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Thailand A Base for Doing Business in Asia

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BOI-Promoted Foreign Companies can Own Land for Residential and Business Purposes ... The BOI Unit for Industrial Linkage Development (the BUILD Program) ... – PowerPoint PPT presentation

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Title: Thailand A Base for Doing Business in Asia


1
Thailand A Base for Doing Business in Asia
  • Presentation by
  • The Ministry of Foreign Affairs
  • Royal Thai Government

2
Rapid Growth Slows Down
  • Fastest Growing Economy in the World From
    1985-1994 Average Per Capita GDP Growth of 8.2
  • Double-Digit Export Growth for Years
  • Rapid Industrialisation and Growth of Supporting
    Industries
  • Strong Fiscal Policy Foreign Reserves

3
Economic and Social Fundamentals
  • Stable Macro-Economic Environment
  • Cost-Effective Labour Force and Abundant Natural
    Resources
  • Strategic Location at the Heart of Southeast Asia
  • Favourable Approach to Foreign Investment
  • Social Stability, Strong Emphasis on Personal
    Freedoms

4
What Went Wrong? Major Economic Challenges
  • 1996 - A Year of Warning Signals
  • Export Stagnation
  • Economic Growth Slowdown
  • Rising Current Account Deficit
  • Stock Market Melt-Down
  • 1997 - The Situation Worsens
  • Stock Market Continues to Fall
  • Baht Floated on July 2
  • Non-Performing Loans to Unsustainable Levels
  • 58 Finance Companies Suspended
  • IMF-Led Rescue Package on August 20

5
At the Crossroads
  • Two Key Challenges Converge
  • Short-Term Loss of Confidence in the Financial
    Sector
  • Longer-Term Deterioration of Competitiveness in
    the Real Sector
  • Regional Economies in Turmoil
  • First the Baht, the Peso, Rupiah, Ringget, etc.
  • IMF assists Philippines, Thailand, Indonesia
  • On the Domestic Front
  • Shortage of Financing, Infrastructure, Confidence
  • Inadequate Investments in People and Technology
  • IMF Macro-economic Management

6
Lessons Learned from the Crisis
  • Need for Effective and Transparent Regulatory
    Frameworks and Public Sector Accountability
  • Importance of a Strong, Sound Financial System
  • Need for Better Corporate Governance
  • Necessity of Human Resource Development and
    Technology Upgrading

7
A Comprehensive 5-Point Program to Recovery
  • Macro-economic Stability and Growth
  • Financial Sector Reforms
  • Industrial and Agricultural Restructuring
  • Political and Civil Service Reforms
  • Social and Environmental Programmes

8
Right Time for Investment
  • Multiple Signs of Economic Recovery
  • Stable Macro-economic Situation
  • On the Rise Manufacturing, Investment,
    Consumption, and Exports
  • 3-4 Growth Forecast for 1999
  • Increasingly Competitive Labour Force, with Wages
    at Pre-crisis Levels
  • BOI Incentives

9
Improving the Business Climate - 1
  • Promotion of Supporting Industries in a Wide
    Range of Areas
  • Supporting Industrial Upgrading via Additional
    Import Duty Exemptions
  • Actively Promoting Thailand as a Base for
    Regional Trading and Investment
  • Establishing the One-Stop Service Centre for
    Visas and Work Permits

10
Improving the Business Climate - 2
  • BOI-Promoted Foreign Companies can Own Land for
    Residential and Business Purposes
  • Facilitating Permanent Residence in Thailand for
    Foreign Investors
  • Specific Measures in Response to the Crisis
  • Reducing Import Duty Guarantee Requirements for
    Exporters
  • Greater Assistance for Expansion Projects
  • Flexibility in Responding to the Needs of
    Investors and to National Interests

11
Investment Promotion Zones
12
Top Incentives for Investments in Zone 3 - Away
from Bangkok
  • 100 Import Duty Exemption on Machinery
  • 100 Corporate Income Tax Exemption for 8 Years,
    50 Reduction for 5 More Years
  • Import Duty Exemption on Raw and Essential
    Materials for Projects Exporting 30 of Total
    Sales
  • 5 year 75 Reduction on Import Duty of Raw and
    Essential Materials Used in Production for
    Domestic Sales, Subject to Annual Renewal
  • Double Deduction on Taxable Income of Water,
    Electricity, and Transport Costs for 10 Years
    from Date of First Sale
  • Deduction from Net Profits of 25 of Costs of
    Project's Infrastructure

13
Policies to Promote Export Industries
  • The Board of Investment Offers
  • Exemption of Import Duties on Raw and Essential
    Materials Imported Specifically for Use in
    Products for Export
  • Exemption of Import Duties on Products Imported
    for Re-export
  • Exemption of Export Duties
  • Permission to Deduct From Assessable Income for
    Corporate Income Tax an Amount Equal to 5 of the
    Increased Income Over the Previous Year,
    Exclusive of Insurance and Freight Charges
  • Classification as Priority Activity - Maximum
    Benefits, Regardless of Location

14
Short-term Measures Incentive Enhancement
  • Relaxed Location Requirements
  • Further Tax Exemptions
  • Import Duty Exemptions on Raw Materials for
    Non-BOI Promoted Projects (if used for export
    production)
  • Better Terms for Foreign Shareholdings

15
The Business-Related Services of the Board of
Investment
  • Strong BOI Regional and Overseas Offices
  • The BOI Unit for Industrial Linkage Development
    (the BUILD Program)
  • Information on Opportunities in the Greater
    Mekong Sub-region and Beyond
  • The One Stop Service Centre for Obtaining
    Licenses, Work Permits, and Other Required
    Documentation
  • Investment Information and Matchmaking Centre
  • Information on Investment Opportunities and
    Policy Developments
  • BOI FAIR 2000

16
What are the Key Investment Opportunities?
  • Agro-industry Higher Value-added Food Processing
    and biotechnology
  • Automotive Assembly, Parts, and Export
  • Electronics Integrated Circuits, Hard-disk
    Drives, Telecommunications Products
  • Privatisation Opportunities Communications,
    Energy, Banking and Finance, Transportation, Water

17
Thailands Economic and Business Strengths
  • Resilient, Diversified Economy
  • Deepening and Broadening of Support Industries
  • Abundant Natural Resources
  • Large and Highly-Productive Labour Force
  • Large and Expanding Domestic Market of 62 Million
    with Significant Income
  • Strategic Location at the Centre of Southeast
    Asia and the Greater Mekong Sub-region
  • Support for Foreign Investors

18
Thailands Policy Strengths
  • IMF-guided Economic Policy
  • Consensus on Economic Restructuring
  • Favourable Approach to the Private Sector
    Government As Supporter Not Regulator
  • Positive Attitudes to Foreign Investment, and to
    Internationalisation and Integration
  • Steady Moves to Liberalisation and Privatisation

19
Thailands Social Strengths
  • The Monarchy Provides the Thai People with a
    Special Sense of Unity and Identity
  • The Buddhist Religion Promotes Understanding and
    a Peaceful Approach
  • Strong Traditions of Personal and Economic
    Freedom
  • Respect for Freedom of the Press
  • Comprehensive Social and Recreational Resources
    and International Schools

20
In Conclusion .... An Invitation to do Business
in Thailand
  • Thailands Economy is Already Rebounding
  • Working with International Experts to Restructure
    the Economy for Sustainable Growth
  • Strengthening the Public-Private Partnership
  • Private Sector Opportunities are Real and the
    Need for Foreign Investment and Technical
    Expertise is Great
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