Thailand Board of Investment Total Inv. 8544,164 840 6,151 375 2,863 Total For. 6753,359560 4,154263...

ThailandBoard of Investment

Total Inv. 8544,164

840 6,151 375 2,863

Total For. 6753,359560 4,154

263 2,358

100% For. 3201,900291 2,391

118 1,410

By Country

Japan 275 1,332 251 1,672128 889

U.S.A. 48 420

35 196 18 560

Taiwan 42 103

55 964 30

46Hong Kong 17

202 13 268

8 198

Singapore 62 305

40 305

21 110

E.U. 84 567 66

321 31

464

2001 2002 2003 (Jan.-May) Number Value of Number Value of Number Value of

of Investment of Investment of Investment Projects (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: 2001 US$=44.48 baht; 2002 US$=43.00 baht; 2003 US$=42.68 baht

Board of Investment Board of Investment Net Applications by Net Applications by

CountryCountry


Major Investors in Major Investors in 20022002

ProjectApprovals

Investment Value

Country Rank Country Rank

Japan 1 Japan 1

Europe 2 Europe 2

Taiwan 3 Singapore 3

Singapore 4 USA 4

USA 5 UK 5


Investment by Investment by SectorSector

(2002)(2002)

Sector Projects (Net Apps)

Value (Bt. Bn.)

Agriculture 171 82.3Minerals and Ceramics

13 2.2

Light Industry 71 15.1Metal Processing 193 58.1Electrical & Electronics

159 35.3

Chemicals 88 31.0Services 145 40.4


BOI Project ApprovalsBOI Project Approvals For India For India (1998-2003)(1998-2003)

Several Projects From APL Group Indo-Rama Textiles Indo Poly Indo Worth Indo-Thai Synthetics

A Total of 7 Software Projects, all in the Last 2 Years.

Two PET Projects, Each for More Than 1 Billion Baht

A Half-Dozen Jewelry Projects


BOI Project ApprovalsBOI Project Approvals For India For India (1998-2003)(1998-2003)

Services2%

Light Industry

45%

Chemicals, Paper and

Plastic29%

E&E16%

Agriculture8%


Liberal Investment Liberal Investment RegimeRegime

No Export Requirements No Foreign Equity

Restrictions in Manufacturing Sectors

No Local-Content Requirements

No Location Requirement in All But 6 Activities


The Board of The Board of Investment Investment

Basic Incentives and Basic Incentives and MeasuresMeasures

The Board of The Board of Investment Investment

Basic Incentives and Basic Incentives and MeasuresMeasures Guarantees and

Permissions Guarantees against

nationalization and price controls

Permission to own land and bring in foreign experts

Tax Incentives Tax exemption /reduction on

imported machinery and input

Income tax exemption Support services

Advisory and information provision

Publications


The Board of Investment The Board of Investment Basic Incentives and MeasuresBasic Incentives and Measures

The Board of Investment The Board of Investment Basic Incentives and MeasuresBasic Incentives and Measures

To reduce initial investment costs:Tax exemption or

reduction on imported machinery

Tax exemption or reduction on imported inputs

Exemptions from corporate income tax for 3-8 years

Note: Income Tax Holiday is capped at 100% of Investment Capital


Zones of OpportunityZones of OpportunityZones of OpportunityZones of Opportunity


Import Duty on Import Duty on MachineryMachinery

Zone1 Reduce

50%2 Reduce

50%3 Exempt


Import Duty on Import Duty on Raw MaterialsRaw Materials

Import Duty on Import Duty on Raw MaterialsRaw Materials

Zone1 1 Year

Exemption2 1 Year

Exemption3 5 Year

Exemption


Corporate Income Corporate Income Tax ExemptionTax Exemption

ZoneInside

Industrial

Estate

Outside Industrial Estate

Zone 1

3 Years Not Exempt

Zone 2

5 Years 3 Years

Zone 3

8 Years 8 Years

The Amount of a Project’s Corporate Income Tax Holiday is Capped at 100% of Investment Capital


Additional Zone 3 Additional Zone 3 Incentives Incentives

40 provinces

Inside Industrial Estate


50% reduction of income tax for 5 years

Double deduction of water, electricity, transport costs for 10 years

25% deduction of infrastructure installation or construction costs


Additional Zone 3 Incentives Additional Zone 3 Incentives Additional Zone 3 Incentives Additional Zone 3 Incentives

18 least-developed provinces

Inside Industrial Estate


50% reduction of income tax for 5 years

Double deduction of water, electricity, transport costs for 10 years

25% deduction of infrastructure installation or construction costs


Criteria and Condition Criteria and Conditionss

Criteria Value added D/E ratio Modern tech

nology Environment

al protection

Conditions 9000ISO Performance

based Cap on

corporate income tax exemption (equal to investment capital)


Investment Policy Investment Policy ReformReform

intensive

Old Model New Model Capital intensive & labor

intensive Skill & Knowledge

Production base Integrated Internationalbusiness center

Tax incentives provider Facilitation & investment services provider”

Standard package Customization to promote

SMEs and communityenterprises

Large Corporations,


New Investment New Investment Promotion FocusPromotion Focus

3 Dimensions3 Regions7 Strategies5 Target Industries


3 Dimensions3 Dimensions

Shift emphasis from capital investment towards investment that creates:TalentSkill DevelopmentTechnology Transfer Innovation

Customized Incentive Packages: Balance between investor needs and economic contribution

Cluster Development


Developing Industrial Developing Industrial ClustersClusters

Developing Industrial Developing Industrial ClustersClusters

Project location requirements have been lifted

New and Expansion projects are free to expand wherever they deem appropriate

For environmental protection purposes, the following activities do not apply:Tanneries, bleaching and

dying, heat treatment using cyanide, recycling/reusing unwanted materials


Changing Role of the BOIChanging Role of the BOI

Provide Tax Provide Tax IncentivesIncentives

Provide Value-Added Provide Value-Added

Investment ServicesInvestment Services

Solve Problems and Enhance

Investment Environment

ProactiveMarketing

Set up Investment Network

Enhance Capabilities of Thai

Community Enterprises

Market Community Enterprises

Develop KnowledgeAbout International

Investment Law

Promotion InvestmentAdministration

Develop Database System

Increase Training and Skills Development


55 Target IndustriesTarget Industries

Agro Industry Food Processing Rubber Products Bio - Technology

Fashion Industry Jewelry Leather Products Garments

Automotive Pick-ups Major Auto Parts

High Value - Added Services

Long Stay ROH Film Industry

Printing Industry MICE Call Center

ICT incl. Electronics Fiber Optics Telecom

IC Design


Target IndustriesTarget Industries Specific Policies and

Measures Will Be Developed for Each Target Industry, Based OnCompetitivenessLevels of technologyMarket potential

Non-target IndustriesNo change in policyNo backtrackingNo reduction in incentives


Thai Automotive Thai Automotive IndustryIndustry

Thailand: Regional Hub15 assemblers with capacity

of 1 million units/year5 motorcycle manufacturersLarge supplier base

700 tier 1 suppliers1,100 tier 2&3 suppliers

Strong market potential 35% domestic sales growth

(H1/03)39% export growth (Jan.-

May)


New Automotive Industry New Automotive Industry PolicyPolicy

Projects must be submitted in packages comprising manufacture of car assemblies, vehicle parts and automotive engines.

Investment must be not less than 10 billion baht.

Car assemblies manufacture must be export-oriented with a distinct target.

Vehicle parts and automotive engines manufacture will supply products in their own packages or for export only.


More than 1,000 companies involved in these industries, including 621 BOI-promoted companies thatEmploy 300,000+ Thai

workersGenerate annual export

earnings of more than US$20 billion, or roughly 35% of all Thai exports

Trade surplus in 2001 of US$4.7 billion

Electronic and Electrical Electronic and Electrical Industry in ThailandIndustry in Thailand

Electronic and Electrical Electronic and Electrical Industry in ThailandIndustry in Thailand


HDD & HDD Parts IBM, Fujitsu, Western Digital,

Nidec,Seagate, Read-Rite, Hoya, Minebea

Printers Cal-Comp, Canon, Oki

PCBAs Celestica, Koshin, ACT, SCI

Systems, SVI, Hana, Pemstar, PCTT, Mektec

White Goods (Air Conditioner, Refrigerator) Daikin, Fujitsu General,

Mitsubishi, Sharp, Toshiba, Sanyo

Current Key Players in Current Key Players in Thailand’s E&E Thailand’s E&E

IndustryIndustry


Promotion of Value Promotion of Value Chain Chain

in Electronics Industryin Electronics Industry Promote projects in the

electronic industry that locate all elements of the value chain in Thailand

Cover all downstream and upstream activities, such as R&D, design, quality control, production development, and technical support

Have total sales of at least 2,500 million baht/year

Must transfer technology to domestic operators

ThailandBoard of Investment Regional Operating

Headquarters Tourism-Related Activities

Retirement Homes Long-stay Tourism Dedicated Health Centers

ICT-Related Services E-Commerce application

service providers E-Commerce users

Entertainment Industry Printing Industry

High Value ServicesHigh Value Services


Regional Operating Regional Operating Headquarters (ROH)Headquarters (ROH)

Last year, the Government Established Regulations Covering Regional Operating Headquarters

Companies must be incorporated under Thai law and have paid-up minimum capital of 10 million baht They must service branches or

affiliates in at least 3 countries Income must come from managerial,

administrative, technical, or other prescribed supporting services for branches/associated companies


ROHROH Benefits

Corporate income tax at 10% for:Qualified servicesRoyalties from ROH in ThailandInterest income on loans made to ROH branches/associated enterprises

Tax exemption for dividends from ROH branches/associated enterprises

Expats working for ROH are taxed at 15% for 1st 2 years, instead of on sliding scale


Services of the BOIServices of the BOI

The BOI offers : Support around the world – 5

overseas offices (New York, Paris, Frankfurt, Shanghai, Tokyo)

One-Stop Shop for Visas and Work Permits – Work Permits within 3 hours

Services of BUILD Unit to promote industrial subcontracting ASEAN Supporting Industry Database (ASID)

Comprehensive, world-class website Help with work and residency permits Interaction with other government

agencies on behalf of investors


• Up-to-date Info on BOI Policies, Procedures, Incentives and Services

• Links to Business News About Thailand

• What’s New at the BOI• Links to Important

Business Sites• Cost of Doing Business

in Thailand

• Database of Promoted Companies

• Comprehensive Information From Other Government Agencies

• BOI Statistics• Trade Statistics• Demographic Data• Industrial Estates

Since 2000, the BOI web site has been ranked as Since 2000, the BOI web site has been ranked as the the #5 Investment Promotion Agency website Investment Promotion Agency website

in the world byin the world by Corporate LocationEmail: [email protected]: [email protected]

BOI on the InternetBOI on the Internethttp://www.boi.go.thhttp://www.boi.go.thBOI on the InternetBOI on the Internethttp://www.boi.go.thhttp://www.boi.go.th

Thailand Board of Investment Total Inv. 8544,164 840 6,151 375 2,863 Total For. 6753,359560 4,154263...

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Transcript of Thailand Board of Investment Total Inv. 8544,164 840 6,151 375 2,863 Total For. 6753,359560 4,154263...