Thailand Implements New Aviation Development Plan to strengthen Thailand’s position as Southeast Asia’s next regional MRO hub

Aerospace companies investing in Thailand, under the plan, will benefit from a host of fiscal and non-fiscal incentives that range from corporate tax exemptions to assistance with work permits and product sourcing.
2 years ago


The Thailand Board of Investment’s New York office, announced the implementation of a new 15-year aviation industry development plan intended to further develop Thailand’s aerospace sector and strengthen its position as Southeast Asia’s next regional aviation and MRO hub.

The plan, approved in February 2017 by the Thai Ministry of Transportation, establishes a framework and offers incentives, that will support the growth of aircraft maintenance and spare parts production in Thailand. Aerospace companies investing in Thailand, under the plan, will benefit from a host of fiscal and non-fiscal incentives that range from corporate tax exemptions to assistance with work permits and product sourcing.

Available incentives include: 

  • An eight-year corporate income tax exemption, regardless of zone, NOT subject to the corporate income tax exemption cap;
  • Exemption of import duties on machinery, regardless of zone;
  • An additional 50% corporate income tax reduction for another 5 years for any project located in the Eastern Economic Corridor (EEC).

As the plan unfolds, the Thai ministry hopes to achieve an ambitious target of establishing an “Aeropolis” to handle the maintenance of regional aircraft and upgrade the country’s aviation industry to Tier 2 (Design and Build) as well as improve human resource skills in the sector.

Currently, Thailand is home to 28 factories making spare parts for aircrafts, and by 2020, thanks to the plan, the Ministry expects this number to almost double to 40.

The plan’s roll out will occur in conjunction with the Thai Government’s flagship initiative, the “Eastern Economic Corridor Development Project” (EEC), which transforms the eastern part of Thailand into a special economic zone.

The EEC, which is a zone covering 13,000 Km² and spans the provinces of Chon Buri, Rayong and Chachoengsao, has been designated as a high-tech industry cluster with an eye towards becoming ASEAN's leading economic zone for industry, infrastructure and urban development. The corridor is designed to accommodate the government's 10 targeted industries of next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemical; digital; and medical services.

As part of the new aerospace development plan, U-Tapao Airport, which is located in the EEC, will be upgraded to an international airport to accommodate more than three million passengers per year. The airport presently serves as Thai Airlines’ third MRO center in the country. A recently announced MoU was signed between Airbus and Thai Airlines to invest USD $560 million to expand the facility to handle 12 aircraft simultaneously; the site will incorporate specialized repair shops for such items as composite structures, a maintenance training center and data analyzing technology. The expanded MRO complex, which is expected to be one of the most modern and extensive MRO facilities in the Asia-Pacific region, lays the infrastructure ground work to meet the logistical needs of companies investing in the EEC.

“We are committed to ensuring we have a healthy economy, said Ms. Ajarin Pattanapanchai, Deputy Secretary General of the Thailand Board of Investment. “Creating a robust environment for foreign direct investment is an integral part of our plan to ensure Thailand’s economy remains strong for years to come.”

The Thai government’s roll out of its Aerospace Development plan follows a series of recent investment announcements by Bridgestone, Airbus and TurbineAero, global aerospace companies which have started to recognize the unique growth opportunities that exist in Thailand and chosen it as a place to do business over other countries in the ASEAN region.

Source: Thailand Board of Investment

Illustration Photo: Airbus engine (Public Domain from



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