Improvement of Business Environment under the current Government and New Investment Policy in Thailand Mr. Kitti Tangjitrmaneesakda Secretary General The Federation of Thai Industries 1

1.Issues relating to the business environment in Thailand 2.Government measures in support of investment promotion policy Outline of Presentation 2

Issues relating to business environment in Thailand 3 -Promotion of FTAs (JTEPA, AJCEP) -Customs Procedure (e.g. transparency, customs operation, laws and regulations) -Labor Policy (e.g. visa and work permit, shortage of work force, law and regulations) -Infrastructure Development (mega-projects) -Deregulations (e.g. deregulation of Foreign Business Act.) -Promotion of Regional Operating Headquarters (ROHs)

Government measures in support of investment promotion policy 4 1.Review of investment promotion strategy 2.Promotion of set-up of international headquarter (IHQ) and international trading company (ITC) 3.Promotion of non-tax measures 4.Facilitation for investors regarding the set-up of IHQ and ITC

New Investment Promotion Strategy ( ) 5 1.Promote investment that help enhance national competitiveness 2.Promote environment-friendly activities 3.Promote clusters in accordance with regional potential and strengthened value chain 4.Promote investment in southern border provinces 5.Promote special economic zone, especially in border areas 6. Promote Thai overseas investment

New Approach to Granting Investment Incentives 6 Activity-based Incentives Classified incentive based on the Importance of activities Merit-based Incentives 1. Competitiveness Enhancement 2. Decentralization 3. Industrial Area Development Grant additional incentives to Encourage more investment/ expenditures that benefit the country or overall industry Exemption of import duty on machinery/ raw material and non-tax incentive

Activity-Based Incentives 7 A2: Activities in infrastructure for the country’s development, activities using advanced technology to create value added, with none or very few existing investments in Thailand A1: Knowledge-based activities, focusing on R&D and design to enhance the country’s competitiveness A3: High technology activities which are important to the country’s development, with a few investments already existing in Thailand A4: Activities with lower technology than A1-A3 but add value to domestic resources and strengthen supply chain B1/B2: Supporting industries that do not use high technology but are still important to value chain

Other special policies 8 1.Industrial development in border provinces in Southern Thailand 2.Investment in special economic zones

Phase 1 Phase 2 1)Tak 2)Mukdah an 3)Sakeaw 4)Trat 5)Songkla 1)Tak 2)Mukdah an 3)Sakeaw 4)Trat 5)Songkla 1)Chiangrai 2)Nongkai 3)Nakhonpan om 4)Kanchanab uri 5)Naratiwas 1)Chiangrai 2)Nongkai 3)Nakhonpan om 4)Kanchanab uri 5)Naratiwas Special Economic Zone in Thailand Myanmar Laos Vietnam Cambodia Vietnam

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