BOI ends solar panel, steel incentives to tackle oversupply

On Monday, BOI secretary general Narit Therdsteerasukdi stated that the initiative aims to enhance the capabilities of Thai entrepreneurs to adapt to the modern global landscape. 

The strategy is designed to strengthen the competitiveness of Thai SMEs, maintain economic stability amid market fluctuations, and reduce risks stemming from US trade policies. Additionally, it seeks to integrate Thai businesses into global supply chains.

The four key measures include:

• Boosting SME efficiency – A special incentive scheme will encourage Thai SMEs to improve operational efficiency through investments in new machinery, automation, digital technologies, energy conservation, and global sustainability standards. Tax exemptions for efficiency improvements will increase from three years (up to 50% of investment value) to five years (covering 100% of investment value).
• Reducing oversupply risks – Investment incentives will no longer be granted to industries facing potential oversupply or trade-related vulnerabilities, such as solar cell and panel manufacturing, lead-acid battery production, automotive components, metal cutting, and non-recyclable waste sorting. Additionally, downstream steel manufacturing incentives will be withdrawn, including long-form steel, hot-rolled and thick steel sheets, and various steel tubing.
• Stricter production criteria – Certain industries exposed to US trade measures—such as automotive parts, electrical appliances, electronics, metal products, and light industries—must demonstrate significant raw material transformation. This includes customs classification changes at the four-digit level to ensure exports generate clear benefits for Thailand.
• Revised foreign employment conditions – Companies with 100+ employees seeking investment promotion must maintain a Thai workforce of at least 70%. A minimum income threshold for foreign personnel will be introduced—executives must earn at least 150,000 baht per month, while specialists must earn 50,000 baht—to balance domestic employment opportunities and foster knowledge transfer to Thai workers while attracting high-value foreign expertise.

Additionally, BOI has commissioned a study, in collaboration with the Federation of Thai Industries (FTI) and the Thailand Development Research Institute (TDRI), to explore measures for increasing domestic value creation and foreign investment partnerships. 

The study aims to encourage international firms to collaborate with Thai entrepreneurs and expand business opportunities, particularly in industries vital to global supply chain integration, Narit added.