Transcript ThaiLAND OF INVESTMENT - Associazione Industriali della

ThaiLAND OF INVESTMENT
Pannee Chengsuttha
Director
Thailand Board of Investment,
Paris Office
October 24, 2006, Vicenza, Italy
Suvarnabhumi International Airport
Thailand in General
Key Data:
Region:
Population:
Area Total:
Area Land:
Religion:
Capital:
Southeast Asia
65 million
514,000 km2
511,770 km2
Buddhism (94%)
Bangkok
The Macroeconomic
Picture in Statistics (1 of 2)
2002 2003 2004 2005
GDP Growth (%)
GDP (US$ Bil)
Inflation (%)
GDP Per Capita
5.4
6.8
7.1
4.5
126.3 133.2 165.7 176.4
0.7
2006f
4.25-5.251
194.84
4.5
4-51
2,631
2,825
2,9964
43.0
52.1
57.22
1.8
2.7
1,966 2,198
(US$)
Foreign Reserves
38.9
42.1
(US$ Bil.)
Source: Bank of Thailand
Notes: 1=ThailandOutlook.com, 2=As of April 30, 3= avg. Jan-April, 4=NESDB
The Macroeconomic
Picture in Statistics (2 of 2)
Export Growth (%)
Value of Exports
2002 2003
2004
2005 2006f
5.8
14.0
22.0
15.0 11.0-13.01
66.9
77.6
97.7
109.2
5.5
5.6
3.1
-3.7
n.a.
123.2 138.4
146.5
155.4
164.43
70.7
72.6
75.13
125.94
(US$ Bil.)
Current Account
(% of GDP)
MPI
(Manufacturing Production Index)
Capacity Utilization 59.3
66.3
Source: Bank of Thailand
Notes: 1=ThailandOutlook.com, 2=As of April 30, 3= avg. Jan-April, 4=NESDB
Thailand is committed to increase openness
… as indicated by increase external trade and
FDI, tariff reforms, FTAs
Indicators of Openness
Gross FDI
Major Foreign Investors (2001-2005)
(Applications for Investment Privileges)
400
€10.4 Bn
Billion Euro with Thai Baht
equivalent
(THB 514.6)
300
TOP 3 : Japan , USA , EU
200
€2.9Bn
(THB142.9)
€2.4 Bn
(THB117.7)
100
€1.5 Bn
(THB74.8)
0
Japan
EU
USA
Taiwan
European Investments
5-Year Totals by Country 2001-2005
Projects
€ Million
United Kingdom
90
963.6
Netherlands
56
798.7
Switzerland
53
552.5
Germany
89
532.6
Belgium
29
204.9
France
58
95.7
Italy
19
48.2
TOTAL
239
3,196.2
Country
Major Sources of EU Investment in Thailand
Applying for BOI Promotion in 2005-2006
Total Investment
No. of Projects
37
35
421.58
UNIT MILLION €
400
350
25
300
250
15
200
148.55
150
Ex Rate: €1 = 48.56 THB
TOP 3 : NL, UK, GER
UK
Italy
Netherlands
6.15
Italy
0
14.33
France
UK
Netherlands
Italy
Germany
50
Italy
72.05
100
Germany
7
France
40
35
30
25
20
15
10
5
0
450
The Board of Investment
Basic Incentives and Measures
• Guarantees and Permissions
Guarantees against nationalization and price
controls
Permission to own land and bring in foreign
experts
• Tax Incentives
Tax exemption /reduction on imported machinery
and input
Income tax exemption
• Support services
Advisory and information provision
Publications
Value of Investments Increasing
Unit: Euro Billion
13.12
14.08
112%
6.52
44%
2002
FDI increases
62% to 9.97 billion
6.80
25%
2003
Total investment applications
2004
2005
Basic BOI privileges and incentives
Tax Incentives
• Corporate income tax
Non-Tax Incentives
• Land ownership rights for
foreign investors
holidays up to 8 years
• Import duty reductions or
•
experts and technicians
exemptions on machinery
and raw materials
Permission to bring in foreign
•
Work permit/visa facilitation
Zones
Sector Matrix:
Incentives to strengthen
competitiveness
Strategic or Priority
Industries
Maximum incentives
regardless of zone or
location
Example : Software
Mould & Die
Zone-Based Incentives:
Low
High
Zone 1 → Zone 2 → Zone 3
Ease of Doing Business
1
New Zealand
11
Ireland
Criteria
2
Singapore
12
Iceland
Starting a business
3
United States
13
Finland
Hiring and firing workers
4
Canada
14
Sweden
Enforcing contracts
5
Norway
15
Lithuania
Access to credit
6
Australia
16
Estonia
Closing a business
7
Hong Kong
17
Switzerland
Registering property
8
Denmark
18
Belgium
Dealing with licenses
9
United Kingdom
19
Germany
Paying taxes
10
Japan
20
Thailand
Trading across borders
Investor protection
Source: World Bank Study: Doing Business in 2006
Promising Countries for
Overseas Business Operations
Long-Term
Medium-Term (2005-2008)
Rank
Country
Rank
Country
1
China
1
China
#2
Thailand
2
India
3
India
3
Thailand
4
Vietnam
4
Vietnam
5
U.S.
5
U.S.
6
Russia
6
Russia
7
Indonesia
7
Indonesia
8
Korea
8
Brazil
9
Taiwan
9
Korea
10
Malaysia
10
Taiwan
Includes production, sales, R&D,
outsourced operations
Includes production, sales, R&D,
outsourced operations
Source: 16th Annual JBIC Survey: “Outlook for Japanese Foreign Direct Investment” , Nov. 2004
Key Factors Supporting Thailand’s
Rankings
1. Market growth potential
2. Labor costs
3. Political and social stability
4. Supply base for
assemblers
5. Base for exports
6. Developed local
infrastructure
7. Tax incentives for
investment
8. Industrial clusters
9. Domestic market size
10. Policies to attract
foreign capital
Source: 16th Annual JBIC Survey: “Outlook for Japanese Foreign Direct Investment,” Nov. 2004
Developed Infrastructure
Highway system: 64,000 km connects all 76
provinces
Mobile phones growing 6 million/yr
24 million users in 2003.
7 international airports: 700,000 tons cargo.
25 million passengers per year
World-class Wi-Fi and inexpensive
broadband widely available
Rail system: 4,000 km linking to Malaysia &
Singapore
8 deep sea ports
57 industrial estates in 21 provinces
Suvarnabhumi International Airport
World’s Newest Airport
World’s Biggest Single Terminal
Open September 28, 2006 in THAILAND
1st Phase:
76 flights/hour
45 million passengers/year
State-of-the-Art Cargo Systems
Low Rent Costs for
Grade-A Office Space in Asian CBDs
Ba
ng
Si kok
n
Ku gap
or
al
e
a
Lu
m
pu
r
Be
i ji
n
S
ha g
H
o
ng
C
h
hi
M ai
in
h
C
i
M ty
um
N
ew bai
D
el
hi
50
45
40
35
30
25
20
15
10
5
0
Bangkok
Singapore
Kuala Lumpur
Beijing
Shanghai
Ho Chi Minh City
Mumbai
New Delhi
Source: Colliers International. 2Q 2004. Asia Pacific News
Bangkok Central Business District:
€10/sq. ft./year
Comparative Business Costs
Thailand
Singapore
China
India
Taiwan
0.045
0.058
0.026
(2002)
0.064
0.044
Corporate income
tax rate (Jan 2004)
30%
20%
33%
35.9%
25%
Office costs
(Euro/meter/year,
Jan 2005)
33.36
Euro
80.40
Euro
95.76
Euro
123.84
Euro
88.56
Euro
Electricity cost for
industry (Euro per
kwh, 2004)
Sources:
Electricity: IMD
Corp. income tax: KPMG
Office costs: DTZ
Ex Rate: €1= 50 THB
Lowest Cost of Living in Asian Cities
Global Rank
City
Index
1
Tokyo
130.7
5
Hong Kong
109.5
7
Seoul
104.1
11
Beijing
101.1
16
Shanghai
95.3
29
Hanoi
85.6
36
Ho Chi Minh City
84.5
45
Jakarta
83.9
46
Singapore
83.6
104
Kuala Lumpur
67.7
109
Mumbai
66.8
119
BANGKOK
63.5
Note:
New York is
base city for
index, with
score of 100.0
Source: Mercer
Human Resource
Consulting, 2004
Strategic Location to World Markets
EFTA
US
China
Japan
India
Bahrain
29/Dec/02
EFTA
1/Oct/03
1/Sep/04
AFTA
Peru
Australia
1/Jan/05
New
Zealand
Double Taxation Agreement with 52 countries including Italy
Since 31 May 1980
Investment Opportunities in Thailand
 Auto parts
 Machinery and parts
 Fashion and Jewelry
 Electronic and Electrical products
 Value Added Services
Auto & Autoparts Industry
Geared for Excellence
Thailand: Automotive Hub of ASEAN
 2005 production ~ 1.125 million units
(World’s 14th largest)
 Export ~ 440,000 units
 Largest in Southeast Asia
 Capacity of 2.0 million units in 2008
 World’s largest production of one-ton pickup
trucks
 820,000 units in 2005
Automotive Industry in Thailand
Thailand Automotive and Parts Trade Balance
Unit = Mil US $ < Current Rate :
1 US $ = 41 Bath
Country
Country
Australia
Japan
India
Malaysia
Indonesia
USA
China
Thailand Export To
632.80
636.90
79.30
253.40
477.20
330.80
36.30
Thailand Import
From
7.20
1,929.20
2.10
65.80
115.90
50.90
25.80
625.60
-1,292.30
77.20
187.60
361.30
279.90
10.50
Balance Of Trade
Export Ranking
1
6
5
3
4
7
As of Year, 2003
Mil US $
2000
1750
$2,000
1500
1250
$1,500
1000
$1,000
750
500$500
M il US 250
$
0 $0
-250
($500)
-500
($1,000)
-750
-1000
($1,500)
-1250
-1500
2
Thailand Export To
Thailand Export To
Thailand Import From
Country
Thailand Import From
Balance Of Trade
Source : The Customs Department of Thailand
Investment Opportunities in
Automotive Industries
•
Auto assembly for local and export markets
under AFTA and other FTA arrangements
•
Auto part manufacturing to serve domestic
and export markets
•
Potential small car hub -- low fuel
consumption
•
NGV target: 120,000 NGVs by 2008
Fashion Industry
Designing the Future
Leather, Gems & Jewelry, Textiles & Garments
Fashion Industry
Objective: Becoming SE Asia’s Fashion
Center
– Gem & Jewelry Capital of Southeast Asia
• Renowned expertise in diamond cutting
– Bangkok Fashion City
• Major government push for the industry
– Many renowned - branded garments,
produced in Thailand for USA & EU
Markets
• Brunet, Triumph, Victoria Secret, Saint
Michael, Marks & Spencer
Investment Opportunities in
Thailand
BOI Incentives outside
GIE:
• Imported Duty
exemption/reduction on
machinery & raw
materials
•Up to 8 years corporate
income tax holiday
•Addition incentives if
locate in BOI Zone 3
•Non-tax incentives
Incentives in GIE:
• Import Duty exemption/
reduction on machinery
& raw materials
• 5- 8 years tax holiday
• VAT exemption on
imported duty on Raw
Material
• VAT exemption on sales to
BOI promoted companies
and within GIE
• Non-tax incentives
Textile Industry Cluster
1. Integrated Textile Industrial Zones/Estate Developers:
–
8 years corporate income tax holiday
–
Duty-free machinery
2. Textile-Related Activities:
BLEACHING & DYEING & FINISHING PROJECTS
•
Locating in Textile IE:
– 8 years corporate income tax holiday
– Duty-free machinery
•
Locating outside Textile IE: Standard incentives according to zone
OTHER TEXTILE-RELATED PROJECTS locating on Textile IE
•
Duty-free machinery
•
Corporate income tax exemptions:
– Zone 1: 5 years
– Zone 2: 7 years
– Zone 3: 8 years
Machinery and Equipment
Toward Regional Manufacturing and
Distribution Hub in the Region
Opportunities in Machinery
• Thailand continues to industrialize, but is dependent on foreign
industrial machinery for immediate future.
• Industries in Thailand developed over the past decade with
parallel increases in demand for machinery imports.
• High demand for:
– Food and farm machinery
– Alternative energy/energy conservation machinery
– Textile machinery
– Automotive machinery
Machinery and Equipment
Investment Opportunities in
Thailand
•
•
•
•
•
•
•
Machine tools
Plastic injection machinery
Plastic extrusion machinery
Packaging machinery
Material handling equipment
Robotics and factory automation equipment
Specialized/process machinery or equipment for
specific industries
Machinery &
Tooling
Zone 1
Zone 2
Zone 3
Manufacturers:
General
Machinery Duty: Machinery Duty:
50% reduction
50% reduction &
Exemption in IE.
Machinery Duty:
Exemption
Corporate
income tax
exemption:
In IE - 3 years
Corporate
income tax
exemption:
8 years
Corporate income
tax exemption:
In IE - 7years,
Outside IE. - 3 year
Exempt from machinery import duties
Targeted
Products
Exempt from corporate income tax for 8 years
Examples: CNC Machines as in BOI Lists, Farm and
Food Processing Machine.
Recent Political Incident

Peaceful Political change

More stable than in recent months

No Real Negative Impact on investment

Business as normal

IMF, World Bank have confidence
on Thai economy after the incident

BOI’s Policy has never changed
BOI and SIMEST
 Memorandum of Understanding signed in 2005
 Promotes cooperation in investment, organizing
investment promotion activities, exchange of
information
 Auto parts, Machinery and parts, Jewelry and
Textile
Where to contact us
* Royal Thai Embassy, Rome
* BOI Office in Paris
Address: Ambassade Royale de Thaïlande
8, Rue Greuze, 75116 Paris, France
Tel:
+33 1 5690 2600
Fax:
+33 1 5690 2602
E-mail: [email protected]
BOI on the Internet : www.boi.go.th