THAILAND is the world’s 17 th largest manufacturer output 28 rd largest exporter 24 th largest...
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www.boi.go.th
Thailand: Land of Investment
Pichit Dejneeranat.
Director, Thai Overseas Investment DivisionInternational Affairs Bureau
Thailand Board of Investment
May 2013
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THAILAND is the world’s• 17th largest manufacturer output• 28rd largest exporter• 24th largest economy by
purchasing power
And the 2nd largest economy in ASEAN
*Source: Economist Pocket Facts
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Fast Facts
GDP US$365 Billion (2012)US$5,382 per capita
12% Agriculture
45% Industry
43% Services
Population 67 MillionLabor Force 40.2 million
Sources: MOC, NESDB, Pocket World in Figures 2013 Edition
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2013 Outlook
Recovery of global economy
Recovery of global demand forelectronics & computers
Low and stable inflationary pressure
Domestic demand expected to grow at satisfactory rate
Sufficient budgetary framework to implement public investment projects
Economic Projection 2013
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Top 10 Exports
2011 20122012
(Jan-Feb)2013
(Jan-Feb)
Motor cars, parts and accessories 16.98 22.91 3.02 3.82
Automatic data processing machines and parts thereof 17.06 19.06 2.41 2.71
Refine fuels 10.09 12.90 2.10 1.85
Iron and steel and their products 4.99 7.05 0.76 1.68
Rubber 12.70 8.75 1.73 1.61Polymers of ethylene, propylene, etc in primary forms 8.80 8.53 1.30 1.50
Chemical products 8.29 8.52 1.27 1.48Rubber products 8.39 8.41 1.37 1.37
Precious stones and jewellery 12.30 13.15 2.68 1.05
Machinery and parts thereof 6.11 6.24 0.96 1.03Others 116.85 114.00 17.18 18.09Total 222.58 229.52 34.78 36.20
Unit: US$ Billion
Source: www.moc.go.th as of April 4, 2013
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Top 10 Imports
2011 20122012
(Jan-Feb)2013
(Jan-Feb)
Jewellery including silver bars and gold 19.92 13.03 2.21 5.59
Crude oil 32.90 35.84 4.73 5.10Machinery and parts 19.97 26.18 3.86 4.12
Electrical machinery and parts 13.35 17.01 2.37 2.66
Iron, steel and products 13.91 15.17 2.28 2.55
Parts and accessories of vehicles 6.53 12.61 1.54 2.34
Chemicals 14.82 14.77 2.18 2.23Computers, parts and accessories 8.61 9.83 1.42 1.59Other metal ores, metal waste scrap, and products 8.95 8.13 1.24 1.45
Electronic integrated circuits 10.11 9.18 1.28 1.38Others 79.72 85.86 12.23 14.24Total 228.78 247.59 35.37 43.24
Unit: US$ Billion
Source: www.moc.go.th as of April 4, 2013
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WHY THAILAND?
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Thailand: Highly Ranked#10 World Economic Freedom in Asia Pacific (2013)
#4 in Asia for Corporate Governance
#8 World’s Most Attractive FDI Destination (UNCTAD 2012-2014)
#18 worldwide for Ease of Doing Business#4 Easiest Place in Asia to Do Business
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Office Rent Rates in the Asia-Pacific - 2012
01,0002,0003,0004,0005,0006,0007,000
TOTAL RENT COST (baht/sq.m./month)
(Baht)
Source: www.cbre.co.th as of Feb 3, 2013)
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ASEAN Corporate Income Tax 2013
0%
5%
10%
15%
20%
25%
30%
Singapore Thailand Vietnam Malaysia Indonesia
Source: KPMG
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www.boi.go.th
Infrastructure Development Plans
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Infrastructure• 7 International Airports
In 2009, 53.9 million passengers, 1.1 million tons of cargoes
Suvarnabhumi Airport – Capacity: 45 million passengers and 3 million tons if cargo per year
• Over 70,000 km Highway Systems• 6 Deep Sea Ports & 2 International River Ports
Capacity over 10 million TEUs Laem Chabang Sea Port – Capacity: 10.8
million TEUs, with additional 8 million TEUs expansion
e-Customs facilities• 4,346 km Rail links to Malaysia & Singapore• 60 Industrial Estates
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Projected Infrastructure Investment (2011-2020)
3.1
5.4
7.8
11.1 10.910.3
6.5 6.1
3.1
0.50
2
4
6
8
10
12
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
US$ Bn
Source: Ministry of Transport as of Jan 2013,
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Investment Budget Plan for Transportation, 2013-2020
ROAD (33.9%)US$21.78 billion
RAIL(60.8%)US$39.07 billion
MARINE(3.3%)US$2.13 billion
AIR(1.93%)US$1.24 billion
Total budget: US$64.2 billion
Source: The Office of Transport and Traffic Policy and Planning (BOI’s Overseas Office Meeting) as of Oct 31, 2012 US$1=Bt29.80 in Q1, 2013
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“Logistics Shortcut”- Dawei & Laem Chabang Ports
The linkage between Thailand’s Eastern Seaboard and
Myanmar’s Dawei will provide immense business opportunities
as the emerging Economic Driver in the region.
With high potential to open the Western gateway for the
existing production bases in East Asia, the new trade and
transportation route will create “Logistics Shortcut” for the
region and the supersized co-production base will be an important Growth Nodes
linking the GMS region to global market.
Source: NESDB, as of July 10,2012
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www.boi.go.th
Investment Policies
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No restrictions on foreign currency
100% foreign ownership
No export requirements
No local content requirements
LIBERAL INVESTMENT REGIME
Thailand and the BOI offer:
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Activities Eligible for BOI Promotion Agriculture and Agro-Industries Mining and Mineral Processing Light Industries e.g. jewelry, shoe, garments Metal-Working Industries, including automotive Electrical and Electronics Chemicals and Petrochemicals Services and Public Utilities
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(20)
Tax Incentives Corporate income tax holidays up
to 8 yrs•Additional 50% reductions of corporate income tax for 5 yrs may apply in zone 3
Import duty reductions or exemptions on machinery and raw materials
Double deduction of public utility costs
Deductions for infrastructure construction/installation costs
Non-Tax Incentives Land ownership rights
for foreign investors Permission to bring in
foreign experts and technicians
Work permit/visa facilitationOne-Stop-Shop Visas & Work Permits are issued in 3 hours
Basic BOI privileges and Measures
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BOI Zoning and IncentivesZone: 1 2 3Incentives: Lower Higher
Import Duty Privileges Outside I.E Inside I.E
Zone 1 50% Reduction 50% ReductionZone 2 50% Reduction ExemptZone 3 Exempt Exempt
Corporate Income Tax Outside I.E Inside I.E
Zone 1 No Privilege 3 years
Zone 2 3 years 7 years
Zone 3 8 years 8 years
Objective: Decentralization
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Sector Matrix:Incentives to strengthen
competitiveness
Strategic or Priority Activities
• Maximum incentives regardless of location
• Customized packages
Zone-Based Incentives:• Zone 1• Zone 2• Zone 3
From Zone-Based to Sectoral Approach
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Comparison of All Net Applications for Investment Promotion 2011 vs 2012
Number of Projects
403 331
63 75136 102
611
279 347
283 327
413
791
535
0
400
800
1,200
1,600
2,000
2,400
2,800
2011 2012
Number of Projects
Services
Chemical
E&E
Auto
Fashion
Minerals
Agro
Amount Invested
2.32 3.051.01 1.890.51.45
8.222.82
5.39
2.8
7.88
7.91
19.7
4.28
0
10
20
30
40
50
2011 2012
US$ Billion
2,112
2,584+22.4%
21.64
47.58
+120%
Source: BOI, as of Jan 17, 2013 US$1=Bt31.08 in 2012
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BOI Investment Promotion Policy BOI’s investment promotion policy is to promote “Sustainable development” to enhance the country’s competitiveness in science and technology and encourage the improvement of manufacturing quality as well as reduce environmental impact
High-tech Industry
Renewable energy
Eco-friendly Industry
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Priority Activity Incentives
• Exemption on machinery import duties • 8-year corporate income tax holiday• Additional incentive if submit application by Dec 2013 or if locate
in Science Park• 50% corporate income tax reduction for another 5 years
Special Incentive for Priority Activities
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Sectors of Opportunity
Target Industries
Agriculture and food processing
Automotive
Machinery
Mold & Die
Target Industries
Biotechnology
Alternative energy
E&E
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www.boi.go.th
Automotive Industry“Thailand: Automotive Hub of Asia”
9th largest automobile producer in the world in 2012
14 assemblers with a combined production of more than 2,000,000 in 2012
High Local content of up to 90%
Target of 3 million units in 2017
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Hub of regional R&D Center
Hub of global suppliers
Economy of scale
High quality skill of labor
Production base for Pick-up and Eco-Car
Thai Automotive Industry
Why Thailand ?
Testing Center
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1st Milestone1 million units
Rank 15th
2nd Milestone2.45 million units
Rank Top 9th
3rd Milestone3 million units
Thai automotive industry ASEAN Hub• Light Truck (1 ton Pick – up) • Eco – Car• Global supplier • Automobiles & parts regional R&D center
“Thailand is a global green automotive production base with strong domestic supply chains which create high value
added for the country”
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Thailand’s Rubber Industry
Thailand’s rubber industry is classified into 3 major categories
• Primary processed rubber• Block rubber• Sheet rubber and concentrated rubber
Natural Rubber is processed into several types of products
• Car tires, motorcycles/bicycle tires• Inner tubes for trucks, buses, etc.• Rubber gloves, rubber bands
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Domestic Sales of Rubber Products 2010 - 2012
Year Growth (%)
2010 2011 2012 YOY
Car tires (mil.unit) 16.51 14.38 19.26 33.97
Truck and bus tires (mil.unit) 3.54 3.02 3.38 11.83
Motorcycle/Bicycle tires (mil.unit) 22.28 20.97 24.10 14.91
Truck and bus inner tubes (mil.unit) 1.74 1.39 1.76 26.57
Motorcycle/bicycle inner tubes (mil.unit) 39.02 32.14 34.78 8.21
Retreads (unit) 87,862 85,410 98,571 15.41
Rubber gloves (mil.pieces) 807.75 967.10 1,032 6.70
Primary processed rubber (tons) 90,337 106,707 121.99 14.33Source: Industrial Economics Information Center, Office of Industrial Economics as of April 26, 2013
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www.boi.go.th
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Thailand’s Energy Policy1
• Enhancing energy related industries & business to be next generation value-creator.
2• Securing country’s energy supply.
3• Pricing energy right.
4• Up-scaling RE mix to 25% in 10 years.
5• Targeting energy intensity reduction by 25% (based on
2010 level) within 20 years.
Source: DEDE (Renewable Energy Asia 2012), as of Sept 12, 2012.
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Alternative Energy Development Plan (AEDP) 2012-2021
Renewable Energy ( 9,198 MW)
Solar power 2,000 MW
Wind power 1,200 MW
Hydro power 1,608 MW
MSW 160 MW
Biomass 3,630 MW
Biogas 600 MW
New forms of RE (3 MW)
Geothermal energy
1 MW
Wave and Tides 2 MW
AEDP 2012-2021, targeting to replace 25% of total fossil-fuel consumption with RE at the end of 2021.
Source: Ministry of Energy, as of April 2012
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www.boi.go.th
Renewable Energy
National Policy to Promote Alternative EnergyTarget : To increase share to 25% by 2025
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Types Units Goal2021
Current Capacity31st Dec 2012
Electricity MW 9,201 2,786
Solar MW 2,000 376.72
Wind MW 1,200 111.73
Small Hydro MW 1,608 101.75
Biomass MW 3,630 1,959.95
Biogas MW 600 193.40
MSW MW 160 42.72
Heating Ktoe 9,335 4,882
Solar Ktoe 100 4.0
Biomass Ktoe 8,200 4,342
Biogas Ktoe 1,000 458
MSW Ktoe 35 78
Biofuel ML/day 39.97 4.3
Ethanol ML/day 9 1.6
Biodiesel ML/day 5.97 2.7
9.9% of RE in Total Energy Consumption
3
Renewable Energy Status 2012: Current and Target
Source: DEDE
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www.boi.go.th
Electronics & Electrical ProductsIntegrating Innovation & Technology
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HDD Brand
Owners
1st Tier Supplier
s
2nd Tier Supplier
s
3rd Tier Supplier
s
Metal/Other parts indirect materials tooling
SuspensionMotor partsSub-assembly & coil
HGA/HASMotorBase/CoverActuatorPCBAFPCMedia
Thailand’s Hard Disk Drive Cluster
Source: http://www.nectec.or.th/2008/r-d/hdd.html , Aug 31, 2012
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Top E&E exportElectrical Products1) Air-conditioners2) TV/VDO cameras3) Circuit breakers4) Refrigerators5) Television
Electronics1) Computer components2) Integrated circuit (IC)3) Transmission4) Equipment used for
telephone or telegraphs5) Diode, transistors,
semiconductors
Top E&E importElectrical Products1) Circuit breakers, switches,
plugs2) TV set components3) VDO tape, CD, DVD4) Electric wires and electric
harnesses5) Refrigerator Compressor
Electronics1) Integrated Circuit (IC)2) Computer components3) Mobile phones4) Notebook, computers5) Diode, transistors,
semiconductorsSource: www.thaieei.com Import and export figures during Jan-Nov 2013
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Assembly
Testing
Lead FrameIC Design Wafer
• Sumiko LeadFrame
• TSP-T • Rohm
Mechatech • Yamakin
• Microchip• NXP• Spansion• Hana
Semiconductor• Circuit
Electronics • Millennium
Microtech• Utac Thai• Stars
Microelectronics
• Microchip• Maxim
Integrated
• Stats ChipPAC• Oki• Sony Device
Technology• Sanyo
Semiconductor• Rohm
Integrated System
• Toshiba Semiconductor
• Thai NJR• Vigilant
Technology
• Rohm LSI• Silicon Craft
Technology
Integrated Circuit Cluster in Thailand
Source: BOI E&E Industries Division, as of Dec 17,2009
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www.boi.go.th
Service Sectors
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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 Bt15 million, or have invested at least Bt30 million in Thailand
- By end of 3rd year, 75% of ROH personnel to be qualified staff, and 5 persons earning at least Bt2.5 million annual salary and benefits per person
- All companies must be real operating companies with a physical presence and staff
For portion of income from OVERSEAS OPERATIONS
0% CORPORATE INCOME TAX
for 15 years
Key Conditions
BenefitFor portion of income from
LOCAL OPERATIONS
10% CORPORATE INCOME TAX
for 15 years
Regional Operating HeadquartersBenefit
In addition to conditions for income from overseas and
local operations:
- Income generated from services to overseas companies must be at least 50% of total revenues
For income of EXPATRIATE EMPLOYEES
15% PERSONAL INCOME TAX
for 8 years
Key Conditions
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BOI Incentives : Rights & Benefits
International Procurement Offices (IPO)
Conditions• Must have or rent warehouse and utilize a
computerized inventory system.• Must include procurement, quality control
and packaging activities.• Goods must be procured from various
suppliers, including domestic sources.• The minimum registered capital must not
be less than Bt10 million
Rights & Benefits• Exemption of import duty on
machinery, regardless of zones.
• Privileges under section 36(1): Exemption of import duty on raw or essential materials for use in production for export.
• Privileges under section 36(2): Exemption of import duty on products for re-export such as samples.
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BOI Incentives : Rights & Benefits
Activities:Trade and Investment Support Offices (TISO)
Rights & Benefits Non-Tax Incentives Only– Permission to own land– Permission to bring into
the Kingdom foreign skilled workers and experts sufficient for your business activities
– Permission for foreign nationals to enter the Kingdom for the purpose of studying investment opportunities
– Permission to take out or remit foreign currency
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Target BOI Promotion in Life Science Business
• Medical supplies or medical devices• Medical food • Scientific equipment • Laboratories Services/Test• Research and development• Training Center• Biotechnology
• Biopharmaceutical agent• Diagnostic kits for health, agriculture, food • Bio molecule and bioactive compounds• Biological substances analysis or synthesis services• Biological substances analysis and/or synthesis services
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www.boi.go.th
Thailand’s Medical Device Industry
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Medical devices in Thailand2010 2011 2012e 2013e
Total Market Size 362,374 1,584,410 1,631,942 1,680,900
Total Local Production 113 87 90 92
Total Exports 91 70 72 74
Total Imports 362,351 1,584,392 1,631,924 1,680,882
Import from the U.S. 223,294 275,873 284,149 292,674
Source: Doing Business in Thailand: 2012 Country Commercial Guide for U.S. Companies, as of Oct 15, 2012 Note: The statistics above are unofficial estimates. 31 baht/ 1 US$
Unit: US$ thousands
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Software Development
AnimationCartoons and charactersComputer-generated
imageryWeb-based applications Interactive applicationsGames
Wireless location based service content
Visual effects Multimedia video conferencing
applications E-learning content via broadband
& multimedia & computer-aided instruction
1. Enterprise Software (transaction processing, business solutions)
2. Embedded Software (mobile phones, microchips)3. Digital content, including:
Software Content
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Aerospace Industry
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Factors Supporting Thai Aerospace Industry Growing Airline business in Asia Full support from the government
Infrastructure: Aircraft Industrial Park Maximum tax incentives from BOI for manufacturing of parts and
MRO
A capable and efficient skilled work force. Many universities provide aerospace engineering degree Civil Aviation Training Center provide training for high skill personnel
to enlarge capacity of MRO services Other support industries are widely available: stainless steel
and aluminum fabrication, fiberglass technology, and polymer supply
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www.boi.go.th
High Value-Added Services
The Land of Smiles at Your Service
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Many opportunities exist in this growing sector:• Printing• Tourism facilities, esp. long-stay• Film & Entertainment• Regional Operating Headquarters• Distribution Centers• Aircraft maintenance
Logistics:• Shipping services strongly supported by the Thai
Government to support our strong growth in international trade
Service Industry
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Global Top 20 Destination Cities by International Visitors (2012)
Rank City Visitor (Million) Rank City Visitor
(Million)
1 London 16.9 11 Seoul 8.0
2 Paris 16.0 12 Rome 7.8
3 Bangkok 12.2 13 New York 7.6
4 Singapore 11.8 14 Shanghai 7.5
5 Istanbul 11.6 15 Barcelona 7.3
6 Hong Kong 11.1 16 Milan 7.1
7 Madrid 9.7 17 Amsterdam 6.9
8 Dubai 8.8 18 Vienna 6.7
9 Frankfurt 8.1 19 Beijing 6.2
10 Kuala Lumpur 8.1 20 Taipei 5.4
Source: MasterCard Global Destination Cities Index 2012 as of June 22, 2012
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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 Bt15 million, or have invested at least Bt30 million in Thailand
- By end of 3rd year, 75% of ROH personnel to be qualified staff, and 5 persons earning at least Bt2.5 million annual salary and benefits per person
- All companies must be real operating companies with a physical presence and staff
For portion of income from OVERSEAS OPERATIONS
0% CORPORATE INCOME TAX
for 15 years
Key Conditions
BenefitFor portion of income from
LOCAL OPERATIONS
10% CORPORATE INCOME TAX
for 15 years
Regional Operating Headquarters
Benefit
In addition to conditions for income from overseas and
local operations:
- Income generated from services to overseas companies must be at least 50% of total revenues
For income of EXPATRIATE EMPLOYEES
15% PERSONAL INCOME TAX
for 8 years
Key Conditions
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www.boi.go.th
BOI SERVICES
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Overseas offices
Country desks
1-Stop for visas & work permits:work permits in 3 hours
Interaction with other govt. agencies on behalf of investors
Industrial Subcontracting Services Vendors meet customers program
(BUILD Unit)
Investment Matchmaking Program
ASEAN Supporting Industry Database
BOI SUPPORT SERVICES
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One Start One Stop Investment Center(OSOS)
Help investors to make sure what is required to:
● Apply for investment promotion privileges● Obtain a foreign business license● Tax registration● Complete an environmental impact assessment● Obtain utilities, and much more
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Represented Agencies at OSOS
Investor
Ministry of CommerceBusiness Development
Department
Ministry of FinanceRevenue DepartmentCustoms DepartmentExcise Department
Ministry of EnergyEnergy Business Dept.
Mineral Fuels Dept.Ministry of Industry
Office of the Board of InvestmentDepartment of Industrial Work
Department of Mining and Primary IndustriesIndustrial Estate
Authority of Thailand
Ministry of Public HealthFood and Drug Administration
Ministry of Tourism and SportsMinistry of Transport
Ministry of Labor and Social Welfare
Social Security OfficeLabor Welfare and
Protection Department
Ministry of InteriorDepartment of Lands
Department of Public Works and Town and Country Planning
Provincial Electricity AuthorityMetropolitan Waterworks Authority
Provincial Waterworks Authority
Ministry of Natural Resources and Environment
Natural Resource andEnvironment Planning and
Policy Office
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18th Floor, Chamchuri Square Building319 Phayathai Road, PathumwanDomestic Call: 0 2209 1100, Inter. Call: (66 2) 209 1100Email: [email protected]
More Convenience, less time,more efficiency!
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Thank You!