile Strength), a raw material for automobile tires only. The parent company, Xingda, is the world’s fifth-largest tire reinforcement wire producer. Located in Rojana Industrial Park, Chonburi Province, the investment value is 13.017 billion baht and plans to employ more than 1,400 Thai workers.