Unbeatable Thailand, Unparalleled Opportunities
Thailand's principal agency for promoting investment says the country's multiple opportunities add to its investor appeal
Pongsvas Svasti, Minister of Industry
Dr Atchaka Sibunruang, Secretary General of BOI
Under the slogan ‘Unbeat-able Thailand, Unparalleled Opportunities’, the Thailand Board of Investment (BOI) has even incorporated the country’s ability to overcome any challenge and come back stronger as part of its investment appeal. The Thai fighting spirit, it says, is “embedded in the DNA of all Thai people”.
The BOI has made an important contribution towards maintaining the confidence and investment of foreign companies in the wake of the floods by providing special tax incentives for businesses that have been affected.
These include a zero tariff on importation of replacement machinery and a tax holiday programme. Industrial estates and industrial zones that invest in flood-prevention systems and infrastructure are being offered an eight-year corporate income tax exemption with a cap of 200 per cent of investment, excluding costs of land and working capital.
These initiatives to alleviate investors’ pain appear to have paid off. Despite the crisis, the total value of investment applications in 2011 reached 673 billion baht (£13.5 billion) – higher than the projected target of 500 billion baht (£10 billion) and representing a 38 per cent increase at a total of 1,847 projects, compared with 2010. Foreign direct investment applications were valued at 391 billion baht (£7.86 billion), a 67 per cent increase.
Around half of last year’s direct investment applications from foreign countries – and around half the total value – came from Japan, while companies from China, Singapore and Hong Kong also showed keen interest. The most favoured sectors for investment included metal products and machinery, chemicals and paper, agricultural products such as rubber, electronics and petrochemicals.
Speaking at the third BOI fair held at the start of this year, Tony Blair declared that British businesses still had confidence in Thailand and would maintain their investment presence. The former British prime minister said Thailand was of growing importance for investors as a gateway to the Association of Southeast Asian Nations (ASEAN).
The BOI expects total direct investment by all foreign companies in 2012 will be almost equal to that in 2011, with bio-plastics, processed agriculture, alternative energy, medical tools and the rubber sector all to the fore.
Meanwhile, the BOI has been preparing new strategies to promote investment up to 2016, with the aim of maintaining the momentum needed to take the country on to its next phase of industrial development. There will be strong focus on knowledge-based and creative industries, low-carbon industries and high value-added services, such as tourism, healthcare and logistics.
“The new direction will aim at strengthening the country’s foundations through skills, technology, innovation, basic infrastructure and logistics, all of which will lead to long-term industrial development,” says Pongsvas Svasti, Minister of Industry, under whose department the BOI operates.
He says the objective is to stimulate investment in strategic industries to support the growth not only of major industries like automotive and electronics, but also small and medium-sized enterprises (SMEs).
The government wants to maximise productivity and realise the potential of the regions. “As part of the new investment strategies, the BOI will strengthen the investment support and coordinating roles to help create a better investment environment,” says the Minister.
As the principal government agency for supporting international business and encouraging investment in Thailand, the BOI identifies business opportunities, provides tax incentives and privileges, and supports foreign companies seeking to expand into the Asian market.
Its main objectives are to decentralise Thailand’s industrial base and to attract investment into specific economic activities and investment zones.
Atchaka Sibunruang, the BOI’s Secretary General, says: “We are promoting investments into higher value-adding industries, as this is crucial for the growth of the economy.”
She pinpoints food, agriculture, rubber as a raw material for tyres, car parts, electronics and white goods, and petrochemical products as being higher value-adding sectors with great potential.
As an example, she points out that Thailand has become the biggest automotive hub in the region, with major international car makers like General Motors, Ford, Toyota and Honda operating production bases in the country.
PROJECT TEAM: Alisdair Jones, Vanessa Massimini and Christian Carter