1. Thailand Board of Investment Total Inv. 8544,164 840 6,151 375 2,863 Total For. 6753,359560 4,154263 2,358 100% For. 3201,900291 2,391 118 1,410 By Country Japan275 1,332 251 1,672128 889 U.S.A. 48 420 35 196 18 560 Taiwan 42 103 55 964 30 46 Hong Kong 17 202 13 268 8 198 Singapore 62 305 40 305 21 110 E.U. 84 567 66 321 31 464 2001 2002 2003 (Jan.-May) Number Value of Number Value of Number Value of of Investment of Investment of Investment Projects (mil. US$) Projects (mil. US$) 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 Board of Investment Net Applications by Country

2. Thailand Board of Investment Major Investors in 2002 Project Approvals Investment Value CountryRankCountryRank Japan1 1 Europe2 2 Taiwan3Singapore3 4USA4 5UK5

3. Thailand Board of Investment Investment by Sector (2002) SectorProjects (Net Apps) Value (Bt. Bn.) Agriculture17182.3 Minerals and Ceramics13 2.2 Light Industry7115.1 Metal Processing19358.1 Electrical & Electronics15935.3 Chemicals8831.0 Services14540.4

4. Thailand Board of Investment BOI Project Approvals For India (1998-2003)  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

5. Thailand Board of Investment BOI Project Approvals For India (1998-2003)

6. Thailand Board of Investment Liberal Investment Regime  No Export Requirements  No Foreign Equity Restrictions in Manufacturing Sectors  No Local-Content Requirements  No Location Requirement in All But 6 Activities

7. Thailand Board of Investment The Board of Investment Basic Incentives and Measures The Board of Investment Basic Incentives and Measures  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

8. Thailand Board of Investment The Board of Investment Basic Incentives and Measures 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

9. Thailand Board of Investment Zones of Opportunity

10. Thailand Board of Investment Import Duty on Machinery Zone 1Reduce 50% 2 3Exempt

11. Thailand Board of Investment Import Duty on Raw Materials Import Duty on Raw Materials Zone 11 Year Exemption 2 35 Year Exemption

12. Thailand Board of Investment Corporate Income Tax Exemption Zone Inside Industrial Estate Outside Industrial Estate Zone 13 YearsNot Exempt Zone 25 Years3 Years Zone 38 Years The Amount of a Project’s Corporate Income Tax Holiday is Capped at 100% of Investment Capital

13. Thailand Board of Investment Additional Zone 3 Incentives 40 provinces Inside Industrial Estate Outside Industrial 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

14. Thailand Board of Investment Additional Zone 3 Incentives 18 least-developed provinces Inside Industrial Estate Outside Industrial 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

15. Thailand Board of Investment Criteria and Conditions 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)

16. Thailand Board of Investment Investment Policy Reform intensive Old Model New Model Capital intensive & labor intensive Skill & Knowledge Production base Integrated International business center Tax incentives provider Facilitation & investment services provider ” Standard package Customization to promote SMEs and community enterprises Large Corporations,

17. Thailand Board of Investment New Investment Promotion Focus  3 Dimensions  3 Regions  7 Strategies  5 Target Industries

18. Thailand Board of Investment 3 Dimensions  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

19. Thailand Board of Investment Developing Industrial Clusters  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 materials

20. Thailand Board of Investment Changing Role of the BOI Provide Tax Incentives Provide Value-Added Investment Services Solve Problems and Enhance Investment Environment Proactive Marketing Set up Investment Network Enhance Capabilities of Thai Community Enterprises Market Community Enterprises Develop Knowledge About International Investment Law Promotion Investment Administration Develop Database System Increase Training and Skills Development

21. Thailand Board of Investment 5 Target Industries Agro Industry   Food Processing  Rubber Products  Bio - Technology Fashion Industry   Jewelry  Leather Products  Garments Automotive   Pick-ups  Major Auto Parts High Value - Added Services   Long Stay  ROH  Film Industry   Printing Industry  MICE  Call Center ICT incl. Electronics   Fiber Optics  Telecom   IC Design

22. Thailand Board of Investment Target Industries  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

23. Thailand Board of Investment Thai Automotive Industry  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 market potential 35% domestic sales growth (H1/03) 39% export growth (Jan.-May)

24. Thailand Board of Investment New Automotive Industry Policy  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.

25. 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 Electronic and Electrical Industry in Thailand

26. Thailand Board of Investment  HDD & HDD Parts IBM, Fujitsu, Western Digital, Nidec, Seagate, Read-Rite, Hoya, Minebea  Printers Cal-Comp, Canon, Oki  PCBAs Celestica, Koshin, ACT, SCI Systems, SVI, Hana, Pemstar, PCTT, Mektec  White Goods (Air Conditioner, Refrigerator) Daikin, Fujitsu General, Mitsubishi, Sharp, Toshiba, Sanyo Current Key Players in Thailand ’ s E&E Industry

27. Thailand Board of Investment Promotion of Value Chain in Electronics Industry  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

28. 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 High Value Services

29. Thailand Board of Investment Regional Operating Headquarters (ROH)  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

30. Thailand Board of InvestmentROH  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 1 st 2 years, instead of on sliding scale

31. Thailand Board of Investment Services of the BOI  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

32. Thailand Board of Investment 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 Since 2000, the BOI web site has been ranked as the Investment Promotion Agency website in the world by 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 BOI on the Internet http://www.boi.go.th