THAILAND is the world’s 17 th largest manufacturer output 28 rd largest exporter

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www.boi.go.th Thailand: Land of Investment Pichit Dejneeranat . Director, Thai Overseas Investment Division International Affairs Bureau Thailand Board of Investment May 2013

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Thailand: Land of Investment Pichit Dejneeranat . Director, Thai Overseas Investment Division International Affairs Bureau Thailand Board of Investment May 2013. THAILAND is the world’s 17 th largest manufacturer output 28 rd largest exporter - PowerPoint PPT Presentation

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Page 1: THAILAND is the world’s 17 th  largest manufacturer output 28 rd  largest exporter

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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Page 4: THAILAND is the world’s 17 th  largest manufacturer output 28 rd  largest exporter

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 1.61

Polymers of ethylene, propylene, etc in primary forms

8.80 8.53 1.30 1.50

Chemical products 8.29 8.52 1.27 1.48

Rubber 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 1.03

Others 116.85 114.00 17.18 18.09

Total 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 5.10

Machinery 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 2.23

Computers, parts and accessories 8.61 9.83 1.42 1.59

Other metal ores, metal waste scrap, and products

8.95 8.13 1.24 1.45

Electronic integrated circuits 10.11 9.18 1.28 1.38

Others 79.72 85.86 12.23 14.24

Total 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

6.56.1

3.1

0.5

0

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% Reduction

Zone 2 50% Reduction Exempt

Zone 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 Milestone

3 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

YearGrowth

(%)

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 14.33

Source: 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 Policy

1

• 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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Renewable Energy

National Policy to Promote Alternative Energy

Target : 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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Electronics & Electrical ProductsIntegrating Innovation & Technology

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HDD Brand

Owners

1st Tier Suppliers

2nd Tier Suppliers

3rd Tier Suppliers

Metal/Other parts indirect materials tooling

Suspension

Motor parts

Sub-assembly & coil

HGA/HAS

Motor

Base/Cover

Actuator

PCBA

FPC

Media

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 Frame

IC 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

Benefit

For 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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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

50

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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 CityVisitor

(Million) Rank CityVisitor

(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

Benefit

For 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!

More Convenience, less time,more efficiency!

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Thank You!