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THAILAND is the world’s 17 th largest manufacturer output 28 rd largest exporter 24 th largest economy by purchas

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

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THAILAND is the world’s 17 th largest manufacturer output 28 rd largest exporter 24 th largest economy by purchas

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  1. Thailand: Land of InvestmentPichitDejneeranat.Director, Thai Overseas Investment DivisionInternational Affairs BureauThailand Board of InvestmentMay 2013

  2. 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

  3. Fast Facts Population 67 Million Labor Force 40.2 million Sources: MOC, NESDB, Pocket World in Figures 2013 Edition

  4. 2013 Outlook Economic Projection 2013 Recovery of global economy Recovery of global demand for electronics & computers Low and stable inflationary pressure Domestic demand expected to grow at satisfactory rate Sufficient budgetary framework to implement public investment projects

  5. Top 10 Exports Unit: US$ Billion Source: www.moc.go.th as of April 4, 2013

  6. Top 10 Imports Unit: US$ Billion Source: www.moc.go.th as of April 4, 2013

  7. WHY THAILAND?

  8. Thailand: Highly Ranked

  9. Office Rent Rates in the Asia-Pacific - 2012 (Baht) Source: www.cbre.co.th as of Feb 3, 2013)

  10. ASEAN Corporate Income Tax 2013 Source: KPMG

  11. Infrastructure Development Plans

  12. Infrastructure • 7International 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 • LaemChabang 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

  13. Projected Infrastructure Investment (2011-2020) Source: Ministry of Transport as of Jan 2013,

  14. Investment Budget Plan for Transportation, 2013-2020 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

  15. “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

  16. Investment Policies

  17. Thailand and the BOI offer:

  18. 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

  19. 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 Basic BOI privileges and Measures • Non-Tax Incentives • Land ownership rights for foreign investors • Permission to bring in foreign experts and technicians • Work permit/visa facilitation One-Stop-Shop Visas & Work Permits are issued in 3 hours (20)

  20. BOI Zoning and Incentives Objective: Decentralization Zone: 1 2 3 Incentives: Lower Higher

  21. Zone-Based Incentives: Zone 1 Zone 2 Zone 3 From Zone-Based to Sectoral Approach Sector Matrix: Incentives to strengthen competitiveness • Strategic or Priority Activities • Maximum incentives regardless of location • Customized packages

  22. Comparison of All Net Applications for Investment Promotion 2011 vs 2012 US$ Billion Number of Projects Amount Invested 47.58 +22.4% 2,584 +120% 2,112 21.64 Source: BOI, as of Jan 17, 2013 US$1=Bt31.08 in 2012

  23. 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 Eco-friendlyIndustry Renewable energy High-tech Industry

  24. Special Incentive for Priority Activities • 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

  25. Sectors of Opportunity

  26. Automotive Industry “Thailand: Automotive Hub of Asia”

  27. Why Thailand ? Thai Automotive Industry Hub of global suppliers Production base for Pick-up and Eco-Car Economy of scale High quality skill of labor Hub of regional R&D Center Testing Center

  28. Thai automotive industry  ASEAN Hub • Light Truck (1 ton Pick – up) • Eco – Car • Global supplier • Automobiles & parts regional R&D center 2nd Milestone 2.45 million units Rank Top 9th 1st Milestone 1 million units Rank 15th 3rd Milestone 3 million units “Thailand is a global green automotive production base with strong domestic supply chains which create high value added for the country”

  29. Thailand’s Rubber Industry

  30. Domestic Sales of Rubber Products 2010 - 2012 Source: Industrial Economics Information Center, Office of Industrial Economics as of April 26, 2013

  31. Thailand’s Energy Policy Source: DEDE (Renewable Energy Asia 2012), as of Sept 12, 2012.

  32. Alternative Energy Development Plan (AEDP) 2012-2021 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

  33. Renewable Energy National Policy to Promote Alternative Energy Target :To increase share to 25% by 2025

  34. Renewable Energy Status 2012: Current and Target 9.9% of RE in Total Energy Consumption Source: DEDE

  35. Electronics & Electrical Products Integrating Innovation & Technology

  36. Thailand’s Hard Disk Drive Cluster Source: http://www.nectec.or.th/2008/r-d/hdd.html , Aug 31, 2012

  37. Top E&E export Top E&E import Electrical Products 1) Air-conditioners 2) TV/VDO cameras 3) Circuit breakers 4) Refrigerators 5) Television Electrical Products 1) Circuit breakers, switches, plugs 2) TV set components 3) VDO tape, CD, DVD 4) Electric wires and electric harnesses 5) Refrigerator Compressor Electronics 1) Computer components 2) Integrated circuit (IC) 3) Transmission 4) Equipment used for telephone or telegraphs 5) Diode, transistors, semiconductors Electronics 1) Integrated Circuit (IC) 2) Computer components 3) Mobile phones 4) Notebook, computers 5) Diode, transistors, semiconductors Source: www.thaieei.com Import and export figures during Jan-Nov 2013

  38. Integrated Circuit Cluster in Thailand IC Design Lead Frame Wafer Assembly Testing • Rohm LSI • Silicon Craft Technology • Sumiko LeadFrame • TSP-T • Rohm Mechatech • Yamakin • Microchip • NXP • Spansion • Hana Semiconductor • Circuit Electronics • Millennium Microtech • Utac Thai • Stars Microelectronics • Stats ChipPAC • Oki • Sony Device Technology • Sanyo Semiconductor • Rohm Integrated System • Toshiba Semiconductor • Thai NJR • Vigilant Technology • Microchip • Maxim Integrated Source: BOI E&E Industries Division, as of Dec 17,2009

  39. Service Sectors

  40. Regional Operating Headquarters Benefit Benefit Benefit For portion of income from OVERSEAS OPERATIONS 0% CORPORATE INCOME TAX for 15 years For portion of income from LOCAL OPERATIONS 10% CORPORATE INCOME TAX for 15 years • For income of EXPATRIATE EMPLOYEES • 15% PERSONAL INCOME TAX for 8 years Key Conditions Key Conditions • 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 • 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

  41. BOI Incentives : Rights & Benefits International Procurement Offices (IPO) 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. • 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

  42. 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

  43. 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

  44. Thailand’s Medical Device Industry

  45. Unit: US$ thousands Medical devices in Thailand 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$

  46. Software Development Animation Cartoons and characters Computer-generated imagery Web-based applications Interactive applications Games Software Content 1. Enterprise Software (transaction processing, business solutions) 2. Embedded Software (mobile phones, microchips) 3. Digital content, including: • Wireless location based service content • Visual effects • Multimedia video conferencing applications • E-learning content via broadband & multimedia & computer-aided instruction

  47. Aerospace Industry

  48. 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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