BOI introduces tax breaks for machinery relocation from Cambodia to Thailand

Narit Therdsteerasukdi, BOI Secretary-General, explained that these measures aim to assist both Thai and foreign investors impacted by the closure of the Thailand-Cambodia border, which has disrupted supply chains. 

The closure has led to the need for rerouting and alternative transportation methods, resulting in significantly higher transport costs and delays for businesses.

Recently, the BOI held discussions with investors affected by the situation. Many companies with supply chains linking Thailand and Cambodia, such as those that send raw materials to Cambodia for assembly before returning them to Thailand for further processing or final product manufacturing, have been particularly hard-hit.

Due to the border closure, transportation of goods and raw materials has been disrupted, forcing businesses to reroute via Vietnam and Laos or shift to sea and air transport, which come with higher costs, longer lead times, and greater inventory management challenges.

This has also created a ripple effect on other key industries reliant on parts from these factories, particularly in the automotive, electronics, and electrical appliance sectors.

As a result, many investors have requested the BOI’s assistance to quickly relocate some of their production bases and machinery back to Thailand.

To support these efforts, the BOI has proposed investment promotion measures for businesses affected by the border situation. This will allow businesses that relocate production from Cambodia to Thailand to continue their operations without disruption.

The BOI will offer tax benefits, including full exemption from import duties on second-hand machinery, and investments in second-hand machinery no older than 10 years will be eligible for a 100% corporate income tax exemption on the investment amount. Other benefits will follow standard guidelines.

For businesses relocating machinery to projects already receiving investment promotion, the BOI will allow the importation of machinery from Cambodia for one year, provided that the machinery was previously part of an expired import licence. The investor must submit a relocation plan and application by the end of 2026.

“Due to the closure of the Thailand-Cambodia border, logistics costs and transportation times have risen significantly, especially for investors with production bases linking the two countries. This has disrupted the production of other industries in a cascading effect,” Narit said. 

“The BOI has therefore expedited these measures to help businesses relocate their production bases from Cambodia to Thailand, ensuring continuity of the supply chain and supporting Thailand as a key manufacturing hub in the region.”

BOI approves investment in 4 major projects worth 26 billion baht

Additionally, the BOI board has approved investment promotion for four major projects, with a total investment value of 26.89 billion baht, including:

• Perfect Companion Group, which manufactures pet food brands such as SmartHeart and Me-O, is located in the M-Thai Industrial Park, Samut Prakan, with an investment value of 3.53 billion baht.
• Wayu Power, a wind power producer located in Chaiyaphum, has an investment value of 3.83 billion baht, supplying electricity to the Electricity Generating Authority of Thailand (EGAT) at 78 megawatts.
• ESAN Clean Energy, a wind power producer located in Mukdahan, has an investment value of 6.50 billion baht, supplying electricity to EGAT at 90 megawatts.
• Xing Da Steel Cord (Thailand), which manufactures high-tensile steel wire for tyres, is part of Xingda, the fifth-largest tyre cord manufacturer in the world, located in the Rojana Industrial Park, Chonburi. The company has an investment value of 13.01 billion baht and plans to employ over 1,400 Thai workers.