Thailand 4.0 – a new value-based economy

Bonggot Anuroj
Deputy Secretary General
Thailand Board of Investment

Outline12345Thailand 4.0
Current Investment Promotion Policy
European Investment Trend
EEC Incentive Scheme
BOI Services

1Thailand 4.0

Thailand 4.0: a New Economic Model10 Targeted S-curve Industries
5 New S-Curve

Biofuelsand Biochemical

Digital Economy

Medical HubAutomation
and Robotics

Aviationand Logistics

5 First S-Curve

Agricultural
and Biotechnology

Smart Electronics

Affluent Medical
Next-Generationand Wellness Tourism
Automotive

Food for The Future

2

Current Investment Promotion

PolicyFocus of Current Investment Promotion Policies

Technology and Innovation

People• Research and development• Targeted industries/services• Value-added creation• Human capital• Foreign talents

Productivity Enhancement

Development of targeted areas• Upgrading of existing companies• Eastern Economic Corridor (EEC)• Border Special Economic Zones• Disadvantaged areas

7

BOI’s Investment Policy Framework
Policy100%

Foreign ownership
No local content
requirements
No export
requirements
No restriction
on foreign currency

Tax Incentives
Exemption of importduties on machinery /raw or essentialmaterials imported foruse in production forexport and for R&D

Sector-based Incentives
Up to 8-yearTax holiday fortargeted industries
in accordance with theSeven-Year Investment
Promotion Strategy(2015-2021)

Corporate income tax
exemption up
to 13 years

Technology-based
Incentives
Up to 13 –year Tax holiday
for core technologies or
R&D projects

50% CIT reduction
within 10 years(ITA: Investment TaxAllowance) Deduction up
to 70% of the invested
capital on net profit derived
within 10 years (ITA)

Facilitation
Land ownership rights
Work permit&Visa facilitation

Competitive Enhancement Measures
Up to 15 –year Tax holiday for newtechnologies and high-impact
investment Matching grant for R&D,
training, innovation

BOI Investment Incentive Scheme
Activity-based•Bio Industries•Creative & Digital Industries•High Value Business & Service•Advanced Manufacturing•Basic & Supporting Industries+Technology-based•Biotechnology•Nanotechnology•Advanced Material Technology•Digital Technology• EEC 3 provinces• SEZ 10 provinces

Area-based• Southern Border (4 provinces, 4 districts)• 20 Provinces with the Lowest per Capita Income• Industrial Estates/Zones• Science and Technology Parks(Science Park, Food Innopolis, Space Krenovation Park: SKP)

Merit-based• Research & Development (R&D)• Support academic/research institutes, or technology and humanresource development funds• IP licensing fee• Advanced technology training• Development of Local suppliers• Product and packaging design
Agenda-based• Productivity Enhancement• MAI Listing Support• SMEs Promotion• Support to Small and Community Enterprises

Activity-based Incentives
Incentives are largely based on several key factors
i.e. level of technology, role in supply chain

8yearsBio-based & Medical

Basic & Supporting

A2
A3

High Value Business & ServiceA4

Creative & Digital

B1B2Incentives

CIT exemption

Advanced Manufacturing

A10yearDashboard of Activity-Based Basic Incentives
Exemptionof Corporate
Income Tax

Exemption ofImport Dutyon Machinery

Exemption of import duty on
raw material imported for usein production for export

Non-tax

A2 8 years + MeritA3 5 years + Merit











A4 3 years + Merit
B1 0 year + Merit*











-



A1B28 years(w/ Cap) + Merit-* Tax exemption will depend on the investment amount/ expenditure for enhancing competitivenessTechnology-Based Incentives(1/2)

Additional incentives for investment in the development of Core Technologies in which Thailand has potential toenhance the country’s overall competitiveness and industries. Projects must be engaged in technology transfer bycooperating with educational/research institutions as stipulated by the Board, e.g. Technology Research Consortium

CIT Exemption for 10 years + Merit (1 - 3 years) = Maximum of 13 years
Targeted Core Technologies
Biotechnology

Enabling Services

Nanotechnology

Advanced MaterialTechnologyDigital Technology

For 2-6, only projects that utilize advanced technology,
as approved by the Board

1.Research and Development (R&D)
2.Vocational Training Centers (only in S&T)
3.Electronics Design

4.Engineering Design
5.Scientific Laboratories
6.Calibration Services

Technology-Based Incentives(2/2)

Eligible for “duty exemptions on materials imported for R&D purposes andrelated testing” for research and development activities, biotechnology
activities (only with R&D), and testing related to R&D with the following
guidelines: Materials imported for R&D purposes or related testing,e.g. prototype materials, chemicals, plants or animals, etc.
 Eligible for a 1-year exemption period, which can be renewed annually.

Merit-Based Incentives-Optional Scheme
Product-Based
Incentives

Technology-Based
Incentives+

Merit-Based
Incentives

Total CIT Exemption => Maximum 13 Years

Merit-Based Incentives –Competitiveness Enhancement Measures (Optional)
Types of eligible
investments/expenditures

Additional Cap(% investment capital /expenditure incurred)

In-house, outsourced in Thailand or
1. R&D:
joint R&D with overseas institutes
to technology and human resource
2. Donations
development funds, educational institutes,

300%

3.
4.
5.

specialized training centers, R&D institutes orgovernmental agencies in the S&T field
IP acquisition/licensing fees for commercializing
technology developed in Thailand
Advanced technology training, including digitaltraining such as IoT
Development of local suppliers with at a least
51% Thai shareholding in advanced technology
training and technical assistance& packaging design: In-house or
6. Productoutsourced in Thailand

100%

Additional CIT incentives
depending on investment/
expenditure ratio (%)% of qualified
investments/
expenditures tocombined revenue
for the first threeyears

Add.
CIT
exept.

11% or > 200 MB.

year

200%

2% or > 400 MB.

years

200%

3% or > 600 MB.

years

200%200%23

3European Investment Trend

BOI Statistics 2015 - 2017
2015

Investment Value (unit: million Euro)
25,00020,37720,00015,00021,685

16,163

15,737

13,20018,43017,317

12,461

10,0004,974
5,000
0Application*Exchange rate as of 7 March 2018

Approvals

Certificates2016Foreign Direct Investment in 2015 – 2017 by country
Investment Value (Unit: 1 million Euro)
12112015
2016
2017

10108

64

5.2
42.2

2

2

1122

1.1
100Total

JapanASEAN

1 1.08EU*Exchange rate as of 7 March 2018 (1 Euro = 39.72 Baht)

10China

0.79
0.28

Hongkong00USA

EU Net Application Submitted by Sector in 2015-2017
6411%

2%

7 9%50%

225%

140%

313%

1. Metal Products and Machinery(54 projects, 729.9 mil Euro)
2. Chemicals, Paper(11 projects, 459.4 mil Euro)
3. Electric and Electronic Products(143 projects, 235.0 mil Euro)
4. Services(189 projects, 197.9 mil Euro)
5. Light Industry(20 projects, 173.9 mil Euro)
6. Agricultural Products(15 projects, 31.1 mil Euro)
7. Minerals and Ceramics(2 projects, 2.7 mil Euro)*Exchange rate as of 7 March 2018 (1 Euro = 39.72 Baht)

Belgium Net Application Submitted by Sector in 2015-2017
4,5,6,70%0%0%

219%0%

161%

320%

1. Chemicals, Paper(8 projects, 2.5 mil Euro)
2. Metal Products and Machinery(1 projects, 0.7 mil Euro)
3. Electric and Electronic Products(4 projects, 0.7 mil Euro)
4. Services( - projects, - mil Euro)
5. Light Industry( - projects, - mil Euro)
6. Agricultural Products( - projects, - mil Euro)
7. Minerals and Ceramics( - projects, - mil Euro)*Exchange rate as of 7 March 2018 (1 Euro = 39.72 Baht)

4EEC Incentive Scheme

Targeted Areas
Eastern Economic Corridor (EEC)(Chachoengsao, Chonburi and Rayong)

Special Economic Development Zones (SEZs)(Tak, Sa kaew, Trat, Mukdahan, Songklah, Nongkhai,
Narathiwas, Chiang Rai, Nakhon Panom, kanjanaburi:
10 provinces, 23 districts, 90 sub-districts)

Border Provinces in Southern Thailand

Narathiwat, Pattani, Yala and Satun and 4 districts(Jana, Na Thawee, Saba Yoi, Dhepha) in Songkhla

The 20 Poorest Provinces

Kalasin, Chaiyaphum, Nakhon Phanom, Nan, Bueng Kan,Buri Ram, Phrae, Maha Sarakham, Mukdahan, Mae Hong Son,Yasothon, Roi Et, Si Sa Ket, Sakhon Nakhon, Sa Kaew,Sukhothai, Surin, Nong Bua Lamphu, Ubon Ratchataniand Amnatcharoen)Eastern Economic Corridor (EEC)

1

1

Chachoengsao

2

Chonburi3

RayongEastern Economic Corridor (EEC)

1

New Investment Promotion Measures in the EEC-starting January 1, 2018

 Applications must be submitted by the end of 2019
 Must have cooperation with academic institution / research institution / Center of Excellence to develop
human resource and improve the level of technology

Area-based

Condition

Promoted Zones for Specific Industries No. of apprentices:
1. (EECi, EECd, EEC Aerotropolis)> 10 % of all employees hired or at least 50
Zones for Specific Targeted
2. Promoted
industries

Other Industrial Estates/ Industrial
3. Parks in EEC

No. of apprentices:> 5 % of all employees hired or at least 25

Note: Projects applied for this measure shall not receive additional incentive under merit on Industrial Area Development.

25

HSR

FS

Bidding

TOR

UTP
MRO
MTP

LCB

FS

TOR

Sign
Cont.

FS

TOR

Bidding

SignCont.

FS

TOR

Y2023
Bid- Sign
ding Cont.

Y2023

Y2021
Bidding

FS TOROperation

Nov 2017
Dec 2017
Jan 2018
Feb 2018
Mar 2018
Apr 2018
May 2018
Jun 2018
Jul 2018
Aug 2018
Sep 2018
Oct 2018
Nov 2018
Dec 2018
Jan 2019

Draft Master Timeline for PPP projects in EEC

Sign
Cont.

Y2024

Bid- Sign
ding Cont.

Y2025

as of 2 March 2018

Investment Promotion Scheme for the EEC
Targeted Industries
in the EEC

Promoted Zones forSpecific Industries

S-CurveIndustries+
Activities Supporting
S&T+
Basic

Infrastructure

116
Industries in Total

Promoted Zones forTargeted Industries
Other Industrial
Estates /Industrial Parks

Targeted Industries:
Additional 2 years of CIT exemption(could be more than 8 years) + 50% CIT
reduction for 5 years
Other Industries:
Additional 3 years of 50% CIT reduction
Targeted Industries:
Additional 5 years of 50% CIT reduction
Other Industries:
Additional 3 years of 50% CIT reduction

Targeted Industries in the EEC:
Additional 5 years of 50% CIT reduction

5BOI Services

BOI Offers Manifold Support Services
BOI Support Services
SMART VISA

1-Stop for visas & work
permits: work permits
in 3 hours

NEWInteraction withother govt. agencieson behalf of investors

Subcontracting
Development
Program by BUILD Unit

Country desks

Overseas offices

Where to contact BOI
Frankfurt
Bethmann Strasse 58, 5.OG
60311 Frankfurt am Main,
Germany
Telephone: +49 (0) 69 9291 230
Fax: +49 (0) 69 9291 2320
Email: fra@boi.go.th

BangkokThailand Board of Investment,
Headquarter
Vibhavadi-Rangsit Road, Chatuchak,Bangkok 10900
Tel: +66 (0) -2553-8111
Fax: +66 (0) -2553-8222
E-mail : head@boi.go.th
Website : www.boi.go.th- Thank you www.boi.go.th