Tax Incentives for Entrepreneurs Across Different Asian Countries

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Numerous Asian countries have grown in popularity in the last decades, partly due to their highly developed economies and attractive business sectors, partly due to the tax incentives provided by the local governments to specific business activities. Such tax incentives are generally offered to local investors, but foreign businessmen are also eligible.

The tax exemptions that are available in Singapore are prescribed under the Singapore Income tax Act and the Economic Expansion Incentives Act. The standard corporate tax rate in Singapore is 17%, but new start-up companies can enjoy partial tax exemptions, as follows: 75% of the first $10.000 of chargeable income is exempted from corporate tax and 50% of the next $190,000.

Thailand has targeted several economic sectors, which are expected to drive the economic development of the country in the following years, in areas such as digital technology, biotechnology, nanotechnology and it also promotes investments in the field of research and development. Businessmen who are considering investing in these sectors can benefit from tax incentives, which are divided into activities-based incentives and merit-based incentives.

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The field of research and development (R&D) is also sustained by another Asian jurisdiction – Malaysia, which provides tax incentives (in the form of tax breaks) for capital expenditures performed for R&D activities. Tax breaks, which can be offered for a period of up to ten years, are available in Malaysia for business sectors such as manufacturing or tourism.

Investors interested in starting a business in an Asian country in the field of manufacturing can benefit from relevant tax incentives in Singapore as well, where they can obtain a tax break available for a period of 15 years, provided that the respective company manufactures technological products and other goods from the list approved by the country’s authorities. This regulation is available under the “pioneer tax incentive” policy.

Another Asian jurisdiction which offers tax incentives in the field of manufacturing is India, a country that attracts numerous investors due to its large consumer market and lower employment costs, compared to other Asian countries. This country is also a relevant market for investors interested in economic activities related to the telecommunications and automotive production industry, which also benefit from various types of tax advantages.

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