Thailand: A Prime Destination for
Doing Business in Southeast Asia
Ms. Ajarin Pattanapanchai
Deputy Secretary General
Thai...
THAILAND is the world’s
• 17th largest manufacturer output
• 28rd largest exporter (US$225.4
billion in 2013)
• 2nd larges...
Thailand’s Fast Facts
Thai population 67 million (2013)
Thailand’s GDP
US$385 billion (2013)
US$5,647 per capita GDP
Thai ...
2011 2012 2013
2014
(Jan-
May)
Motor cars, parts and accessories 16.98 22.91 24.40 9.91
Computer parts 17.06 19.06 17.76 7...
WHY THAILAND
Highly Ranked
UNCTAD Ranks Thailand 8th as a
top prospective host economy 2013-
2015
World Bank Ranks Thailand among
the e...
“Over the past 6 years, Thailand has suffered
bouts of political unrest on top of the global
financial crisis and severe f...
213
128
106 105
74
55 51 47
31
0
50
100
150
200
250
Prime Office Occupancy Costs
US$/sq ft/annum
Source: Asia Pacific Offi...
Wage Comparison
92.4
54.8
49.6
42.8
33.3
21.5 20.9
17 14.6
8.5 8 7.9 7.6
0
10
20
30
40
50
60
70
80
90
100
Tokyo
Seoul
Duba...
Construction Costs
Description M2 Costs (THB) M2 Costs
(US$1=32THB)
Industrial Building
Standard Low Rise Factory 15,000-1...
Electricity rate in Thailand is competitive
(US$/KWH)
Source: JETRO 23rd Comparative Survey of Investment-Related Costs
Co...
Water rate in Thailand is lower
than the regional average rate
(US$/M3)
Source: JETRO 23rd Comparative Survey of Investmen...
Thailand’s corporate income tax is the 2nd
lowest in SE Asia
Source: Bank Of Thailand as of August 2012
Corporate Income T...
Top Destinations for
Expat Experience 2013
by HSBC
1.Thailand
Source: Expat Explorer Survey 2013, HSBC
Thailand offers Bes...
Infrastructure
• 7 international airports
 In 2009, 53.9 million passengers, 1.1 million
tons of cargoes
 Suvarnabhumi A...
(18)
High stability and
security of electricity
Supply from both
public and private
sources
Promote
participation of th...
(19)
Efficient Logistics Network
Seaport - Land Transport – Airport
Laem Chabang
Seaport
Donmuang
International
Airport
Su...
GMS
Infrastructure
Development
Source: NESDB as of Jan 20,2009
North-South Corridor
North-Eastern Corridor
East-West Corri...
Free Trade Agreement
Note: * Thailand, Malaysia, Indonesia, Philippines, Singapore and Brunei only.
ASEAN
•+570 million po...
ASEAN Economic Community(AEC) 2015
AEC A Single Market &
Production base
Source: Reaping the benefits of AEC & ,www.asean....
23
• Thailand has 8 intellectual property-related laws, all of
which are consistent with international standards:
• Copyri...
24
Investment Promotion Policy
BOI’s Liberal Investment Regime &
Attractive Investment Incentives
Policy
100% foreign
ownership
No local content
requirem...
26
Overseas offices
Country desks
1-Stop for visas & work permits:
work permits in 3 hours
Interaction with other govt. ag...
27
US Investment
U.S Investment Applications
Totals by Sector: 2005 – 2014 (Q1)
Sector Projects US$ Million
Agriculture 35 257
Minerals and...
Success Stories of US Companies
Sectors of Opportunity
Target
Industries
Agriculture and food
processing
Automotive
Machinery
Aerospace
Target
Industries
...
• Manufacture & repair aircraft parts and equipment
or onboard, or conversion of aircraft
• Machinery and equipment, mold ...
32
Thailand: Automotive Hub of Asia
Thailand’s Automotive Industry Overview
Source: TAI
(2013 produced
2.46 mil.units
exports 1.13
mil.units to 150
countries)
World’s Automotive Production 2013
(Units of production)
World’s Production: 87.24 Million (+3.6%)
Thailand : 2.53 Million...
Brand 2012 Add Capacity 2015
Toyota 700,000 200,000 900,000
Ford & Mazda 500,000 - 500,000
Mitsubishi 400,000 100,000 500,...
Company Sale Office Brand
Capacity
(Unit)
Size
(Ton)
1 Hino Motors
Manufacturing (Thailand)
Hino Motors Sales
(Thailand)
H...
44. Federal-Mogul
47. Michelin
50. GKN Driveline
52. Goodyear
56. Grupo Antolin
58. Bayer
59. TI Automotive
65. Draexlmaie...
Thailand Aerospace Industry
Thailand Aerospace Industry
 Asia overtook North America as the largest aviation
market in 2009 and will account for 30% ...
Major Companies in Thailand
For parts manufacturing & MRO
• Thailand is the 13th Export Rank in the World
• Thailand is the world’s largest producer of HDDs,
# 2 for Air conditione...
Thailand’s E&E Exports 2012
19,387
6,983
3,450
2,279
1,987
1,462
1,233
1,166
1,025
981
924
894
893
780
607
0 5,000 10,000 ...
Alternative Energy in Thailand
SolarBiogas WindBiomass
Garbage Water Bio Diesel Ethanol
National Policy to Promote Alterna...
Incentives for Software Development
Animation
Cartoons and characters
Computer-generated
imagery
Web-based application...
• Thailand continues to industrialize,
but is dependent on foreign
industrial machinery for
immediate future.
• High deman...
Machinery and Parts:
Imports and Exports, 2004 – 2013 (Jan-Jul)
0
100
200
300
400
500
600
700
800
2004 2005 2006 2007 2008...
Import of Machinery& Equipment in Thailand
866.2
1,124.4
576.7
1,072.6
1,211.3
653.5
743.7
669.8 652.7
780.7
1,054.2
865.7...
Benefit
- In 1st fiscal year, have one operating company in
another country; a second within 3rd year; a third
within 5th ...
(52)
Support for US Investors
BOI Office New York
61 Broadway, Suite 2810,
New York NY 10008 USA
Tel: (212) 422 9009
Fax: ...
Thank you
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Thailand: A Prime Destination for Doing Business in Southeast Asia

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Presented by Ms. Ajarin Pattanapanchai, Deputy Secretary General, Thailand Board of Investment, in Seattle on July 30, 2014

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Thailand: A Prime Destination for Doing Business in Southeast Asia

  1. 1. Thailand: A Prime Destination for Doing Business in Southeast Asia Ms. Ajarin Pattanapanchai Deputy Secretary General Thailand Board of Investment
  2. 2. THAILAND is the world’s • 17th largest manufacturer output • 28rd largest exporter (US$225.4 billion in 2013) • 2nd largest economy in ASEAN (GDP US$385 billion in 2013)
  3. 3. Thailand’s Fast Facts Thai population 67 million (2013) Thailand’s GDP US$385 billion (2013) US$5,647 per capita GDP Thai GDP by sector Agriculture: 12% Industry: 45% Services: 43% Thai labor force 39.13 million(2013) Thai exports US$225.4 billion (2013) Thai imports US$219.0 billion (2013) Source: NESDB as of Feb 17, 2014 and Pocket World in Figures 2014 Edition
  4. 4. 2011 2012 2013 2014 (Jan- May) Motor cars, parts and accessories 16.98 22.91 24.40 9.91 Computer parts 17.06 19.06 17.76 7.30 Precious stones and jewelery 12.30 13.15 10.09 4.55 Refine fuels 10.09 12.88 12.73 4.29 Plastics resins 8.80 8.53 8.96 4.08 Chemical products 8.29 8.52 9.11 3.63 Rubber products 8.39 8.41 8.51 3.30 Machinery and parts 6.11 6.24 6.79 2.98 Rubber 12.70 8.75 8.23 2.93 Integrated circuits 7.91 6.69 7.21 2.81 Others 113.93 114.11 114.75 47.08 Total 222.58 229.24 228.53 92.86 Unit: US$ Billion Top 10 Exports in 2011 – 2014 (Jan-May) Source: www.moc.go.th as of June 27, 2014
  5. 5. WHY THAILAND
  6. 6. Highly Ranked UNCTAD Ranks Thailand 8th as a top prospective host economy 2013- 2015 World Bank Ranks Thailand among the easiest places to do Business in Asia and 18th in the World
  7. 7. “Over the past 6 years, Thailand has suffered bouts of political unrest on top of the global financial crisis and severe flooding. Nevertheless, the economy maintains solid economic fundamentals that support its resilience, with high international reserves, relatively low inflation, a moderate amount of government and external debt, and a strong manufacturing base.” Asian Development Bank Outlook 2014
  8. 8. 213 128 106 105 74 55 51 47 31 0 50 100 150 200 250 Prime Office Occupancy Costs US$/sq ft/annum Source: Asia Pacific Office Market View, Q1, 2014 as of May 28, 2014
  9. 9. Wage Comparison 92.4 54.8 49.6 42.8 33.3 21.5 20.9 17 14.6 8.5 8 7.9 7.6 0 10 20 30 40 50 60 70 80 90 100 Tokyo Seoul Dubai H ongK ong Taipei K ualalum purShanghai BeijingBangkokM um bai M anila Jakarta Delhi WageLevels(US$) Gross Net 4 Cities ranked according to gross value of index. New York = 100 Source: UBS/Prices & Earnings update September 2012
  10. 10. Construction Costs Description M2 Costs (THB) M2 Costs (US$1=32THB) Industrial Building Standard Low Rise Factory 15,000-19,000 $469-$594 Electrical Power Systems 5,400 $189* Office (Construction) High Quality 28,000-33,000 $875 - $1031 Medium Quality 23,000-28,000 $719 - $875** Notes: *Includes transformer, Main DB and Sub DB for general factory & office electrics only. Excludes production equipment/machinery power. **Includes cost of communal air conditioning, general electrics and sanitary. Source: Tractus-Asia Updated May 2014
  11. 11. Electricity rate in Thailand is competitive (US$/KWH) Source: JETRO 23rd Comparative Survey of Investment-Related Costs Comparison in Major Cities and Regions in Asia and Oceania, as of May 2013
  12. 12. Water rate in Thailand is lower than the regional average rate (US$/M3) Source: JETRO 23rd Comparative Survey of Investment-Related Costs Comparison in Major Cities and Regions in Asia and Oceania, as of May 2013
  13. 13. Thailand’s corporate income tax is the 2nd lowest in SE Asia Source: Bank Of Thailand as of August 2012 Corporate Income Tax Rates
  14. 14. Top Destinations for Expat Experience 2013 by HSBC 1.Thailand Source: Expat Explorer Survey 2013, HSBC Thailand offers Best Expat Experience and a Low Cost of Living Thailand has been chosen as the best country in the world for Overall Expat Experience & Overall Quality of Life
  15. 15. Infrastructure • 7 international 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  Laem Chabang 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
  16. 16. (18) High stability and security of electricity Supply from both public and private sources Promote participation of the private sector in power generation EGAT 14,998 MW 48% IPP 12,081 MW 38% SPP 2,174 MW 7% Import & Exchange 2,185MW 7% Total Capacity 31,451 MW Peak Demand 26,774 MW Load Factor (Max) 83% Load Factor (Avg.) 75% Source: Energy Planning and Policy Office Security of Energy Supply 2012
  17. 17. (19) Efficient Logistics Network Seaport - Land Transport – Airport Laem Chabang Seaport Donmuang International Airport Suvarnabhumi International Airport Map Ta Put Deep Seaport Bangkok
  18. 18. GMS Infrastructure Development Source: NESDB as of Jan 20,2009 North-South Corridor North-Eastern Corridor East-West Corridor Southern Corridor Central Corridor Southern Coastal Corridor
  19. 19. Free Trade Agreement Note: * Thailand, Malaysia, Indonesia, Philippines, Singapore and Brunei only. ASEAN •+570 million pop. •US$1.3 trillion GDP (2007) ASEAN+3 •+2 billion pop. (1/3 world pop.) •US$9trillion GDP (16% of world GDP) ASEAN+6 •3.3 billion pop. (>50% world pop.) •US$12.25 trillion GDP Thai-Peru Thai-Chile
  20. 20. ASEAN Economic Community(AEC) 2015 AEC A Single Market & Production base Source: Reaping the benefits of AEC & ,www.asean.org, as of December 2009 • Free flow of goods • Free flow of services • Free flow of investment • Free flow of capital • Free flow of skilled labor Transform ASEAN into a stable, prosperous and highly competitive region with equitable economic development, and reduced poverty and socio-economic disparities
  21. 21. 23 • Thailand has 8 intellectual property-related laws, all of which are consistent with international standards: • Copyright Act of 1994 • Patent Act of 1979, as amended by the Patent Act (No.3) of 1999 • Trademark Act of 1991, as amended by the Trademark Act (No.2) of 2000) • Act for the Protection of Layout-Designs of Integrated Circuits 2000 • Trade Secret Act of 2002 • Protection of Geographical Indication Act of 2003 • Plant Varieties Protection Act of 1999 • Traditional Medicine and Practice Act of 1999 IPR Framework
  22. 22. 24 Investment Promotion Policy
  23. 23. BOI’s Liberal Investment Regime & Attractive Investment Incentives Policy 100% foreign ownership No local content requirements No export requirements No restriction on foreign currency Tax Import duty exemptions/ reductions Corporate Income Tax/ Exemption up to 8 years 50% reduction of corporate income tax for up to 5 years Double deduction on utility costs Deductions for qualifying infrastructure costs Non-Tax Land ownership rights Work permit & visa facilitation with in 3 hrs.
  24. 24. 26 Overseas offices Country desks 1-Stop for visas & work permits: work permits in 3 hours Interaction with other govt. agencies on behalf of investors Industrial Subcontracting Services Global Sourcing program (BUILD Unit) Intensive information ASEAN Supporting Industry Database BOI SUPPORT SERVICES
  25. 25. 27 US Investment
  26. 26. U.S Investment Applications Totals by Sector: 2005 – 2014 (Q1) Sector Projects US$ Million Agriculture 35 257 Minerals and Ceramics 4 57 Light Industry 42 64 Auto and Metal Processing 82 3,142 Electrical and Electronics 101 1,601 Petrochemicals, Chemicals 73 2,774 Services and Infrastructure 94 224 TOTAL 431 8,119 Source: BOI, as of Apr 10, 2014 Note: US$1=Bt32.66 in Q1, 2014
  27. 27. Success Stories of US Companies
  28. 28. Sectors of Opportunity Target Industries Agriculture and food processing Automotive Machinery Aerospace Target Industries Biotechnology Alternative energy E&E
  29. 29. • Manufacture & repair aircraft parts and equipment or onboard, or conversion of aircraft • Machinery and equipment, mold & die, jig & fixture • Medical devices • Selected auto parts • Selected electronics devices • Software • Renewable energy • Biotechnology • Food processing • R&D Priorities Activities with Max. Incentives: Duty-free machinery and 8 years income tax exemption
  30. 30. 32 Thailand: Automotive Hub of Asia
  31. 31. Thailand’s Automotive Industry Overview Source: TAI (2013 produced 2.46 mil.units exports 1.13 mil.units to 150 countries)
  32. 32. World’s Automotive Production 2013 (Units of production) World’s Production: 87.24 Million (+3.6%) Thailand : 2.53 Million (+4.3%) #9 in Worlds’Automotive Production #1 in ASEAN for Automotive Production Source: OICA as of Mars, 2014
  33. 33. Brand 2012 Add Capacity 2015 Toyota 700,000 200,000 900,000 Ford & Mazda 500,000 - 500,000 Mitsubishi 400,000 100,000 500,000 Isuzu 220,000 100,000 320,000 Honda 240,000 180,000 420,000 Nissan 220,000 150,000 370,000 Suzuki 135,000 - 135,000 GM 160,000 - 160,000 Others 80,000 - 80,000 TOTAL 2,675,000 730,000 3,405,000 Estimate Production Capacity Forecasted by TAI
  34. 34. Company Sale Office Brand Capacity (Unit) Size (Ton) 1 Hino Motors Manufacturing (Thailand) Hino Motors Sales (Thailand) Hino 20,024 15 - 50.5 2 Isuzu Motors (Thailand) Tri-Petch Isuzu Sales Isuzu 29,000 4.2 – 50.5 3 Thai-Swedish Assembly Volvo Group (Thailand) Volvo 4,500 > 10 UD Trucks 15,500 n.a. 4 Scania (Thailand) Scania Siam Scania 240 n.a. 5 Fuso Truck (Thailand) Fuso Truck (Thailand) Fuso 2,000 n.a. Nissan Diesel (Thailand) UD Trucks n.a. n.a. Foton Truck (Thailand) Foton n.a. n.a. 6 CIMC Vehicle (Thailand) CIMC Vehicle (Thailand) CIMC 6,450 (Trailer) Total 77,714 Truck Manufacturers and Capacity in Thailand Reference: Thailand Automotive Institute (April 2013)
  35. 35. 44. Federal-Mogul 47. Michelin 50. GKN Driveline 52. Goodyear 56. Grupo Antolin 58. Bayer 59. TI Automotive 65. Draexlmaier 67. American Axle 73. Rieter Auto. 84. F-Tech 86. Hayes Lammerz 93. 3M 38 2. Denso 4. Aisin Seiki 13. Yazaki 15. Sumitomo 16. Toyota Boshoku 18. Calsonic Kansei 19. JTEKT 20. Hitachi 28. Toyoda Gosei 33. NTN 34. NSK 35. Mitsubishi 39. NHK Spring 40. Koito 41. TS Tech 43. Takata 46. Bridgestone 49. Tokai Rika 57. Showa 61. Mitsuba 66. Asahi Glass 72. Stanley 74. Akebono Brake 82. Sanden 84. F-Tech 92. Alpine 94. Pioneer 98. Omron Japanese Global Suppliers 28/29 Companies 29/71 Companies Other Global Suppliers 1. Robert Bosch 3. Continental 6. Faurecia 7. Johnson Control 8. ZF 11. TRW 12. Delphi 14. Lear 17. BASF 21. Valeo 22. Visteon 23. Autoliv 25. Mahle 27. Dana 31. BorgWarner 36. Teneco Top 100 Global Suppliers Active in Thai Automotive Industry Strength of Thai Automotive Industry
  36. 36. Thailand Aerospace Industry
  37. 37. Thailand Aerospace Industry  Asia overtook North America as the largest aviation market in 2009 and will account for 30% of air traffic by 2014, while North America will slip to 23% of the total.  Full support from the government: Maximum tax incentives from BOI  A capable and efficient skilled work force.  Many universities provide aerospace engineering degree  Civil Aviation Training Center provide training for high skill personnel of aircraft maintenance and repair services  Other support industries are widely available: stainless steel and aluminum fabrication, fiberglass and polymer supply 40
  38. 38. Major Companies in Thailand For parts manufacturing & MRO
  39. 39. • Thailand is the 13th Export Rank in the World • Thailand is the world’s largest producer of HDDs, # 2 for Air conditioner • A leading country in the manufacture of Integrated Circuits and White Goods • Strong supporting industries for electrical appliances Compressors, motors, plastic and metal parts Source:*E&E Intelligence Unit, as of Mar 10 Electronics & Electrical Industry Major Industrial Sector of Thailand
  40. 40. Thailand’s E&E Exports 2012 19,387 6,983 3,450 2,279 1,987 1,462 1,233 1,166 1,025 981 924 894 893 780 607 0 5,000 10,000 15,000 20,000 25,000 PCB Washing Machine Motor Wire & Cable Part of Telephone Compressor Power Supply Colour TV Teleprinter & Telephone Refrigerator Circuit Breaker Radio Broadcast Product Air Conditioner IC Computer & HDD US$ Million Source : MOC
  41. 41. Alternative Energy in Thailand SolarBiogas WindBiomass Garbage Water Bio Diesel Ethanol National Policy to Promote Alternative Energy Target : To increase share to 25% by 2022
  42. 42. Incentives for Software Development Animation Cartoons and characters Computer-generated imagery Web-based applications Interactive applications Games  Wireless location based service content  Visual effects  Multimedia video conferencing applications  E-learning content via broadband & multimedia & computer-aided instruction 1. Enterprise Software (transaction processing, business solutions) 2. Embedded Software (mobile phones, microchips) 3. Digital content, including: Software Content
  43. 43. • Thailand continues to industrialize, but is dependent on foreign industrial machinery for immediate future. • High demand for: • Metal forming • Food and farm machinery • Alternative energy/energy conservation machinery • Textile machinery • Automotive machinery • Mould & Die Opportunities in Machinery
  44. 44. Machinery and Parts: Imports and Exports, 2004 – 2013 (Jan-Jul) 0 100 200 300 400 500 600 700 800 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (Jan- Jul) Import 386 441 434 426 496 432 529 605 794 397 Export 143 179 201 288 303 274 364 383 414 240 Bt Billion Source: Ministry of Commerce, Sept 2, 2013 Exchange rate = 32 Bt/ 1USD
  45. 45. Import of Machinery& Equipment in Thailand 866.2 1,124.4 576.7 1,072.6 1,211.3 653.5 743.7 669.8 652.7 780.7 1,054.2 865.7 966.8965.4 0 200 400 600 800 1,000 1,200 1,400 2007 2008 2009 2010 2011 2012 2013 (Jan- Jul) Boiler, Nuclear plant, etc. (HS Code 84) Electrical machine (HS Code 85) Billion Baht Source: Ministry of Commerce, Sept 2, 2013
  46. 46. Benefit - 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 For portion of income from OVERSEAS OPERATIONS 0% CORPORATE INCOME TAX for 15 years Key Conditions Benefit For portion of income from LOCAL OPERATIONS 10% CORPORATE INCOME TAX for 15 years Regional Operating Headquarters Benefit 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 For income of EXPATRIATE EMPLOYEES 15% PERSONAL INCOME TAX for 8 years Key Conditions
  47. 47. (52) Support for US Investors BOI Office New York 61 Broadway, Suite 2810, New York NY 10008 USA Tel: (212) 422 9009 Fax: (212) 422 9119 E-mail: boiny@aol.com nyc@boi.go.th BOI Office Los Angeles 611 North Larchmont Blv. 3rd Floor Los Angeles, CA 90004 USA Tel: (323) 960 1199 Fax: (323) 960 1190 Email: boila@sbcglobal.net U.S. Desk @ BOI Headquarters 555 Vibhavadi-Rangsit Rd. Chatuchak, Bangkok 10900 Thailand Tel: (66 2) 537-8111 Fax: (66 2) 537-8098 E-mail: head@boi.go.th
  48. 48. Thank you

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