Board of Investment Net Applications by Country

1. Board of Investment Net Applications by Country 2001 2002 2003 (Jan.-May) Number Value of Number Value of Number Value of of Investment of Investment of Investment Projects (mil. US$) Projects (mil. US$) Projects (mil. US$) Total Inv. 854 4,164 840 6,151 375 2,863 Total For. 675 3,359 560 4,154 263 2,358 100% For. 320 1,900 291 2,391 118 1,410 By Country Japan275 1,332 251 1,672 128 889 U.S.A. 48 420 35 196 18 560 Taiwan 42 103 55 964 30 46 Hong Kong 17 202 13 268 8 198 Singapore 62 305 40 305 21 110 E.U. 84 567 66 321 31 464 Note 1: Investment projects with foreign equity participation from more than one country are reported in the figures for each country Note 2: 2001 US$=44.48 baht; 2002 US$=43.00 baht; 2003 US$=42.68 baht

2. Major Investors in 2002

3. Investment by Sector(2002)

4. BOI Project Approvals For India (1998-2003) • Several Projects From APL Group • Indo-Rama Textiles • Indo Poly • Indo Worth • Indo-Thai Synthetics • A Total of 7 Software Projects, all in the Last 2 Years. • Two PET Projects, Each for More Than 1 Billion Baht • A Half-Dozen Jewelry Projects

5. BOI Project Approvals For India (1998-2003)

6. Liberal Investment Regime • No Export Requirements • No Foreign Equity Restrictions in Manufacturing Sectors • No Local-Content Requirements • No Location Requirement in All But 6 Activities

7. The Board of Investment Basic Incentives and Measures • Guarantees and Permissions • Guarantees against nationalization and price controls • Permission to own land and bring in foreign experts • Tax Incentives • Tax exemption /reduction on imported machinery and input • Income tax exemption • Support services • Advisory and information provision • Publications

8. 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 inputs • Exemptions from corporate income tax for 3-8 years Note: Income Tax Holiday is capped at 100% of Investment Capital

9. Zones of Opportunity

10. Import Duty on Machinery

11. Import Duty on Raw Materials

12. Corporate Income Tax Exemption The Amount of a Project’s Corporate Income Tax Holiday is Capped at 100% of Investment Capital

13. Additional Zone 3 Incentives

14. Additional Zone 3 Incentives

15. Criteria Value added D/E ratio Modern technology Environmental protection Conditions ISO 9000 Performance based Cap on corporate income tax exemption (equal to investment capital) Criteria and Conditions

16. Investment Policy Reform Old Model New Model Skill & Knowledge Capital intensive & labor intensive intensive Production base Integrated International business center Tax incentives provider Facilitation & investment services provider” Customization to promote Standard package Large Corporations, SMEs and community enterprises

17. New Investment Promotion Focus • 3 Dimensions • 3 Regions • 7 Strategies • 5 Target Industries

18. 3 Dimensions • Shift emphasis from capital investment towards investment that creates: • Talent • Skill Development • Technology Transfer • Innovation • Customized Incentive Packages: Balance between investor needs and economic contribution • Cluster Development

19. Developing Industrial Clusters • Project location requirements have been lifted • New and Expansion projects are free to expand wherever they deem appropriate • For environmental protection purposes, the following activities do not apply: • Tanneries, bleaching and dying, heat treatment using cyanide, recycling/reusing unwanted materials

20. Changing Role of the BOI Provide Value-Added Investment Services Provide Tax Incentives Solve Problems and Enhance Investment Environment Proactive Marketing Promotion Investment Administration Develop Database System Set up Investment Network Develop Knowledge About International Investment Law Increase Training and Skills Development Market Community Enterprises Enhance Capabilities of Thai Community Enterprises

21. 5Target Industries Agro Industry • Food Processing • Rubber Products • Bio - Technology Fashion Industry • Jewelry • Leather Products • Garments Automotive • Pick-ups • Major Auto Parts ICT incl. Electronics • Fiber Optics • Telecom • IC Design High Value - Added Services • Long Stay • ROH • Film Industry • Printing Industry • MICE • Call Center

22. Target Industries • Specific Policies and Measures Will Be Developed for Each Target Industry, Based On • Competitiveness • Levels of technology • Market potential • Non-target Industries • No change in policy • No backtracking • No reduction in incentives

23. Thai Automotive Industry • Thailand: Regional Hub • 15 assemblers with capacity of 1 million units/year • 5 motorcycle manufacturers • Large supplier base • 700 tier 1 suppliers • 1,100 tier 2&3 suppliers • Strong market potential • 35% domestic sales growth (H1/03) • 39% export growth (Jan.-May)

24. New Automotive Industry Policy • Projects must be submitted in packages comprising manufacture of car assemblies, vehicle parts and automotive engines. • Investment must be not less than 10 billion baht. • Car assemblies manufacture must be export-oriented with a distinct target. • Vehicle parts and automotive engines manufacture will supply products in their own packages or for export only.

25. Electronic and Electrical Industry in Thailand • More than 1,000 companies involved in these industries, including 621 BOI-promoted companies that • Employ 300,000+ Thai workers • Generate annual export earnings of more than US$20 billion, or roughly 35% of all Thai exports • Trade surplus in 2001 of US$4.7 billion

26. Current Key Players in Thailand’s E&E Industry • HDD & HDD Parts • IBM, Fujitsu, Western Digital, Nidec, Seagate, Read-Rite, Hoya, Minebea • Printers • Cal-Comp, Canon, Oki • PCBAs • Celestica, Koshin, ACT, SCI Systems, SVI, Hana, Pemstar, PCTT, Mektec • White Goods (Air Conditioner, Refrigerator) • Daikin, Fujitsu General, Mitsubishi, Sharp, Toshiba, Sanyo

27. Promotion of Value Chain in Electronics Industry • Promote projects in the electronic industry that locate all elements of the value chain in Thailand • Cover all downstream and upstream activities, such as R&D, design, quality control, production development, and technical support • Have total sales of at least 2,500 million baht/year • Must transfer technology to domestic operators

28. High Value Services • Regional Operating Headquarters • Tourism-Related Activities • Retirement Homes • Long-stay Tourism • Dedicated Health Centers • ICT-Related Services • E-Commerce application service providers • E-Commerce users • Entertainment Industry • Printing Industry

29. Regional Operating Headquarters (ROH) • Last year, the Government Established Regulations Covering Regional Operating Headquarters • Companies must be incorporated under Thai law and have paid-up minimum capital of 10 million baht • They must service branches or affiliates in at least 3 countries • Income must come from managerial, administrative, technical, or other prescribed supporting services for branches/associated companies

30. ROH • Benefits • Corporate income tax at 10% for: • Qualified services • Royalties from ROH in Thailand • Interest income on loans made to ROH branches/associated enterprises • Tax exemption for dividends from ROH branches/associated enterprises • Expats working for ROH are taxed at 15% for 1st 2 years, instead of on sliding scale

31. Services of the BOI The BOI offers : Support around the world – 5 overseas offices (New York, Paris, Frankfurt, Shanghai, Tokyo) One-Stop Shop for Visas and Work Permits – Work Permits within 3 hours Services of BUILD Unit to promote industrial subcontracting ASEAN Supporting Industry Database (ASID) Comprehensive, world-class website Help with work and residency permits Interaction with other government agencies on behalf of investors

32. BOI on the Internethttp://www.boi.go.th Since 2000, the BOI web site has been ranked as the #5 Investment Promotion Agency website in the world byCorporate Location Email: head@boi.go.th • Up-to-date Info on BOI Policies, Procedures, Incentives and Services • Links to Business News About Thailand • What’s New at the BOI • Links to Important Business Sites • Cost of Doing Business in Thailand • Database of Promoted Companies • Comprehensive Information From Other Government Agencies • BOI Statistics • Trade Statistics • Demographic Data • Industrial Estates