Thailand’s government has approved new measures to stimulate the local stock market by enhancing tax breaks and easing lockup requirements for individuals investing in sustainable funds.
Under the new rules, individual investments of up to 300,000 baht ($8,341) in approved Thailand ESG funds will be exempt from taxes after being held for five years, as announced by Deputy Finance Minister Julapun Amornvivat following Tuesday’s Cabinet approval. This tax waiver has been increased from 100,000 baht and the holding period reduced from eight years.
In response to a challenging market environment marked by corporate scandals, irregular trading, and heightened political risk—which has led to over $3 billion in foreign withdrawals from Thailand’s stock market this year—the government is focused on restoring investor confidence. The benchmark SET Index has fallen 7.3% since December, making it the worst-performing index in Asia according to Bloomberg.
“We have high optimism that this new fund will add to positive news for the Thai stock market,” said Pornanong Budsaratragoon, the secretary-general of the Securities and Exchange Commission. The changes are also expected to encourage local companies to enhance their ESG practices.
The SET ESG Index, which tracks companies with strong environmental, social, and governance practices, has declined 0.2% this year, adding to a 9.8% loss so far. Last year, it fell nearly 13%, compared to a 15% drop in the SET Index.
Investments in ESG funds made between 2024 and 2026 will qualify for these tax benefits. While the finance ministry anticipates a revenue loss of up to 14 billion baht from this initiative, the government expects it to boost individual savings and long-term investments.