Thailand

Report
Thailand: Land of Investment
Pichit Dejneeranat
.
Director, Thai Overseas Investment Division
International Affairs Bureau
Thailand Board of Investment
May 2013
www.boi.go.th
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
Fast Facts
GDP US$365 Billion (2012)
US$5,382 per capita
12%
Agriculture
45%
Industry
Population 67 Million
Labor Force 40.2 million
43%
Services
Sources: MOC, NESDB, Pocket World in Figures 2013 Edition
2013 Outlook
Economic Projection 2013
Recovery of global economy
Recovery of global demand for
electronics & computers
Low and stable inflationary pressure
Domestic demand expected to grow
at satisfactory rate
Sufficient budgetary framework to
implement public investment projects
Top 10 Exports
Unit: US$ Billion
2011
2012
2012
(Jan-Feb)
2013
(Jan-Feb)
Motor cars, parts and accessories
16.98
22.91
3.02
3.82
Automatic data processing machines and
parts thereof
17.06
19.06
2.41
2.71
Refine fuels
10.09
12.90
2.10
1.85
4.99
7.05
0.76
1.68
12.70
8.75
1.73
1.61
8.80
8.53
1.30
1.50
8.29
8.52
1.27
1.48
8.39
8.41
1.37
1.37
Precious stones and jewellery
12.30
13.15
2.68
1.05
Machinery and parts thereof
6.11
6.24
0.96
1.03
Others
116.85
114.00
17.18
18.09
Total
222.58
229.52
34.78
36.20
Iron and steel and their products
Rubber
Polymers of ethylene, propylene, etc in
primary forms
Chemical products
Rubber products
Source: www.moc.go.th as of April 4, 2013
Top 10 Imports
Unit: US$ Billion
2011
2012
2012
(Jan-Feb)
2013
(Jan-Feb)
Jewellery including silver bars and gold
19.92
13.03
2.21
5.59
Crude oil
32.90
35.84
4.73
5.10
Machinery and parts
19.97
26.18
3.86
4.12
Electrical machinery and parts
13.35
17.01
2.37
2.66
Iron, steel and products
13.91
15.17
2.28
2.55
6.53
12.61
1.54
2.34
14.82
14.77
2.18
2.23
8.61
9.83
1.42
1.59
Parts and accessories of vehicles
Chemicals
Computers, parts and accessories
Other metal ores, metal waste scrap, and
products
Electronic integrated circuits
8.95
8.13
1.24
1.45
10.11
9.18
1.28
1.38
Others
79.72
85.86
12.23
14.24
228.78
247.59
35.37
43.24
Total
Source: www.moc.go.th as of April 4, 2013
WHY
THAILAND?
Thailand: Highly Ranked
#10 World Economic Freedom in Asia
Pacific (2013)
#4 in Asia for Corporate Governance
#8 World’s Most Attractive FDI
Destination (UNCTAD 2012-2014)
#18
worldwide for Ease of Doing Business
#4 Easiest Place in Asia to Do Business
Office Rent Rates in the Asia-Pacific - 2012
(Baht)
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
TOTAL RENT COST (baht/sq.m./month)
Source: www.cbre.co.th as of Feb 3, 2013)
ASEAN Corporate Income Tax 2013
30%
25%
20%
15%
10%
5%
0%
Singapore
Source: KPMG
Thailand
Vietnam
Malaysia
Indonesia
Infrastructure Development Plans
www.boi.go.th
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
Projected Infrastructure Investment (2011-2020)
12
11.1 10.9
US$ Bn
10.3
10
7.8
8
6.5
6
4
6.1
5.4
3.1
3.1
2
0.5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Ministry of Transport as of Jan 2013,
Investment Budget Plan for Transportation, 2013-2020
Total budget: US$64.2 billion
ROAD (33.9%)
US$21.78 billion
MARINE(3.3%)
US$2.13 billion
RAIL(60.8%)
US$39.07 billion
AIR(1.93%)
US$1.24 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
“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 coproduction base will be an
important Growth Nodes
linking the GMS region to
global market.
Source: NESDB, as of July 10,2012
Investment Policies
www.boi.go.th
Thailand and the BOI offer:
No restrictions on
foreign currency
100% foreign
ownership
LIBERAL INVESTMENT
REGIME
No export
requirements
No local content
requirements
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
Basic BOI privileges and Measures




Tax Incentives
Non-Tax Incentives
Corporate income tax holidays up  Land ownership rights
for foreign investors
to 8 yrs
 Permission to bring in
•Additional 50% reductions of
foreign experts and
corporate income tax for 5 yrs
technicians
may apply in zone 3
 Work permit/visa
Import duty reductions or
facilitation
exemptions on machinery and raw
One-Stop-Shop
materials
Visas & Work Permits
Double deduction of public utility
are issued in 3 hours
costs
Deductions for infrastructure
construction/installation costs
(20)
BOI Zoning and Incentives
Zone:
1
Incentives: Lower
Import Duty
Privileges
2
Objective:
Decentralization
3
Higher
Outside I.E
Inside I.E
Zone 1
50% Reduction
50% Reduction
Zone 2
50% Reduction
Exempt
Zone 3
Exempt
Exempt
Corporate Income
Tax
Outside I.E
Inside I.E
Zone 1
No Privilege
3 years
Zone 2
3 years
7 years
Zone 3
8 years
8 years
From Zone-Based to Sectoral
Approach
Sector Matrix:
Incentives to strengthen
competitiveness
Strategic or Priority
Activities
Zone-Based Incentives:
• Zone 1
• Zone 2
• Zone 3
• Maximum incentives
regardless of location
• Customized packages
Comparison of All Net Applications for Investment Promotion
2011 vs 2012
Number of Projects
Number of
Projects
Services
Chemical
2,112
47.58
40
19.7
791
2,000
US$ Billion
50
2,584
2,800
2,400
Amount Invested
E&E
413
30
1,600
283
327
1,200
279
347
800
535
400
136
63
403
611
102
75
331
Auto
Fashion
Minerals
21.64
20
7.91
10
Agro
0
0
2011
2012
Source: BOI, as of Jan 17, 2013 US$1=Bt31.08 in 2012
7.88
2.8
2.82
4.28
0.5
1.01
2.32
2011
5.39
8.22
1.45
1.89
3.05
2012
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-friendly
Industry
Renewable
energy
High-tech
Industry
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
Sectors of Opportunity
Agriculture
and food
processing
Biotechnolo
gy
Automotive
Target
Industries
Target
Industries
Alternative
energy
Machinery
E&E
Mold & Die
Automotive Industry
“Thailand: Automotive Hub of Asia”
9th largest automobile producer in the world in 2012
14 assemblers with a combined production of more than
2,000,000 in 2012
High Local content of up to 90%
Target of 3 million units in 2017
www.boi.go.th
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
Thai automotive industry  ASEAN
Hub
• Light Truck (1 ton Pick – up)
• Eco – Car
• Global supplier • Automobiles & parts regional R&D center
“Thailand is a global green automotive
production base with strong domestic
supply chains which create high value
added for the country”
1st Milestone
1 million units
Rank 15th
3rd Milestone
3 million units
2nd Milestone
2.45 million units
Rank Top 9th
Thailand’s Rubber Industry
Thailand’s rubber industry is classified into 3
major categories
• Primary processed rubber
• Block rubber
• Sheet rubber and concentrated rubber
Natural Rubber is processed into several types
of products
• Car tires, motorcycles/bicycle tires
• Inner tubes for trucks, buses, etc.
• Rubber gloves, rubber bands
Domestic Sales of Rubber Products 2010 - 2012
Growth
(%)
Year
2010
2011
2012
YOY
Car tires (mil.unit)
16.51
14.38
19.26
33.97
Truck and bus tires (mil.unit)
3.54
3.02
3.38
11.83
Motorcycle/Bicycle tires (mil.unit)
22.28
20.97
24.10
14.91
Truck and bus inner tubes (mil.unit)
1.74
1.39
1.76
26.57
Motorcycle/bicycle inner tubes
(mil.unit)
39.02
32.14
34.78
8.21
Retreads (unit)
87,862
85,410
98,571
15.41
Rubber gloves (mil.pieces)
807.75
967.10
1,032
6.70
Primary processed rubber (tons)
90,337
106,707
121.99
14.33
Source: Industrial Economics Information Center, Office of Industrial Economics as of April 26, 2013
www.boi.go.th
Thailand’s Energy Policy
1
2
3
4
5
• Enhancing energy related industries & business to be
next generation value-creator.
• Securing country’s energy supply.
• Pricing energy right.
• Up-scaling RE mix to 25% in 10 years.
• Targeting energy intensity reduction by 25% (based on
2010 level) within 20 years.
Source: DEDE (Renewable Energy Asia 2012), as of Sept 12, 2012.
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 ( 9,198 MW)
Solar power
2,000 MW
Wind power
1,200 MW
Hydro power
1,608 MW
MSW
Biomass
Biogas
160 MW
3,630 MW
600 MW
New forms of RE (3 MW)
Geothermal
energy
1 MW
Wave and Tides
2 MW
Source: Ministry of Energy, as of April 2012
Renewable Energy
National Policy to Promote Alternative Energy
Target : To increase share to 25% by 2025
www.boi.go.th
Renewable Energy Status 2012: Current and Target
Types
Units
Goal
Current Capacity
2021
31st Dec 2012
MW
9,201
2,786
Solar
MW
2,000
376.72
Wind
MW
1,200
111.73
Small Hydro
MW
1,608
101.75
Biomass
MW
3,630
1,959.95
Biogas
MW
600
193.40
MSW
MW
160
42.72
Ktoe
9,335
4,882
Solar
Ktoe
100
4.0
Biomass
Ktoe
8,200
4,342
Biogas
Ktoe
1,000
458
MSW
Ktoe
35
78
ML/day
39.97
4.3
Ethanol
ML/day
9
1.6
Biodiesel
ML/day
5.97
2.7
Electricity
Heating
Biofuel
Source: DEDE
9.9% of RE in Total Energy Consumption3
www.boi.go.th
Thailand’s Hard Disk Drive Cluster
3rd
Tier
Suppliers
Metal/Other parts
indirect materials
tooling
2nd
Tier
Suppliers
Suspension
Motor parts
Sub-assembly & coil
Source: http://www.nectec.or.th/2008/r-d/hdd.html , Aug 31, 2012
1st
Tier
Suppliers
HGA/HAS
Motor
Base/Cover
Actuator
PCBA
FPC
Media
HDD
Brand
Owners
Top E&E export
Top E&E import
Electrical Products
Electrical Products
1) Air-conditioners
2) TV/VDO cameras
3) Circuit breakers
4) Refrigerators
5) Television
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,
Source: www.thaieei.com Import and export figures during Jan-Nov 2013 semiconductors
Integrated Circuit Cluster in Thailand
IC Design
Wafer
• Rohm LSI
• Silicon Craft
Technology
Assembly
• Microchip
• Stats ChipPAC
• NXP
• Oki
• Spansion
• Sony Device
Technology
• Hana
Semiconductor • Sanyo
Semiconductor
• Circuit Electronics
Source: BOI E&E Industries Division, as of Dec 17,2009
Lead
Frame
• Sumiko
LeadFrame
• TSP-T
• Rohm
Mechatech
• Testing
Yamakin
• Microchip
• Maxim
Integrated
Service Sectors
www.boi.go.th
Regional Operating Headquarters
Benefit
Benefit
For portion of income from
OVERSEAS OPERATIONS
For portion of income from
LOCAL OPERATIONS
0% CORPORATE
INCOME TAX
for 15 years
10% CORPORATE
INCOME TAX
for 15 years
Key Conditions
- 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
Benefit
For income of
EXPATRIATE EMPLOYEES
15% PERSONAL
INCOME TAX
for 8 years
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
BOI Incentives : Rights & Benefits
International
Procurement Offices
(IPO)
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
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.
BOI Incentives : Rights & Benefits
Rights & Benefits
Activities:
Trade and Investment
Support Offices (TISO)
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
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
Thailand’s Medical Device Industry
www.boi.go.th
Unit: US$ thousands
Medical devices in Thailand
2010
Total Market Size
2011
2012e
2013e
362,374
1,584,410
1,631,942
1,680,900
113
87
90
92
Total Exports
91
70
72
74
Total Imports
362,351
1,584,392
1,631,924
1,680,882
Import from the U.S.
223,294
275,873
284,149
292,674
Total Local Production
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$
Software Development
Software Content
1. Enterprise Software (transaction processing, business
solutions)
2. Embedded Software (mobile phones, microchips)
3. Digital content, including:
 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
Aerospace Industry
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
High Value-Added Services
The Land of Smiles at Your Service
www.boi.go.th
Service Industry
Many opportunities exist in this growing sector:
• Printing
• Tourism facilities, esp. long-stay
• Film & Entertainment
• Regional Operating Headquarters
• Distribution Centers
• Aircraft maintenance
Logistics:
• Shipping services strongly supported by the Thai
Government to support our strong growth in
international trade
Global Top 20 Destination Cities by International
Visitors (2012)
Rank
City
Visitor
(Million)
Rank
City
Visitor
(Million)
1
London
16.9
11
Seoul
8.0
2
Paris
16.0
12
Rome
7.8
3
Bangkok
12.2
13
New York
7.6
4
Singapore
11.8
14
Shanghai
7.5
5
Istanbul
11.6
15
Barcelona
7.3
6
Hong Kong
11.1
16
Milan
7.1
7
Madrid
9.7
17
Amsterdam
6.9
8
Dubai
8.8
18
Vienna
6.7
9
Frankfurt
8.1
19
Beijing
6.2
10
Kuala Lumpur
8.1
20
Taipei
5.4
Source: MasterCard Global Destination Cities Index 2012 as of June 22, 2012
Regional Operating
Headquarters
Benefit
Benefit
For portion of income from
OVERSEAS OPERATIONS
For portion of income from
LOCAL OPERATIONS
0% CORPORATE
INCOME TAX
for 15 years
10% CORPORATE
INCOME TAX
for 15 years
Key Conditions
- 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
Benefit
For income of
EXPATRIATE EMPLOYEES
15% PERSONAL
INCOME TAX
for 8 years
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
BOI SERVICES
www.boi.go.th
Investment Matchmaking Program
BOI SUPPORT SERVICES
1-Stop for visas & work permits:
work permits in 3 hours
Industrial Subcontracting Services
Vendors meet customers program
(BUILD Unit)
ASEAN Supporting Industry Database
Interaction with other govt. agencies
on behalf of investors
Country desks
56
Overseas offices
One Start One Stop Investment
Center(OSOS)
Help investors to make sure what is required to:
●
●
Apply for investment promotion privileges
Obtain a foreign business license
● Tax registration
● Complete an environmental impact assessment
● Obtain utilities, and much more
57
Represented Agencies at OSOS
Ministry of Public Health
Food and Drug Administration
Ministry of Tourism and Sports
Ministry of Transport
Natural Resource and
Environment Planning and
Policy Office
Ministry of Commerce
Business Development
Department
Ministry of Labor and
Social Welfare
Ministry of Finance
Revenue Department
Customs Department
Excise Department
Ministry of Natural
Resources and Environment
Social Security Office
Labor Welfare and
Protection Department
Investor
Ministry of Interior
Ministry of Energy
Energy Business Dept.
Mineral Fuels Dept.
Ministry of Industry
Office of the Board of Investment
Department of Industrial Work
Department of Mining and
Primary Industries
Industrial Estate
Authority of Thailand
Department of Lands
Department of Public Works and
Town and Country Planning
Provincial Electricity Authority
Metropolitan Waterworks Authority
Provincial Waterworks Authority
More Convenience,
less time,
more efficiency!
18th Floor, Chamchuri Square Building
319 Phayathai Road, Pathumwan
Domestic Call: 0 2209 1100, Inter. Call: (66 2) 209 1100
Email: [email protected]
59
Thank You!

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