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The Ministry of Finance (MOF), the Securities and Exchange Commission (SEC), the Association of Investment Management Companies (AIMC), and the Stock Exchange of Thailand (SET) today jointly announced a collaborative initiative to facilitate investments in Thailand ESG Extra Funds (Thai ESGX) and the transfers of units of Long-Term Equity Funds (LTF), starting May 2, 2025. Facilitating this initiative, a new centralized service providing investors with access to consolidated data of their LTF holdings will be available on SET website to support their decision-making on LTF investment switching under the government's new tax incentive program. The asset management industry projected that Thai ESGX will attract not less than THB 20 billion (approx. USD 596.48 million) worth of investment.
This initiative follows the government's recent introduction of tax incentives aimed at bolstering investments in ESG stocks and strengthening the Thai capital market. These incentives apply to both new investments in Thai ESGX and the transfers of existing LTF investments to Thai ESGX during a designated two-month window from May to June 2025, in accordance with the Revenue Department’s rules. The SEC has established relevant regulatory guidelines governing the establishment and management of Thai ESGX, and a total of 37 Thai ESGX from 19 asset management companies (AMCs) are seeking the SEC’s approval.
The asset management industry will begin offering Thai ESGX on May 2, 2025, while the LTF investment transfer service will become available on May 13. Additionally, investors will be able to access a consolidated dashboard of their entire LTF holdings through a dedicated portal on SET website at www.set.or.th/ltf from May 2, 2025 onwards to support their decision-making on the transfer of their investments from LTFs to Thai ESGX for tax deduction benefits.
Fiscal Policy Office (FPO) International Economic Advisor Warotai Kosolpisitkul stated: "Following a wave of LTF redemptions in early 2025 which affected the Thai capital market, this tax incentive program has been initiated with aims to stabilize the market, bolster fundraising through SET, and promote investments in ESG stocks. The two-pronged incentive for new and existing investments is 1) Tax benefits for new investments in Thai ESGX, and 2) Tax benefits for LTF transfers to Thai ESGX. These measures will provide investors with additional investment alternatives, expand the number of sustainability-conscious investors, increase the proportion of institutional investors focusing on sustainability-related stocks, and ultimately incentivize listed companies to adapt their businesses towards long-term sustainability."
SEC Secretary-General Pornanong Budsaratragoon shared that the SEC is confident Thai ESGX will serve as a key mechanism for advancing ESG practices across various business sectors and Thailand’s national sustainability agenda while also encouraging greater public participation in the capital market through long-term investments. “The SEC has expedited related regulatory adjustments, allowing AMCs to apply for fund establishment and obtain approvals within the targeted timeline. Additionally, the SEC has coordinated with AIMC, AMCs, and the SET Group to provide unitholders with convenient access to their consolidated LTF holdings. To qualify for the tax incentive, unitholders must transfer their entire LTF holdings from all AMCs to Thai ESGX," added Pornanong.
AIMC Director Theeranat Rujimethapass said on behalf of the Thai asset management companies: "As asset managers, we are committed to ensuring that investments will deliver long-term value for investors while supporting Thai capital market stability and driving ESG excellence among listed companies working towards net-zero targets and Thailand’s sustainability.” He also highlighted significant progress since the December 2023 introduction of Thai ESG funds which includes higher investor participation (252,403 unitholders as of end-2024), increasing assets under management (THB 33.07 billion as of March 31, 2025), and expanding coverage from approximately 200 listed companies upon the initial launch of Thailand ESG Funds (Thai ESG) to over 440.
To date,19 AMCs are poised to launch 37 Thai ESGX. These funds will be available for subscription from May 2 and for LTF unit transfer from May 13, both until the end of June 2025. All AMCs and designated fund distributors are prepared to guide investors through these options and processes, with an industry-wide fundraising target of at least THB 20 billion through Thai ESGX.
SET President Asadej Kongsiri shared that SET is ready to provide a centralized data service for LTF portfolios. This new service on SET website will enable investors to conveniently view their consolidated LTF holdings across various AMCs in one place through a single access point on the SET website. This data consolidation will allow investors to seamlessly access useful information to support their decisions on the investment switching from LTFs to Thai ESGX. Furthermore, SET plans to collaborate with AIMC to enhance this platform by integrating other tax-advantaged investment vehicles, such as Retirement Mutual Funds (RMFs), Super Savings Funds (SSFs), and Thai ESG, to provide investors with a more comprehensive solution for monitoring and managing tax efficient investment portfolios.
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Remark:
Thai ESGX are investment vehicles that, according to their investment policies, primarily allocate capital to environment-oriented or sustainability-oriented assets issued by Thailand’s public sector or businesses incorporated under Thai law. At least 80 percent of the net asset value (NAV) of each Thai ESGX must be allocated to such assets on average per fiscal year. Additionally, each Thai ESGX is required to invest at least 65 percent of its NAV in sustainability-focused stocks on average per fiscal year.
Investment Categories and Tax benefits:
Category 1: General investors can subscribe to Thai ESGX from May 2 to June 30, 2025, and can claim tax deductions of up to 30 percent of their assessable income, capped at THB 300,000. Investors are required to hold such investments for a minimum of five years from the investment date until the redemption date.
Category 2: Investors holding LTF units as of March 11, 2025, who declared their intention to transfer their entire LTF holdings across all AMCs (excluding holdings under other tax-benefit classes within the same funds, such as SSF class) to Thai ESGX during May-June 2025, can claim total tax-deductible investments for tax years of 2025-2029 capped at THB 500,000, with a maximum of THB 300,000 for 2025 and the remaining balance evenly allocated for tax deductions in subsequent tax years.
