Thailand Tax Update: New Tax Incentives for Angel Investors

At the end of January 2018, the Thai government approved a Ministerial Regulation providing a tax incentive (“Tax Incentive”) to any Angel Investor investing in a start-up company that conducts a promoted business activity in an industry approved by the National Science and Technology Development Agency (“NSTDA”).

More specifically, the Tax Incentive is granted to an angel investor that has invested in a start-up company or juristic partnership at either the incorporation or capital increase stage. Such an incentive will take the form of a tax exemption on personal income tax, capped at THB 100,000 for each applicable tax year.

According to the Ministerial Regulation, to qualify for the Tax Incentive, the following conditions must be met:

1.The company or juristic partnership must be incorporated under Thai law and registered between 1 October 2015 and 31 December 2019;

2.The registered capital of the company or juristic partnership must not exceed THB 5 million and the revenue generated from such an entity’s supply of goods or services must not exceed THB 30 million in any fiscal year that the tax incentive is used;

3.The company or juristic partnership must conduct a business activity in an approved industry as listed below:

  • Food and Agriculture
  • Energy Saving, Renewable energy, and Clean energy;
  • Biotechnology;
  • Medical and Public Health;
  • Tourism, Services, and Creative Economy;
  • Progressive materials;
  • Textile, clothing, and ornament;
  • Automotive and parts;
  • Electronics, computer, software and information technology services; and
  • Research Based Development and Innovation or [new] industry.
  • The business activity must be technology-based as indicated by the NSTDA. Additionally, approval from the NSTDA is required.

4.At least 80% of the total revenue of the company or juristic partnership must come from the sale of goods or services and/or related to the approved industry in the fiscal year;

5.A Tax Incentive is provided for any investment in the company or an increase of registered capital from 1 January 2018 to 31 December 2019;

6.The Angel Investor must hold shares in the start-up company or juristic partnership for a period of at least two consecutive years from the date of investment.

This benefit should prove very useful for attracting investment funds needed to advance the economic and industrial development goals of the country by providing a much needed incentive and enhanced returns to Angel Investors.

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