Current%20Situation%20and%20BOI%20Promotion%20Policy%20of - PowerPoint PPT Presentation

View by Category
About This Presentation
Title:

Current%20Situation%20and%20BOI%20Promotion%20Policy%20of

Description:

Current Situation and BOI Promotion Policy of E&E Industry in Thailand Mr. Seksan Ruangwohan Director Investment Promotion Bureau 3 Thailand Board of Investment – PowerPoint PPT presentation

Number of Views:73
Avg rating:3.0/5.0
Slides: 60
Provided by: ora102
Learn more at: http://intranet.boi.go.th
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Current%20Situation%20and%20BOI%20Promotion%20Policy%20of


1
Current Situation and BOI Promotion Policy of
EE Industry in Thailand
Mr. Seksan Ruangwohan
Director
Investment Promotion Bureau 3 Thailand Board of
Investment May 2012
1
2
Presentation Outline
  • Current World Economy and Current Situation of
    EE Industry in Thailand
  • Why Thailand
  • BOI EE Investment Policies
  • Investment Promotion Policy for Sustainable
    Development (Hi-Tech Industry)
  • New Measures for affected by flood projects
  • BOI and BOI Services
  • Investment Opportunities

3
Current World Economics and Current Situation of
EE Industry in Thailand
4
World Economy Status
Global GDP Growth 2011, 2012 (p), 2013 (p)
GDP GROWTH () 2011 2012 (p) 2013 (p)
World 3.9 3.5 4.1
Advanced economies 1.6 1.4 2.0
Emerging and developing economies 6.2 5.7 6.0
GDP GROWTH () 2011 2012 (p) 2013 (p)
United States 1.7 2.1 2.4
EU 1.6 0.0 1.3
Japan -0.7 2.0 1.7
Brazil 2.7 3.0 4.1
Russia 4.3 4.0 3.9
India 7.2 6.9 7.3
China 9.2 7.5 8.8
ASEAN-5 4.5 5.4 6.2
Source IMF, April 2012 NESDB, January 2012
FPO, March 2012
5
Source IMF, April 2012
6
Overall Thailand GDP Growth
GDP growth from 1999 - 2011
QGDP 2001 Q1, 2012
Q2,11
Q3,11
Q1,12
Q4,11
Q2,12
1999
2001
2003
2005
2007
2009
2011
Adapted from NESDB (2012) and Index Mundi (2012)
7
Foreign Direct Investment in Thailand
45.4
8
Quarterly Foreign Direct Investment in Thailand
according to BOI applications
50.3
9
World Electrical and Electronics industrial
status exports and imports of the ASEAN-5
Exporting amount of the ASEAN-5
Importing amount of the ASEAN-5
Source Global Trade Atlas, April 2012 IEE
10
World Electrical and Electronics industrial
status Top 15 country based on the export in 2011
RANKING COUNTRY EXPORTING VALUE in 2011 (Million US Dollars)
1 China 669,618
2 Hong Kong 244,259
3 United States 218,501
4 Germany 181,799
5 Japan 170,165
6 Singapore 152,631
7 South Korea 137,265
8 Netherlands 123,982
9 Taiwan 114,361
10 Mexico 93,879
11 Malaysia 80,358
12 France 55,753
13 Thailand 53,219
14 Italy 45,897
15 Czech Republic 43,291
In 2011, Thailand ranked13 in the WORLD for export in EE market

The 3th country in ASEAN

Second to Singapore (6th) and Malaysia (11th)
Source Global Trade Atlas, April 2012
11
Thailand EE Export Import 2002-2012
Source Customs Department EEI
12
Domestic Sale
Total EE Export
Thousand
Source IEE, Thailand, April, 2012
13
Top EE Export
Top EE Import
Electrical Products 1. Air-conditioner 2. Circuit
breaker, switches, plugs 3. VDO camera 4.
Refrigerator 5. Color TV
Electrical Products 1. Circuit breakers, switches,
plugs 2. VDO tape, CD, DVD 3. TV parts,
components 4. Wiring harness 5. VDO cameras
Electronics 1. Computer parts 2. IC 3. PCB,
PCBA 4. Diode, transistors, semiconductors. 5.
Equipments used for telephone or telegraphs
  • Electronics
  • IC
  • Computer parts
  • Mobile phones
  • Computers, notebook, Palm
  • Printed circuit

Source IEE, Thailand
14
Thailands Markets for EE Export In January and
February 2012
Markets for Electrical Appliance
Markets for Electronics
OVERALL
ASEAN 17
JAPAN 14
USA 12
EU 11
ME 9
CHINA 8
OTHERs 27
CHINA 19
ASEAN 16
USA 16
EU 13
JAPAN 8
ME 1
OTHERs 27
Source IEE, Thailand, April, 2012
15
Projection for EE Industry
Export projection in 2012 Export projection in 2012 Export projection in 2012
Product Exporting value (Thousand Million USD) Growth
Electrical Appliance 21.6 -2
Electronics 28.3 -8
EE 49.9 -5
Source IEE, Thailand, April, 2012
16
Thailand EE Production Index
Electrical Appliance production index
Electronics production index
Jan Feb 2012 17.9 YoY
Jan Feb 2012 28.9 YoY
Jan
Mar
May
Jun
Aug
Oct
Dec
Jan
Mar
May
Jun
Aug
Oct
Dec
Source IEE, April, 2012
17
Net BOI Application for EE Projects
18
Current EE export, production index, and BOI net
application investment Status
GROWTH APRL -gt MAY
BOI INVESTMENT 32
EE EXPORT 20
PI 13
19
WHY THAILAND
20
Importance of the Manufacturing Sector
Share Export Value by Sector
Share GDP by Sector
21
We Have Something to Boast About
  • Ease of Doing Business - 17 in the world, 3 in
    Asia
  • Most Attractive FDI Locations - 11 in the World
  • Most Efficient in Public Sector - 3 in the Asia
  • Corporate Governance - 4 in the Asia
  • Thailand is the world largest producer of HDDs

Thailand in the leading Rank In Asia In the World
Overall Business Environment 1 17
Getting Electricity 1 9
Dealing with Construction 1 14
Trading Across Border 1 17
Enforcing Contracts 1 24
Registering Property 1 28
Protecting investors 2 13
Source World Bank Study, 2011 / World investment
Prospects Survey, 2010-2012 / JBIC Survey Result,
2010
22
Infrastructure
  • 7 international airports
  • In 2011, 66 million passengers, 1.1 million tons
    of cargoes
  • Suvarnabhumi Airport Capacity 45 million
    passengers and 3 million tons of cargo per year
  • Over 70,000 km Highway Systems
  • 6 Deep Sea Ports 2 International River Ports
  • Capacity over 10 million TEUs
  • Laem Chabang Sea Port Capacity 10.8 million
    TEUs, with additional 8 million TEUs expansion
  • e-Customs facilities
  • 4,346 km Rail links to Malaysia Singapore
  • 60 Industrial Estates

23
2011 Cost of Living Survey
Cities Country Rankings Rankings Rankings Rankings
Cities Country March 2008 March 2009 March 2010 March 2011
Tokyo Japan 2 1 2 2
Osaka Japan 11 2 6 6
Hong Kong Hong Kong 6 5 8 9
Singapore Singapore 13 10 11 8
Beijing China 20 9 16 20
Shanghai China 24 12 25 21
Taipei Taiwan 63 61 78 52
Jakarta Indonesia 82 106 94 69
Bangkok Thailand 105 98 121 88
Kuala Lumpur Malaysia 106 96 138 124
Hanoi Vietnam 91 58 121 136
Source World Cost of Living Survey 2011, Mercer
Human Resource Consulting as of Aug 29, 2011
24
Efficient Logistics Network Seaport - Land
Transport Airport

Suvarnabhumi International Airport
Donmuang International Airport
Laem Chabang Seaport
Map Ta Put Deep Seaport
(24)
25
Free Trade Agreement
  • Entering into force
  • AFTA
  • AEC in 2015

Note ASEAN are Thailand, Malaysia, Indonesia,
the Philippines, Singapore and Brunei only.
Source BOI International Affairs
www.thaifta.com, as of Feb 05, 2010
26
Second Stimulus Package (2010-2012)
The cabinet approved an investment framework
featuring 618 projects worth 35.74 billion USD
for the second stimulus package, covering
2010-2012.
Projects Budget (Billion USD)
7) Education 3.45
8) Peoples Welfare 0.21
9) Science Technology 0.30
10) Environment 0.13
11) Tourism Development 0.21
12) Creative Economy 0.44
13) Community Development 2.29
Projects Budget (Billion USD)
1) Irrigation 5.95
2) Transportation Logistics 14.27
3) Energy 5.14
4) Telecoms 3.87
5) Fundamental Tourism Infrastructure 0.50
6) Health Care 2.48
Source Royal Thai Government, PDMO as of 2010
27
  • BOI EE Investment Policies

28
Basic BOI Privileges and Measures
  • Non-Tax Incentives
  • Land ownership rights for foreign investors
  • Permission to bring in foreign experts and
    technicians
  • Work permit visa facilitation
  • One-Stop-Shop Visas Work Permits are issued in
    3 hours
  • Tax Incentives
  • Import duty reductions or exemptions on machinery
    and raw materials
  • Corporate income tax holidays up to 8 years
  • Additional 50 reductions of corporate income tax
    for 5 years
  • Double deduction of public utility costs
  • Deductions for infrastructure construction/install
    ation costs

29
Corporate Income Tax Exemption
BOI Zoning and EE Basic Incentives
  • Zone-Based
  • Incentives
  • Zone 1
  • Zone 2
  • Zone 3

Lower incentives
Higher incentives
Zone Inside Industrial Estate Outside Industrial Estate
Zone 1 5 Years 5 Years
Zone 2 7 Years 6 Years
Zone 3 8 Years 8 Years
Laem Chabang IE and Rayong IE receive 8 years
30
Objectives of EE Investment Policies
  • To enhance competitiveness of EE industry
  • To promote investments along the entire value
    chain
  • To attract high value long-term investments
  • To encourage development of Skills, Technology
    and Innovation (STI)

31
EE Investment Incentives
Investment projects are categorized as follows
  • General Investment Projects
  • Priority Activity Projects
  • Special Priority Activity Projects
  • High Value Long-term EE Investment Projects
  • Existing Projects

32
General Investment Projects (1/2)
  • General investment projects
  • Incentives Basic Incentives
  • STI Incentive (Optional)
  • Additional tax holidays
  • No limit on tax
    exemptions

33
Additional STI Incentives (Optional)
  • Investment and Expenditures on
  • Research and development or design
  • Advanced technology training
  • Funding of educational and research institutes
  • Donation to TechHRD Fund

of First Three Years Sales Additional tax holidays
1 or max. 150 million baht 1 year
2 or max. 300 million baht 2 years
3 or max. 450 million baht 3 years
Note Corporate income tax holiday may not exceed
eight years.
34
General Investment Projects (2/2)
  • Exemption from import tariffs on machinery
    without time limit
  • For ICs, HDDs and parts, Material for Micro
    Electronics (Wafer or Thin Film Technology),
    upgraded existing machinery can be utilized in
    new investment projects

35
Priority Activity Projects
Priority Activity Projects
Priority activity projects Manufacture
of Semiconductor , HDD and parts, Telecom
equipments and parts, Medical electronic parts,
Agritronics products and parts, Industrial
automation equipments, Automotive electronic
parts, Flexible Printed Circuit and multi-layer
PCB Incentives 8 years corporate income
tax exemption
regardless of location
STI Incentive (Optional) No cap on
tax exemptions
36
Special Priority Activity Projects
Special Priority Activity Projects
Special priority activity projects ?
Manufacture of Solar cell and its raw materials,
Media/Platter for HDD, Flat panel display,
Wafers and thin film technology

(production process must be approved by the BOI)
? Electronic Design, Software Incentives
8 years corporate income tax exemption

without cap (regardless of location)
37
Incentives for Software Development
Software Group
1. Enterprise Software (transaction processing,
business solutions) 2. Embedded Software (mobile
phones, microchips) 3. Digital content, including
  • Animation
  • Cartoons and characters
  • Computer-generated imagery
  • Web-based applications
  • Cloud Computing
  • Interactive applications
  • Games
  • Wireless location based service content
  • Visual effects
  • Multimedia video conferencing applications
  • E-learning content via broadband and multimedia

Incentives Duty-free machinery 8 years
income tax exemption without cap
38
Specific Software Procedure
1. Modeling 2. Requirement Analysis 3.
Design 4. Implementation 5. Program and System
Testing 6. Deployment 7. Configuration and Change
Management 8. Professional Training
39
Privileges for high value long-term
EE Investment projects (15,000 M ?)

Extended duration of corporate income tax holidays
Companies may choose to consolidate into one
project or keep as separate projects
Project

1
Project
2
Project
Final Project
5 Yrs

8 Yrs
Duration of Privileges (yrs)
62
62
40
Compulsory STI expenditures for
high value long-term EE investments
All high value long-term investment projects must
meet the following STI criteria during operation
of final project
STI requirements
Zone 1
Zone 2
Zone 3
  • 2
  • 1.5 of total 1st
  • 1

of total 1st
of total 1st
  • RD

3-year sales or at least 500 million baht
whichever is less
Advanced Technology Training
3-year sales or at least 400 million baht
whichever is less
3-year sales or at least 300 million Baht
whichever is less
  • Funding
  • educational/

Required total STI expenditures are calculated
from the first 3-year sales of the final
project and previous projects combined.
research institutions
41
Privileges for Higher value long-term
EE Investment projects (30,000 M ?)

Extended duration of corporate income tax holidays
Companies may choose to consolidate into one
project or keep as separate projects

Project
1
Project
2
Project
Final Project
8 Yrs

8 Yrs
Duration of Privileges (yrs)
62
62
42
Incentives for Existing projects
  • Existing projects can import machinery and
    equipment with duty exemption in order to enhance
    efficiency and technological capabilities

43
Investment Promotion Policy for Sustainable
Development
44
Policy to Support Hi-Tech Industry
  • Tax Incentives
  • Exemption of import Duties on machinery
  • Corporate Tax exemption 8 years with No Cap
  • 50 Reduction of corporate income tax for 5 years
    from the expiry date
  • Double deduction of public utility costs for 10
    years
  • Deduction from net profit of 25 of the
    investment in infrastructure installation and
    construction cost in addition to normal capital
    depreciation for 10 years

45
Policy to Support Hi-Tech Industry
  • Eligibility
  • Any Location except Bangkok
  • Applicable to designated activities only
  • Application submission deadline Dec 31, 2012

46
Policy to Support Hi-Tech Industry
  • Hi-Tech EE Products
  • 5.4 Telecom Products, Industrial Automation
    Equipment
  • 5.5 Semiconductor, Solar Cell, HDD SSD Parts,
    Telecom Parts, Flat Panel Display, Automotive
    Electronic Parts, Agritronic Parts, Medical
    Electronic Parts
  • 5.6 Material for Micro Electronics
  • 5.7 Electronic Design

47
New Measures for affected by flood projects
48
New measure for affected by flood projects (2012)
  • Existing projects with existing capacity
    corporate tax exemption of the investment
  • Existing projects with existing non-capacity
    corporate tax exemption of the investment

Investing in the same affected province Treated as if new project with 8 years corporate tax exemption (150 Cap of new investment Existing Cap)
Investing in another province 8 years corporate tax exemption (100 Cap of new investment Existing Cap)
Existing Corp Tax exemption years Additional Corp Tax exemption years
Less than or equals to 5 years 3 additional years tax exemption
More than 5 years 6 years 2 additional years tax exemption 50 tax deduction for 2 years
More than 6 years 7 years 1 additional year Corp Tax exemption 50 tax deduction for 4 years
More than 7 years 8 years 50 tax deduction for 5 years
49
New measure for affected by flood projects (2012)
  • New projects to be invested in the affected by
    flood provinces
  • Exemption from importing duty on new and less
    than 10 year-old machineries
  • Projects eligible for sustainable development
    still receives the same incentives
  • Application submission deadline is December 31,
    2012

Investing province Normal Incentives New Incentives
Industrial areas in Pathumthani 5 years Corp tax exemption with 100 Cap 8 years Corp tax exemption with 150 Cap
Industrial areas in Phra Nakhon Si Ayutthaya 7 years Corp tax exemption with 100 Cap 8 years Corp tax exemption with 150 Cap 3 years 50 Corp tax deduction
50
  • BOI BOI Services

51
Liberal Investment Policy
  • No foreign equity restrictions in manufacturing
    sectors
  • 100 foreign ownership possible in many services
  • No restrictions on foreign currency remittances
  • No export requirement
  • No local content requirement

52
BOI Support Services
Sectional divisions to guide you through the
process
53
  • Staff from relevant agencies will also be
    available for consultations on a range of topics.
  • Help investors with applications to make sure
    investors know what is required to
  • Register a company
  • Apply for investment promotion privileges
  • Obtain a foreign business license
  • Tax registration
  • Complete an environmental impact assessment
  • Obtain utilities, etc.
  • OSOS staff will also accept applications for
    things such as corporate name registration,
    corporate tax ID numbers, VAT registration,
    foreign business licenses, investment promotion
    incentives, etc.

54
Represented Agencies at OSOS
Ministry of Public Health Food and Drug
Administration Ministry of Tourism and
Sports Ministry of Transport
Ministry of Natural Resources and
Environment Natural Resource and Environment
Planning and Policy Office
Ministry of Commerce Business Development
Department
Ministry of Labor and Social Welfare Social
Security Office Labor Welfare and Protection
Department
Ministry of Finance Revenue Department Customs
Department Excise Department
Investor
Ministry of Interior Department of
Lands Department of Public Works and Town and
Country Planning Provincial Electricity
Authority Metropolitan Waterworks
Authority Provincial Waterworks Authority
Ministry of Energy Energy Business Dept. Mineral
Fuels Dept.
Ministry of Industry Office of the Board of
Investment Department of Industrial
Work Department of Mining and Primary
Industries Industrial Estate Authority of
Thailand
55
One Start One Stop Investment Center 18th Floor,
Chamchuri Square Building 319 Phayathai Road,
Pathumwan Bangkok 10330, Thailand Tel 66(0)2 209
1100 Email osos_at_boi.go.th
56
Investment Opportunities
57
HIGH
Opportunity in the Missing Links
Telecom PC CE
IC Design
Wafer
Components
Industrial Value-Added
IC
PCB
LOW
Downstream
Upstream
Midstream
Industries
58
Targeted EE Products
Products Countries
EMS USA, Canada, Singapore, Taiwan, China, Hong Kong, Germany, Sweden, Belgium, Finland, France, Hungary, Norway, Switzerland, UK, Netherlands, Luxembourg
Solar Cell Japan, USA, Germany, UK, Taiwan
Embedded Software Japan, USA, Europe
IC Electronic Design USA, Taiwan
Media/Substrate Japan, USA
Wafer USA
59
Thank you
About PowerShow.com