Thailand’s Eastern Economic Corridor: What Companies Need to Know

With the Eastern Economic Corridor (EEC), Thailand hopes to develop its eastern provinces into a leading ASEAN economic zone. The EEC straddles three eastern provinces of Thailand – Chonburi, Rayong, and Chachoengsao – off the coast of the Gulf of Thailand and spans a total of 13,285 square kilometers.

The government hopes to complete the EEC by 2021, turning these provinces into a hub for technological manufacturing and services with strong connectivity to its ASEAN neighbors by land, sea and air.

The government has announced a major cut in personal income tax to 17% for investors in the EEC, land leases of up to 50 years, and free flow of foreign currencies in the three eastern provinces

Thailand expects to spend US$43 billion (1.5 trillion baht) for the realization of the EEC over the next five years. This funding will come from a mix of state funds, public-private partnerships (PPPs), and foreign direct investment (FDI).

The government has identified four “core areas” essential in making the EEC a must-go economic zone:

  • increased and improved infrastructure
  • business, industrial clusters, and innovation hubs
  • tourism
  • the creation of new cities through smart urban planning

Optimizing a region

Thailand’s eastern seaboard already enjoys strong connectivity to neighboring countries and established trade routes. The seaboard has seen success in the petrochemical, automobile, and electronic industries.

A major focus of the EEC is to improve existing connectivity and foster manufacturing and innovation. The government envisions sea routes from the eastern provinces of Thailand to Myanmar’s on-going Dawei deep-sea port project, Cambodia’s Sihanoukville port, and Vietnam’s Vung Tau port.

The Laem Chabang seaport – already the country’s biggest – will also be expanded, with the goal of transforming it into a marine hub of Southeast Asia.

To improve connectivity by air, Thailand is expanding the U-Tapao airport in Rayong province. With the opening of a second passenger terminal and runway, the U-Tapao airport’s passenger capacity will increase from its current 800,000 people to 3 million. The expansion will not only facilitate an increase in tourist arrivals – attracted to Thailand’s eastern beaches – but will also transform U-Tapao into a hub for aviation maintenance, repair and overhaul, air cargo, and logistics.

Connectivity by road will improve with the development of high-speed and double-track railways connecting ports, airports, industrial clusters, and major urban centers throughout Thailand.

Development Projects

In order to realize the abovementioned four “core areas” of development, the government has identified 15 major investment projects for the EEC.

These are:

  • U-Tapao airport and aircraft maintenance
  • Sattaship commercial sea port
  • Further development of Laem Chabang port
  • Further development of Map Ta Phut port
  • Development of a high-speed eastern rail route
  • Development of double-track railways through the eastern provinces
  • Expansion of highways and motorways
  • Development of next-generation automotive vehicles with focus on battery and electric vehicles
  • Development of aviation, industry and lifestyle robotics, smart electronics
  • Advanced petrochemical and bio-economy
  • Turning eastern provinces into a medical hub
  • Promotion of tourism in the eastern provinces
  • Development of eastern provinces into a global business hub
  • Creation of new cities to support a surge in eastern population with focus on inclusive growth
  • Strengthening of public utilities

Additionally, the government is planning to build a digital park in Si Racha located on the coast of Chonburi in hopes of developing an Eastern Economic Corridor of innovation (EECi) – a complimentary project which will provide digital connectivity. 

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