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BUSINESS OPPORTUNITIES     IN THAILAND        Udom Wongviwatchai          Secretary General    Thailand Board of Investmen...
TNCS’ TOP PROSPECTIVE HOST ECONOMIES FOR                2012–2014      (PERCENTAGE OF RESPONDENTS SELECTING ECONOMY       ...
2013                              2013         1          Singapore             11     Finland    The World Bank Ranks    ...
Value of Investment PromotionApplications By Industry, 2003 – 2012          Agro          Minerals           Fashion      ...
ASEAN - EU Snapshot                                ASEAN’s Macro-Economy                                •  GDP (2011): US$...
ASEAN Corporate Income Tax          2013   30%   25%   20%   15%   10%    5%    0%         Singapore   Thailand   Vietnam ...
Sectors of Opportunity             Agriculture             and food             processing                                ...
Food Industry“Thailand: Kitchen to the World”
2011 THAILAND’S TOP FOOD EXPORT CATEGORIES            AND WORLD’S RANKING                          World’s # 6 Rice & Grai...
Strengths of Thai Food Industry                       > 80% of raw materials used by the                       food indust...
Automotive Industry“Thailand: Automotive Hub of Asia”                              As of Feb 14, 2013
Thailand’s Automotive Industry               Overview Thailand:     Target:      Output:      High local9th largest       ...
2012 Thailand’s Automotive Industry                                 VEHICLE                                 MOTORCYCLE    ...
Top 100 Global Suppliers 2010                Present in Thailand      Japanese Global Suppliers               Other Global...
Renewable Energy
Thailand’s Energy Policy    •  Enhancing energy related industries &1      business to be next generation value-creator.  ...
Alternative Energy Development                    Plan (AEDP) 2012-2021     AEDP 2012-2021, targeting to replace 25% of to...
Economic transition from     labor intensive toknowledge-based is creating       great demand                    As of Mar...
Opportunities in Machinery•  Thailand continues to industrialize, but is   dependent on foreign industrial machinery for  ...
Investment Incentives:Metal Products &Parts Manufacturing          •  50% reduction of        •  50% reduction of       • ...
As of Jan 31, 2013
Biodiversity in Thailand                                     Biodiversity in Thailand is ranked as the eighth most        ...
Biotechnology:                          BoI Eligible Activities                                                   Seed & P...
Incentives for Biotechnology                                                    Exemption ofBiotechnology                 ...
As of Feb 18, 2013
Policy to Support Hi-Tech Industry                                  Tax Incentives   •  Exemption of import duties on mach...
Customized incentives for                     Higher Value investment projects            Projects with investment value a...
Roles of the BOI•  Facilitating market entry—100% foreign ownership   in manufacturing and most services eligible for BOI ...
Thailand and the BOI offer:   No restrictions                      100% foreign     on foreign                       owner...
Roles of the BOI•  Facilitating market entry—100% foreign ownership in   manufacturing and most services eligible for BOI ...
Tax Incentivesü  Corporate income tax holidays up to 8    yrs     §  Additional 50% reductions of      corporate income ...
BOI ZONING AND      INCENTIVES Zone:        1    2           3 Incentives: Lower Higher Import   Duty      Outside I.E    ...
From Zone-Based to                  Sectoral Approach                      Sector Matrix:                      Incentives ...
STI Incentives (Optional)                    Investments and expenditures on:  Criteria          •  Research and developme...
BOI SERVICES
Roles of the BOI•  Facilitating market entry—100% foreign ownership in   manufacturing and most services eligible for BOI ...
ASEAN SUPPORTING INDUSTRY       DATABASE (ASID)     www.asidnet.org•  Information and profiles of companies   in supportin...
One Start One Stop Investment Center                               More Convenience,                               less ti...
Roles of the BOI•  Facilitating market entry—100% foreign   ownership in manufacturing and most services   eligible for BO...
Belgian Investment
Foreign Direct Investment                              Applications                  20                             16.2  ...
Trend of Belgium Applications                 150                                                                         ...
Belgium Investment                           Applications                           Totals by Sector: 2002 – 2012         ...
Belgium Investments in       Thailand
BOI OFFICE IN GERMANY     Mr. Chanin Khaochan     Director     Thailand Board of Investment, Frankfurt Office     Bethmann...
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  1. 1. BUSINESS OPPORTUNITIES IN THAILAND Udom Wongviwatchai Secretary General Thailand Board of Investment March 2013
  2. 2. TNCS’ TOP PROSPECTIVE HOST ECONOMIES FOR 2012–2014 (PERCENTAGE OF RESPONDENTS SELECTING ECONOMY AS A TOP DESTINATION) (x) = 2011 ranking 1 China (1) 2 United States (2) 3 India (3) 4 Indonesia (6) 5 Brazil (4) 6 Australia (8) 6 United Kingdom (13) 8 Germany (8) 8 Russian Federation (5) 8 Thailand (12) 11 Viet Nam (11) 12 Mexico (10) 13 Japan (-) 14 Netherlands (-) 14 Poland (6) 14 South Africa (-) 17 Korea, Republic of (-) Developed economies 17 Sweden (-) Developing and transition economies 19 France (19) 19 Italy (-) 19 Malaysia (19)Source: UNCTAD Top host economies for FDI 2012-2012 as of July 12, 2012
  3. 3. 2013 2013 1 Singapore 11 Finland The World Bank Ranks Thailand among the easiest 2 Hong Kong 12 Malaysia places to do Business in New Asia and 18th in the World 3 Zealand 13 Sweden United 4 States 14 Iceland 5 Denmark 15 Ireland 6 Norway 16 Taiwan United 7 Kingdom 17 Canada 8 Korea, Rep 18 Thailand 9 Georgia 19 Mauritius 10 Australia 20 GermanySource: Doing Business 2013, October 25, 2012
  4. 4. Value of Investment PromotionApplications By Industry, 2003 – 2012 Agro Minerals Fashion Auto E&E Chemical Services Euro billion 40 37.01 35 30 15.3 25 20 16.42 17.63 16.84 15.88 15.97 6.1 15 4.4 12.82 11.20 4.1 4.3 11.17 6.2 4.2 2.7 7.98 3.1 3 9.4 10 2.2 3.2 2.2 4.1 4.2 2.1 3.8 6.4 1.4 1.9 2.2 1.5 3.6 1.3 0.6 1 1.5 0.3 5 2 1.7 2.1 1.6 3.3 1.7 0.4 4.3 1.1 4 1.4 1.4 1.7 1.5 1.5 3.3 1.9 0.3 0.4 0.5 0.3 0.2 0.5 0.7 0.8 0.5 0.7 0.8 0.4 0.7 0.5 1.5 1.8 1.7 1.8 2.4 0.9 1.3 1 1.1 1 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Exchange rate: €1 = Bt39.96 in 2012Source: BOI, as of Jan 17, 2013
  5. 5. ASEAN - EU Snapshot ASEAN’s Macro-Economy •  GDP (2011): US$2,112.4 Bn* (€1,643 bn) •  GDP per capita: US * IMF Forecast $3,376 (€2,626 bn) •  GDP Growth: 5.7% and 6.4% in 2011-2012 •  Population: 600 million EU’s Macro-Economy •  GDP (2011): € 12,650 bn •  GDP per capita: € 25,200 •  GDP Growth: 1.5% and -0.3% in 2011-2012 •  Population: 501 million Source: European Economic Forecast 2013 & EurostatSource: Tilleke and Gibbins & IMF Forecast as of Feb 27, 2013 Exchange rate: US$1=Bt31.08 and €1 = Bt39.96 in 2012
  6. 6. ASEAN Corporate Income Tax 2013 30% 25% 20% 15% 10% 5% 0% Singapore Thailand Vietnam Malaysia IndonesiaSource: KPMG
  7. 7. Sectors of Opportunity Agriculture and food processing Biotechnology Automotive TargetIndustries Target Alternative Industries energy Machinery Mold & Die E&E
  8. 8. Food Industry“Thailand: Kitchen to the World”
  9. 9. 2011 THAILAND’S TOP FOOD EXPORT CATEGORIES AND WORLD’S RANKING World’s # 6 Rice & Grains World’s # 1 Cassava Exports ExportsTHAILAND:12th  in  total  food  exports World’s # 2 Sugar Exports World’s Top 15 Fruit World’s $# 3 Fishery &Vegetable Exports Exports
  10. 10. Strengths of Thai Food Industry > 80% of raw materials used by the food industry are locally sourced at low prices Abundant Raw Material Skilled & Good hard working Quality & Safety WorkforceSize of workforce now > 39.5 million GMP and International Standard Minimum Daily Wage Bt300 (€7.5) Good Manufacturing Practices is a mandatory measure for 54 types of food productsSource: Thailand Food Industry Outlook, Commercial Section, Royal Danish Embassy Mar 2011
  11. 11. Automotive Industry“Thailand: Automotive Hub of Asia” As of Feb 14, 2013
  12. 12. Thailand’s Automotive Industry Overview Thailand: Target: Output: High local9th largest To 14 content :automobile manufacture assemblers 80-90% forproducer in 3,000,000 with a pick-up andthe world in units in 2017 combined 30-70% for 2012* production passenger of more car than 2,000,000 in 2012Source: OICA and TAI
  13. 13. 2012 Thailand’s Automotive Industry VEHICLE MOTORCYCLE Growth Growth Growth Growth December Jan.-Dec. December Jan.-Dec. YOY % YTD % YOY % YTD %Production(Units) 221,353 2,453,717 123 68.32 183,384 2,606,161 21.30 27.56DomesticWholesale 144,676 1,436,335 161 80.71 152,894 2,130,067 24.94 6.11(Units)Export(CBU) 86,297 1,026,671 146 39.56 85,959 856,935 -29 -24.37(Units)Source: Thailand Automotive Institute as of Jan 28, 2013
  14. 14. Top 100 Global Suppliers 2010 Present in Thailand Japanese Global Suppliers Other Global Suppliers 2. Denso 46.Bridgestone 1. Robert Bosch 44. Federal-Mogul 4. Aisin Seiki 49.Tokai Rika 3. Continental 47. Michelin13.Yazaki 57.Showa 6. Faurecia 50. GKN Driveline15.Sumitomo 61.Mitsuba 7. Johnson 52. Goodyear16.Toyota Boshoku 66.Asahi Glass Control 56. Grupo Antolin18.CalsonicKansei 72.Stanley 8. ZF 58. Bayer19.JTEKT 74. Akebono 11. TRW 59. TI Automotive20.Hitachi Brake 12. Delphi 65. Draexlmaier28.Toyoda Gosei 82.Sanden 14. Lear 67.American Axle33.NTN 84. F-Tech 17. BASF 73. Rieter Auto.34.NSK 92.Alpine 21. Valeo 84. F-Tech35.Mitsubishi 94.Pioneer 22. Visteon 86. Hayes39.NHK Spring 98. Omron 23. Autoliv Lammerz40.Koito 25. Mahle 93. 3M41.TS Tech 27. Dana43.Takata 31. BorgWarner 36.Teneco 28/29 Companies 29/71 companies
  15. 15. Renewable Energy
  16. 16. Thailand’s Energy Policy •  Enhancing energy related industries &1 business to be next generation value-creator. •  Securing country’s energy supply.2 •  Pricing energy right.3 •  Up-scaling RE mix to 25% in 10 years.4 •  Targeting energy intensity reduction by 25%5 (based on 2010 level) within 20 years. Source: DEDE (Renewable Energy Asia 2012), as of Sept 12, 2012.
  17. 17. 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.Renewable Energy ( 9,198MW)Solar power 2,000 MWWind power 1,200 MWHydro power 1,608 MWMSW 160 MWBiomass 3,630 MWBiogas 600 MWNew forms of RE (3 MW)Geothermal 1 MWenergyWave and 2 MWTidesSource: Ministry of Energy, as of April 2012
  18. 18. Economic transition from labor intensive toknowledge-based is creating great demand As of Mar 4, 2013
  19. 19. Opportunities in Machinery•  Thailand continues to industrialize, but is dependent on foreign industrial machinery for immediate future.•  High demand for: –  Food and farm machinery –  Alternative energy/energy conservation machinery –  Textile machinery –  Automotive production machinery –  Mould & Die Industry
  20. 20. Investment Incentives:Metal Products &Parts Manufacturing •  50% reduction of •  50% reduction of •  Exempt from machinery duty machinery duty machinery DutyGeneral • Corporate income tax •  Corporate income tax •  8 years corporate exemption: In IE-3 years exemption: income tax exemption –  In IE-7 years –  Outside IE-3 years Zone 1 Zone 2 Zone 3 Exempt from machinery import dutiesPriority Exempt from corporate income tax for 8 years Examples: Sintered products, mold & die parts
  21. 21. As of Jan 31, 2013
  22. 22. Biodiversity in Thailand Biodiversity in Thailand is ranked as the eighth most bio-diverse region in the world. Thailand is the world’s highest biodiversity per unit area-hosting several forests types and aquatic habitats. Thailand supports up to 10,000 species of plants, • 980 species of birds, • 300 species of mammals, • 490 species of reptiles and amphibians, • 2,800 species of fishes and • 150,000 species of microbes – accounting for about 10% of all species of living organisms in the world.Source: Thailand BIOTEC Guide 2011/2012 as of July 17, 2012
  23. 23. Biotechnology: BoI Eligible Activities Seed & Plant R&D Biotechnology Biopharmaceutical agents Diagnostic kits for health, agriculture, food and environment Biomolecule & bioactive compounds using microorganisms, plant cells and animal cells Raw materials and/or essential materials used in molecular biological experiment Biological substances analysis and/or synthesis servicesSource: A Guide to BOI 2010
  24. 24. Incentives for Biotechnology Exemption ofBiotechnology import duty on machinery Exemption of 8-year-CIT without being subject to CIT exemption cap 50% reduction of CIT on the net profit generated from investment for 5 years after the exemption period Double deductions for transportation, electricity and water costs for 10 years from the date of first income derivation from promoted activity Deduction of infrastructure installation or constructioncosts from net profit in addition to normal depreciation of not more than 25% of the project.Note: Applications must be submitted to the BOI within Dec 31, 2012
  25. 25. As of Feb 18, 2013
  26. 26. Policy to Support Hi-Tech Industry Tax Incentives •  Exemption of import duties on machinery •  Corporate income tax exemption 8 years with no cap •  50% reduction of corporate income tax for 5 years from the expiry date •  Double deduction of public utility costs for 10 years •  Deduction from net profit of 25% of the investment in infrastructure installation and construction cost in addition to normal capital depreciation for 10 years Eligible •  Any Locations except Bangkok •  Applicable to designated activities only •  Application submission deadlines: Dec 31, 2012Source: BoI Announcement No.2/2553, April 23, 2010.
  27. 27. Customized incentives for Higher Value investment projects Projects with investment value at least Bt 30 billion baht (excluding cost of land and working capital) will be eligible for a customized tax incentive packageSource: BOI E&E Industries Division as of Feb 5, 2010
  28. 28. Roles of the BOI•  Facilitating market entry—100% foreign ownership in manufacturing and most services eligible for BOI promotion•  Reducing initial investment costs through provision of tax incentives•  Providing business-related services –  Information –  Site visits –  Subcontracting development•  Facilitating business operations –  Right to own land –  Visas and work permits –  Help Desk
  29. 29. Thailand and the BOI offer: No restrictions 100% foreign on foreign ownership currency LIBERAL INVESTMENT REGIME No export No local content requirements requirements
  30. 30. Roles of the BOI•  Facilitating market entry—100% foreign ownership in manufacturing and most services eligible for BOI promotion•  Reducing initial investment costs through provision of tax incentives•  Providing business-related services –  Information –  Site visits –  Subcontracting development•  Facilitating business operations –  Right to own land –  Visas and work permits –  Help Desk
  31. 31. Tax Incentivesü  Corporate income tax holidays up to 8 yrs §  Additional 50% reductions of corporate income tax for 5 yearsü  Import duty reductions or exemptions on machinery and raw materialsü  Double deduction of public utility costsü  Deductions for infrastructure construction/installation costs
  32. 32. BOI ZONING AND INCENTIVES Zone: 1 2 3 Incentives: Lower Higher Import Duty Outside I.E Inside I.EPrivileges 50% 50%Zone 1 Reduction Reduction 50%Zone 2 Exempt ReductionZone 3 Exempt Exempt Corporate Outside Inside Income Tax I.E I.EZone 1 No Privilege 3 yearsZone 2 3 years 7 yearsZone 3 8 years 8 years
  33. 33. From Zone-Based to Sectoral Approach Sector Matrix: Incentives to strengthen competitiveness Strategic or Priority Activities •  Maximum incentivesZone-Based regardless of locationIncentives: •  Zone 1 •  Customized packages •  Zone 2 •  Zone 3
  34. 34. STI Incentives (Optional) Investments and expenditures on: Criteria •  Research and development or design •  Advanced technology training •  Funding educational and research institutions •  Contribution to Science and Technology Development Fund Required STI Additional Year Exemption of Removal of Investment & of Corporate Import Corporate Income Expenditures Income Tax Duties on Tax Exemption Exemption Machinery Cap1% of the first 3 1 ü üyears’ sale or at leastBt150 million,whichever is less2% of the first 3 2 ü üyears’ sale or at leastBt300 million,whichever is less3% of the first 3 3 ü üyears’ sale or at leastBt450 million,
  35. 35. BOI SERVICES
  36. 36. Roles of the BOI•  Facilitating market entry—100% foreign ownership in manufacturing and most services eligible for BOI promotion•  Reducing initial investment costs through provision of tax incentives•  Providing business-related services –  Information –  Site visits –  Sourcing•  Facilitating business operations –  Right to own land –  Visas and work permits –  Help Desk
  37. 37. ASEAN SUPPORTING INDUSTRY DATABASE (ASID) www.asidnet.org•  Information and profiles of companies in supporting industries and manufacturers of parts and components in 10 ASEAN countries
  38. 38. One Start One Stop Investment Center More Convenience, less time, more efficiency!18th Floor, Chamchuri Square Building319 Phayathai Road, PathumwanDomestic Call: 0 2209 1100, Inter. Call: (66 2) 209 1100 38Email: osos@boi.go.th
  39. 39. Roles of the BOI•  Facilitating market entry—100% foreign ownership in manufacturing and most services eligible for BOI promotion•  Reducing initial investment costs through provision of tax incentives•  Providing business-related services –  Information –  Site visits –  Subcontracting development•  Facilitating business operations –  Right to own land –  Visas and work permits –  Help Desk
  40. 40. Belgian Investment
  41. 41. Foreign Direct Investment Applications 20 16.2 2011 2012 16 +63.5% 12 Belgium Euro Billion 9.9 applications in 9.4 2012: €11.9 million 8 4.9 4 0.6 1.3 1.2 0.8 0.6 0.030.3 0.2 0 Total Japan EU ASEAN USA. AustraliaExchange rate: €1 = Bt39.96 in 2012Source: BOI, as of January 17, 2013
  42. 42. Trend of Belgium Applications 150 12 Value 127.8 No.of Projects 11 116.8 120 9 9 94.3 8 8 No. of Projects 90 7 Euro Million 6 6 6 60.3 60 5 59.4 4 3 30 2 2 12.4 11.9 8.1 2.4 1.5 0.1 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Source: BOI, as of Feb 28, 2013 Exchange rate: €1 = Bt39.96 in 2012
  43. 43. Belgium Investment Applications Totals by Sector: 2002 – 2012 Sector Projects € Million Agricultural Products 7 25.0 Minerals and Ceramics 4 66.3 Light Industries/Textiles 16 18.2 Metal Products and Machinery 5 55.7 Electric and Electronic Products 11 0.9 Chemicals and Paper 8 217.2 Services 17 111.7 TOTAL 68 494.9Source: BOI, as of Feb 28, 2013 Exchange rate: €1 = Bt39.96 in 2012
  44. 44. Belgium Investments in Thailand
  45. 45. BOI OFFICE IN GERMANY Mr. Chanin Khaochan Director Thailand Board of Investment, Frankfurt Office Bethmannstrasse 58, 60311 Frankfurt am Main, Germany Tel.: +49 69 929 1230 Fax: +49 69 929 123 20 Email: fra@boi.go.th Website: www.boi.go.th45
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