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“Thailand Investment Policy and
Opportunities”
Mr. Chokedee KaewsangMr. Chokedee Kaewsang
Deputy Secretary General
Thailand Board of Investment
28 August 2013
Hong Kong
• Economic Overview
• Why Thailand
Presentation Outline
• Why Thailand
• Investment Policies
• Sectors of Opportunities
Economic Overview
Fast Facts
GDP HKD$ 2.79 trillion (2012)
HKD$ 41,099 per capita
An Upper Middle Income An Upper Middle Income CountryCountry
12% 12% Agriculture
45% Industry
43% Services
Population 67 Million
Labor Force 40.2 million
Sources: MOC, NESDB, Pocket World in Figures 2013 Edition
Exchange rate: HKD 1=Bt 4.0709 as of Jul 31, 2013
Economic Projection Year 2013
(% YoY) 2011 20122013
Q1 Year (P)*
GDP (at 1988 price) 0.1 6.5 5.3 4.2-5.2
Export of goods (US$) 14.3 3.2 4.5 7.6
Import of goods (US$) 24.9 7.8 7.1 7.6
Current Account to GDP(%) 1.7 0.8 0.8 0.9
Inflation 3.8 3.0 3.0 2.3-3.3
Unemployment rate 0.7 0.7 0.7 0.7
Source: NESDB as of May 20, 2013
Remark: (P) = Projection
Thailand Nominal GDP and Growth Rate
1.45
1.59
1.74
1.92
2.08
2.23 2.22
2.48
2.59
2.84
--11..44
44..44 44..88
22..22
55..3377..0 0 66..22
44..55 55..11 4.84.8 22..66
--22..33
7.8 7.8
0.10.1
66..44
55..33
0
5
10
1.50
2.00
2.50
3.00GDP
Growth Rate
HKD$ (trillion) (%)
0.910.89 0.89
0.95
0.99
1.05
0.71
--1010..55
--22..33
-15
-10
-5
0.00
0.50
1.00
1.50
Source: NESDB :Q1 2013 as of May 20, 2013,
Exchange rate: HKD$ 1= Bt 4.0709, as of Jul 31, 2013
1,2681,358 1,357 1,318 1,262
1,4891,591
2,112
1,584
1,500
2,000
2,500
3,000
Nu
mb
er o
f ap
pli
cati
on
sInvestment Applications Submitted 2003 – 2013 (Jan-Jun)
(Includes Foreign and Domestic Projects)
1,029
1,268 1,318 1,262
692
619
0
500
1,000
Nu
mb
er o
f ap
pli
cati
on
s
Source: BOI, as of April 29, 2013
Value of Investment Applications Submitted, 2003– 2013 (H1)(Includes Foreign and Domestic Projects)
161.2173.1
126.3
161.1 156.7165.3 159.2
150
200
250
300H
KD
$ B
illi
on
GlobalRecession
78.4
126.3109.6 109.9
68.4 68.4
0
50
100
150
HK
D$ B
illi
on
Source: BOI, as of Aug 7, 2013 Exchange rate: HKD$ 1=Bt 4.0709
150.5300
400HKD$ billion
Agro Minerals Fashion Auto E&E Chemical Services
Value of Investment Promotion Applications
By Industry, 2003 – 2013 (Jan-Jun)
363.3
9 13.1 10 15 9.3 17.5 16.2 17.7 23.29 21.62
39.132.2
6.5 6.54.8 7.2 7.7
14.55.4
4.7
33.6
4.5 4.4 1.6 2.8 3.8
11.1
2.8
17.8 35.8
13.6 18.9 14 16.532
62.8
36.519.5 16.9 20.8 16.1
21.5
41.2
8.514.8
30.426.9
37.3
12.9 5.6 10.1
21.4
60.1
6.513.4
4043.4
29.5
42.1
40.7
92.4
41
60.4
74.2
115.2 8.1
3
41.9
15
21.320.6
16.2
18.8
31.1
0
100
200
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
(Jan-
Jun)
Source: BOI, as of July 16, 2013
78.5
161.0173.2
125.9
156.0
109.6
156.7
109.9
164.5155.4
96.2
123.4
97.4
159.2
100
120
140
160
180
HK
D$
Value of Foreign Applications Submitted, 2003 – 2013 (H1)
48.059.2
96.2
75.6 73.1
86.2
58.0
97.4
68.4 68.4
0
20
40
60
80
100
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2012 (H1)
2013 (H1)
HK
D$
Billio
n
Source: BOI, as of July 9, 2013
68.4
43.3
68.4
45.2
40.0
50.0
60.0
70.0
Bil
lion
2012 (H1) 2013 (H1)
+0.05%
Foreign Direct Investment Applications
7.3
2.8 5.1 2.57.1
3.84.2
0.10.0
10.0
20.0
30.0
Total Japan ASEAN Hong Kong EU USA.
HK
D$ B
illi
on
Source: BOI, as of July 9, 2013 Exchange rate: HKD$ 1= Bt 4.0709 as of July 31, 2013
12,940
72
40
50
60
70
80
9,000
12,000
15,000
No
. o
f P
roje
cts
Mil
lion
Value
No.of Projects
Trend of HK Applications
1,171
3,394
1,037
3,2582,818
3,77820 2026
32
22 19
0
10
20
30
0
3,000
6,000
2008 2009 2010 2011 2012 2012 (H1) 2013 (H1)
No
. o
f P
roje
cts
HK
D$ M
illi
on
Source: BOI, as of July 15, 2013 Exchange rate: HKD$ 1=Bt 4.0709 as of July 31, 2013
HK Investment Applications
Totals by Sector: 2008 – 2013 (H1)
Sector Projects HKD$ Million
Agricultural Products 4 108.77
Minerals and Ceramics 8 446.29
Light Industries/Textiles 17 373.85
Metal Products and Machinery 26 2,344.69Metal Products and Machinery 26 2,344.69
Electric and Electronic Products 53 5,044.12
Chemicals and Paper 18 856.10
Services 85 19,222.16
TOTAL 211 28,395.98
Source: BOI, as of July 15, 2013
Exchange rate: HKD$ 1=Bt4.0709 as of July 31, 2013
Why Thailand
• Market potential
• Attractive Investment Policies• Attractive Investment Policies
• Competitive cost
• Well-equipped infrastructure
Thailand
•67 million population
•GDP (2012) US$ 365 billion (HKD$ 2.79 trillion)
ASEAN
•GDP (2011): US$1.8 trillion (HKD$ 13.74 trillion)
ASEAN
•GDP (2011): US$1.8 trillion (HKD$ 13.74 trillion)
•GDP per capita: US$3,376 (HKD$ 25,775)
•GDP Growth: 5.7% and 6.4% in 2011-2012
•Population: 600 million people
•Area: 4.46 million km2
ASEAN+3
•+2 billion pop.(1/3 world pop.)
•US$9.9 trillion GDP (HKD$ 75.58 trillion) (18% of world GDP)
Exchange rate: US$1=Bt31.08 and HKD$1 = Bt 4.0709 as of 31 July 2013
ASEAN
JTEPAASEAN-Korea
ASEAN-China
Thai-India
ASEAN-EU
Thai-EU
Thailand’s FTA and Trade PartnersThailand’s FTA and Trade Partners
ASEAN-India
ASEAN-Japan
11 Agreements, 16 CountriesASEAN
ASEAN-CER
Thai-NewZealand
Thai-Australia
In Effect Under
negotiationPending
Thai-Peru
BIMSTEC
Thai-Chile
Source: Department of Foreign Trade as of August 22, 2013
finalized
RCEP
The World Bank Ranks
Thailand among the easiest
places to do Business in
Asia and 18th in the World
20132013 20132013
11 Singapore 1111 Finland
22 Hong Kong 1212 Malaysia
33 New Zealand 1313 Sweden
44 United States 1414 Iceland
55 Denmark 1515 Ireland
66 Norway 1616 Taiwan66 Norway 1616 Taiwan
77United
Kingdom1717 Canada
88 Korea, Rep 18 Thailand
99 Georgia 1919 Mauritius
1010 Australia 2020 Germany
Source: Doing Business 2013, October 25, 2012
TNCs’ top prospective host
economies for 2012–2014(Percentage of respondents selecting economy as a top
destination)
1 China (1)2 United States (2)3 India (3)4 Indonesia (6)5 Brazil (4)6 Australia (8)6 United Kingdom (13)8 Germany (8)8 Russian Federation (5)
(x) = 2011 ranking
8 Russian Federation (5)8 Thailand (12)
11 Viet Nam (11)12 Mexico (10)13 Japan (-)14 Netherlands (-)14 Poland (6)14 South Africa (-)17 Korea, Republic of (-)17 Sweden (-)19 France (19)19 Italy (-)19 Malaysia (19) Developed economies
Developing and transition economies
Source: UNCTAD Top host economies for FDI 2012-2012 as of July 12, 2012
ASEAN Corporate Income Tax 2013
15%
20%
25%
30%
0%
5%
10%
15%
Singapore Thailand Vietnam Malaysia Indonesia
Source: KPMG
Affordable Office Space
1266.4
856.4768.6 724.7
600
800
1000
1200
1400
HKD$/sq ft/annum
468.5358.7 351.4 344.0
212.3 175.7
0
200
400
600
Source: CBRE Market View Asia Pacific Office, Q3/2012 as of Jan 21, 2013
Note: US$1=Bt29.8 and HKD$1 = Bt 4.0709 as of 31 July 2013
Wage Comparison92.4
54.849.6
42.833.3
21.5 20.917
30
40
50
60
70
80
90
100
Wage
Lev
els
(US
$)
Gross Net
21.5 20.917 14.6
8.5 8 7.9 7.6
0
10
20
30
Wage
Lev
els
(US
$)
Cities ranked according to gross value of index. New York = 100Source: UBS/Prices & Earnings update September 2012
Hemaraj Land and Development PLC
Amata Industrial Estate
Gateway CityIndustrial Estate
Asia Industrial Estate
Laem Chabang Industrial Estate
304 Industrial Park
Map of basic infrastructure sites and industrial parks in and around Bangkok
Ping Thong Industrial Estate
Padaeng Industrial Estate
Map Ta Phut Industrial Estate
Wellgrow Industrial Estate
Golf Course
International School& University
Hospital
Rojana Industrial Park
Thailand’s Industry Cluster by IEs*
Food and dairy products (sugar, bakery,
NORTH
• E&E parts
• Food and dairy products (sugar, bakery,
dried fruit snack, juice, and MSG).
• Agricultural processing (animal feed)
CENTRAL
• Automotive parts
• Chemical products
• Electronics parts
• Consumer products
BANGKOK &
VICINITY AREAS:
• Food & beverages
• Chemical products
• Electronics parts
• Consumer
products(Shampoo,
toothpaste and etc)
• Consumer products
WEST
• Apparels.
• Frozen and
processed food.
• Electronics parts
• Food products (ice
cream, yogurt, and
ready-to-drink
yogurt)
EAST
• Automotive parts
• Chemical products
• Petrochemical products
SOUTH
• Palm oil
• Gypsum
• Automotive parts
Source: Office of Transport and Traffic and Policy Office (BOI’s Overseas Office Meeting) as of Oct 31, 2012
* Industrial Estates
Projected Infrastructure Investment (2011-2020)
57.10
81.2579.7975.40
47.5844.6550.00
60.00
70.00
80.00
90.00HKD$ Bn
22.69
39.5344.65
22.69
3.66
0.00
10.00
20.00
30.00
40.00
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Ministry of Transport as of Jan 2013
Note: US$1=Bt29.8 and HKD$ 1=Bt 4.0709 as of July 31 ,2013
Investment Budget Plan for
Transportation, 2013-2020
ROAD (33.9%)
HKD$ 159.47 billion
RAIL(60.8%)
HKD$ 285.97 billion
Total budget: HKD$ 470.1 billion
HKD$ 159.47 billion HKD$ 285.97 billion
MARINE(3.3%)
HKD$ 15.57 billion
AIR(1.93%)
HKD$ 9.09 billion
Source: The Office of Transport and Traffic Policy and Planning (BOI’s Overseas Office
Meeting) as of Oct 31, 2012 Note: US$1=Bt29.8 and £1=Bt 4.0709 as of July 31, 2013
107
Distance (km)Single-track
Double track
Projects Under Rail Transport
Development ProgramHigh-Speed
Train
Budget
(1st phase)
HKD$ mil.
Bangkok- Nong
Khai (Laos-
Kunming)615 km 23,641
Bangkok-Padang 982 km 20,061
Railway improvements
to cover 47 provinces
3,755
173107 Double track
Triple trackBesar (Malaysia)
982 km 20,061
Bangkok-Rayong 221 km 18,265
Bangkok-Chiang
Mai745 km 29,540
Total2,563
km91,507
Source: Report on Investment Plan for Transport Sector (Year 2013-2020), OTP as of Feb 6, 2013
Note: US$1=Bt29.8 and HKD$1 = Bt 4.0709 as of 31 July 201
Investment Policies
Liberal Investment Policy
• No Restriction on foreign shareholding in
manufacturing
• 100% foreign shareholding allowed in some • 100% foreign shareholding allowed in some
service
• No local content requirement• No export condition
Tax Incentives
� Corporate income tax holidays up to
8 yrs
� Additional 50% reductions of
corporate income tax for 5 yrs
� Import duty reductions or exemptions on machinery and raw
BASIC BOI PRIVILEGES AND MEASURES
Non-Tax measures� Land ownership rights for
foreign investors
� One Stop Services Center (OSOS)
� Work permit/visa facilitation for foreign � Import duty reductions or
exemptions on machinery and raw materials
� Double deduction of public utility costs
� Deductions for infrastructure construction/installation costs
facilitation for foreign experts and technicians
One-Stop-Shop
Visas & Work Permits are issued in 3 3 hourshours
Activities Eligible for BOI PromotionActivities Eligible for BOI Promotion
Agriculture and Agro-Industries Mining, Ceramics Basic MetalsLight Industries
e.g. jewelry, shoe, garments
Metal Products, Machinery, Transport
including automotive, Aerospace
Electrical and ElectronicsChemical,
Petro-Chemical, paper, plastics
Services
and Public Utilities
10 Target Industries
Sectors of Opportunities
Target industry to Thailand
• Automotive
• Electronics & Electrical Products• Electronics & Electrical Products
• Alternative Energy
• High Value Added Services
Thailand Automotive Industry
As of Aug 1, 2013
World’s Automotive Production 2012
19,272
10,329 9,9438,000
12,000
16,000
20,000
Thousands
World’s Production: 84 Million
THAILAND: 2.45 Million
#10 in Worlds’ Automotive Production
#1 in ASEAN for Automotive Production
5,6494,558 4,145
3,343 3,002 2,479 2,454 2,232 1,979 1,968 1,577 1,1790
4,000
Source: OICA and Thailand Automotive Institute as of Aug 1, 2013
Thailand’s Automotive Industry Overview
Thailand:
10th largest
automobile
producer in
the world in
2012
Target:
To
manufacturer
3,000,000 units
in 2017
Output:
14 assemblers
with a
combined
production of
more than
High local
content :
80-90% for
pick-up and
30-70% for
passenger car2012in 2017
more than
2,000,000 in
2012
passenger car
Source: TAI
OPPORTUNITIES: COMPONENTS NEEDED IN THAILAND
� Automatic Transmissions� Continuously Variable Transmissions (CVT)� Traction motors for automobiles; e.g. hybrid or fuel cell cars� Regenerative Braking System� Electronic Stability Control (ESC)� Rubber tires for vehicles� Rubber tires for vehicles� Substrate for catalytic converters� Electronic fuel injection systems� Battery for electric-powered vehicles
Source: BOI Announcement
No.2/2553, as of April 23, 2010
BOI Priority Activities
- 8-yr CIT Exemption All Zones/No cap
- Import duty Exemption on Machinery
As of Aug 8, 2013
Thailand’s E&E Industry
40
41
3661,584
23%
77%
Structure of Thailand’s E&E Industry
Assemblers
Part suppliers
Local: 43%
Foreign/JV: 57%
366
3
Part suppliers
Local: 60%
Foreign/JV: 40%
Factories Summary
Small: 1,359
Medium: 388
Large: 308
Total: 2,055
Source: Thai E&E Institute, as of June 2013
Thailand’s E&E Industry
Electrical appliances Electronics
Unit: HKD$ Billion
155.0 168.7 174.3
251.9 236.7 239.2
2010 2011 2012
174.3 (Electrical appliance)
239.2 (Electronics)
413.5
Source: EEI Thailand, as of June 10, 2013
Exchange rate: US$1=Bt 31.08 and HKD$1 = Bt 4.0709 as of 31 July 2013
Source: World Semiconductor Trade Statistics and Electrical and Electronics Institute of Thailand as of April 5, 2013
Source: World Semiconductor Trade Statistics and Electrical and Electronics Institute of Thailand as of April 5, 2013
Policy to Support Hi-Tech Industry
Eligible Activities:
5.4.3 Manufacture of industrial electronics
5.4.4 Manufacture of telecommunication equipment
5.5.1 Manufacture of semiconductors
5.5.2 Manufacture of memory storage equipment
- Only HDD & SSD & Parts
5.5.4 Manufacture of parts for telecommunication equipment5.5.4 Manufacture of parts for telecommunication equipment
5.5.5 Manufacture of medical electronics
5.5.6 Manufacture of parts for agricultural electronics
5.5.7 Manufacture of electronic parts for vehicles
5.5.10 Manufacture of solar cells and raw materials for solar cells
5.5.12 Manufacture of flat panel display
5.6 Manufacture of material for microelectronics
5.7 Electronic Design
Source: BOI Announcement No.1/2556 as of Feb 28, 2013
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 • 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, 2013
Source: BoI Announcement No.1/2556, Feb 28, 2013.
� Thailand Exports Ranked 13th in the World in 2011
� E&E exports US$54.16 billion in 2012, 23% of total exports
� Major products: HDD, IC, TV, A/C & other WG
� Thailand is the world’s largest producer of HDDs
� A leading country in the manufacture of integrated
Electronics and Electrical Industry
� 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: Electrical and Electronics Institute, as of February’13
Renewable Energy
Alternative Energy Development Alternative Energy Development
Plan (AEDP) Plan (AEDP) 20122012--20212021
Renewable Energy ( 9,198 MW)
Solar power 2,000 MW
Wind power 1,200 MW
Hydro power 1,608 MW
AEDP 2012-2021, targeting to replace 25% of total fossil-fuel consumption
with RE at the end of 2021.
MSW 160 MW
Biomass 3,630 MW
Biogas 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
High ValueHigh Value--Added Added ServicesServices
Many opportunities exist in this growing sector:
• R&D and design
• Printing
• Tourism facilities, esp. long-stay
• Film & Entertainment
Services IndustryServices Industry
• Film & Entertainment
• Regional Operating Headquarters
• Distribution Center (DC)/ International Distribution Centers (IDC)
• International procurement office (IPO)
• Trade and investment support office (TISO)
• Aircraft maintenance
Services account for about 50% of GDP
Thank youThank you
THANK YOUTHANK YOU
谢谢谢谢
52