Board of Investment Thailand Policies and Incentives. Ms. Vibulphan Juntarashote Sydney, Australia July 24, 2006

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1 Board of Investment Thailand Policies and Incentives Ms. Vibulphan Juntarashote Sydney, Australia July 24, 2006

2 Liberal Investment Regime No export requirements No foreign equity restrictions in manufacturing sectors No local content requirements No location requirements in all but 6 activities (for environmental protection)

3 Role of the BOI Investment policy and incentive provider Investment Projects Administration Facilitation Services Investment and industry monitoring

4 Policy Objectives Continued decentraliztion Good governance and transparency Attract investment to least developed provinces Strengthen national competitiveness Require international standard certification (e.g. ISO 9002)

5 Recent Investment Promotion Policies Skills, technology and innovation (STI) Hard Disk Drives (HDD) Semiconductors Software Iron and Steel Alternative energy and energy conservation Textile Industry Cluster Film-making and entertainment Regional Operating Headquarters (ROH) International Procurement Offices (IPO) Business Process Outsourcing (BPO)

6 Investment Promotion Strategies Value Creation Science and Knowledge Based Technologies Collaboration w/ Science Parks /universities Hi-tech Industries Bio- tech IC design & wafer Nano Technology Target Industries Agriculture New products, High value added, Ready to eat Fashion OEM ODM & OBM Automotive # 9 ranking Electronics and ICT Cluster upstream-downstream High-value-added services IPO BPO ROH Alternative Energy Thai Overseas Investment China, India, CLMV and other new emerging economies Cooperate with allies in - Market expansion - Raw materials sourcing - Cost reduction & capability enhancement Enhancement of industrial competitiveness R&D, technology & machinery Improvement, Energy saving, IT system Development of basic industries Petrochemical, metal, alternative energy, NGV, logistics, public transportation

7 The Board of Investment Basic Incentives and Measures To reduce initial investment costs: Tax exemption or reduction on imported machinery Tax exemption or reduction on imported raw or essential materials Exemptions from corporate income tax for 3-8 years

8 Basic BOI privileges and incentives TAX INCENTIVES NON-TAX INCENTIVES Corporate income tax holidays up to 8 years Import duty reductions or exemptions on machinery and raw materials Land ownership rights for foreign investors Permission to bring in foreign experts and technicians Work permit/visa facilitation

9 BOI Basic Promotion Packages 3 Investment Promotion Zones to promote industrial decentralization Zone: Incentives: Lower Higher Incentives

10 Target Industries Agro Industry Food Processing Rubber Products Bio - Technology Fashion Industry Automotive Electronics and ICT High Value - Added Services Energy Jewelry Leather Products Pick-ups Major Auto Parts Electronics Parts and Computer Consumer Electronics Home Appliances Software ROH Garments Logistic Call Center Power Plant Energy Saving Consultant Renewable Energy Tourism

11 Creating an Enabling Environment for Investments Expand range of online information Applications can now be submitted online Information in 7 languages, including German Provide more post-application services Investment facilitation division Sourcing (BUILD) Use feedback from investors to improve BOI policies and services One-stop service center for visas and work permits New E&E incentives Backed by ISO 9001:2000 Certification

12 Services of the BOI Services of the BOI The BOI offers: Investment Matchmaker Program Support around the world 7 overseas offices (New York, Los Angeles, Paris, Frankfurt, Shanghai, Tokyo and Osaka) One-Stop Shop for Visas and Work Permits Work Permits within 3 hours Promotion of industrial subcontracting Vendors Meet Customers Program (BUILD) Comprehensive, world-class website Help with work and residency permits Interaction with other government agencies on behalf of investors

13 BOI Support Services: Sectoral Divisions to guide you through the process Investment Matchmaker Program 1-Stop for visas & work permits: work permits in 3 hours Industrial Subcontracting Services Vendors meet customers program (BUILD Unit) ASEAN Supporting Industry Database (ASID) Interaction with other govt. agencies on behalf of investors Country desks Overseas offices

14 Hub of Access to Regional Markets (Countries and populations) India: 1.1 billion Early Harvest Agreement China: 1.3 billion Early Harvest China-ASEAN FTA Japan: 127 million Japan-ASEAN FTA Taiwan: 23 million ASEAN: 503 million AFTA Other FTAs FTAs: U.S., New Zealand, BIMSTEC, Peru, Bahrain Australia: 20 million TAFTA

15 Thailand Increases Trade Partners Recently concluded FTAs with New Zealand, Australia, China, India Current comprehensive FTAs under negotiation with the USA and Japan Creation of Thailand-Turkey Business Council planned for 2006; bilateral trade expected to increase 6 times over 1 ASEAN-China trade value predicted to reach $100 billion within 3 years 2 1) Bangkok Post 24/6/06 2) The Nation 7/6/06, reported from China-ASEAN Forum, Yunnan

16 Thailand-Australia Cooperative Agreements TAFTA Australia s 4 th trade agreement came into effect January 1 st Agreement on Bilateral Cooperation came into effect July 27 th 2005, directing future cooperation on issues such as immigration, environmental regulations, and security Both countries are members of the Cairns Group promoting agricultural trade liberation, and APEC

17 Thailand s major competitive advantages derive from its stability and its democratically elected government. Its highly skilled work force, good supply chain network, and ongoing infrastructural development are other factors that make Thailand attractive to Australian companies. Gary Wollacott, President of the Australian-Thai Chamber of Commerce

18 AUSTRALIA Approved Applications 5-Year Totals by Sector: Sector Projects A$ Million Agriculture Minerals and Ceramics 3, Light Industry Auto and Metal Processing 2, Electrical and Electronics Petrochemicals, Chemicals 5, Services and Infrastructure 1, TOTAL 14, Average $A = 26.7 baht

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