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Ms. Ajarin PattanapanchaiThailand Board of Investment

April 2006

Investment Opportunitiesin Thailand

“Incentives for BIO-TECH Business”

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• Why Thailand

• Thailand Investment Statistics

• BOI Incentives for Biotech Business

• Investment Opportunities

ThailandThailand: : Where Success Stories BeginWhere Success Stories Begin

33

Why ThailandWhy Thailand::

• International Rankings• Ease of Doing Business• Low costs

44

● UNCTAD survey of world’s 325largest transnational corporations

● Asian region has most positive FDI prospects

● Overall, Thailand ranked #9 in world VietnamTop 4

South KoreaTop 5

THAILANDTHAILANDTop Top 33

IndiaTop 2

ChinaTop 1

RANKING OF FDI PROSPECTS IN ASIA

2005-8

Thailand Rated #Thailand Rated #3 3 Most Most Attractive FDI Location Attractive FDI Location

in Asia in Asia by UNCTAD Surveyby UNCTAD Survey

UNCTAD Global Investments Prospects Assessment, Sept. 2005

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Improved CompetitivenessImproved Competitiveness: : 20052005 World RankingsWorld Rankings

3439India2431China3529Korea1628Malaysia29#27Thailand2321Japan1211Taiwan23Singapore62Hong Kong

2004Rank 2005

Source: IMD Institute for Management Development

Improved government efficiency &Economic

performanceAdaptability of govt policy

to economic changesGov’t leaders understand

business challenges for effective policies

High growth of labor force productivity

Low VAT 7%Internet $ 15/mo

66

ThailandThailand20Japan10

Germany19United Kingdom

9

Belgium18Denmark8

Switzerland17Hong Kong7

Estonia16Australia6

Lithuania15Norway5

Sweden14Canada4

Finland13United States3

Iceland12Singapore2

Ireland11New Zealand1

World Bank Top World Bank Top 20 20 Ease of Doing BusinessEase of Doing Business

Note: The ease of doing business measure is an average of the country’s ranking in each of the 10 areas of business measured in Doing Business in 2006 by the World Bank.

Trading across borders

Dealing with licenses

Paying taxes

FOR 10 BUSINESS AREAS:

Investor protection

Registering property

Closing a business

Access to credit

Enforcing contracts

Hiring and firing workers

Starting a business

77

YEAR GDP % 2003 6.82004 6.22005 4.52006 Projection

Bank of Thailand 4.75 - 5.75Finance Ministry 4.5 - 5.5World Bank 5

ThailandThailand’’s Economic Growths Economic Growth

88

Developed InfrastructureDeveloped Infrastructure

7 international airportsairports moving 700,000 tons of cargo and 25 million passengers per year

HighwayHighway system: 64,000 km to all provinces

Deep sea ports: : capacity over capacity over 5 5 million TEUmillion TEU44,,000 000 km railkm rail, links to Malaysia, Singapore5757 industrial estatesindustrial estates

World-class, WiWi--FiFi capabilities andinexpensive broadband broadband widely available

24 24 million mobile phonemillion mobile phone users in 2003, growing 6 million/yr

Suvarnabhumi Intl. Airport: 45 million passengers/year

7 international airportsairports move 800,000 tons of cargo and 35 million passengers per year

Low CBD Office rent: $12.5/sq. ft./year

99

Thai Graduates in Science and Engineering

1 Source: Ministry of Education

74,616(Total for

all technical

fields)

26,9871,80325,184Computer Science

7,841

7,216

Postgraduate (2002)

37,057

52,667

TOTAL(2002)

29,216

45,451

Undergraduate (2002)

Technical School Degrees (2003)

Natural Sciences

Engineering

Thai Universities With Engineering Programs:22 Public 14 Private

TOTALSTOTALS: : 99,85199,851 16,86016,860 116,711116,711

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IPR FrameworkIPR Framework• Thailand has 8 intellectual property-related

laws, all of which are consistent with international standards: – Copyright Act of 1994– Patent Act of 1979, as amended by the Patent Act

(No.3) of 1999– Trademark Act of 1991, as amended by the

Trademark Act (No.2) of 2000– Act for the Protection of Layout-Designs of

Integrated Circuits 2000– Trade Secret Act of 2002– Protection of Geographical Indication Act of 2003– Plant Varieties Protection Act of 1999– Traditional Medicine and Practice Act of 1999

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Science ParkScience Park• Thailand’s Science Park Serves as an

incubation Center for Science-Related Investment

• Support Includes:– Joint investment (i.e. joint ventures)– Assistance in finding and acquiring

technology– Analytical and technical services– Intellectual property services– Quality management services– Maximum BOI Incentives

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ASEANASEAN: : 550 550 million million AFTAAFTA

AustraliaAustralia: : 20 20 million million TAFTATAFTA

ChinaChina: : 1.31.3 billion billion Early Harvest Early Harvest ::ChinaChina--ThailandThailand

ChinaChina--ASEAN FTA ASEAN FTA

IndiaIndia: : 11..1 1 billion billion Early Harvest AgreementEarly Harvest Agreement

JapanJapan: : 128 128 million million JapanJapan--Thailand Economic Thailand Economic Partnership AgreementPartnership Agreement

TaiwanTaiwan: : 23 23 millionmillion

ThailandThailand: : 6464 millionmillionNoNo. . of Tourists >of Tourists >13 13 millionmillion//yryr

Strategic Location to Asian MarketsStrategic Location to Asian Markets((Countries and populationsCountries and populations))

New ZealandNew Zealand: : 4 4 million million Closer Economic PartnershipCloser Economic Partnership

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Thailand Thailand Investment Promotion StatisticsInvestment Promotion Statistics

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Value of Net Applications Increasing

Unit: US$ Billion 17.49

2002 2003 2004 2005

16.29

7.686.16

44%25%

112%

Total investment applications

7%

FDI increases62% to 12.4 billion

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Total Foreign 668 5,988 749 7,624 849 12,388100% Foreign 255 2,557 334 2,722 426 3,259By CountryJapan 261 2,561 340 2,529 387 4,353U.S.A. 38 1,142 39 875 52 195Taiwan 56 191 61 231 54 284Hong Kong 11 299 18 64 25 278Singapore 46 351 81 554 82 351E.U. 67 877 94 796 121 887

2003 2004 2005Number Value of Number Value of Number Value of

of Investment of Investment of InvestmentProjects (mil. US$) Projects (mil. US$) Projects (mil. US$)

Note 1: Investment projects with foreign equity participation from more than one country are reported in the figures for each country Note 2: 2002 US$=43.00 baht; 2003 US$=41.53 baht; 2004 US$=40.27

Net Applications by CountryNet Applications by Country

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BOI IncentivesBOI Incentives

1717

TAX INCENTIVES

• Corporate income tax holidays up to 8 years

• Import duty reductions or exemptions on machinery and raw materials

NON-TAX INCENTIVES

• Land ownership rights for foreign investors

• Permission to bring in foreign experts and technicians

• Work permit/visa facilitation

Role of BOI in Promoting InvestmentRole of BOI in Promoting InvestmentBasic BOI privileges and incentivesBasic BOI privileges and incentives

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ZonesZones Sector Matrix:Incentives to strengthen

COMPETITIVENESS

Strategic or Priority Industries

Maximum incentives regardless of zone or

location

Example : R&D

Zone-Based Incentives:• Zone 1• Zone 2• Zone 3 Higher incentives

Lower incentives

Zone and Sector Matrix

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Incentives for Biotech BusinessIncentives for Biotech Business

Priority Activity Incentives • Exemption on machinery import duties

• 8 years corporate income tax holiday• Additional incentive if locate in Science Park

• Research & Development• Scientific Laboratories

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Example of Promoted Biotech Example of Promoted Biotech ProjectProject

Health Concepts International Ltd.(Subsidiary of Concept Foundation)• HIV serum bank and Cyclofem QC lab • HIV testing service & contract testing for

research organization• Plasma sample for R&D• Locate in Science Park

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Incentives for AgroIncentives for Agro--Base BiotechBase Biotech

Priority Activity Incentives • Exemption on machinery import duties

• 8 years corporate income tax holiday

• Plant Propagation & Seed Grading• Inspection & Analysis of Diseases of Crops, Livestock or Aquatic Animals, Soil or Water for Agriculture Usage

• Inspection & Analysis and Certifying of Quality Standards of Agriculture Products

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Manufacturing of Scientific Equipment Manufacturing of Medical Supplies or Medical Equipment

Incentives for Additional Incentives for Additional Biotech BusinessBiotech Business

Priority Activity Incentives • Exemption on machinery import duties

• 8 years corporate income tax holiday

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Amended Privileges for Standard

Investment Projects (1)

New Incentives for Pharmaceuticals

Zone 38 Yrs

Zone 26-7 Yrs

Zone 15 Yrs

Exemption of corporate income tax (Years)

Must achieve GMP (Good ManufacturingPractice) standards corresponding with PIC/S

(Inspection Cooperation Scheme) within 2 years of beginning operations.

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Investment Opportunities Investment Opportunities in in BiotechBiotech

2525

Thailand: World’s Leader in Agro-Based Products

Strong Agro-based Industries Total Export Value : US$7.5Billion/ year Top five net food exporter in the world Leading exporter of natural rubber, rice, cassava, sugar, seafood, canned tuna, canned pineapplesRubber-based industry : World’s largest rubber producerTapioca : abundance of raw material Tapioca 5 mil. tons Alcohol, bio fuel, food additivesUse Thailand as the production base of agro-base bio-tech

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Strengths and Opportunity in Medical Strengths and Opportunity in Medical BiotechBiotech

• Most private hospitals are gearing toward capturing patients from other countries/serving more than 1,200,000patients in 2005

• Thai doctors study abroad, speak international languages and are among the best in the region

Thailand: Regional Medical Hub

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Thank You!

www.boi.go.thhead@boi.go.th