Thailand tempts crypto companies with $1 billion tax exemption

Thailand will not charge companies raising capital through Initial Coin Offerings and value-added tax as it looks to take part in the Asian-driven bull run predicted by billionaire Cameron Winklevoss.

Members of Thailand’s cabinet ruled that companies that raise money through “investment currencies” can also raise money through bonds, Rachada Dhnadirek, member of the Executive Committee, told the Bangkok Post.

Thai government waives over $1 billion with tax exemption

Under the new ruling, the Thai government will lose about $1 billion in taxes over the next two years from about $3.7 billion raised through initial coin offerings. It did not specify whether companies are required to provide information to the Thai Securities and Exchange Commission before conducting ICOs.

Thailand has proven increasingly attractive to crypto companies, competing directly with its Asian counterparts Hong Kong and Singapore.

According to The Bangkok Post, a Recap report from a tax software company revealed that Thailand had acquired 57 crypto companies and had the second highest crypto ownership percentage. Ownership grew despite a government banning crypto payments due to financial stability risks.

According to Recap CEO Daniel Howitt, tightening crypto regulations will determine whether Thailand can become an Asian crypto hub.

“Like many other countries, Thailand is also tightening its rules on crypto trading and digital asset advertising. With stricter regulations, it will be interesting to see if this helps or hinders Bangkok’s position as a crypto hub in the coming months,” he told the Bangkok Post.

The World’s Leading Crypto Hubs | Source: Summary

Last year, the Securities and Exchange Commission vowed to introduce more investor protection by restricting celebrity advertising in the wake of the FTX’s collapse. It has yet to announce a new leader after the board reportedly refused to extend the term of the agency’s secretary general, whose contract expires at the end of April 2023.

The Cyber ​​Crime Investigation Bureau recently warned Thai citizens about cryptocurrency scams through foreign exchanges.

Can Thailand compete with Hong Kong?

Meanwhile, Hong Kong is benefiting from tightening regulations in Singapore caused by several high-profile cryptos.

Last year, Singapore’s Monetary Authority released consultation papers to propose stricter regulations for customer money held on crypto exchanges. These consultations are likely to be largely completed in the first half of 2023.

In addition, the city-state wants to impose banks’ cyber risk frameworks on crypto platforms.

Singapore authorities are still searching for Do Kwon, the co-founder of Singapore-based Terraform Labs, the company behind the collapsed stablecoin TerraUSD.

Singaporean crypto exchanges Zipmex and Vauld filed for creditor protection in July 2022 after being stung by the TerraUSD meltdown. Vauld was granted an extension until March 24, 2023 to finalize its restructuring plan.

On the other hand, Hong Kong has embraced the asset class, mitigating investor risk through knowledge tests and reasonable cryptocurrency exposure limits. It has also received support from crypto tycoon Justin Sun and several Chinese officials.

If Thailand wants to compete with Hong Kong, it will likely need significant investment. The Hong Kong government has pledged $6.4 million annually to Web 3 companies.

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