In an effort to boost its digital economy, Thai government waives tax for venture capital firms—directed mainly at technology businesses within the 10 core industries for 10 years.
Thailand, keen on promoting the country's digital economy, is granting a dividend and income tax break for venture capitalist (VC) firms for up to 10 years to help encourage the influx of investments into businesses and start-ups operating within the 10 supported industries, according to a report published at Thairath.
Deputy Minister of Finance Wisuth Srisuphan says the tax exemption also extends to individuals who have contributed to the partnered VC funds, and will be eligible for new businesses and start-ups established between the 1st of October to the 31st of December this year.
Furthermore, the Ministry of Science and Technology–in partnership with various venture capital firms– recently agreed to the establishment of a 500 million baht 'fund-of-funds' aimed at investing in tech start-ups operating within the supported industries. According to the Bangkok Post's "Tax Break for Start-up Funds" May 5th, 2016), the 10 core industries include next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.
The fund will be established within the latter part of the year, and will be a co-investment between the government and its partner VC firms, with the government holding no more than 50% stake in each individual fund, according to Pichet Durongkaveroj, minister of Science and Technology.
"The government will be establishing a dedicated asset management firm to manage the fund, which will be directed mainly at technology businesses within the 10 core industries," added the minister.
To speed up the process of patent sharing and to provide businesses with a steady supply of innovation and research, the Ministry of Science and Technology is also currently trying to pass a new bill that will allow VC firms to more easily distribute patents to the businesses that can best utilise them. The bill will also allow the private sector to gain access to research funding from the government, for the research and development of new technology.
Mr. Pichet says, "The government hopes to encourage VCs to have a part in the development of the business sectors, which will not only help to establish a digital market base in Thailand, but also to help hasten its growth as well."