The Securities and Exchange Commission (SEC) has revised regulations for the Thailand ESG Fund to enhance investment opportunities and support companies that excel in environmental conservation, sustainability, and strong corporate governance with plans to increase corporate value. These updates align with the Cabinet’s resolution from July 30, 2024, which approved revised tax incentives to encourage investments that contribute to national sustainability. The new regulations took effect on August 16, 2024.
Under the updated criteria, the Thailand ESG Fund can now invest in a wider range of companies with high ratings in environmental practices, sustainability, corporate governance, and transparency, as assessed by reliable independent institutions. This initiative aims to drive value creation among listed companies. The SEC has also updated regulations for asset management companies (AMCs) overseeing the Thailand ESG Fund, requiring them to leverage their knowledge, capabilities, and expertise in selecting high-quality assets for investment, in line with the goal of supporting Thailand’s sustainable development.
Investors in the Thailand ESG Fund are eligible for a tax deduction of up to 30% of their individual assessable income, with a maximum limit of 300,000 baht per person per year. This tax incentive applies to investment units purchased between January 1, 2024, and December 31, 2026. To qualify for the tax deduction, investment units must be held for at least five years from the date of purchase. The Ministry of Finance will review the effectiveness of this tax measure at the end of the three-year period.
Investors are advised to carefully consider the investment policies and sustainable development goals of each fund before making decisions. The Thailand ESG Fund will disclose sustainability information in accordance with the regulations governing Sustainable and Responsible Investing Funds (SRI Funds).
Pornanong Budsaratragoon, SEC Secretary-General said, “The SEC has issued five notifications amending the regulations to expand the eligible assets of Thailand ESG Fund. These notifications were published in the Government Gazette on 16 August 2024, enabling AMCs to establish a new Thailand ESG fund or revise the existing schemes to be in line with the expanded investment scope. The SEC also held a session on 14 August 2024 to clarify these amendments for AMCs and relevant business operators.”
The Secretary-General informed that under the new criteria, the Thailand ESG Fund can also invest in companies with corporate governance excellence and disclosure of a corporate value-up plan via the Stock Exchange of Thailand (SET)’s platform.