Several Asian countries are doing everything possible to strengthen their competitive position and to attract crypto companies to themselves. Earlier this year we wrote about the developments in Hong Kong, the Arab Emirates and Singapore and now Thailand is added.
Thailand removes the tax on ICOs, a way for companies to raise money with crypto. The only exception to this is utility tokens.
Members of the Thai cabinet ruled that companies that raise money through ICOs can also raise money through bonds, Executive Committee member Rachada Dhnadirek told The Bangkok Post. They are exempt from tax.
This means that the Thai government will miss out on about $ 1 billion in taxes over the next two years (out of an estimated $ 3.7 billion). It is not known whether companies that raise money through ICOs must provide information to the Thai Securities and Exchange Commission, say the AFM of Thailand.
According to the Bangkok Post, 57 crypto companies have been added in Thailand, this number grew despite a government that had banned crypto payments due to financial stability risks.
Thailand banned crypto payments last year, but allowed crypto investment and trading. The decision was made in March last year, and crypto payment providers were given 30 days to cease operations.
After the implementation of the new tax exemption, crypto companies in Thailand will be able to issue tokens without any tax on primary or secondary sales.
According to Daniel Howitt, CEO of tax firm Recap, 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 rules, it will be interesting to see if this helps or hinders Bangkok’s position as a cryptohub in the coming months, ” Howitt tells The Bangkok Post.
However, it was also announced that the utility tokens would not be part of the new exemption. This is because the value of utility tokens is tied to the marketing efforts of their issuers.
Utility tokens are crypto that have the function of using a certain product or service. This means that the buyer of a utility token has now paid the issuer so that the company can develop a product that the buyer can later repurchase for that service.
Hong Kong is coming
Elsewhere in Asia, Hong Kong appears to be benefiting from the tightening of regulations in Singapore.
Last year, the Monetary Authority of Singapore released consultation documents to propose stricter regulations for client funds held on crypto exchanges. This consultation is likely to be largely completed in the first half of 2023.
In addition, Singapore wants crypto companies to take the same security measures as banks.
On the other hand, Hong Kong has just embraced crypto again. In a few months, Hong Kong can again be invested in crypto, and that means that Chinese investors can put their money into crypto through Hong Kong.
If Thailand wants to compete with Hong Kong, it will probably need significant investment. The Hong Kong government has committed $ 6.4 million annually to web 3 companies.