Investment Policies

11

Dr. Bonggot AnurojExecutive Director

Thailand Board of Investment18 November 2010 Pattaya, Thailand

Current BOI Investment Policiesand TAFTA

2

Outline

1. FDI Trend and Australian Investment in Thailand

2. Investment Benefits under TAFTA3. Current BOI Investment Policies

““Certificate of Origin: Process and ProceduresCertificate of Origin: Process and Procedures””

ByBy

SOMPOB TERAUMPONSOMPOB TERAUMPON

Department of Foreign TradeDepartment of Foreign Trade

Ministry of CommerceMinistry of Commerce

Department of Foreign TradeDepartment of Foreign TradeDepartment of Foreign Trade

Import-Export Form IssuingImportImport--Export Form IssuingExport Form Issuing

Certificate of OriginCertificate of Origin

–– Preferences Forms e.g.Preferences Forms e.g. FORM FTAFORM FTA, A, D , E , JTEPA , AJ, AK, AANZ, A, D , E , JTEPA , AJ, AK, AANZ

–– NonNon--preferences Formpreferences Form == FORM FORM C/OC/O

The othersThe others

-- Import / Export License and CertificateImport / Export License and Certificate

Our service goalsOur service goalsOur service goals

ConvenientConvenient

Fast manner with less proceduresFast manner with less procedures

Save costsSave costs

Steps of Certificate of Origin IssuingSteps of Certificate of Origin Issuing

Exporter

Department of

Foreign Trade

Exports with

Certificate of Origin

Importer Submit Form

FTA to the customs

Our service processOur service processOur service process

Purchase Forms

at DFT

Submit forms

with relevant

documents

Receive FormsComplete Forms

1. Manual System

2. Electronic SystemWithin 1 hour

Submit

information online Receive Forms

Within 30 minutes

Application Procedures For Form FTA By ManualApplication Procedures For Form FTA By Manual

1.Apply for an Export 1.Apply for an Export –– Import CardImport Card

2. Pre 2. Pre –– origin examination origin examination –– Exporters send ROO data Exporters send ROO data

for pre for pre -- origin examination origin examination ( ( ChapterChapter 2525 -- 9797))

3. Apply for Form FTA : Duly filled in relevant 3. Apply for Form FTA : Duly filled in relevant

((completed in Englishcompleted in English))

4. Attach required documents with Form FTA4. Attach required documents with Form FTA

5. Receive Form FTA5. Receive Form FTA

Application Procedures for Form FTA By Electronic Application Procedures for Form FTA By Electronic

1. Apply for an Export1. Apply for an Export--Import CardImport Card

2. Register to get User name /Password2. Register to get User name /Password

3. pre3. pre--origin examinationorigin examination--Exporters send ROO data for preExporters send ROO data for pre--origin origin

examination examination ((Chapter 25Chapter 25--9797))

4. Apply for Form FTA 4. Apply for Form FTA ––Exporters request for the form via the internet.Exporters request for the form via the internet.

5. Receive form at various off ices.5. Receive form at various off ices.--attach required documents at this attach required documents at this

step or submit the documents later, not later than 10 days.step or submit the documents later, not later than 10 days.

From 4 April 2011From 4 April 2011

Apply the Certificate of Origin (C/O) Apply the Certificate of Origin (C/O) by EDIby EDI

Bureau of Foreign Trade ServicesBureau of Foreign Trade ServicesBureau of Foreign Trade Services

Receive a Call Number (Queue)Receive a Call Number (Queue)Receive a Call Number (Queue)

Request for relevant formsRequest for relevant formsRequest for relevant forms

Submit companies informationSubmit companies informationSubmit companies information

Forms printingForms printingForms printing

Verification processVerification processVerification process

Forms are signed by Certifying AuthorityForms are signed by Certifying AuthorityForms are signed by Certifying Authority

Applications are signed by the companiesApplications are signed by the companiesApplications are signed by the companies

FormsFormsForms

Form Form FTAFTA

Certificate Certificate of Origin of Origin ((C/O)C/O)

Checking preferential tariff under TAFTAChecking preferential tariff under TAFTA

http://http://www.dft.go.thwww.dft.go.th

Form FTAForm FTA1. Goods consigned from (Exporter1. Goods consigned from (Exporter’’s business name, address, country)s business name, address, country)

PAST CO.,LTDPAST CO.,LTD715 NORTH SATHORN ROAD,715 NORTH SATHORN ROAD,BANGRAK BANGKOK 10500 THAILANDBANGRAK BANGKOK 10500 THAILAND

2. Goods consigned to 2. Goods consigned to ((ConsigneeConsignee’’s s name,address,countryname,address,country))ABC SUPER CO., LTDABC SUPER CO., LTDCaulfieldCaulfield EastEast,, Victoria 3145, Victoria 3145, AAUSTRALIAUSTRALIA

3. Means of transport and route (as far as know)3. Means of transport and route (as far as know)BY AIR FREIGHTBY AIR FREIGHT

Departure dateDeparture dateJUNE 23, 2009JUNE 23, 2009VesselVessel’’s name / Aircraft etcs name / Aircraft etcTG 1717/23TG 1717/23Port of Discharge Port of Discharge VICTORIAVICTORIA

5. Item 6. Marks and 7. Number and type of pack5. Item 6. Marks and 7. Number and type of packages, description of ages, description of goodsgoodsnumber numbers on (including quantity whernumber numbers on (including quantity where appropriate and HS e appropriate and HS numbernumber

packages of the importingpackages of the importing countrycountry

1. CODE NO. H.S. 3923 29 20 1. CODE NO. H.S. 3923 29 20 DECRIP LAMINATED POLYPRDECRIP LAMINATED POLYPROPYLENE BAGS****OPYLENE BAGS****TION H.S. 0805 20 00TION H.S. 0805 20 00

2. FRESH TANG2. FRESH TANGARINES****ARINES****TOTAL :TOTAL :FORTYFORTY--SEVEN(47)BAGS**** SEVEN(47)BAGS**** ONE HUNDRED (100) CARTONS .****ONE HUNDRED (100) CARTONS .****

Instructions for filling out Form FTAInstructions for filling out Form FTAin box 8in box 8

Product wholly obtained in Product wholly obtained in the Party of exportationthe Party of exportation

Product Specific RulesProduct Specific Rules

8. Origin8. Origincriterion criterion

(see notes (see notes overleaf)overleaf)

““WOWO””

““PSPS””

9. Gross weight9. Gross weightand valueand value

(FOB)(FOB)

10. Number 10. Number and date and date

of invoicesof invoices

G.W.G.W.4,320.00 KGS4,320.00 KGSUS$ 5,829.73US$ 5,829.73

INV NO. INV NO. 06/BIO7806/BIO78DATEDDATED

22 JUNE 200922 JUNE 2009

11. Declaration by exporter 11. Declaration by exporter

The undersigned hereby declares that the above details and staThe undersigned hereby declares that the above details and statement tement are correct;that all the goods were produced inare correct;that all the goods were produced in

THAILAND THAILAND ....................................................................................................................................................................................................................................................

( country ) ( country )

And that they comply with the origin requirements specified for And that they comply with the origin requirements specified for thosethosegoods in the Free Trade Agreement for goods exported togoods in the Free Trade Agreement for goods exported to

AUSTRAUSTRALIAALIA........................................................................................................................................................................................... ...........................................................

( importing count( importing country)ry)

BANGKOK 23 JUNE 2009BANGKOK 23 JUNE 2009....................................................................................................................................................................................................................................................

Place and date, signature of authorized sPlace and date, signature of authorized signatory ignatory

12. Certification 12. Certification

It is hereby certified, on the basis of control carried out,It is hereby certified, on the basis of control carried out,

that the declaration by the exporter is correthat the declaration by the exporter is correct.ct.

............................................................................................................................................................................................................................................

Place and date, Signature and Stamp of certifying authorityPlace and date, Signature and Stamp of certifying authority

Required document for Form FTA applicationRequired document for Form FTA application

11..Original copy of Invoice or duplicateOriginal copy of Invoice or duplicate2.Original copy of Bill of 2.Original copy of Bill of Lading,AirwayLading,Airway Bill or any Bill or any

Transportation BillTransportation Bill3.An application form for pre3.An application form for pre--exportation verification exportation verification

of product origin for products under Chapter 01of product origin for products under Chapter 01--24244.Pre4.Pre--origin examination origin examination ((Chapter 25Chapter 25--9797))

Theft, Lost or Torn of Form FTATheft, Lost or Torn of Form FTA

The exporter may request the DFT to reThe exporter may request the DFT to re--issue the issue the new Formnew Form FTAFTA

((before the expiration of its validitybefore the expiration of its validity).).

Supporting Documents;Supporting Documents;

-- a letter informing the thiefa letter informing the thief……..

-- notice issued by the Police notice issued by the Police ((if Form FTA theft loss or destruction in if Form FTA theft loss or destruction in

ThailandThailand))

-- a letter informing the thiefa letter informing the thief…….form the exporter .form the exporter ((if Form FTA theft if Form FTA theft

loss or destruction in other countryloss or destruction in other country))

-- the copies of Form FTA, invoice and bill of lading or other the copies of Form FTA, invoice and bill of lading or other

Transportation bill.Transportation bill.

In box 12 the issuing authority of Thailand should stamp and In box 12 the issuing authority of Thailand should stamp and

indicate: certified true copyindicate: certified true copy

3535

PrePre--exportationexportation

A) Inspection of Preferential QualificationA) Inspection of Preferential Qualification

1) Manual System1) Manual System

►► industrial products classified under HS 25industrial products classified under HS 25--9797►► submit information and documents concerning submit information and documents concerning the production the production e.g. copy of government registration, e.g. copy of government registration, copy of factory license, invoice, letter of attorneycopy of factory license, invoice, letter of attorney►► access to eaccess to e--foreign tradeforeign trade►► ensure the satisfaction of ensure the satisfaction of RooRoo

3636

PrePre--exportationexportation2) Internet System (e2) Internet System (e--foreign trade)foreign trade)

Registration (username / Password)

Login

Fill-up application

Submit informationabout the production Verification and certification

3737

Origin criteriaOrigin criteria

1. Wholly obtained1. Wholly obtained2. Sufficient Transformation2. Sufficient Transformation

ExampleExample►► CTH : Change of heading CTH : Change of heading

Parts suitable for useParts suitable for usewith the apparatus ofwith the apparatus of

heading 7303heading 7303(HS 73(HS 730303))

Tubes (HS 73Tubes (HS 730404))

3838

Rules of Origin VerificationRules of Origin Verification

Cost of productionCost of production1. Local materials1. Local materials2. Imported materials (Non2. Imported materials (Non--originating materials)originating materials)3. Production cost3. Production cost4. Profit4. Profit5. Ex5. Ex--factory pricefactory price6. Transportation cost6. Transportation cost7. F.O.B. price7. F.O.B. price8. TAFTA Value Content8. TAFTA Value Content’’s calculations calculation (RVC)(RVC)

3939


Imported materials Imported materials (Non(Non--originating materials)originating materials)

►► import from foreign country ( C.I.F. price)import from foreign country ( C.I.F. price)►► domestic trader domestic trader oror►► products or materials that do not qualify as products or materials that do not qualify as

originating materials or cannot specify the originoriginating materials or cannot specify the origin

4040


Production costProduction cost

►► Labors/Maintenance/QCLabors/Maintenance/QC►► Depreciation and EquipmentsDepreciation and Equipments►► R&DR&D►► TestingTesting

4141


ExEx--factory pricefactory price►► material costs + production cost + profitmaterial costs + production cost + profit

F.O.B. priceF.O.B. price►► ExEx--factory price + transportation costfactory price + transportation cost

4242

TAFTA Value ContentTAFTA Value Content’’s calculations calculation (RVC)(RVC)

F.O.B. F.O.B. –– Imported materialImported material x 100 x 100 ≥≥ 40% 40% -- 50%50%F.O.B.F.O.B.

4343

TAFTA Value ContentTAFTA Value Content’’s calculations calculation (RVC)(RVC)for Motor Car HS. 8703 (PSR: CTH + RVC 40%)for Motor Car HS. 8703 (PSR: CTH + RVC 40%)

Study CaseStudy Case: TAFTA Value Content: TAFTA Value Content’’s calculation (RVC)s calculation (RVC)

The company has a production cost at FOB price of US$ 100 per unThe company has a production cost at FOB price of US$ 100 per unit it in detail as follows:in detail as follows:

►► materials usesmaterials uses1. material A imported from Korea1. material A imported from Korea 45 US$45 US$2. material B imported from Australia2. material B imported from Australia 20 US$ 20 US$ (with C/O form FTA)(with C/O form FTA)

3. material C purchased from domestic producer 15 US$3. material C purchased from domestic producer 15 US$►► Production costProduction cost 10 US$10 US$►► ProfitProfit 5 US$5 US$►► Transportation cost (from factory to port) 5 UTransportation cost (from factory to port) 5 US$S$►► F.O.B. price (Bangkok)F.O.B. price (Bangkok) 100 US$ 100 US$ ((45+20+15+10+5+5)45+20+15+10+5+5)

TAFTA Value ContentTAFTA Value Content’’s calculation s calculation (RVC (RVC ≥≥ 40%)40%)

Imported material usesImported material usesA (Korea)HS. 7207HS. 7207

Local material usesLocal material usesB (Australia) C (Thailand)B (Australia) C (Thailand)

HS. 4104 HS. 4001HS. 4104 HS. 4001

Production costProfitTransportation cost

4545


Imported material uses

► Total imported 45 US$» material A 45

TotalTotal 45 US$45 US$

Value added in domestic country

► Total local material uses 35 US$» material B 20» material C 15

► Production cost 10► Profit 5► Transportation cost 5

TotalTotal 55 US$55 US$

4646


F.O.B. F.O.B. –– Imported materialImported material x 100 x 100 ≥≥ 40%40%F.O.B.F.O.B.

100100--4545 x 100 = 55%x 100 = 55%100100

4747

PostPost--verificationverificationA) The alternativesA) The alternatives

►► based on official request under TAFTAbased on official request under TAFTA►► based on risk analysis (RA)based on risk analysis (RA)►► RA is operated to prevent an abuse of TAFTA and RA is operated to prevent an abuse of TAFTA and circumventioncircumvention

B) The control procedureB) The control procedure►► checking the authenticitychecking the authenticity

●● original Form FTA must not be modifiedoriginal Form FTA must not be modified►► checking the accuracychecking the accuracy

●● submit producing information and tracing submit producing information and tracing documentsdocuments

4848

PostPost--verificationverification

C) The administrative enforcementC) The administrative enforcement

►► reject the preferential tariff grantingreject the preferential tariff granting

►► applicant must be enlisted to the administrative controlapplicant must be enlisted to the administrative control

●● watch listwatch list●● black listblack list●● taking legal actiontaking legal action

4949

ConclusionConclusion

1. Pre 1. Pre -- verification is to facilitate all exports verification is to facilitate all exports under TAFTA .under TAFTA .

2. Post2. Post--verification is to determine and to confirm verification is to determine and to confirm the accuracy of the origin under TAFTA.the accuracy of the origin under TAFTA.

Facilitating/Contact Points for Administrative officesFacilitating/Contact Points for Administrative offices

1.Nonthaburi1.Nonthaburi-- The Department of Foreign Trade of the Ministry of Commerce.The Department of Foreign Trade of the Ministry of Commerce.

Tel. 66Tel. 66--25472547--4753, Fax: 664753, Fax: 66--25472547--47574757

-- SuvarnabhumiSuvarnabhumi Airport., CEAirport., CE--1 1 BldeBlde., 2 ., 2 FioorFioor..

Tel. 66Tel. 66--21342134--09420942--45, Fax: 6645, Fax: 66--21342134--09460946

-- Bangkok Port.Bangkok Port.

Tel. 66Tel. 66--22402240--2232, 662232, 66--22492249--2106 Fax: 662106 Fax: 66--22402240--22322232

-- The Department of Export Promotion of the Ministry of CommerceThe Department of Export Promotion of the Ministry of Commerce..

Tel. 66Tel. 66--25122512--0123 ext. 817 Fax: 660123 ext. 817 Fax: 66--25122512--03290329

2. Office of Foreign Trade Region;2. Office of Foreign Trade Region;-- Chiang Mai; Tel. 66Chiang Mai; Tel. 66--53275327--46714671--2 Fax: 662 Fax: 66--53275327--79017901

-- Chiang Chiang RaiRai; Tel. 66; Tel. 66--53715371--96129612--4 Fax: 664 Fax: 66--53715371--96159615

-- ChonburiChonburi; Tel. 66; Tel. 66--38543854--1177,661177,66--38213821--3063 Fax: 663063 Fax: 66--38343834--11731173

-- NongkhaiNongkhai; Tel. 66; Tel. 66--42414241--33733373--5 Fax: 665 Fax: 66--42414241--33763376

-- SrakaeoSrakaeo; Tel. 66; Tel. 66--37423742--5062 Fax: 665062 Fax: 66--37423742--50635063

-- SongklaSongkla; Tel. 66; Tel. 66--74257425--25012501--2 Fax: 662 Fax: 66--74257425--25012501

3.3. Detailed information available from website;Detailed information available from website;www.dft.go.thwww.dft.go.th or Hot Line 1385or Hot Line 1385

http://www.dft.go.th/

3

FDI Trend and Australian Investment in Thailand

4

Net Foreign Applications Submitted (2003 – 2010)

668

749

849 823 845 832788

691

249

307

499

308

502

297

351

175

200

400

600

800

1000

2003 2004 2005 2006 2007 2008 20092010 (Jan-Oct)

No.

of P

roje

ct

100

250

400

550

Bt B

illio

n

No. of ProjectBt Billion

Source: BOI, as of Nov 12, 10

5

157

175

52

71

15

37

17 9 10 1026

3 5 2 4 30

50

100

150

200

Bt B

illio

n

Total Japan EU Singapore China USA India Australia

2009(Jan-Oct) 2010(Jan-Oct)


+11.1%

Major Foreign Direct Investment Applications

6

Trend of Australian Projects Approvals

1,6711,210 514

1,557

3,195

676

6,071

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Bah

t Mill

ion

2004 2005 2006 2007 2008 2009 2010(Jan-Oct)


7

Sector Projects Bt Billion

Agriculture 11 0.79

Minerals and Ceramics 4 5.38

Light Industry/Textiles 18 0.84

Metal Products & Machinery 36 4.37

Electric and Electronics 14 0.22

Chemicals and Paper 8 1.86

Services 21 1.43

TOTAL 112 14.89

Australian Project ApprovalsTotals by Sector: 2004 – 2010 (Jan-Oct)


8

Investment Benefits under TAFTA

9

Investment Liberalization under TAFTA (1/2)

Australia allows 100% Thai ownership in many areas, such as:

• Legal business consulting• Landscape architect• Repairs of automobiles• Thai language school; Thai massage

school; Thai cooking school• MiningRemark: investment over A$10 m. requires

special permission

10

Investment Liberalization under TAFTA (2/2)

Thailand allows 60% AUS ownership in:• International exhibition centre; Conference

centre; Large-scale hotel; Aquarium; Marina

• High education on science and technology • Basic infrastructure Construction• Mining

11

Investment protection under TAFTA

• Expropriation • Compensation for losses• Access to dispute settlement

mechanism

12

Current BOI Investment Policies

1313

Liberal Investment Policy

• No foreign equity restrictions in manufacturing sectors

• 100% foreign ownership possible in many services

• No restrictions on foreign currency remittances

• No export requirement• No local content requirement

14

Criteria for Foreign Shareholding

1. Projects in agriculture, animal husbandry, fisheries, mineral exploration and mining and service businesses under List One of the Foreign Business Act B.E 2542: Thai nationals must hold shares totaling not less than 51 percent of the registered capital.

2. Manufacturing projects: there are no equity restrictions for foreign investors.

3. The Board may set the amount of shares eligible to be held by foreign investors on promoted projects when deemed appropriate.

15

Example of Services Business – Foreign Majority Ownership/Wholly-ownedActivity Company Name Activity Company Name

Regional Operating Headquarters (7.13)

Pepsico Services Asia Ltd Hotel (7.4.3) Maikhao Dream

Co.,Ltd

Trade and Investment Support Office (7.10)

NHK Spring (Thailand) Co.,Ltd

International Procurement Office (7.12)

Sanshin Electronics (Thailand) Ltd

Research and Development (7.20)

Showa Regional Center (Thailand) Co.,Ltd

International Distribution Centers (IDC) (7.11)

Katoen NatieServices (Thailand) Ltd

Software (5.8) Inet-Logistics Co.,LtdRecycling and reuse of unwanted materials (7.27)

Mr. NemuChandaria

Source: BOI’s Database as of 15 Nov 2010

16

Sector Matrix:Incentives to strengthen

competitiveness

Strategic or Priority Industries

• Maximum incentives regardless of location

• Customized packages

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

Zones

17

Package of Privileges and Incentives

STI Policy STI Policy –– Additional IncentivesAdditional Incentives

NONNON--TAX IncentivesTAX Incentives

•100% ownership land rights for foreign investors•Permission to bring in foreign experts and technicians Work permit & VISA facilitation

• Import duty reductions or exemptions on machinery and raw materials

• Corporate income tax holidays up to 8 years; additional 50% reductions for 5 years

• Double deduction of public utility costs

• Deductions for construction/installation costs infrastructure

TAX IncentivesTAX Incentives

18

Additional Incentive Package for STIPrivileges will be based on the project’s total investment in STI expenditures in any of the following three STI categories:– Research and development or

design – Advanced technology training – Support for educational and

research institutes – Donation that contribute to NSTDA

matching fund*

19

Requirement and Additional Incentive for STI Activities

STI Expenditure Additional Incentives

1% of total sales for the first 3 years of operations or at least 150 million baht 1 year (uncapped)

2% of total sales for the first 3 years of operations or at least 300 million baht 2 years (uncapped)

3% of total sales for the first 3 years of operations or at least 450 million baht 3 years (uncapped)

Note: Corporate income tax holiday may not exceed eight years.

20

(1) Extension of certain measures under 2008-2009 Investment Year Eligible Activities• Energy saving and alternative energy e.g. fuel cell, biogas • Manufacture of eco-friendly material and product, e.g.

bioplastics• High technology activities e.g. industrial electronics, electronic

parts for vehicles, biotech, nano-tech, functional fiber etc. Incentives • Exemption of import duties on machinery• 8-year exemption of corporate income tax with no cap • 5-year 50% reduction of corporate income tax on net profit• 10-year double deduction of transportation, electricity and water

supply costs• deduction from net profit of 25% of investment in infrastructure

installation and construction costs in addition to normal capital depreciation

New Policies for 2010 “Investment for Sustainable Development”

21

Category 1.18 Manufacture of alcohol or fuel from agricultural products,

including scrap, garbage and/or waste

Category 4.2.3 Manufacture of energy-conserving machinery or equipment or machinery or equipment which uses alternative energy

Category 4.15 Manufacture of fuel calls

Category 7.1.1 Production of electricity or steam power- For cases that use alternative energy such as energyfrom agricultural material, biogas and wind energy

(1) Activities related to energy conservation and alternative energy

22

Category 6.3 Manufacture of eco-friendly chemicals

Category 4.2.3 Manufacture of eco-friendly products

(2) Activities related to eco-friendly materials and products

23

Category 1.11.10 Manufacture of medical foodCategory 2.5.3 Manufacture of advanced ceramicsCategory 2.19 Manufacture of nano materials or products from

manufactured nano materialsCategory 3.1.1 Manufacture of natural or synthetic fibers

- Only manufacture of functional fiberCategory 3.9 Manufacture of medical equipmentCategory 3.10 Manufacture of scientific equipmentCategory 4.2.1 Manufacture of machinery, equipment and parts

that have engineering designCategory 4.2.2 Manufacture of farm machinery or equipment and

food processing machinery or equipment

(3) High-technology businesses (1/4)

24

Category 4.2.4 Manufacture or repair of mould and die- Only manufacture of mould and die and parts

Category 4.9 Manufacture, repair or conversion of aircraft, including aircraft parts and equipment or onboard equipment

Category 4.10 Manufacture of vehicle parts- Automatic Transmissions- Continuously Variable Transmissions (CVT)- Traction motors for automobiles; e.g., hybrid or fuel

cell cars- Electronic Stability Control (ESC)- Regenerative Braking Systems- Rubber tires for vehicles


25

Category 5.4.3 Manufacture of industrial electronicsCategory 5.4.4 Manufacture of telecommunication equipmentCategory 5.5.1 Manufacture of semiconductorsCategory 5.5.2 Manufacture of memory storage equipment

- Only manufacture of Hard Disk Drive (HDD), Solid State Drive (SSD) and HDD and SSD parts

Category 5.5.4 Manufacture of parts for telecommunication equipment

Category 5.5.5 Manufacture of parts for medical electronicsCategory 5.5.6 Manufacture of parts for agricultural electronicsCategory 5.5.7 Manufacture of electronic parts for vehicles


26

Category 5.5.10 Manufacture of solar cells and raw materials forsolar cells

Category 5.5.12 Manufacture of flat panel displayCategory 5.6 Manufacture of material for microelectronicsCategory 5.7 Electronic designCategory 7.18 Human resource developmentCategory 7.19 BiotechnologyCategory 7.20 Research and developmentCategory 7.21 Scientific laboratoriesCategory 7.22 Calibration services


27

(2) Measure to promote production efficiencyimprovement by technology upgrade formanufacturing of new products

Incentives • Exemption of import duties on machinery regardless of zone • 3-year exemption of corporate income tax on revenue derive

from the production of new product, not exceeding 100% of the investment in upgrading the production line


28

(3) Measure to promote energy conservation,

alternative energy utilization or reduction of environmental impacts

Incentives • Exemption of import duties on machinery• 3-year exemption of corporate income tax on revenue of existing

projects, accounting for 70% of the investment under this measure excluding cost of land and working capital

• Corporate income tax exemption period shall start from the date of revenue derivation after promotion certificate issuance


29

(4) Measure to solve the environmental problemEligible Activities• Oil refinery, Natural gas separation, Power generation, Chemicals and

petrochemicals, Minerals and base metals

Incentives • Exemption from import duty on machinery improvement to reduce their

environmental impact• 3-year corporate income tax exemption on revenue of existing projects,

accounting for 70% of the investment value of the improvement excluding the cost of land and working capital

Notes :1. Projects must reduce environmental impact according to criteria and

methods specified by BOI.2. Applications must be submitted by 31 December 2012

30

For portion of income from LOCAL OPERATIONS

10% CORPORATE INCOME TAX

for 15 years

Benefit

- In 1st fiscal year, have one operating company in another country; a second within 3rd year; a third within 5th year

- Have annual expenses in Thailand of Baht 15 million, or have invested at least Baht 30 million in Thailand

- By end of 3rd year, 75% of ROH personnel to be qualified staff, have 5 specialised professionals, and 5 top executives earning at least Baht 2.5 million in annual salary and benefits each

- Must have registered capital over 10 million baht

For portion of income from OVERSEAS OPERATIONS

0% CORPORATE INCOME TAX

for 15 years

Key Conditions

Benefit

Attractive Incentives for REGIONAL OPERATING HEADQUARTERS

Benefit

In addition to conditions for income from overseas and

local operations:- Corporate income

generated from services to overseas companies must be at least 50% of total revenues

- Personal income paid from overseas office is exempt

For income of EXPATRIATE EMPLOYEES

15% PERSONAL INCOME TAX

for 8 years

Key Conditions

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สทิธปิระโยชนและเงื่อนไข BOI สําหรับกิจการ ROH

การปรับปรุงหลักเกณฑ และสิทธิประโยชนสําหรับกิจการ ROH (2/3)

• Exemption of import duty on machinery for R&D and training activities

• Permitted to bring into the Kingdom skilled workers and experts to work in investment-promoted activities

• Permitted to own land• Can be 100% foreign-owned

• Must provide services to their companies in at least 3 countries• 10 million baht registered capital• Must have operating licenses from relevant agencies• Must have scope of business as approved by the BOI

Conditions

Incentives

BOI Incentives for ROH

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BOI FAIR 2000

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Going Green for the Future: BOI Fair 2011

10 - 25 November 2011

IMPACT Exhibition and Convention Center

Organized by The Board of Investment of Thailand

As of 5 November 10

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Thailand—Each Piece Fits Perfectly

Investment Policies

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