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 Japan 275 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 US44.48 baht 2002 US43.00 baht 2003
US42.68 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 Projects Corporate Income Tax
Holiday is Capped at 100 of Investment Capital
13
Additional Zone 3 Incentives
14
Additional Zone 3 Incentives
15
Criteria and Conditions

• 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)

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

Standard package

Customization to promote
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
Enhance Capabilities of Thai Community
Enterprises
Market Community Enterprises
21
5 Target Industries
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 23 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
  US20 billion, or roughly 35 of all Thai
  exports
• Trade surplus in 2001 of US4.7 billion

26
Current Key Players in Thailands EE 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 RD, 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 by Corporate Location Email
head_at_boi.go.th

• Up-to-date Info on BOI Policies, Procedures,
  Incentives and Services
• Links to Business News About Thailand
• Whats 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