Free Trade Zones (FTZs)

Thailand offers several Free Trade Zones (FTZs) or Free Zones (FZs), also known as Industrial Free Zones (IFZs), which provide tax and duty incentives for businesses engaged in manufacturing, logistics, and export-oriented activities. These zones are regulated by the Industrial Estate Authority of Thailand (IEAT) and the Customs Department.

 

Key Benefits of Setting Up a Company in Thailand’s Free Trade Zones

1.Tax Incentives

- Corporate Income Tax (CIT) exemptions or reductions (up to 8 years).
- Import duty exemptions on raw materials, machinery, and equipment.
- VAT exemptions for goods imported into the zone.

2.Customs Benefits

- Duty-free import of raw materials for export-oriented production.
- Simplified customs procedures (bonded warehouse facilities).

3.Business-Friendly Policies

100% foreign ownership allowed (unlike some Thai BOI-promoted companies). No restrictions on repatriation of profits.

4.Strategic Locations

- Near major ports (Laem Chabang, Bangkok Port).
- Close to airports (Suvarnabhumi, Don Mueang).
- Industrial estates (Eastern Economic Corridor - EEC).

Types of Free Zones in Thailand

  1. Industrial Free Zones (IFZs)
    • Operated by IEAT, mainly for manufacturing and export.
    • Examples: Amata City, Map Ta Phut, Eastern Seaboard Industrial Estate.
  2. Free Trade Zones (FTZs) & Bonded Warehouses
    • Managed by Customs Department.
    • Used for logistics, storage, and re-export.
    • Examples: Laem Chabang Port FTZ, Bangkok FTZ.
  3. Special Economic Zones (SEZs)
    • Located near borders (e.g., Mae Sot, Songkhla).
    • Focus on trade with neighboring countries (Myanmar, Laos, Cambodia, Malaysia).
 

Steps to Set Up a Company in Thailand’s Free Trade Zone

The hospital plays a statewide services includes the Acquired

1.Choose the Right Zone

► Select an IEAT-managed Industrial Free Zone or a Customs FTZ based on business needs.

2.Apply for IEAT or Customs Approval

►Submit business plan, financial statements, and company registration documents.
► Obtain IEAT promotion certificate (for IFZs) or Customs bonded warehouse license (for FTZs)

3.Register the Company

► Register with the Department of Business Development (DBD).
► Foreign-owned companies may need Foreign Business License (FBL) unless exempt.

4.Obtain Necessary Permits

► Factory license (if manufacturing). Environmental impact assessment (if required).

5.Start Operations

►Import goods duty-free under bonded warehouse rules.
► Comply with IEAT/Customs reporting requirements.

 

Industries Suitable for FTZs in Thailand

Manufacturing (electronics, automotive, food processing). Logistics & Warehousing. Trading & Distribution. E-commerce & Fulfillment Centers.

Comparison: FTZ vs. BOI Promotion

Feature

Free Trade Zone (FTZ)

BOI-Promoted Company

Ownership

100% foreign allowed

100% foreign possible (depending on activity)

Tax Benefits

Duty-free imports, CIT exemptions

CIT holidays (3-8 years), reduced rates

Location

Only in designated zones

Anywhere in Thailand

Main Focus

Export-oriented manufacturing

Broad (tech, services, R&D, etc.)

Conclusion

Setting up a company in a Thailand Free Trade Zone is ideal for export-driven manufacturing and logistics businesses. The IEAT and Customs Department provide tax and duty benefits, while allowing full foreign ownership in many cases. For companies targeting ASEAN markets, Thailand’s FTZs offer a strategic advantage.