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Dr. Bonggot AnurojDr. Bonggot Anuroj
Executive Director of Investment Marketing BureauExecutive Director of Investment Marketing Bureau
Thailand Board of InvestmentThailand Board of Investment
30 March 2011 30 March 2011 [email protected]@boi.go.th
Thailand’s Investment Promotion PoliciesThailand’s Investment Promotion PoliciesThailand’s Investment Promotion PoliciesThailand’s Investment Promotion Policies
Outline of Presentation
-Investment Promotion Policy
- Investment Trend
- BOI Services
-Investment Promotion Policy
- Investment Trend
- BOI Services
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BOI Investment Policies
BOI Investment Policies
No Restrictions on Repatriation of ProfitsNo Restrictions on Repatriation of Profits
100% Foreign Ownership100% Foreign Ownership
No Export requirementsNo Export requirements
No local content requirementNo local content requirement
1
2
3
4*some restrictions apply
*
Liberal Investment PolicyLiberal Investment Policy
List of BOI activities eligible for Investment Promotion
129 sub-items are eligible for investment promotion129 sub-items are eligible for investment promotion
Criteria for Project Approval
• Minimum investment amount of at least 1 millionbaht (excluding land cost and working capital)
• Valued added for at least 20 percent of sales revenues
• A debt-equity ratio (D/E) of less than 3 to 1• Utilization of modern production processes and
new machinery (used machinery must be less than10 years old and certified by relevant parties)
• Adequate environmental protection systems
Criteria for Foreign Shareholding• 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
• Manufacturing projects: there are no equity restrictions for foreign investors
• The Board may set the amount of shares eligible to be held by foreign investors on promoted projects when deemed appropriate
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Investment Incentives
NON-TAX IncentivesNON-TAX Incentives
• Land ownership 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
Major BOI Incentives Schemes
• Decentralization – Incentives vary according to zones
• Priority activities– 8-year corporate income tax exemption and exemption of
import duties on machinery regardless of locations• Sector-specific policies• Optional incentive scheme– STI Scheme
• Special temporary measures: “Investment Promotion Policies for Sustainable Development”
BOI ZoningBOI ZoningZone-Based Zone-Based IncentivesIncentives Zone 1 includes Bangkok, Samut Prakan, Samut
Sakhon, Nakhon Pathom, Nonhtaburi and Pathum Thani
Zone 2 includes Ang Thong, Ayutthaya, Chachoengsao, Chon Buri, Kanchanaburi, Nakhon Nayok, Phuket, Ratchaburi, Rayong, Samut Songkhram, Saraburi, and Suphanburi
Zone 3 encompasses the remaining 58 provinces
Source: Thailand Board of Investment
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
Examples of Priority Activities
• Agriculture and agro-industries• R&D• Software development• Molds & Dies• Biotechnology• Alternative energy• Manufacture of hi-tech products e.g. advanced
ceramics
Privileges will be based on the project’s total investment in STI expenditures in any of the following 4 categories:
Additional Incentive Package for STI(Skill, Technology & Innovation)
R&DR&D Adv Tech Training
Adv Tech Training
SciTech FundingSciTech Funding
S&T S&T Dev Dev FundFund
Requirement and Additional Incentive for STI Activities
STI ExpenditureAdditional 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: 1. Investment ceiling uncapped. Corporate income tax holiday may not exceed eight years.2. Exemption of import duty on machinery
Note: 1. Investment ceiling uncapped. Corporate income tax holiday may not exceed eight years.2. Exemption of import duty on machinery
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Application submission deadline: December 31, 2012
1. Special incentives for 3 groups of targeted activities1) Manufacture of eco-friendly material and product, e.g. bioplastics2) Energy saving and alternative energy3) 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 2010-2012 “Investment for Sustainable Development”
2) Measure to promote energy conservation, alternative-energy utilization or reduction of environmental impacts
Incentives• Import duty exemption on machinery, regardless of
zone.
• 3-year corporate income tax exemption on the revenue of existing projects, accounting for 70% of the investment under this measure excluding cost of land and working capital.
New Policies for 2010-2012 “Investment for Sustainable Development”
3) Measure to promote production efficiency improvement by technology upgrade for manufacturing of new productsIncentives•Exemption from import duties on machinery, regardless of zone.•Exemption from corporate income tax for 3 years, regardless of zone. The benefit from this exemption may not exceed 100% of the project’s investment value.
3) Measure to promote production efficiency improvement by technology upgrade for manufacturing of new productsIncentives•Exemption from import duties on machinery, regardless of zone.•Exemption from corporate income tax for 3 years, regardless of zone. The benefit from this exemption may not exceed 100% of the project’s investment value.
New Policies for 2010-2012 “Investment for Sustainable Development”
Board of Investment Announcement Board of Investment Announcement
No.1/2553No.1/2553 (2010)(2010)
Subject: Measure to promote SMEs InvestmentSubject: Measure to promote SMEs Investment
Listed of Activities Eligible for SMEs investment Listed of Activities Eligible for SMEs investment PromotionPromotion
Agriculture and Agricultural Product (13 activities)Mining, Ceramics and Basic Metals (7 activities)Light Industry (11 activities)Metal Product, Machinery and Transport
Equipment ( 12 activities)Electronic Industry and Electrical Appliance
(5 activities)Chemicals, Paper and Plastics ( 3 activities)Service and Public Utilities ( 1 activities)
52 activities are eligible for promotion
Project with an investment of 500,000 baht or more
(excluding cost of land and working capital) Not less than 51 % of the registered capital must be
Thai sharesMust have a debt equity ratio of less than 3:1Used machinery which cost less than 10 million
baht are allowed to be used; investment on new machinery must cost more than 25% of used machine’s value
Conditions (1/2)Conditions (1/2)
Conditions (2/2)Conditions (2/2)
Investment amount of each project must be less than 80 million baht (excluding cost of land and working capital). Overall, total value of company’s net asset must be less than 200 million baht (excluding cost of land and working capital)
Applications must be submitted by December
31, 2011
BOI Announcement No. 1/2554 (2011)Granting of Rights and Benefits under section
36(1) and (2) to existing companies to alleviate the impact of the Strengthening of the Baht
Rights and Benefits (1/2) Application must be existing companies with investment
capital, excluding cost of land and working capital, of not less than one million baht in the following industries
- Production of ready-to-wear garments
- Production of leatherwear
- Production of footwear
- Production of furniture or decorative items
- Production of textiles
- Production of toys
- Production of sport equipment
- Gems and jewelry
- Production of lenses
- Printing
Rights and Benefits (2/2)
Applicants must be certified by an association or agency approved by BOI
Promoted project shall receive rights and benefits in accordance with section 36 (1) and (2) for period of1 year, and the renewal thereof shall be pursuant to criteria prescribed by BOI
Promoted project shall comply with regulations and procedures for the application of rights and benefits inaccordance with section 36(1) and (2), as set forth by BOI
Applicants must submit the application within 31 December 2011
Recent Investment Trend
166 198 26735
46 2134
5
87 73101
13
201
320
73
204
224
43
144117
213
34
359675
432
66
251
209
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2008 2009 2010 2011 (Jan-Feb)
No. of Projects Services
Chemical
E&E
Auto
Fashion
Minerals
Agro
Source: BOI, as of 15 March 2011
Number of Projects Amount Invested
38 71.3 66.17.5
26.619.5 29.3
1
17.911.3
0.3
56.8 67
14.9
68.6 84.5 65.6
6.8
52.4 23 41.2
19.2
165.8
376.2
167
19.56.7
77
0
100
200
300
400
500
600
700
2008 2009 2010 2011 (Jan-Feb)
1,262
1,489
Bt Billion
446.3
638.1+7%
-30%1,591
447.4
Comparison of All Net Applications for Investment Promotion 2008 – Feb 2011
(Includes Foreign and Domestic Projects)
26969.3
351
236
77
104
80
3834
1143
1135
75 2
0
60
120
180
240
300
360
Bt
Bill
ion
Total Japan EU Singapore China USA India
2009 2010
Source: BOI, as of Jan 17, 2011
-32.7%
Japan Remains No. 1 Investor in ThailandForeign Direct Investment Applications
BOI Approved SMEs Projects (Jan 2003-Feb 2011)
Type of Activities
1. Agriculture and
Agricultural Product
Number of Project
177
Value (Million baht)
9,269
2. Mining, Ceramics
and Basic Metals 4 85
3. Light Industry 23 3244. Metal Product, Machinery and Transport Equipment
35 677
BOI Approved SMEs Projects Jan 2003- Feb 2011
Type of Activities
5. Electronic Industry and Electrical Appliance
Number of Project
13
Value (Million baht)
176
6. Chemicals, Paper and Plastics
48 754
7. Service and Public Utilities
2 32
Total 302 11,319
BOI Services
32Overseas 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
BOI Unit for Industrial Linkage Development (BUILD)
15 years of service
BUILD Activities• Provide information on subcontracting opportunities in Thailand via database web
applications• Assist foreign buyers wishing to source from
Thai manufacturers• Match buyers and subcontractors in related
businesses• Arrange participation of Thai manufacturers in
trade shows and exhibitions abroad
ASEAN Supporting Industry Database (ASID)
• Information and profiles of companies in supporting industries and manufacturers of parts and components in 10 ASEAN countries
• ASID can be easily accessed via the internet at www.asidnet.org
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One Start One Stop Investment Center18th Floor, Chamchuri Square Building319 Phayathai Road, PathumwanBangkok 10330, ThailandDomestic Call: 0 2209 1100, Inter. Call: (66 2) 209 1100Email: [email protected]
More Convenience, less time,more efficiency!
More Convenience, less time,more efficiency!
Services at OSOS– 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.
10 - 25 November 2011
IMPACT Exhibition and
Convention Center
Organized by Thailand
Board of Investment
Objectives
1. To celebrate the auspicious occasion of the 84th birthday of His Majesty the King.
2. To highlight the achievements of Thai industry in the areas of technology and innovation, as these will greatly enhance
efficiency and industrial competitiveness and result in new, environment-friendly production.
3. To build confidence in the Thai economy, while also improving the country’s image; BOI Fair 2011 will give wide
exposure to the Thai industrial sector’s commitment to serving society and preserving the natural environment.
4. To provide an opportunity for members of the industrial community to meet, conduct business, and network.
“Going Green for the Future”โลกสดใส ไทยย��งย�น
Theme
Show date : 10 - 25 November 2011 (16 Days)
Venue : IMPACT Exhibition and Convention Center (237,000 sq.m)
- Outdoor : Lakeside 166,000 sq.m
- Challenger 1-3 60,000 sq.m
- Hall 9 11,000 sq.m
Exhibitors:84 Outdoor Pavilions and more than 3,000 Indoor Booths
Visitors : More than 5 million visitors expected
General Information
Thank You!
www.boi.go.thwww.boi.go.th