Political uncertainty continues to undermine the O&G investment climate. However, the non-postponement of the 2019 elections should help to shore up confidence.
June 16, 2021
Asia - South East
South eastern Asia, bordering the Andaman Sea and the Gulf of Thailand, southeast of Myanmar.
Concession-based fiscal system which has had three main variations over time, with the most recent terms known as the ‘Thai III’ regime. Thai III terms include royalty, additional profits tax (called the Special Remuneratory Benefit (SRB)) and corporate income tax. Royalty rates are incremental and based upon production rates, with discounting of rates for deep-water licences. SRB rates are uniquely based upon annual revenue and the cumulative metres of wells drilled on the concession area, with an adjustment for the geological complexity of the concession.
Thailand is the second largest economy in ASEAN, driven by its pro-investment policies and well-developed infrastructure. General Prayut Chan-o-cha was elected by Parliament as Prime Minister in 2019, contemperaneously with the restoratio of a King as the Head of State. Despite some political uncertainty, Thailand continues to encourage FDI as a means of promoting economic development, employment, and technology transfer. The Thai government maintains a regulatory framework that broadly encourages investment. Some investors have nonetheless expressed views that the framework is overly restrictive, with a lack of consistency and transparency in rule-making and interpretation of law and regulations. The Board of Investment (BOI), Thailand’s principal investment promotion authority, and acts as a primary conduit for investors, and provides assistance in navigating Thai regulations and provides investment incentives as well as tax and non-tax privileges.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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