Analyzing the Factors Contributing to the Establishment of Thailand as a Hub for Regional Operating Headquarters

The third and final paper for this week’s conference at Prince of Songkhla University in Phuket:

Analyzing the Factors Contributing to the Establishment of Thailand as a Hub for Regional Operating Headquarters

Myat Su Yin1* and John Walsh 2

Abstract

In June 2010, the Thai government proposed improved investment tax incentive schemes to attract more foreign companies to establish Regional Operating Headquarters (ROH) in Thailand. The major theme of incentive packages has been the waiving of income tax on ROHs locating in Thailand. In the wake of the political crisis, these tax benefits are considered as important measures in reinforcing the Kingdom’s position as an important manufacturing and service hub for the ASEAN region. While investor confidence was wavering because of the unstable political environment since 2006, investors are weighing business continuity and safety concerns against the incentives. This paper briefly compares the original ROH tax incentives from 2002 with the new ones, examines the factors contributing to the establishment of Thailand as a hub for ROHs and analyzes the competitiveness of Thailand in comparison with Hong Kong, Singapore and Malaysia in the context of national competitiveness for establishing ROH. National competitiveness is measured by using Double Diamond based 9 factor model (IPS Model) from the IPS national competitiveness research study.

Keywords: Regional Operating Headquarters (ROH), Competiveness, IPS Model, Thailand

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