BOIs Investment Policies for Thailand 4.0 Pannee Chengsuttha - - PowerPoint PPT Presentation

BOI’s Investment Policies for Thailand 4.0

Pannee Chengsuttha

Executive Investment Advisor Thailand Board of Investment 7 June 2018

Outline

Current Investment Promotion Policy BOI Services Thailand 4.0 Introducing BOI

4

Why Thailand

1 2 3 5 5 6 + +

Investment Incentives in the EEC

Why Thailand

1

Thailand’s Competitiveness

Source: Compiled from Ministry of Commerce, Center for Economic and Business Forecasting (UTCC) , Ministry of Finance and Thailand Board of Investment

THAILAND

20% Corporate Income Tax Low Cost of Living Low Cost Office Space Well-Equipped Industrial Estates Well- developed Infrastructure

Thailand Ranks High in International Surveys

Thailand was ranked at 3rd for Ease

• f doing business among ASEAN

countries and 26th globally in 2018.

Country Rank Singapore 1 Malaysia 2 Thailand 3 Brunei Darussalam 4 Vietnam 5 Indonesia 6 Philippines 7 Cambodia 8 Laos 9

IMD World Competitiveness ranks Thailand 27th in its global competitiveness index for 2017

Country Rank China Hong Kong 1 Singapore 3 Taiwan 14 China 18 Malaysia 24 … … Thailand 27 South Korea 29 Philippines 41

Thailand 4.0

2

7

Thailand 4.0: a Next Step for Thailand’s Economy

THAILAND

1.0

Low Income

Agriculture

THAILAND

2.0

Middle Income

Light Industry

THAILAND

3.0

Middle-High Income

Heavy Industry / Advanced Machinery

THAILAND

4.0

High Income

Creativity + Innovation Smart Thailand

8

10 Targeted S-curve Industries 5 First S-Curve 5 New S-Curve

Food for The Future Digital Economy Medical Hub Automation and Robotics Aviation and Logistics Agricultural and Biotechnology Smart Electronics Affluent Medical and Wellness Tourism Next-Generation Automotive Biofuels and Biochemical

Introducing BOI

3

BOI’s Core Functions

Business Support Services

• Offers an attractive and

competitive package of tax incentives.

• Imposes no foreign equity

restrictions on manufacturing activities or on some service.

• Provide assistance in the

provision of visas and work permits to facilitate entry and subsequent operation for a foreign-owned business.

• Waives restrictions on

land ownership by foreign entities.

• Provides comprehensive

information and advice on establishing operations in Thailand.

• Arranges site visits.
• Identifies potential

suppliers, subcontractors, joint-venture partners.

• Provides useful contacts

with key public and private

• rganizations.
• Coordinates between the

foreign business community and other public agencies

Enhancing Competitiveness and Investment Facilitation

Current Investment Promotion Policy

4

BOI’s Investment Policy Framework Policy Tax Incentives

Facilitation

Land ownership rights Work permit & Visa facilitation

100%

Foreign ownership No local content requirements No export requirements No restriction

• n foreign currency

Exemption of import duties on machinery / raw or essential materials imported for use in production for export and for R&D Corporate income tax exemption up to 13 years 50% CIT reduction within 10 years Sector-based Incentives Up to 8-yearTax holiday for targeted industries in accordance with the Seven-Year Investment Promotion Strategy (2015-2021) Technology-based Incentives Up to 13 –year Tax holiday for core technologies or R&D projects

New Chapter of Investment Promotion

Thailand 4.0

Core Technology Industrial Cluster

Bio-tech Agriculture & Food Bio-Med Health & Wellness Mechatronics Smart Devices & Robotics

Embedded Technology

Digital & IOT Service Design & Technology Creative, Culture and High Value Services

From To

Volume-based Value-based Capital-driven Innovation-driven Physical capital Human capital Manufacturing High value services Sector-based & Standard Tax Incentive

Whole “tailored” packages & negotiations

Investment 4.0

Investment-led Transformation

Human Resource Technology Targeted Industries

Infrastructure

Enterprise

Prioritizing human resources and technology

13

BOI Investment Incentive Scheme

• Bio Industries
• Creative & Digital Industries
• High Value Business & Service
• Advanced Manufacturing
• Basic & Supporting Industries
• Biotechnology
• Nanotechnology
• Advanced Material Technology
• Digital Technology

Technology-based Activity-based Area-based

• EEC 3 provinces
• SEZ 10 provinces
• Southern Border (4 provinces, 4 districts)
• 20 Provinces with the Lowest per Capita Income
• Industrial Estates/Zones
• Science and Technology Parks

(Science Park, Food Innopolis, Space Krenovation Park: SKP)

Merit-based

• Research & Development (R&D)
• Support academic/research institutes, or technology and human

resource development funds

• IP licensing fee
• Advanced technology training
• Development of Local suppliers
• Product and packaging design

Agenda-based

+

• Productivity Enhancement
• MAI Listing Support

Activity-based Incentives

A1 A2 A3 A4 B1 B2 Bio-based & Medical Advanced Manufacturing Basic & Supporting High Value Business & Service Creative & Digital

Incentives

Incentives are largely based on several key factors i.e. level of technology, role in supply chain

8

years year

CIT exemption

Dashboard of Activity-Based Basic Incentives

Exemption

• f Corporate

Income Tax Exemption of Import Duty

• n Machinery

Exemption of import duty on raw material imported for use in production for export

Non-tax

8 years

(w/ Cap) + Merit

8 years + Merit 5 years + Merit 3 years + Merit 0 year + Merit*

• 

         

• 

    

A1 A2 A3 A4 B1 B2

* Tax exemption will depend on the investment amount/ expenditure for enhancing competitiveness

Technology-Based Incentives (1/2)

Additional incentives for investment in the development of Core Technologies in which Thailand has potential to enhance the country’s overall competitiveness and industries. Projects must be engaged in technology transfer by cooperating with educational/research institutions as stipulated by the Board, e.g. Technology Research Consortium

Biotechnology Nanotechnology Advanced Material Technology Digital Technology

Targeted Core Technologies CIT Exemption for 10 years + Merit (1 - 3 years) = Maximum of 13 years Enabling Services

1.Research and Development (R&D) 2.Vocational Training Centers (only in S&T) 3.Electronics Design 4.Engineering Design 5.Scientific Laboratories 6.Calibration Services

For 2-6, only projects that utilize advanced technology, as approved by the Board

Productivity Enhancement Measure

Replace or upgrade machinery for energy conservation, alternative energy utilization, reduction

• f environmental impacts

Replace or upgrade machinery for efficiency enhancement, e.g. Automation, Digitalization Upgrade production line to acquire international agricultural industrial standard Invest or spend in R&D / advanced engineering designs 18

Productivity Enhancement Measure

• Applicants must be existing businesses, whether BOI or non-BOI promoted (except certain businesses).
• In the case of non-BOI status, the company must conduct a BOI-eligible activity.
• In case of BOI status, CIT exemption must have already expired or has never been granted.
• Minimum investment of 1 million Baht (excluding cost of land and working capital) or 0.5 million for

SMEs

Eligibility

• Exemption of import duties for machinery
• 3-year CIT exemption on the revenue of an existing project with the total tax exemption amount

capped at 50% of investment in productivity enhancement (In case of investment in automation, the cap will be raised to 100% if minimum 30% local industrial linkages are reached.)

• Corporate income tax exemption period starts from the date of investment promotion certificate.

Incentives

• Investment must be completed within 3 years from the date the promotion certificate is issued.
• Required KPIs include such productivity indicators as reduced unit direct costs, reduced processing

time, reduced waste and reduced cycle time.

• Applications must be submitted by the end of 2020

Requirements

19

List of Activities Eligible for Promotion

Agriculture and Agricultural Products Mineral, Ceramics and Basic Metals Metal Products, Machinery and Transport Equipment Electronic and Electrical Appliances Industry Chemicals, Plastics and Paper Services and Public Utilities Light Industry Technology and Innovation Development

Investment Incentives in the EEC

5

22

Enhancing Investment in the EEC

• Application deadline for 30th December 2019.
• Must collaborate with education and research institutions to develop

technology or personnel.

Area

• 1. Area to encourage specialist businesses such as area of innovation for specialist

economy (Eastern Economic Corridor of Innovation: EECi), area to encourage industry growth and digital innovation (Digital Park Thailand: EECd), Cities for Eastern Thailand Flights (EEC Aerotropolis: EEC-A)

• 2. Area to enhance business industry targets Currently 21 Industrial Estates.
• 3. Estates/industrial area within EEC including areas which the EEC committee has not

announced as enhanced areas, according to provision 2.

Please note: Businesses which benefit from this measure cannot receive further benefits from project 3, in which a business is established in a development area.

23

Investment Promotion Scheme for the EEC

Targeted Industries in the EEC

Around 118

BOI Activities Targeted

Industries Activities Supporting

S&T

Basic

Infrastructure

Targeted Industries: Additional 2 years of CIT exemption (could be more than 8 years) + 50% CIT reduction for 5 years Other Industries: Additional 3 years of 50% CIT reduction Targeted Industries: Additional 5 years of 50% CIT reduction Other Industries: Additional 3 years of 50% CIT reduction

Targeted Industries in the EEC: Additional 5 years of 50% CIT reduction

Promoted Zones for Specific Industries Promoted Zones for Targeted Industries Other Industrial Estates / Industrial Parks

24

Cooperation with Education Institution, Research Institution, and Centers of Excellence

TM

Talent Mobility Program (TM) provides collaborative research- matching services between the public and private sector.

WiL

Work Integrated Learning (WiL) Provides collaborative educational services between educational institutes and the private sector in the form of Public Private Partnerships (PPP).

DVT

Dual Vocational Training (DVT) vocational educational institutes forming agreements with private firms, to create effective curriculums, training, testing, and evaluation for students to gain practical working experiences.

CoE

Co-operative Education (CoE) (for gradate study, university and college) structured method of combining classroom-based education with practical work experience. provides academic credit for structured job experience.

NEW Special vocational education project in the Eastern Economic Corridor

BOI Services

6

BOI Offers Manifold Support Services

Interaction with

• ther govt. agencies
• n behalf of investors

SMART VISA

NEW

Overseas offices Country desks

Subcontracting Development Program by BUILD Unit 1-Stop for visas & work permits: work permits in 3 hours

BOI Support Services

One Start One Stop Investment Center (OSOS) 18th Floor, Chamchuri Square Building, 319 Phayathai Road, Pathumwan, Bangkok Thailand

• Tel. 02-209-1100
• Email. osos@boi.go.th

One Start One Stop Investment Center (OSOS)

More convenience Less time More efficiency!

27

28

New Services

Office of the Board of Investment

555 Vibhavadi-Rangsit Road, Chatuchak Bangkok 10900 Thailand

• Tel. : (+66) 2553 8111

Fax : (+66) 2553 8222 E-mail : head@boi.go.th Website : http://www.boi.go.th/ GPS : 13.818517, 100.558074

The Smart Visa Program is intended to attract experts, senior managers, and investors to work

• r invest in technology companies to help

develop the 10 targeted industries which will, in turn, drive technology and innovation in Thailand.

Smart Electronics Next-Gen Automotive Affluent, Medical & Wellness Tourism Food for the Future Agriculture & Biotech Medical Hub Digital Aviation & Logistics Automation & Robotics Biofuels & Biochemicals

Taking Thailand to New Heights with Foreign Talents and Technology

Smart Visa launched on February 1, 2018

Eligibility and Benefits of SMART Visa

• Science and technology experts
• Salary ≥ 200,000 baht/month
• Employment contract with

remaining validity of ≥ 1 year

• Employing companies being in

the targeted industries

• Maximum 4-year visa, but not exceeding

the employment contract term

• No work permit required for working in

the endorsed companies

• 90-day reporting to the Immigration

extended to 1 year

• No re-entry permit required
• Spouse and children granted permission

to stay and work in Thailand with no work permit required

• Minimum direct investment of 20

million baht

• Investing in companies using

technology in manufacturing or delivering services and being in the targeted industries

• Maximum 4-year visa
• No work permit required for working in

the endorsed companies

• 90-day reporting to the Immigration

extended to 1 year

• No re-entry permit required
• Spouse and children granted permission

to stay in Thailand

• Spouse granted permission to work with

no work permit required

SMART

“T”

SMART

“I”

Eligibility Rights and Benefits

Eligibility and Benefits of SMART Visa

• Holder of Bachelor’s degrees or higher

with work experience ≥10 years

• Salary ≥200,000 baht/month
• Employment contract with remaining

validity of ≥1 year

• High-levels executives
• Working for companies using

technology in manufacturing or delivering services and being in the targeted industries

• Maximum 4-year visa, but not exceeding the

employment contract term

• No work permit required for working in the

endorsed companies

• 90-day

reporting to the Immigration extended to 1 year

• No re-entry permit required
• Spouse and children granted permission to

stay in Thailand

• Spouse granted permission to work with no

work permit

• Fixed deposit of ≥600,000 baht with the

remaining maturity term of ≥1 year

• Health insurance
• Participating in an endorsed incubation,

accelerator program or a similar program/or

• btaining joint venture with or being

endorsed by a relevant government agency

• Must set up a company in the targeted

industries in Thailand within 1 year with at least 25% ownership or being a board member

• 1-year visa for the first time, renewable for

<2-year if requirements are met

• No work permit required for working in the

endorsed companies or projects

• 90-day reporting to the Immigration

extended to 1 year

• No re-entry permit required
• Spouse and children granted permission to

stay in Thailand

• Spouse granted permission to work with no

work permit

SMART

“E”

SMART

“S”

Eligibility Rights and Benefits

Where to contact – Smart Visa One-Stop Service Center for Visas and Work Permits SMART Visa Unit

18th Floor, Chamchuri Square Building, 319 Phayathai Road, Pathumwan Bangkok 10330

0-2209- 1100 ext. 1109-1110

smartvisa@boi.go.th

Office of the Board of Investment 555 Vibhavadi-Rangsit Road, Chatuchak Bangkok 10900 Thailand

• Tel. : (+66) 2553 8111

Fax : (+66) 2553 8222 E-mail : head@boi.go.th Website : http://www.boi.go.th/ GPS : 13.818517, 100.558074

Where to contact BOI