A STUDY OF INVESTMENT PROMOTION POLICY IN THAILAND IN COMPARISON WITH VIETNAM: A CASE STUDY OF FOREIGN DIRECT INVESTMENT

Abstract

A study of investment promotion policy in Thailand in comparison with Vietnam: A case study of foreign direct investment. The study found the foreign direct investment was essential to economic development of developing countries because domestic saving level was insufficient for domestic investment needs. Therefore, foreign direct investment was additionally used in domestic investment. This type of investment was not only in the form of an amount of money but included technical knowledge, managerial skill, and intellectual capital that can increase national potential of competition and activate the growth of Thai economy. Comparing the investment promotion policies between those of Thailand and Vietnam, tax benefits and non-tax were similar; that was, there was a tax credit for corporate income and an exemption for raw material import duties a land possessory right, a foreigner employment right. Interestingly, Vietnam did not have a profit remittance tax which had been levied in Thailand. Apart from tax collection issues

            The different base of Thailand and Vietnam resulted in difference of the investment promotion policies. Vietnam is at the beginning of developing era; accordingly, there is enough space for newly establishing industrial factories. Thus, the national economic growth rate in Vietnam directs to be high and upgraded. In comparison, Thailand is going to reach the saturation point so the investment promotion has not considered only on tax management but also the levels of development. Furthermore, the operation of project approval, accompanies with decentralization of administrative power, should be improved to be more timely and clearly that favors the smoothness of coordination.