Thailand
Board of Investment
Board of Investment
Net Applications by
Country
2001
Number
of
Projects
Value of
Investment
(mil. US$)
2002
2003 (Jan.-May)
Number
of
Projects
Value of
Investment
(mil. US$)
Total Inv. 854 4,164
Total For. 675 3,359
100% For. 320 1,900
840
560
291
6,151
4,154
2,391
375
263
118
2,863
2,358
1,410
By Country
Japan
275
U.S.A.
48
Taiwan
42
Hong Kong 17
Singapore
62
E.U.
84
251
35
55
13
40
66
1,672
196
964
268
305
321
128
18
30
8
21
31
889
560
46
198
110
464
1,332
420
103
202
305
567
Number Value of
of
Investment
Projects (mil. US$)
Note 1: Investment projects with foreign equity participation from more than one country are
reported in the figures for each country Note 2: 2001 US$=44.48 baht; 2002 US$=43.00 baht;
2003 US$=42.68 baht
Major Investors in 2002
Thailand
Board of Investment
Project
Approvals
Country
Investment Value
Rank
Country
Rank
Japan
1
Japan
1
Europe
2
Europe
2
Taiwan
3
Singapore
3
Singapore
4
USA
4
USA
5
UK
5
Investment by Sector
(2002)
Thailand
Board of Investment
Sector
Projects
Value
(Net Apps)
(Bt. Bn.)
Agriculture
171
82.3
Minerals and Ceramics
13
2.2
Light Industry
71
15.1
Metal Processing
193
58.1
Electrical & Electronics
159
35.3
Chemicals
88
31.0
Services
145
40.4
BOI Project Approvals
For India (1998-2003)
Thailand
Board of Investment
 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
BOI Project Approvals
For India (1998-2003)
Thailand
Board of Investment
Services
2%
Chemicals,
P aper and
P lastic
29%
E&E
16%
Agriculture
8%
Light
Industry
45%
Liberal Investment Regime
Thailand
Board of Investment
 No Export Requirements
 No Foreign Equity Restrictions
in Manufacturing Sectors
 No Local-Content Requirements
 No Location Requirement in All
But 6 Activities
The Board of Investment
Basic Incentives and Measures
Thailand
Board of Investment

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
Thailand
Board of Investment
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
Zones of Opportunity
Thailand
Board of Investment
Import Duty on Machinery
Thailand
Board of Investment
Zone
1
Reduce 50%
2
Reduce 50%
3
Exempt
Import Duty on
Raw Materials
Thailand
Board of Investment
Zone
1
1 Year Exemption
2
1 Year Exemption
3
5 Year Exemption
Corporate Income
Tax Exemption
Thailand
Board of Investment
The Amount of a Project’s Corporate Income Tax
Holiday is Capped at 100% of Investment Capital
Zone
Zone 1
Zone 2
Zone 3
Inside
Industrial
Estate
3 Years
5 Years
8 Years
Outside
Industrial
Estate
Not Exempt
3 Years
8 Years
Additional Zone 3
Incentives
Thailand
Board of Investment
40 provinces
50% reduction of
income tax for 5 years
Double deduction of
water, electricity,
transport costs for 10
years
25% deduction of
infrastructure
installation or
construction costs
Inside
Industrial
Estate
Outside
Industrial
Estate



Additional Zone 3 Incentives
Thailand
Board of Investment
18 least-developed Inside
Industrial
provinces
Estate
50% reduction of income
tax for 5 years
Double deduction of
water, electricity,
transport costs for 10
years
25% deduction of
infrastructure
installation or
construction costs
Outside
Industrial
Estate






Criteria and Conditions
Thailand
Board of Investment
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)

Investment Policy Reform
Thailand
Board of Investment
Old Model
New Model
Capital intensive & labor
intensive
Skill & Knowledge
Production base
Tax incentives provider
Standard package
intensive
Integrated International
business center
Facilitation & investment
services provider”
Customization to promote
Large Corporations,
SMEs and community
enterprises
Thailand
Board of Investment
New Investment Promotion
Focus
 3 Dimensions
 3 Regions
 7 Strategies
 5 Target Industries
3 Dimensions
Thailand
Board of Investment
 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
Developing Industrial Clusters
Thailand
Board of Investment
 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
Changing Role of the BOI
Thailand
Board of Investment
Provide Value-Added
Investment Services
Provide Tax
Incentives
Promotion Investment
Administration
Solve Problems
and Enhance
Investment Environment
Develop Database System
Develop Knowledge
About International
Investment Law
Proactive
Marketing
Set up Investment
Network
Increase Training and
Skills Development
Market
Community
Enterprises
Enhance Capabilities
of Thai
Community Enterprises
5 Target Industries
Thailand
Board of Investment
Agro Industry
Fashion Industry
Automotive
ICT incl. Electronics
High Value - Added
Services
 Food Processing
 Rubber Products
 Bio - Technology
 Jewelry
 Leather Products
 Garments
 Pick-ups
 Major Auto Parts
 Fiber Optics
 Telecom
 Long Stay
 ROH
 Film Industry
 IC Design
 Printing Industry
 MICE
 Call Center
Target Industries
Thailand
Board of Investment
 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
Thai Automotive
Industry
Thailand
Board of Investment
 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 2&3 suppliers
 Strong
 35%
market potential
domestic sales growth
(H1/03)
 39% export growth (Jan.-May)
New Automotive Industry
Policy
Thailand
Board of Investment
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.

Electronic and Electrical
Industry in Thailand
Thailand
Board of Investment
 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 US$20 billion, or
roughly 35% of all Thai exports
 Trade surplus in 2001 of US$4.7
billion
Current Key Players in
Thailand’s E&E Industry
Thailand
Board of Investment

HDD & HDD Parts


Printers


Cal-Comp, Canon, Oki
PCBAs


IBM, Fujitsu, Western Digital, Nidec,
Seagate, Read-Rite, Hoya, Minebea
Celestica, Koshin, ACT, SCI Systems,
SVI, Hana, Pemstar, PCTT, Mektec
White Goods (Air Conditioner,
Refrigerator)

Daikin, Fujitsu General, Mitsubishi,
Sharp, Toshiba, Sanyo
Promotion of Value Chain
in Electronics Industry
Thailand
Board of Investment
Promote projects in the electronic
industry that locate all elements of
the value chain in Thailand
 Cover all downstream and upstream
activities, such as R&D, 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

High Value Services
Thailand
Board of Investment
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

Regional Operating
Headquarters (ROH)
Thailand
Board of Investment
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

ROH
Thailand
Board of Investment
 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
Services of the BOI
Thailand
Board of Investment

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

BOI on the Internet
http://www.boi.go.th
Thailand
Board of Investment
Since 2000, the BOI web site has been ranked as
the #5 Investment Promotion Agency website
in the world by Corporate Location
Email: head@boi.go.th
• Up-to-date Info on BOI
Policies, Procedures,
Incentives and Services
• Links to Business News
About Thailand
• What’s 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