Thailand’s border Special Economic Zones (SEZs) cover parts of ten provinces along the borders with Myanmar, Laos, Cambodia and Malaysia. Investors there can choose between two sets of tax benefits: the BOI’s SEZ incentives, with up to 8 years of corporate income tax exemption, or a reduced corporate income tax rate of 10% for 10 accounting periods under Royal Decree No. 797, in force since June 2025. The two cannot be combined. A separate tax regime, with a 3% corporate income tax rate, applies in the southern border provinces until 31 December 2026.
Last updated: October 2026
The ten border provinces
The SEZs were created in two phases:
| Phase | Province | Border |
|---|---|---|
| Phase 1 (2015) | Tak | Myanmar |
| Phase 1 (2015) | Mukdahan | Laos |
| Phase 1 (2015) | Sa Kaeo | Cambodia |
| Phase 1 (2015) | Trat | Cambodia |
| Phase 1 (2015) | Songkhla | Malaysia |
| Phase 2 (2016) | Chiang Rai | Myanmar and Laos |
| Phase 2 (2016) | Nong Khai | Laos |
| Phase 2 (2016) | Nakhon Phanom | Laos |
| Phase 2 (2016) | Kanchanaburi | Myanmar |
| Phase 2 (2016) | Narathiwat | Malaysia |
Each zone covers specific districts and sub-districts, usually around a border crossing or a cross-border logistics route, not the whole province. Check that your site is inside the zone before relying on any incentive.
Option 1: the BOI’s SEZ incentives
The BOI measure for border SEZs is set by BOI Announcement No. 19/2565, in force since 3 January 2023. It distinguishes targeted activities, listed in an appendix to the announcement, from other promoted activities.
| Incentive | Targeted activities | Other promoted activities |
|---|---|---|
| Corporate income tax exemption | 8 years, capped at 100% of the investment (excluding land and working capital) | 3 additional years on top of the activity’s exemption, up to 8 years in total |
| 50% corporate income tax reduction | 5 years after the exemption, except for a few listed activities | 5 years after the exemption, for Group A1 or A2 activities that already receive the 8-year exemption |
| Double deduction of transport, electricity and water costs | 10 years from the first revenue | |
| Deduction for infrastructure installation or construction | 25% of the investment, on top of normal depreciation | |
| Import duties | Exemption on machinery, and on raw and essential materials used to produce for export for 5 years | |
The targeted activities cover sectors such as agro-industry, textiles, construction materials, packaging, electronics, pharmaceuticals, logistics, industrial estates and tourism. Some carry specific conditions, such as environmental certifications or minimum investment amounts. Projects in the Narathiwat SEZ follow the BOI’s separate measures for the southern border provinces instead.
For the general BOI framework, see our guide to BOI promotion.
Option 2: the 10% corporate income tax rate (Royal Decree No. 797)
Royal Decree No. 797, published on 5 June 2025 and in force since 6 June 2025, reduces the corporate income tax rate from 20% to 10% for companies operating in industries designated for the border SEZs. The rules were detailed in Revenue Department Notification No. 468 of 19 March 2026.
- Scope: net profit from producing goods in the SEZ and from services performed and used in the SEZ, in the ten border provinces.
- Duration: 10 consecutive accounting periods, starting with the period in which the company notifies the Revenue Department.
- Conditions: separate accounts for eligible and non-eligible activities, with separate profit and loss calculations.
- No combination with BOI incentives: a company that receives a corporate income tax exemption or reduction under BOI promotion cannot use the 10% rate.
The 10% rate can suit a profitable company that does not need, or does not qualify for, BOI promotion. A project with heavy upfront investment will usually gain more from a BOI exemption. The choice should be modelled before applying. For the standard tax rules, see our article on corporate tax in Thailand.
Land ownership: a BOI right, not an SEZ right
The possibility for a foreign-owned company to own land does not come from SEZ status. It comes from Section 27 of the Investment Promotion Act, which allows the BOI to authorise any promoted company to own land for its promoted activity, wherever the project is located. A promoted company in an SEZ, in the EEC or elsewhere in Thailand has the same right, subject to a separate BOI approval after the promotion certificate is issued.
A separate BOI measure allows majority foreign-owned promoted companies with paid-up capital of at least 50 million baht to own up to 5 rai for offices, 10 rai for housing for executives and experts, and 20 rai for staff housing. The land must be sold or transferred within one year after the company stops receiving investment incentives. A company using the 10% tax rate without BOI promotion does not have this right. Land in industrial estates can also be owned through the IEAT: see our guide to choosing an IEAT industrial estate.
The southern border regime: 3% corporate income tax until 31 December 2026
A separate tax regime applies in the Special Development Zone of the southern border provinces: Narathiwat, Pattani, Yala and Satun, and the districts of Chana, Thepha, Na Thawi and Saba Yoi in Songkhla. It is not the same area as the border SEZs: only Narathiwat is covered by both, and the SEZ districts of Songkhla are not part of this zone.
Royal Decree No. 783 extended the regime for the period from 1 January 2024 to 31 December 2026. Its main measures, renewed every three years since 2015, are:
- corporate income tax of 3% of net profit for companies with a place of business in the zone;
- for individuals running a business in the zone, the option of a final tax of 0.1% of their business income;
- reduced withholding tax and specific business tax on sales of real estate in the zone.
Related decrees for the same period give a corporate income tax exemption to new SMEs in targeted industries registered in the zone, an additional deduction for investments improving business assets, and incentives for companies outside the zone that invest in businesses inside it.
The regime ends on 31 December 2026 unless the government extends it again, as it has done since 2015. Investors considering the southern border provinces should check its status before planning their tax structure for 2027.
Key takeaways
- Border SEZs cover specific districts in ten provinces: Tak, Mukdahan, Sa Kaeo, Trat, Songkhla, Chiang Rai, Nong Khai, Nakhon Phanom, Kanchanaburi and Narathiwat.
- BOI incentives (Announcement No. 19/2565): up to 8 years of corporate income tax exemption, 50% reduction for 5 years in some cases, double deduction of utility and transport costs for 10 years, and a 25% infrastructure deduction.
- Royal Decree No. 797 offers a 10% corporate income tax rate for 10 accounting periods, but cannot be combined with BOI tax incentives.
- Land ownership for foreign companies is a BOI right available anywhere in Thailand, not an SEZ privilege.
- A separate 3% corporate income tax regime applies in the southern border provinces until 31 December 2026.
Frequently asked questions
Which provinces have border Special Economic Zones?
Tak, Mukdahan, Sa Kaeo, Trat, Songkhla, Chiang Rai, Nong Khai, Nakhon Phanom, Kanchanaburi and Narathiwat. In each province, only specific districts and sub-districts are included.
What tax incentives does the BOI offer in the SEZs?
Targeted activities receive an 8-year corporate income tax exemption, usually followed by a 50% reduction for 5 years. Other promoted activities receive 3 additional years of exemption, up to 8 years in total. All projects can deduct transport, electricity and water costs twice for 10 years and deduct 25% of infrastructure costs.
What is the 10% corporate tax rate in the SEZs?
Under Royal Decree No. 797, in force since 6 June 2025, companies in industries designated for the SEZs can pay corporate income tax at 10% instead of 20% for 10 accounting periods. It cannot be combined with BOI tax exemptions or reductions.
Can a foreign company own land in an SEZ?
Yes, if it is BOI-promoted and obtains the BOI’s approval to own land for its project. This right comes from BOI promotion and applies anywhere in Thailand, not only in SEZs.
Does the 3% corporate tax rate apply to all SEZs?
No. It applies in the southern border Special Development Zone (Narathiwat, Pattani, Yala, Satun and four districts of Songkhla) under Royal Decree No. 783, from 1 January 2024 to 31 December 2026.
What happens to the 3% rate after 2026?
It ends on 31 December 2026 unless the government extends it, as it has done every three years since 2015. Check its status before planning the 2027 tax year.
Why are the zones located along the borders?
To develop cross-border trade and logistics with Thailand’s neighbours, attract investment to less industrialised provinces and support regional economic integration.
Conclusion
The border SEZs combine BOI incentives, a reduced tax rate option and easy access to neighbouring markets. The right choice depends on the project: BOI promotion for investment-heavy projects that need tax holidays, land ownership or foreign staff, the 10% rate for profitable companies outside the BOI framework, and the 3% southern regime only in its specific area and for as long as it lasts.
Our team helps foreign investors compare the SEZ options, the BOI and the IEAT and choose the right structure for their project. Contact us to discuss your project.
