A treasury center, which provides integrated financial services, plays an important role in enhancing financial strength of any company via improved forex management flexibility, reduced borrowing and transactional expenses, plus lower forex risk, among others.
However, many multi-national companies (MNCs) are reluctant to establish their regional treasury centers in Thailand despite low wages and office rental costs, versus Singapore or Malaysia. Although the Thai government began to relax relevant regulations in 2010, those changes have failed to attract either Thai or foreign MNCs to set up regional treasury centers here due chiefly to a lack of tax incentives. Because the current government recognizes the importance of this matter, on November 25, the Cabinet resolved to provide further incentives for MNcs wishing to establish such facilities in the country.
We at KResearch are of the view that this move will help attract more MNCs towards using Thailand as a trade and investment center when operating in ASEAN. Moreover, since many Thai companies are planning to expand businesses abroad, tax incentives as part of this initiative will likely induce them to set up their regional treasury centers here rather than elsewhere. Being home to MNCs' regional treasury centers may help create high-income jobs within our workforce, thus benefiting our economy.