1. 1 Duangjai Asawachintachit Deputy Secretary General Thailand Board of Investment (BOI) 5 July 2012 Thailand’s Investment Trends and Policies

2. 2 1.FDI in Thailand 2. Policies Related to Sustainable Development 3.Thai Investment Overseas Topics

3. 3 1. FDI in Thailand

4. 4 Value of FDI Net Flow to Thailand by Sector (2005-2011) Source: Bank of Thailand

5. 5 Ratio of FDI Inflow into Thailand to World FDI Source: UNCTAD

6. 6 Ratio of FDI inflow into Thailand to FDI inflow into ASEAN Source: UNCTAD

7. 7 NET FOREIGN APPLICATIONS SUBMITTED (2003 – MAY 2012) Source: BOI, as of 13 June 2012

8. 8 NET FOREIGN APPLICATIONS SUBMITTED 2003-2012 (JAN-MAY) BY SECTOR Source: BOI, as of June 27, 2012 249 307 499 308 502 298 351 236 397 206

9. 9 BOI INVESTMENT FOREIGN APPLICATION 2003-2012 (JAN-MAY) BY SECTOR SectorProjectsBaht Billion Agriculture 593178 Minerals and Ceramics 233376 Light Industry 627107 Auto and Metal Processing 2,311816 Electrical and Electronics 1,589737 Petrochemicals, Chemicals 1,020459 Services and Infrastructure 1,653677 TOTAL 8,0263,351 Source: BOI, as of June 27, 2012

10. 10 236 396 200 Total FDI 25 50 104 194 Japan 100 Hong Kong 13 11 Singapore 25 5 Korea 8 11 28 Billion baht 2010 2011 300 +87% +68% 4 China Taiwan 8 4 Major Investors in Thailand is mostly from Asia Investment Applications Submitted to BOI ที่มา : BOI สำนักความร่วมมือการลงทุน ต่างประเทศ

11. 11 Policies Related to Sustainable Development

12. 12 BOI’s Vision Your Partner for Sustainable Investment

13. 13 Application submission deadline: December 31, 2012 1. Special incentives for 3 groups of targeted activities 1) Manufacture of eco-friendly material and product, e.g. bioplastics 2) Energy saving and alternative energy 3) High technology activities e.g. industrial electronics, electronic parts for vehicles, biotech, nano-tech, functional fiber etc. Incentives Exemption of import duties on machinery 8-year exemption of corporate income tax with no cap 5-year 50% reduction of corporate income tax on net profit 10-year double deduction of transportation, electricity and water supply costs deduction from net profit of 25% of investment in infrastructure installation and construction costs in addition to normal capital depreciation Policies for 2010-2012 “Investment for Sustainable Development”

14. 2) Measure to promote energy conservation and alternative-energy utilization Incentives  Import duty exemption on machinery.  3-year corporate income tax exemption on the revenue of existing projects, accounting for 70% of the investment under this measure excluding cost of land and working capital. Eligibility  BOI-promoted projects of which tax holidays have expired or those which are not granted tax holidays  non-BOI projects Conditions  Investment must be completed within 3 years after the issuance of the investment promotion certificate.  Energy consumption must be reduced to the level determined or alternative energy must be utilized in the ration determined. Policies for 2010-2012 “Investment for Sustainable Development”

15. 3) Measure to promote the reduction of environmental impacts Incentives  Import duty exemption on machinery.  8-year corporate income tax exemption on the revenue of existing projects, accounting for 100% of the investment under this measure excluding cost of land and working capital. Eligibility  BOI-promoted projects of which tax holidays have expired or those which are not granted tax holidays  non-BOI projects Conditions  Investment must be completed within 3 years after the issuance of the investment promotion certificate.  Impacts on the environment must be reduced according to the criteria determined. Policies for 2010-2012 “Investment for Sustainable Development”

16. 16 STI R&D S&T Dev Fund Sci/Tech Funding Adv Tech Training Additional Incentive Package for STI: Skills Technology Innovation

17. 17 External factors affecting investment in the next 5 years Shift in global economic power & economic integration esp. AEC Fragile global economy Major global crisis (energy, food, climate change, aging and epidemics) Faster technology development, shorter product cycles Continual changes in global business formation Fierce competition in attracting FDI 17

18. 18 S&T development Highly dependent economy High income disparity Environmental and social responsibility Uncertainty of future heavy industries location Water and power supply for industrial expansion Labor quantity and quality sufficiency Fiscal pressure on tax incentives Political stability Domestic factors affecting investment in the next 5 years 18

19. BOI’s Future Policy Directions 1.Strengthening country’s foundations that lead to long-term industrial development 2.Creating economy-society-environment balance as well as agriculture- industry-service mix which leads to sustainable development 3.Promoting diversified business and Global Niche using country’s natural advantages 4.Promoting new growth industries such as eco-friendly products, alternative energy, biotechnology, wellness products and services etc. 5.Strengthening Thai companies’ competitiveness and business opportunities 6.Continued decentralization 7.Stronger emphasis on Thai investment overseas to enhance competitiveness

20. 20 3. Thai Overseas Investment

21. 21 Thailand Overseas Investment The First Time that TOI Surpassed FDI ที่มา : ธนาคารแห่งประเทศไทย

22. 22 Snapshot of Target Countries and Sectors for Thailand Overseas Investment Myanmar Resource-seeking - Natural gas - Agriculture - Food processing Vietnam Labor-seeking - Garment - Textile - Footwear - Furniture Indonesia Resource-seeking - Coal Market-seeking - Consumer products

23. 23 Examples of Thailand Overseas Investment Projects Company NameProject (Country) PTTEPPetroleum Exploration and Production (Myanmar, Vietnam, Cambodia, Indonesia, Oman, Algeria, Egypt, Bahrain, Australia and New Zealand) BANPUCoal mining (Indonesia, China, Mongolia, Australia) MITR PHOLSugar, Plantation, Renewable Energy, Paper (China, Laos, Australia) MINORHotel & Restaurants (Vietnam, Maldives, Sri Lanka, Australia) THAI UNION GROUPFood (MW Brands Holding—France) SAHAVIRIYA STEELSteel mill (UK) THAI BEVERAGEHotel (Australia) LANDMARKHotel (UK) ITAL-THAIConstruction (India, Indonesia, Vietnam, Malaysia, Bangladesh, Madagascar)

24. 24  Reduce overseas investment risks  Build good relationship with target recipient countries  Use fiscal and financial measures to promote TOI  Prepare Thai entrepreneurs for overseas investment  Facilitate and solve investor’s problems Measures aimed at promoting Thai investment Overseas Approved by the Board of Investment on 13 September 2010

25. 25 1. Information Provision  Investment guides/handbooks on target countries e.g. ASEAN  Target sector opportunity study e.g. agriculture, textiles, auto parts, tourism, construction  Investment opportunities seminars  Website  Consultancy 2. Business Development Missions to Target Countries 3. Entrepreneur capacity building - Thailand Overseas Investment Training for Entrepreneurs Current BOI Activities/Measures

26. 26 THANK YOU WWW.BOI.GO.TH