Ms. Ajarin Pattanapanchai

1
Thailand Growing Opportunities
Ms. Ajarin Pattanapanchai Deputy Secretary
General Thailand Board of Investment
(1)
2
Thailand in General
Region Southeast Asia Population 65 million
Area Total 514,000 km2 Coast Line 3,219
km Capital Bangkok Religions Buddhism
95 GDP per capita (2008) 4,080
Agriculture 11 Manufacturing 45
Services 44
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Thailands Global Economic Rankings

• 33rd biggest economy
• 31st biggest exporter
• 31st biggest earner from services and income
• 23rd largest surpluses
• 18th largest manufacturing output
• 36th largest services output
• 16th largest air travel
• 17th most tourist arrivals

Source The Economists Pocket World in Figures,
2010
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Strong Economics Fundamental
Economic Projections 2008 2009 2010
1) GDP growth (y-o-y) 2.5 -2.3 7-7.5
2) Export growth, FOB value (y-o-y) 15.9 -13.9 24.5-27.5
3) Import growth, CIF value (y-o-y) 26.5 -24.9 34.0-37.0
4) Trade account (billion US. dollar) 0.1 19.4 11.0-14.0
5) Current account (billion US. dollar) 1.6 20.9 11.0-14.0
6) Inflation (billion US. dollar) 5.5 -0.9 3.0-3.5
Source Bank of Thailand July Inflation Report,
as of July 28, 2010
5
Exports Imports, 2004-2010 (Jan-Jul)
Items 2004 2005 2006 2007 2008 2009 2010 (Jan-Jul)
Export (US million ) 96,503 110,937 129,720 153,865 177,775 152,502 108,631
Change (y-o-y) 20.60 15.00 16.90 18.60 15.50 -14.2 34.1
Import (US million) 94,034 118,175 128,772 139,958 179,223 133,796 103,193
Change (y-o-y) 25.33 25.70 9.0 8.70 28.10 -25.3 48.9
Source Ministry of Commerce, as of Aug 24, 2010
6
Top 10 Exports in 2007 2010 (Jan-Jul)
Unit US Billion
Items 2009 2010 (Jan-Jul) Growth ()
Computer and parts 16.02 10.78 32.3
Motor cars, parts, accessories 11.12 9.95 81.7
Precious stones and jewelry 9.76 6.34 11.5
Integrated circuits 6.44 4.51 37.5
Rubber 4.31 4.18 106.4
Refine fuels 5.43 3.73 40.0
Rubber products 4.49 3.55 52.5
Plastics resin 4.46 3.42 41.0
Chemical products 4.47 3.15 33.1
Iron, steel and their products 4.95 2.90 6.3
Others 80.98 56.13 27.9
Total 152.43 108.63 34.1
Source MOC, as of Aug 25, 10
7
Top 20 World Banks Ease of Doing Business
1 Singapore 11 Japan
2 New Zealand 12 Thailand
3 United States 23 Korea
4 Hong Kong 25 Malaysia
5 Denmark 47 Taiwan
6 United Kingdom 93 China
7 Canada 104 Vietnam
8 Australia 126 Philippines
9 Norway 135 Indonesia
10 Ireland 159 Laos PDR
Criteria
Starting a business
Hiring and firing workers
Enforcing contracts
Access to credit
Closing a business
Registering property
Dealing with licenses
Paying taxes
Trading across borders
Investor protection
(7)
Source World Bank Study Doing Business in 2010
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Consistent Improvement inInvestment
EnvironmentThailand Ranks World Bank Ease of
Doing Business
9
Grant Thorntons 2010 emerging markets
opportunity indexThree major benefits that
investors will gain when investing in Thailand
are incentives, a low cost of labor and land and
low levels of security threats for foreign
investors

• HSBC Thailand ranked as 3rd best country for an
  expatriate stand of living

Political Economic Risk Consultancy (PERC)
survey of 1,373 senior expat executives within 12
countries on bureaucracies in Asia, Thailand is
ranked 3rd, in term of bureaucratic efficiency
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Infrastructure- Transportation
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STATE-OF-THE-ART INFRASTRUCTURE

• Transportation
• National highway system 64,000 km. connecting
  all 76 provinces Expanding connections into
  Cambodia, Laos, Vietnam and southern China
• 7 international airports total capacity to
  support 8,500 arrival and 9,300 departure
  passengers per hour
• Rail system 4,346 km. linking to Malaysia
  Singapore
• Bangkok Mass Transit Sky train and Subway
  -Expansion plan for 137 km. during 2006-2012

(11)
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INFRASTRUCTURE

• Shipping
• 6 deep sea ports and 2 international river ports
• Including container, tank farms and liquid
  jetties
• Automotives
• e-Customs facilities
• Laem Chabang Port
• 7 container terminals with TEU 7.4 million exist
  capacity, expansion to TEU 10.8 million in 2011
• 3 Auto Yard with 2.9 million vehicles per year
  capacity

(12)
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GMS InfrastructureDevelopment
North-South Corridor
North-Eastern Corridor East-West
Corridor Southern Corridor
Central Corridor Southern Coastal
Corridor
Source NESDB as of Jan 20,2009
14
Free Trade Agreement
Strategic Location and Expanding Network of FTAs

• Entered into force
• AFTA
• ASEAN-China
• ASEAN-Japan
• ASEAN-India
• ASEAN-S.Korea
• ASEAN-Australia-NZ
• Thailand-Australia
• Thailand-NZ
• Thailand-India
• Thailand-Japan

Note Thailand, Malaysia, Indonesia, the
Philippines, Singapore and Brunei only.
Source BOI International Affairs
www.thaifta.com, as of Feb 05, 2010
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Investment Promotion Policy
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Liberal Investment Policy

• No restrictions on foreign currency remittances
• No export requirement
• No foreign equity restrictions in manufacturing
  sectors and promoted services sector
• No local content requirement

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Basic BOI privileges and Measures

• Tax Incentives
• Corporate income tax holidays up to 8 yrs
• Additional 50 reductions of corporate income tax
  for 5 yrs may apply in zone 3
• Import duty reductions or exemptions on machinery
  and raw materials
• Double deduction of public utility costs
• Deductions for infrastructure construction/install
  ation costs

• 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

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Development of Thai Industry
Knowledge Technology Driven
Productivity Driven
since 2003
Investment Driven
1992
Labour Driven
1980
Labour Driven
1970
19
Investment Opportunities in Major Sectors
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Thailand Worlds Leader in Agro-Based Products

• Worlds No.1 producer of natural rubber, rice
• Worlds top exporter of cassava tapioca, sugar,
  frozen seafood, canned tuna, canned pineapples,
  and chicken meat

Major Agricultural Waste
Oil Palm Fiber, Shell, Bunches gt 0.3 mil. tons/yr

Tapioca Slurry, Rhizome gt 1.4 mil. tons/yr
Rice Husk, Rice Straw gt 27 mil. tons/yr

• Sugar Cane
• Tops and leaves,
• Bagasse gt 25.4 mil. tons/yr

Source MOC, as of 29 January 2009
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National Policy to Promote Renewable
Energy Target To increase share of renewable
energy to 8 by the year 2011 and 20 by 2022
Solar
Biogas
Wind
Biomass
Garbage
Water
Bio Diesel
Ethanol
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Thailand Auto Hub of Asia

• Largest auto producer in Southeast Asia, 14
  largest producer in the world, target to be top
  ten in next 4 years
• Worlds 2nd largest producer and market of pickup
  trucks.
• 16 assemblers production forecast for 2010 1.6
  mil. units 55 exports

• Strong Supporting Industry
• 2,300 suppliers of Tier 1, 2 ,3 with
  combination of multinational, JV and domestics
  enterprises
• High Local content 80-90 for pick up and
  30-70 for passenger car

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Electronics and Electrical Industry

• Thailand is the 13th Export Rank
• EE exports 1/3 of total export value
• Thailand is the worlds largest producer of HDDs
• A leading country in the manufacture of
  Integrated Circuits and White Goods
  (refrigerator, air-conditioning)
• Strong supporting industries for electrical
  appliances
• Compressors, motors, plastic and metal parts

23
SourceEE Intelligence Unit, as of Feb 12, 09
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Services The Land of Smiles at Your Service

• Many opportunities exist in this growing sector
• RD and design
• Printing
• Tourism facilities
• Film Entertainment
• Regional Operating Headquarters
• Business Process Outsourcing
• Logistics

25
Thailand Regional Medical Hub

• World class hospital services, high-quality
  medical treatment with Thai hospitality
• Health tourism increased over 200 in last few
  years, becoming the largest in Asia
• Statistic of foreign patients
• 2003 970,000
• 2004 1,100,000
• 2005 1,280,000
• 2006 1,300,000
• 2007 1,500,000
• 2008 2,000,000

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Regional Operating Headquarter Incentives if you
provide services to companies outside of Thailand

• Business management, admin.
• Sourcing raw materials, parts, finished products
• Research development
• Technical assistance
• Marketing and sales promotion
• Human resources training
• Business advisory services
• Investment feasibility studies
• Credit management
• Other services approved by the Revenue Department
  on a case-by-case basis

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TOPLINE OF BENEFITS CONDITIONS FOR REGIONAL
OPERATING HEADQUARTERS
Benefit
Benefit
Benefit
For portion of income from LOCAL OPERATIONS 10
CORPORATE INCOME TAX for 15 years
For portion of income from OVERSEAS
OPERATIONS 0 CORPORATE INCOME TAX
for 15 years

• For income of EXPATRIATE EMPLOYEES
• 15 PERSONAL INCOME TAX for 8
  years

Key Conditions
Key Conditions

• In 1st fiscal year, have one operating company in
  another country a second within 3rd year a
  third within 5th year
• Have annual expenses in Thailand of Baht 15
  million, or have invested at least Baht 30
  million in Thailand
• By end of 3rd year, 75 of ROH personnel to be
  qualified staff, have 5 specialised
  professionals, and 5 top executives earning at
  least Baht 2.5 million in annual salary and
  benefits each
• Must have registered capital over 10 million baht

• In addition to conditions for income from
  overseas and local operations
• Corporate Income generated from services to
  overseas companies must be at least 50 of total
  revenues
• Personal income paid from overseas office is
  exempt

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BOI Investment Services

• BOI is a Full Service Investment Center
• We provide comprehensive information on
  opportunities in Thailand
• Industrial Subcontracting assistance (BUILD)
• Free sourcing assistance to your specifications
• International standards
• Investment Facilitation Unit
• We assist you with other government agencies
• Even with your utility connections

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• Thailands first comprehensive investment center
• Opens on November 23, 2009
• Objectives
• Facilitate entry of new investors
• Assist businesses looking to expand
• Serve as a focal point for dealing with 21
  relevant government agencies
• Who can use services Open to all businessmen
• Big and small
• Domestic or foreign
• BOI-promoted or not

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THANK YOU
WWW.BOI.GO.TH
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Supports for US Investors

• BOI Office New York
• 61 Broadway, Suite 2810,
• New York NY 10008 USA
• Tel [phone]
• Fax [phone]
• E-mail boiny_at_aol.com
• nyc_at_boi.go.th

• BOI Office Los Angeles
• 611 North Larchmont Blv.
• 3rd Floor
• Los Angeles, CA 90004 USA
• Tel [phone]
• Fax [phone]
• Email boila_at_sbcglobal.net

U.S. Desk _at_ BOI Headquarters 555
Vibhavadi-Rangsit Rd. Chatuchak, Bangkok 10900
Thailand Tel [phone] Fax (66 2)
537-8098 E-mail head_at_boi.go.th
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32
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