Thailand Launches ESG Investment Fund, Expands Vayupak
Thailand will introduce a new ESG mutual fund to promote sustainable investments. This initiative encourages individuals to invest in businesses with strong environmental, social, and governance (ESG) practices. The government offers a 30% tax deduction, allowing investors to deduct up to 300,000 baht per year from their taxable income. To qualify, investors must hold their investments for at least five years. Unlike government-managed investments, private asset managers will oversee these ESG funds.
While this marks a new shift towards sustainability, Thailand already has a state-backed investment vehicle—the Vayupak Fund. The government established this it in 2003 to strengthen financial markets and support state-owned enterprises (SOEs). The Ministry of Finance (MoF) manages Vayupak, directing capital toward large publicly listed companies and strategic industries. Over the years, the Vayupak has played a key role in stabilizing the economy by injecting liquidity into the stock market.
Expansion of Vayupak goes along with ESG Investment Fund
In 2024, the Thai government expanded the Vayupak Fund by raising 150 billion baht ($4.3 billion). This move aims to boost the stock market and increase confidence among local investors. The fund’s expansion comes at a time when foreign investment outflows and economic uncertainties pose risks to Thailand’s financial stability.
Despite both funds contributing to economic growth, they serve different purposes. The Vayupak focuses on market stability and public sector growth, while the ESG mutual fund promotes sustainability and retail investment. The Vayupak remains under government control, whereas private firms manage ESG funds.
The introduction of ESG funds provides new investment opportunities for individuals. Investors now have more options to align their portfolios with financial and sustainability goals. As Thailand expands its investment landscape, these investment vehicles will shape the country’s economic future.
Analysts expect strong interest in the ESG fund due to its tax incentives and sustainable focus. The Vayupak will likely continue playing a critical role in financial stability. Thailand’s investment landscape is evolving, giving investors more ways to grow their wealth.
