1 “Thailand’s Investment Environment and Opportunities” Duangjai Asawachintachit Assistant Secretary General Thailand Board of Investment March 12, 2010 Cardiff, United Kingdom Thailand’s Fast Facts Thai population 67 million (2009) Thailand’s GDP £168.64 bn (2009) Thai GDP by sector Agriculture: 11.6% Industry: 45.1% Services: 43.3% Thai labor force 38.95 million (2009) Thai exports £ 97.01 billion (2009) Thai imports £ 85.96 billion (2009) Source: NSO, BOT, MOC, NESDB, and The Nation, as of February, 2010 Note: £1=BT53.57 in 2010
Transcript
1
“Thailand’s Investment Environment and Opportunities”
Duangjai Asawachintachit Assistant Secretary General
Thailand Board of InvestmentMarch 12, 2010
Cardiff, United Kingdom
Thailand’s Fast FactsThai population 67 million (2009)
Thailand’s GDP £168.64 bn (2009)
Thai GDP by sector
Agriculture: 11.6%
Industry: 45.1%
Services: 43.3%
Thai labor force 38.95 million (2009)
Thai exports £ 97.01 billion (2009)
Thai imports £ 85.96 billion (2009)
Source: NSO, BOT, MOC, NESDB, and The Nation, as of February, 2010 Note: £1=BT53.57 in 2010
5.24.9 2.5
-2.3
-3-2-10123456
2007 2008 2009 2009f 2010f
Thai EconomyReal Gross Domestic Product
3.5-4.5
Source: The Inflation Report by Bank of Thailand as of Jan 2010
Recession Recession OverOver
Global Economy Global Economy DropsDrops
Economic Forecast 2010YoY (%) 2009 2010 f
Total Investment (at 1988 price) 9.0 4.6
Private -12.8 5.0
Public 2.7 3.5
Total Consumption (at 1988 price) -0.1 2.8
Private -1.1 3.0
Public 5.8 1.6
Export of Goods (Value) -13.9 15.5
Volume -14.2 9.0
Import of Goods (Value) -24.9 24.0
Volume -23.0 18.0
Inflation -0.9 3.0-4.0
Source: : NESDB, Feb 22, 2010
166 21246 2287 69
216
219
144 126
359709
251
209
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2008 2009
No. of Projects
Services
Chemical
E&E
Auto
Fashion
Minerals
Agro
Comparison of Applications for Investment Promotion 2008 vs. 2009 (Includes Foreign and Domestic Projects)
Number of Projects Amount Invested
By Project
0.62 1.250.430.77
0.29
1.031.11
1.890.85
0.432.69
8.04
0.091.25
0
2
4
6
8
10
12
14
16
2008 2009
1,262 projects
1,573 projects
GBP
7.25 Billion
13.5 Billion24.64%
86%
Source: BOI, as of Feb 22,10 BOT/Exchange Rate (2008-2009) Yearly Average Basis
UK Project Approvals Totals by Sector: 2004-Jan 2010
Sector Projects £ MillionAgriculture 14 20.22Minerals and Ceramics 4 87.30Light Industry 17 20.82Auto and Metal Processing 38 507.95Electrical and Electronics 39 105.98Petrochemicals, Chemicals 5 5.60Services and Infrastructure 38 108.45TOTAL 155 856.32
Source: BOI, as of Feb 26, 10 BOT/Exchange Rate : £ 1 = Bt 53.57 (2009)
Investment EnvironmentInvestment Environment
Global Ranking
Ease of Doing Business
• Thailand #12 in the world– World Bank Study: Doing Business 2010
Forbes Tax Misery IndexMisery 2009
France 167.9Belgium 156.4 Sweden 150.7 Netherlands 146.5United Kingdom 106.8
Hong Kong CorporatePersonalWealthEmployer SSEmployeeSSVAT/Sales
Source: 2009 Tax Misery & Reform Index, April 3, 2009
Sydney Shanghai
KL SingaporeTaipei Jakarta Mumbai
Bangkok
Delhi
0
5
10
15
20
25
Source: UBS Prices and Earnings 2009
Total Tax and Social Security Contributions as Percentage of Gross Wages
Expat Experience 2009
Top Destinations for Expat Experience
1. Canada2. Australia3. Thailand4. Singapore5. Bahrain6. South Africa7. France8. United States9. Spain10.Hong Kong
Source: Expat Explorer Survey 2009, HSBCas of Nov 27, 2009 (3,100 respondents)
Dimensions Thailand
Overall 3Organizing school for Children 4Organizing my finances 11Organizing my healthcare 2Finding somewhere to live 1Entertainment 2Making friends 1Healthcare 4Accommodation 2Food 3Clothing 3Social life 2
Strategic Location and Expanding Network of FTAs
Free Trade Agreement
Entered into forceAFTA*ASEAN-ChinaASEAN-JapanASEAN-IndiaASEAN-S.KoreaASEAN-Australia-NZThailand-AustraliaThailand-NZThailand-IndiaThailand-Japan
Source: BOI International Affairs & www.thaifta.com, as of Feb 05, 2010
Note: * Thailand, Malaysia, Indonesia, the Philippines, Singapore and Brunei only.
2010 Free Trade Agreement StatusEntered into force Expected to be
concluded soon On process
• ASEAN-China (21 Jul 2005)• ASEAN-Japan (1 Jun 2009)• ASEAN-India (trade in goods)
(1 Jan 2010)• ASEAN-Korea (1 Jan 2010)• JTEPA (1 Nov 2007)• TAFTA (1 Jan 2005)• TNZCEP (1 Jul 2005)• AFTA (29 Jan 1992)• AANZFTA (1 Jan 2010)• Thailand-India/EHS (1 Sept 2006)
• Peru (to be implemented)
• BIMSTEC*(* will be signed in early 2010)
•ASEAN-EU • East Asia Free Trade (EAFTA)• Thailand-European Free Trade Association• Comprehensive Economic Partnership in East Asia (CEPEA)• Thailand-India (trade in service and investment)
Source: Department of Foreign Trade, www.thaifta.com, as of Mar 8, 2010
Infrastructure
Thailand – 5th out of 108 airports ranked“Best Airport by Size ( over 40 million passengers)”
Source: Airport Council International (ACI), as of Mar 10,2009
Best Airports Worldwide 2008
Over 40 million passengers
1st Ranking : Hong Kong
2nd Ranking: Dallas Fort Worth
3rd Ranking: Beijing
4th Ranking: Denver
5th Ranking: Bangkok Suvarnabhumi
Thailand has over 50 Industrial estates, zones and parks nationwide
Modern Industrial Estates
Ports
Chieng Saen River PortChieng Kong River Port
Mabtaphut Sea PortBangkok Sea Port
Ra Nong Sea Port
Laem Chabang Sea Port
Source: NESDB, as of Nov 29,2008, update the figure from Thailand Transport Portal in Jan 2010 & PAT & Map Ta Phut Port
Ports Capacity/Year
Bangkok 1.3 million TEUs.
Laem Chabang 6.9 million TEUs.
Map Ta Phut 2.0 million tonnes
Source: NESDB
GMS Economic Corridors•Well-defined area centered on a transport corridor
•Integrated with the development of other infrastructure and economic activities
•Planned and systematic project, policy, and institutional interventions
Key Objectives•Connect centers of economic activity
•Facilitate trade, investment and tourism
•Reduce transport costs, and facilitate mobility across borders
Second Stimulus Package (2010-2012)
Projects Budget (£ mil)
1) Community Investment 2,104.74
2) Water Resource and Agriculture
1,175.49
3) Education 1,026.90
4) Transport & Logistics 920.32
5) Income guarantee 790.20
6) Health Care Infrastructure
290.23
7) Social Welfare 181.21
The cabinet approved an investment framework worth £ 6.9 billion for the second stimulus package, covering 2010-2012 (as of March 5, 2010)
Source: www.tkk2555.com as of Mar 5, 2010 (Note: BOT exchange rate Q1/09, £ 1 : Bt 50.62)
Projects Budget (£ mil)
8) Tourism Development 106.56
9) Fundamental Tourism Infrastructure
64.83
10) Health Care HRD 38.08
11) Creative Economy 26.29
12) Natural Resources 13.62
13) Science & Technology 3.65
14) Energy 3.44
15) Contingency fund 167.92
BOI Investment Policy
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
Activities Eligible for BOI Investment Promotion
• Agriculture and Agricultural Products• Mining, Ceramics and Basic Metals• Light Industry• Metal Products, Machinery and Transport
Equipment• Electronic Industry and Electric
Appliances• Chemicals, Paper and Plastics• Services and Public Utilities
Investment 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
BOI ZoningDecentralization
Zone-Based Incentives:• Zone 1• Zone 2• Zone 3
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
Additional Incentive Package for STI(Skill, Technology & Innovation)
Privileges 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 – Contribution to the Science and
Technology Fund
New Policies for 2010 New direction to encourage
“Investment for Sustainable Development”
(1) Certain measures of “2008-2009 Investment Year” which have expired, but are considered useful for sustainable development
(2) HRD measures necessary for a knowledge-based economy(3) Measures to strengthen Science & Technology (S&T)
development(4) Environment and community friendly investment promotion
policies: measures such as eco-town and eco-industrial estate(5) Measures to support creative industries and healthcare
industries
Investment Opportunities
World Ranking: Automobile Production by Country (2008)
11,563,629
9,323,587
8,685,440
6,052,337
3,823,380
3,048,973
2,521,443
2,315,3122,179,296
2,128,186
2,068,1881,800,543
1,589,3801,391,728
1,147,1101,023,774
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
JapanChina
USA
GermanyKorea
BrazilSpain
IndiaMexico
FranceCanada
Russia UKThailand
Turkey Italy
No.141,391,728
Source: The Thailand Automotive Institute
(Vehicles)
Domestic and Export Sales Growth
440,705538,966
690,100 776,152
535,596
703,261682,163
631,251615,269
548,871
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2005 2006 2007 2008 2009
Domestic sales
Export sales
(Vehicles)
Source: FTI, as of Feb 18, 10
Automobile Export from Thailand in 2009EuropeUnit: 34,794Change: (-64%)Share: 6.5%
AsiaUnit: 142,642Change: (-24%)Share: 27%
Central/ South AmericaUnit: 38,973Change: (-57%)Share: 7% Africa
Unit: 32,636Change: (-35%)Share: 6%
AustraliaUnit: 144,319Change: (-23%)Share: 27%
Middle EastUnit: 142,230Change: (-11%)Share: 27%
Source: Federation of Thai Industries (FTI), as of Jan 26, 2010 Note: CHF1=BT31.61 in 2009
Total (2009)Unit: 535,594 Change: (-31%)Value: CHF7.89 bn, Change: (-22%)
Pure Thai23 %
SMEs
ForeignJ/V
ForeignMajority
47 %.
LocalSuppliers
Tier 1 Suppliers
LSEs
(648 Companies) Thai Majority
30 %
[* LSEs : Large Scale Enterprises SMEs : Small & Medium Enterprises] The data updated in 2009 by TAI
(16 Auto Assemblers, 7 Motorcycle Assemblers)
(1,641 Companies)
Tier 2 & 3 Suppliers
Assembly
Structure of Thai Automotive Industry
2008 Top 100 Global OEM Parts SuppliersThe ones in red have operations in Thailand.
Global 100 Suppliers
• Robert Bosch GmbH• Denso Corp.• Continental AG• Magna International• Aisin Seiki Co. Ltd.• Johnson Controls Inc.• Delphi Corp.• Faurecia• ZF Friedrichshafen AG• TRW Automotive Inc.• Lear Corp.• Toyota Boshoku Corp.• ThyssenKrupp Tech.• Yazaki Corp.• Valeo SA• Benteler Automobil.• Sumitomo Electric Ind• Visteon Corp.• Hyundai Mobis• Dana Holding Corp.• Schaeffler KG• JTEKT• Magneti Marelli S.p.A.• ArvinMeritor Inc.• Cummins Inc.
Source: MOC, as of Feb 11, 2010 Note: £1=BT53.57 in 2009
• Thailand continues to industrialize, but is dependent on foreign industrial machinery for immediate future.
• High demand for:– Food and farm machinery– Alternative energy/energy conservation machinery– Textile machinery– Automotive machinery– Mould & Die Industry
Opportunities in Machinery
ThailandThailand’’s Food s Food IndustryIndustry
World’s Rice Bowl: Rice Exports from Asean
2005/06 2006/07 2007/08 2008/09 2009/10
Thailand 7,376 9,557 10,011 8,600 10,000
Vietnam 4,705 4,522 4,649 5,950 5,000
Cambodia 350 450 500 400 500
Burma* 47 31 541 670 1,400
Source: World Market & Trade, USDA, Thai Rice Exporters Association
Note: * Fiscal year is from April 1 to March 31 Unit: 1,000 metric tonnes
Tuna SeafoodPineapple Fruits&vegetablesSweet corn Ready to eat & food ingredients
Source: Thai Food Processors Association (TFPA) as of Feb 9, 2010
• Thailand has a relatively well-developed food processingsector. The country is a major producer and exporter ofprocessed food products.
• Thai standards are higher than other developing nations dueto reliance on exports to Japan, the US and the EU. Foodprocessors, especially those who export, prefer premiumingredients to maintain product standards.
• The food processing sector’s active involvement in R&D activities and constant new product introductions create new demand for new food ingredients.
Investment Opportunities
urce: 2009 Thailand food Processing Ingredients Sector, GAIN Report as of 23 January 2009
Biotechnology Application in Thailand
Green Biotechnology
Red Biotechnology
Agricultural application• Food processing
Medical application• Genetic testing and Pharmacogenomics• Pharmaceutical products• Testing kits• Stem cell technology
• Excellent support: National Research Centers– National Center for Genetic Engineering and Biotechnology
(BIOTEC)– National Electronics and Computer Technology Center
(NECTEC)– National Metal and Materials Technology Center (MTEC)– National Nanotechnology Center (NANOTEC)– National Science and Technology Development Agency
(NSTDA)– Thailand Institute of Scientific and Technological Research
(TISTR)– National Research Fund (Reports to the Prime Minister)
Source: Biotechnology brochure, May 27,2009
Alternative Energy in Thailand
Solar Biogas Wind Bio Cluster
Waste Water Bio Diesel Ethanol
The Fifteen Year – Alternative Energy PlanObjectives• To enable Thailand to use alternative energy as
the main source of energy to replace oil import• To strengthen Thailand’s energy security• To promote use of alternative energy as part of
a strategy to promote green communities• To support alternative energy technology
production in Thailand• To research, develop and promote high
efficiency technology for alternative energy
Target“Increasing the proportion of alternative energy to 20% of the national
final energy consumption by 2022”Source: Ministry of Energy, as of May 2009
Energy Saving and Alternative Energy Related Businesses
Activities• 1.26 Manufacture of alcohol or fuel from agricultural products,
including scrap, garbage and/or waste• 4.24 Manufacture of energy-conserving machinery or equipment or
manufacture of machinery or equipment which uses alternative energy• 4.25 Manufacture of fuel cells • 5.5.24 Manufacture of solar cells• 7.1.1 Power generation from alternative energy (from wind/biogas,
agriculture materials/gas)• 4.26 Manufacture of engines, machinery and accessories for Natural Gas
Vehicles• 4.27 Assembly of Natural Gas Vehicles. Especially bus or heavy truck• 7.29 Natural Gas service stations for vehicles
7.28 Energy Service Companies (ESCO)Rights & Benefits• Exemption from import duties on machinery, regardless of zone• 8-year exemption from corporate income tax, regardless of zone,
without being subject to corporate income tax exemption cap
Note• Classified as a priority activity of special importance and benefit
to the country• Projects must be approved by the Ministry of Energy• Other rights and benefits shall be granted according to BOI
Announcement No.1/2543
•Many opportunities exist in this growing sector:• R&D and design• 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
Services
BOI Services
Sectional divisions to guide you through the process
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 Matchmaker Program
ASEAN Supporting Industry Database
BOI Support Services
SUBCON Thailand 2010• Held from 13-15 May 2010 at Bangkok International
Trade and Exhibition Center (BITEC), Thailand• Over 18,121 visitors from around the world• Over 150 competitive subcontractors• Business Matchmaking program
– 2,041 partnership match-ups in 2009 – Over Bt 3 billion worth of transactions
• Academic to Business (A2B) project– Top universities participated
– Staff from relevant agencies will also be available for consultations on a range of topics.
– Help investors with applications to make sure investors know what is required to:
• Register a company• Apply for investment promotion privileges• Obtain a foreign business license• Tax registration• Complete an environmental impact assessment• Obtain utilities, etc.
– OSOS staff will also accept applications for things such as corporate name registration, corporate tax ID numbers, VAT registration, foreign business licenses, investment promotion incentives, etc.
Represented Agencies at OSOS
Investor
Ministry of CommerceBusiness Development
Department
Ministry of FinanceRevenue DepartmentCustoms Department
Excise 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
