TIR 2023 January

Vol. 33 l January 2023 THAILAND’S ROAD TO A STRONGER TOMORROW: Building New Opportunities for New Economy

BOI NET APPLICATION Total Foreign Investment January – December 2022 1,070 Projects USD 13.14 Billion Total Investment 2,119 Projects USD 20.13 Billion FOREIGN INVESTMENT BY TARGET SECTORS First S-Curve New S-Curve Electronics Digital 153 Projects l USD 3,833.93 M 73 Projects l USD 1,189.97 M Automotive Medical 125 Projects l USD 2,993.26 M 22 Project l USD 244.06 M Petrochemicals Biotechnology & Chemicals 9 Projects l USD 240.03 M 80 Projects l USD 1,029.64 M Automation Agriculture & Robotics & Food Processing 6 Projects l USD 52.63 M 91 Projects l USD 891.39 M Aerospace Tourism 5 Projects l USD 20.87 M 2 Projects l USD 133.83 M FOREIGN INVESTMENT BY MAJOR ECONOMIES NU55eStPDhreo1rj5ela8cn.t8sd7sM USDSo13u,31t2hP3rKo.5oje2rceMtas J2Ua9Sp3DaPn1ro,5je3c7t.s45 M US17wSPDitrzo2ej7er6lca.t7ns1d M U3U3SniPDtero1dj,e5Sc2tta3st.1e9s M USD125,834P3rCo.4jhe4icnMtas HU60oSnPDgro1Kj,e1oc9nt5sg.57 M 301M7Pa5Trlo.aH7jye7AscMitIasLAND1US7iSn8DgPa1rpo,UT63oja8eS4rice1PwDt.sr1ao18nj,e3Mc6t9s.31 M Unit: USD (1 USD = 33.02 THB as of 23 January 2023) Note: Investment projects with foreign equity participation from more than one country are reported in the figures for both countries. Statistics on net applications are adjusted whenever applications are returned to applicants due to insufficient information. For more details, please visit www.boi.go.th

04 08 Cover Story Industry Focus Building on Success: Charting the Next Course Thailand Harnesses the Power of Innovation and for Thailand’s Economy Technology to Drive Industries Forward 11 13 Policy Highlight Executive Talk Creating a New Landscape Pioneering a New Era with a 5-year Investment Strategy with BOI’s Strategies 16 19 Company Interview Thai Economy at A Glance Harvesting New Opportunities from the Emerging Economic Landscape

COVER STORY Building on Success: Charting the Next Course for Thailand’s Economy After almost three years of economic disruption caused by the COVID-19 pandemic, Thailand is now ready to embark on the next chapter of its economic development by envisioning its investment strategy for the next five years (2023-2027) with a greater emphasis on innovative, high-tech, and green industries. It is also aiming to capitalize on its own valuable assets, particularly its prime geostrategic location and well-equipped physical and digital infrastructure, in order to realize the vision of making Thailand ‘a regional hub of business, trade, and investment’. It has been almost three years mitigating the effects of COVID-19 cutting-edge, smart technology, since the sweeping adverse effects on the country and paving the way and eco-friendly industries. of the unprecedented COVID-19 for a stronger and more durable pandemic caused a global health economic recovery, Thailand’s Thailand’s clichéd yet and economic crisis. Thailand was economy is now building back one-of-a-kind key no exception, with the country’s better, with a projected economic strengths GDP in 2020 falling by more than recovery of 3.4 percent in 2022 6 percent from 2019 and the and 3.6 percent this year1. On It may have become something number of foreign tourists visiting the back of this, Thailand is now of a clichéd point of pride, but Thailand plummeting. set to begin ‘the new economy Thailand’s geographical advantage However, thanks to the era’ by aligning its own unique has long made the country a government’s multifaceted strengths with prospective future fantastic investment destination. package of policies aimed at investment trends, including Located in the heart of Southeast Asia amid the rapidly developing 1 https://www.worldbank.org/en/news/press-release/2022/12/14/thailand-s-economy-remains-resilient-amid-global-headwinds 04 Thailand Investment Review

CLMV region and ASEAN, an directed towards development to even greater investment with COVER STORY area with 660 million potential that takes into account global an S-curve area-targeted strategy consumers, combined with the future trends, such as economic that aligns with the country’s new country’s first-rate transportation prosperity combined with social engine of growth. In order to attract infrastructure, Thailand offers well-being, human values, and FDI and help the country realize its foreign businesses not only all the environmental protection. aspirations of becoming a value- benefits of well-established cross- Introduced as Thailand’s based digital economy, Thailand is border trade and investment but new growth hub, the Eastern offering numerous tax and non-tax also massive market access to Economic Corridor (EEC) is incentives. Thailand’s overarching potential emerging economies currently incentivizing businesses endeavor is, therefore, indicative and beyond. Tapping into these with the appealing mixture of its of the country’s promising plan to key advantages, Thailand has exceptional strategic location make the EEC a centerpiece for transformed itself into a regional and the benefits of Thailand 4.0 future areas of investment. connectivity center, a second implementation. Located 90 km Despite the recent economic home for a number of global multi- southeast of Bangkok, the EEC disruption, Thailand’s core strengths national firms, and a supply chain provides a more geographically and government policies have hub for major industries. concentrated 13,000 sq. km put the country’s FDI situation In addition to its geographical zone that spreads across the ‘back on track’. Thailand enjoyed strength, Thailand’s priority in country’s eastern seaboard in the a surge of FDI inflows in 2022. transforming itself into a ‘value- provinces of Chonburi, Rayong, The applications for investment based’ digital economy through and Chachoengsao, where it promotion to BOI increased 36% the ‘Thailand 4.0’ model has enjoys well-established and from the previous year, accounting illuminated the country’s bright comprehensive connectivity to for approximately 13 billion USD. future strategy for overcoming neighboring countries and regions the many economic traps, via Laem Chabang seaport and Towards a better future particularly the ‘middle-income U-Tapao airport. trap’, identified from previous While the project has proven In light of the country’s concerted economic development models its worth by attracting successful efforts to continue promoting FDI and leveraging the country towards investments in the petrochemical, and ease of doing business while a high-income status. To this end, automobile, and electronic industries, drawing on the lessons from its the country’s efforts are now the EEC is now opening its doors past successes and setbacks in economic development, Thailand’s 0 5Thailand Investment Review

COVER STORY brand-new Five-Year Investment the largest in Southeast Asia. with the prevailing global investment Promotion Strategy (2023-2027) Building on the country’s recent trend of taking better care of the has been put in place as the shift towards the production of environment while expanding country’s bible on investment more electric vehicles, Thailand trade and investment volumes in strategy. As part of this strategy, is now one of the most attractive tandem. The rise in both the value Thailand will formulate policies destinations for EV investments, and quantity of BCG projects in and services that foster local and owing to the large number of Thailand recently reflects the foreign investment in relevant investors already present there, growing interest and confidence of industries in order to sustain the highly-skilled expertise of investors in sustainable and green economic resilience and further the Thai labor market, and the trade and investment activities. elevate Thailand’s status as a country’s favorable cost of living Thailand’s strategy is designed regional center for business, and facilities. to encourage the expansion of trade, and logistics. Meanwhile,Thailand’s adoption S-curve industries and increase Entering into force across of the Bio-Circular-Green (BCG) investments in the EEC. Currently, 2023–2027, the plan aims to drive Economy onto the national agenda 10 designated first and new Thailandinto‘theneweconomyera’ demonstrates the country’s active S-curve industries are among throughtheapplicationofthreecore role as a global leader of BCG Thailand’s top FDI sectors. concepts: innovation, technology, implementation with the aim of Meanwhile, the EEC has become and creativity; competitiveness enhancing productivity and the most popular FDI destination, and adaptability; and inclusiveness economic growth while sustaining drawing THB1.92 trillion in foreign with sustainability in all aspects. an eco-friendly society. In addition investments in its first five years For example, Thailand has to being consistent with the UN of operation, surpassing the initial long been recognized as a giant 2030 Agenda for Sustainable target of THB1.7 trillion. Building on of automotive exports, being Development, the BCG is in line its success, the EEC aims to 06 Thailand Investment Review

attract THB2.2 trillion in the next Airports Project from Don Mueang to attract investment in specific COVER STORY five years, with an average annual and Suvarnabhumi to U-Tapao activities, including the medical investment of THB400-500 billion, Airports and the first phase of industry, genomics, and frontier according to Deputy Prime Minister the Sino–Thailand–Laos Railway technology, respectively. Supattanapong Punmeechaow2. Project in Thailand, which will Given its one-of-a-kind Furthermore,Thailand is connect Bangkok to Korat. The strengths and resilience in working to improve its transportation construction of the High-Speed building the country back better infrastructure in all directions. In Railway is expected to start in again despite an environment addition to the six-lane road that 2023 after the delivery of the land of unpredictability, Thailand is now links Samut Prakan to plots. Meanwhile, at Rayong’s confident that all the efforts it the EEC provinces3, two other Silicon Tech Park—the country’s has made will reassure potential major infrastructure projects are digital city model—an ultra- high- foreign investors that it will continue currently under construction speed internet gateway is being to welcome foreign businesses and set to open in 2026: the deployed to showcase Thailand’s and be a heaven for investment High-Speed Rail Linking Three advanced digital infrastructure and for all. In order to realize its goals its ability to facilitate digital tools of leveraging the country into a for investors across all potential regional hub for business, trade, investment venues. and logistics, and charting its The Eastern Economic Corridor future course towards the ‘new Office has also prepared support economy era’, now is the time for for the future expansion of the Thailand to continue improving the industrial sector within the EEC country’s business environment area. The special promotion zones and ease of doing business, and at Thammasat University (Pattaya), to promote appropriate and timely Burapha University, and Ban investment measures aimed at all Chang were launched with the aim potential investors. 2 https://www.thestar.com.my/aseanplus/aseanplus-news/2022/12/10/thailand039s-eec-eyes-22-trillion-baht-in-investments-after-sweeping-up- 3 h1t9tp-tsri:l/l/iothna-ibnaehwt-si.np-rfdir.sgto-f.itvhe/-eyne/anresws/detail/TCATG220419122341320 0 7Thailand Investment Review

INDUSTRY FOCUS Thailand Harnesses the Power of Innovation and Technology to Drive Industries Forward As the world continues transitioning to a more technologically advanced and ‘smart’ society, Thailand unveils its focus for future investment with a perfect blend of existing successful investment fields and the use of cutting-edge technology and innovation to drive the economy forward. For instance, Thailand is transforming from a production base in the automotive and electric and electronics industries to a center for world-class next- generation automotive and smart electronics industries. In this digital age, humankind is increasingly surrounded by advanced innovation and technology. These two life-changing components have a far-reaching impact on people’s daily lives in countless ways. For example, at the individual level, innovation and technology have dramatically changed people’s modes of communication from letter writing to mobile texting, enabling people to communicate with each other more easily and quickly regardless of distance. Meanwhile, the application of innovation and technology in transportation systems, natural disaster preparedness and prevention, and commercial as one of the plan’s three core purposes are all examples of concepts ‘innovation, technology, ‘Detroit of Asia’ how innovation and technology and creativity’, and why Thailand can have a profound impact on a encourages foreign investment in Having been developing its country’s economy and people’s its targeted S-curve industries, all capabilities as a top-tier automotive livelihoods. Given the increasing of which are strongly encouraged producer for five decades, Thailand importance of these two fields, the to adopt technological tools for has established itself as the largest global trend is toward harnessing investment. In addition, Thailand automotive manufacturer among the power of innovation and aims to build on its prior success Southeast Asian countries and technology to drive the country’s in various industries and advance was ranked 10th in the world in economy forward. them toward a more innovative, 20211. Internationally recognized It is the reason why Thailand’s higher-technology, and creative as an ‘Automotive Hub of Asia’, brand-new Five-Year Investment sector, particularly its world-class Thailand now produces and exports Promotion Strategy (2023-2027) automotive and electrical and approximately 1.7 million vehicles indicates innovation and technology electronics (E&E) industries. to different countries worldwide. 1 https://www.oica.net/category/production-statistics/2021-statistics/ Meanwhile, the automotive industry has also long been a major 08 Thailand Investment Review

contributor to Thai economic next-generation automotive vehicles, hybrid electric vehicles, INDUSTRY FOCUS growth, accounting for more than manufacturer. In addition to its and EV. To accommodate the 10% of Thailand’s GDP annually. well-recognized physical and increasing number of EV cars, As the world moves towards a digital infrastructure and prime Thailand currently provides more greener way of life, the car industry geostrategic location, Thailand is than 2,500 charging stations is likewise heading towards a the home of the production base for nationwide from various service breakthrough in manufacturing a number of renowned Japanese, providers3. more fuel-efficient and eco- American, European, and Chinese With the government’s support friendly vehicles. According to automobile businesses. Furthermore, and a strong partnership between Bloomberg’s prediction, Electric Thailand offers investors access the public and private sectors, vehicles (EV) are expected to to a pool of highly skilled and Thailand has announced ‘30@30’ be 66 million or account for experienced workers in the policy to boost manufacturing two-thirds of global automotive automotive sector, guaranteeing capacity of zero emission vehicles sales by 20402. Given this global the consistent delivery of high- by 30% by 2030. The country set a trend, Thailand has introduced quality products. goal of producing 225,000 electric the ‘next-generation automotive Thailand is also a hub for auto passenger cars and pickup cars per industry’ with the application parts and supporting industries. year by 2025, accounting for 10% of of innovation and technology This includes not just engine the total automotive production in the as one of its targeted S-curve and body parts, but also brake country. Meanwhile, Thailand will be industries in order to promote the systems, steering systems, able to manufacture 725,000 electric country as a hub of a value-added and suspensions, making it an passenger cars and pickup cars and environmentally friendly ideal location for automobile per year by 2030, accounting for automobile industry. manufacturers. As such, firms 30% of all automotive manufacturing Despite a growing number of can enjoy more cost-efficient and in this territory and contributing potential competitors in automotive convenient access to a complete around THB 200 billion to Thailand’s manufacturing, Thailand continues supply chain for manufacturing. GDP and 30,000 jobs per year4. to showcase to the world how it Meanwhile, Thailand continues This assures Thailand’s commitment can maintain its status as a world- preparing itself for the next to positioning itself as a next- class automotive producer while generation of automobiles, such as generation global automotive also leveraging itself towards the production and increased use production base. becoming a world-leading of eco-cars, plug-in hybrid electric 2 https://www.bloomberg.com/news/articles/2021-08-09/at-least-two-thirds-of-global-car-sales-will-be-electric-by-2040 3 http://www.evat.or.th/attachments/view/?attach_id=266663 4 https://www.thaigov.go.th/news/contents/details/53360?fbclid=IwAR3XzAi9G1OC4k8pLFUxXkX-Lt9xZuC8HRrbHMjSzkTsbTO3oEAQyzljFf8 0 9Thailand Investment Review

INDUSTRY FOCUS Top-notch E&E production Thailand has long been renowned ‘smart E&E’ industry, capitalizing study of Japanese firms in 2021, as a champion of E&E production. on its position as a regional leader 56.4% of raw materials production It is now the world’s second in E&E production to improve were produced domestically in largest hard disk drive (HDD) E&E sectors with the use of Thailand. Therefore, Thailand offers manufacturer after China and technology and innovation. To the resources and know-how the largest in Southeast Asia. this end, Thailand has now set the needed to establish itself as the Aside from HDD, Thailand is a smart E&E sector as one of its ten region’s smart E&E manufacturing prime investment destination for targeted S-curve industries. base. other E&E products, including In addition to the considerable In conclusion, given the semiconductors and mobile potential of its high-skilled labor in advantages of Thailand’s equipment parts, providing USD the E&E industry-755,949 in 2022- geographic location, enriched 69.17 billion in exports in 2021, Thailand’s existing complete and with its extensive experience as despite the peak of the COVID-19 robust supply chain in the upstream a successful production base pandemic5. Nowadays, investment industry is one of the primary for many investment fields and a in the E&E industry also remains a reasons why it is the best location complete supply chain system, high priority. According to the for E&E investment. The one-stop, the country has now stepped up Board of Investment’s 2022 holistic process of in-house to another level of investment statistics, the newly-proposed production, from design, testing, by creating a perfect match FDI projects during Q1-Q3 in the manufacturing to packaging between these great existing E&E sector are worth USD 1.80 and quality control, allows firms strengths and the adoption of billion, accounting for 22% of all to provide their products at a technology and innovation. The newly-proposed FDI projects6. competitive price. next-generation automotive and However, as we are now Meanwhile, Thailand is home smart E&E industries are examples living in a world driven by data to a comprehensive ecosystem of how Thailand’s intriguing future and the Internet of Things (IoT), of supporting industries, such as investment sectors are ready to demand for smart E&E products metal, chemicals, plastics, rubber, welcome all potential investors that support and facilitate people’s and glass production, all of which aboard for the journey into this daily lives in various aspects, such facilitate the procurement of new economy era. as mobile communication devices, components and materials and smart home applications, health- allow simple and cost-effective promoting electronic devices, and sourcing. According to a JETRO care robots, has increased in both volume and importance. Meanwhile, on a larger scale, the ‘smart city’ concept has emerged as a new flagship project for the next phase of city development. Governments have adopted applicable technologies to make their cities and countries more technologically savvy and efficient in terms of resource management, such as solid waste management, renewable energy, water management, and transportation systems. It is for this reason that Thailand is moving towards a 5 http://www.thaieei.com/eiu/TableauPage.aspx?MenuID=86 6 https://www.boi.go.th/upload/content/Summary9mth2022.pdf 10 Thailand Investment Review

Creating a New Landscape POLICY HIGHLIGHT with a 5-year Investment Strategy As the world begins to move forward into a post-pandemic era in 2023, industries across all sectors have started to rethink their recovery plans by shifting toward a more resilient and sustainable business model in the post-pandemic investment ecosystem where global supply chain disruptions and shifts in the geopolitical landscape remain critical challenges. In response to these externalities, industries in which Thailand has mastered its expertise, such as food Thailand is embarking on a new and agriculture, to include more innovation, while also expanding the journey of investment policy horizon of new industries to be promoted for investment in Thailand, direction under its new five-year such as digital, healthcare, aerospace, robotics and creative industries. investment promotion strategy. To accelerate the country’s transition to the new economy, sustainable Aimed at guiding Thailand’s activities in particular will receive special incentives. The new targeted investment policy from 2023-2028, industries also include the manufacturing of hydrogen vehicles, the the strategy is designed to steer setup of electric vehicle (EV) battery swapping stations, economic forest the country towards its objective plantation and energy crops plantation, novel food, and organic food, of revitalizing its economy to be to name just a few. For renewable energy businesses and business more innovative, competitive, activities related to new energies such as hydrogen production, as well and inclusive. In this respect, as power and steam generation from hydrogen, these are now included the latest investment promotion in the targeted businesses with various investment incentive schemes strategy prioritizes seven now available. investment pillars through the To support the comprehensive new strategy, the BOI is now offering drive of new investment incentives a three-fold incentive for international investors, incorporating tax, and ecosystem development. non-tax, and financial measures to facilitate competitive and smooth The strategy focuses on ushering business operations. The highlights of the additional measures include Thailand into the new economic the upgrade of the highest tier of the BOI’s investment promotion era by encouraging technological scheme from the original A1 tier of 8 years of Corporate Income Tax advancement, the transition (CIT) exemption to A1+ of 10-13 years of CIT exemption. The newly to green and smart industries, launched A1+ scheme is available to upstream industries utilizing talent development, as well as creativity and innovation with the overarching aim of reinforcing the country’s status as a regional hub for business, trade and logistics. While maintaining the support of the targeted industries previously promoted, this new strategy will reprioritize business activities involving advanced innovations, with greater consideration given to the environmental and societal impacts of prospective investments. This includes the upgrading of the conventional 1 1Thailand Investment Review

POLICY HIGHLIGHT advanced technology and innovation, such as manufacture of wafer, as well as to targeted technology development activities including biotechnology, nanotechnology, and advanced material technology that the establishment of businesses include technology transfer in collaboration with academic and research in Thailand, while also providing institutions in Thailand. Additional incentives available to investors include online services for investment exemption from import duty on machinery, exemption from import duty promotions, incentive utilization on raw materials used for export production, and non-tax incentives requests, and operation reports. such as an expedited scheme for bringing in foreign experts and the Beyond investment facilitation, ownership of land to operate businesses in the country. The visa scheme the center also offers matching includes the recently launched Long-Term Resident (LTR) visa, which services for businesses and joint- will allow foreign talents to live and work in Thailand for up to 10 years. venture partners investing in the This visa category covers different groups of individuals, namely wealthy country. global citizens, wealthy pensioners, work-from-Thailand professionals, The investment measures and highly skilled professionals. The program was put in place with the under the new strategy are effective aim of attracting one million talented foreign nationals into the country. from January 2023 onwards. For Apart from industry-specific investment promotions, the new more information, please visit strategy has identified four new special economic corridors throughout https://www.boi.go.th the country covering 16 provinces: (1) the Northern Economic Corridor (NEC), (2) the Northeastern Economic Corridor (NeEC), (3) the Central- Western Economic Corridor (CWEC), and (4) the Southern Economic Corridor (SEC). This area-based measure is being issued as a complement to the existing promotion scheme in the Eastern Special Development Zone (Eastern Economic Corridor: EEC), which covers three provinces, and the Special Economic Zones (SEZ), which covers 10 provinces. Investment projects in these special economic zones can enjoy the benefit of additional incentives, depending on the specific investment activity, of up to two years of additional CIT exemptions or three years of 50% CIT reduction on top of the industry-specific incentives available to them. Projects in target activities located in the 20 science and technology zones (S&T zone) are also entitled to up to two years of CIT exemption or five years of 50% CIT reduction in addition to the basic incentive. Core activities in the S&T zone include biotechnology development, nanotechnology development, and advanced material technology development. With the aim of retaining investors and supporting relocation, the BOI is offering, for the first time, incentives for long-standing investors with three approved projects with a total value of no less than 10 billion baht over the past 15 years. Loyal investors receiving approval for a new project or expansion project with an investment of 500 million baht or more will also receive special incentives, including an additional CIT exemption for up to three years or a 50% CIT reduction for up to five years, depending on the type of activity. For the relocation program, the additional CIT exemption of up to 5 years is granted to companies relocating their regional headquarters, research and development center, and manufacturing facilities to Thailand. Moving forward, under this new strategy, the BOI will serve the comprehensive role of promoter, integrator, facilitator, and connector to ensure investors benefit from smooth business operations and enhanced ease of doing business in Thailand. Prospective investors are encouraged to visit the one-stop center for pre-and-post investment services. The center provides information and advice on investments and 12 Thailand Investment Review

Pioneering In light of the rapidly changing EXECUTIVE TALK a New Era with global dynamics, Thailand BOI’s Strategies has realized that it cannot continue to attract global investors by being complacent and persisting with its reliance on its existing competitive edges. By focusing on creating a favorable environment for global investors and sharpening its direction and investment targets, Thailand is taking steps to advance its investment promotion strategy in order to maintain its attractiveness in the eyes of investors in comparison to its competitors in the region. AerAbttcthoeeosusscestmbsiahoadiBubnnpueriOeloreleidfcssltIsroeiohsuaatgsimilvcTmtlyat,eehoarsatnnaghtnTetitteeleordshaarstBan.iccamidOialtlnaeippnIannfragisudtsobtapivpuinlneoerruveeoohesTglhrsuihndbitimoanmdeyinglauraeaanstfnntloottdtrrr,ia’ewscsat.irndg Thailand’s Board of Investment (BOI) is very well aware of the Mr. Narit Therdsteerasukdi importance to economic growth Secretary General at of investment, and as a result, it has redefined its role to be more Thailand Board of Investment (BOI) forceful in driving investment promotion in response to current and future challenges. The new Secretary General of the BOI, Mr. Narit Therdsteerasukdi, spoke about the future direction of the BOI, with an emphasis on plans to improve the country’s investment promotion competitiveness through the 5-year Investment Promotion Strategy (2023-2027). Q: How does the BOI redefine the direction of its organization under the new strategy? A: In developing the 5-year strategy, the BOI considers domestic and global factors, the country’s strengths and potential, as well as possible future situations, and we realized that for Thailand to compete in the global arena, economic restructuring in the direction of the New Economy is necessary. 1 3Thailand Investment Review

EXECUTIVE TALK The New Economy is defined as an economy that is driven by technology, innovation, and those industries in which we Q: How will the BOI creativity, with a focus on are already highly competitive modify its role to perform competitiveness and environmental by introducing more advanced the tasks? concerns. As a result, we have technologies and innovations. identified seven directions, or Traditional agricultural industries, A: We will continue to play the pillars, to achieve those goals, for example, will be upgraded role of foreign direct investment which are as follows: to smart farming, while internal promoter. We have focused on Pillar1:Industrialrestructuring combustion engine vehicles will tax breaks as the primary tool for and supply chain strengthening be converted to electric vehicles. attracting investment, but non-tax Pillar 2: Rapid transition to The BOI will also promote incentives will play an increasing Smart & Sustainable industries upstream electronic industries and role in the future. Furthermore, we Pillar 3: Encouraging Thailand transform the chemical industry to will act as a facilitator, coordinating to become an international be increasingly driven by bio-based with various agencies to resolve business hub and a regional trade industries. investment-related issues and and investment hub. Using a whole supply chain develop ecosystem readiness. Pillar 4: Strengthening SMEs approachtoourpromotionactivities We are also determined to and Startups and connecting them for the new S-curve industries, we play the integrator role, which will to the global market target local industries that have help us to assist the government Pillar 5: Promoting investment a high potential to thrive, such by integrating tools such as tax and based on each area’s potential to as the medical, automation and financial incentives, as well as other drive inclusive growth aerospace industries. support from various agencies Pillar 6: Encouraging community Nonetheless, the industries such as the Ministry of Finance, and social investment that will be of particular focus to the Ministry of Higher Education, Pillar 7: Promoting Thai the BOI over the next 2-3 years Science, Research, and Innovation, investment abroad to expand include five industries that have and other related agencies, into business opportunities the potential to transform the Thai an integrated package that will be To achieve these pillars, the economy: the Bio-Circular-Green available to investors. BOI will use a variety of tools, economy, electronic vehicles, Being a connector is another including the Whole Package electronics, digital, and creative critical role in achieving our goal. In plan, integrated services before industries. this regard, we will serve as a bridge and after investment, ecosystem between the operations of SMEs development, and ease of investment Q: What changes in targeted investment promotion can be expected as a result of the new policy? A: We will continue to promote a diverse range of targeted industries ranging from agriculture to industry and services, with a particular emphasis on those designated by the government as existing and new S-curve industries. The BOI’s goal for the existing S-curve industries is to elevate 14 Thailand Investment Review

EXECUTIVE TALK and large entrepreneurs operating particularly in the Eastern Economic and exports during the COVID-19 locally and internationally, adding Corridor special economic zone. pandemic. This fact demonstrates value and elevating their business Added to this, Thailand has the country’s relatively low risks as opportunities. supporting industries that help an investment destination and its Aside from attracting investment, create the country’s strong attractiveness to investors setting the BOI aims to improve Thailand’s supply chain, particularly for the up operations and manufacturing competitiveness in future industries. manufacturing of parts and bases with us. As a result, the BOI is pushing components for the supply chains In addition, as countries strive forward to build a large talent pool by of targeted industries such as the for carbon neutrality in order to meet attracting technology and capable vehicle, electronics, and chemical the challenges of climate change, human resources to Thailand in industries. Thailand is very competitive in order to establish Thailand as a The focus of Thailand’s providing clean energy to the regional business center. investment promotion will no industry sector and the leading longer be on labor-intensive conglomerates that are modifying Q: Thailand faces industries, as it was in the past. their supply chains to emit less competition from other The country is being transformed pollution and steer them towards countries that are also into a technology-intensive sustainability. This is another working hard to attract economy powered by knowledge factor that will boost the country’s investors. What is and innovation. Thailand’s competitiveness. Thailand’s current knowledgeable and skilled human Lastly,Thailandhasmaintained potential for attracting resources, such as engineers and its neutrality in international investors? technicians, will be critical in driving diplomacy in the face of changing industrial transformation. global geopolitics and maintains A: Each country has its own Importantly, Thailand has the good relations with the international set of advantages. Thailand has readiness to respond to challenges community. This makes the country numerous competitive advantages in the new global landscape. a safe investment destination for over its regional competitors. We Firstly, Thailand is resilient imports, exports, and international have excellent infrastructure and to crises, as evidenced by the businesses, ensuring business investment facilities, including ability of businesses to continue continuity and security. electricity, water supply, industrial normal manufacturing, imports, estates, seaports, and airports, Note: This article is written as an excerpt of Mr Narit’s interview with FM 100.5 1 5Thailand Investment Review

COMPANY INTERVIEW Harvesting New Opportunities from the Emerging Economic Landscape aiaWatmhnnlleedpdogarffeoarowaevcvseihewleimirtcoynoehrmfeknwfditefnsoiinclgliitinnefctugnoliorncbtafsyhurce,eascllrseyientpglrweeaursorilctasrmhtet,ueofroetrem, Thailand’s attractiveness. Mr. Kriengkrai Thiennukul Chairman The Federation of Thai Industries (FTI) The Thai economy has been Founded five decades ago and uncertainty, complexity, and recognized as a safe and operated under the supervision ambiguity of the global market, as reliable operating base for of the Ministry of Industry, the well as their readiness to cope. international investors due to Federation of Thai Industries (FTI) its resilience in the face of is Thailand’s leading industrial Q: How prepared is increasing global disruption. association. The responsibilities of Thailand as a global The country’s public and private the FTI are to connect government business hub in light of sectors are collaborating to agencies with the private sector the advancing technology accelerate the momentum of its and to participate in top-level and various challenges? supply chain evolution in order policy-making and legislation with to increase competitiveness the aim of driving coordination and A: The adage “There are and agility in the face of the policy actions that maximize the opportunities in every crisis” rapid technological changes interests of local industries, both applies to Thailand. As global and unexpected disruption in locally and internationally. businesses grapple with crises the global economy. In doing As global industries face such as rising geopolitical so, they are providing a variety a critical juncture in the face of tensions, which unluckily caused of incentives and fostering unfolding uncertainties in the decoupling in the manufacturing coordination to ensure policy geopolitical landscape, global value chain, and the progression of becomes reality as Thailand markets, and ever-advancing war between Russia and Ukraine, rapidly moves toward the new technologies, Thailand Investment the discussions on “security,” economy and sharpens its Review spoke with Mr. Kriengkrai which were previously focused edges in the Bio-Circular- Thiennukul, Chairman of the FTI, on food and energy, have shifted Green economy. to shed light on the strengths of to the ability of supply chains to Thai industries in the volatility, provide uninterrupted operations. As global businesses look for a 16 Thailand Investment Review

manufacturing base that is not only government’s emphasis on the Q: What is your plan for COMPANY INTERVIEW cost effective but also resilient, it is “New Economy” and the BCG turning these ideas clear that Thailand is well positioned Economy business model. We into reality? to handle geopolitical tensions, believe that these high-potential representing a place where supply new business models that focus A: In response to climate chain security allows businesses on “less inputs for more” will be change, the Thai government to operate without disruption. critical in breaking the economy has set targets to reduce carbon Thailand achieved approximately out of the “middle-income trap,” emissions by 40% by 2030, 15% export growth in 2022, as opposed to the old model that achieve carbon neutrality by 2050, despite the disruptions in the food focuses on reasonable wages and and achieve net zero emissions by supply chain which resulted in old technology but has produced 2065. These goals serve as a soaring food prices. If the country only 3% economic growth per year framework for participating maintains its current growth rate, it on average in the past. government agencies. They will will be among the top ten exporters Webelievethistransformation serve as fundamental guidelines in the world, up from its present is needed to help Thailand with for the Thailand Board of largest ranking of 12th to 13th. navigating its problems associated Investment as it focuses on Business adaptation to the climate with ageing population. The developing a comprehensive change crisis, which is another percentage of the country’s population investment promotion framework source of pain for global business, aged over 60 years has reached for businesses that primarily use represented another area in which 20% and continues to rise. low-carbon technologies. Thai industries could benefit from TheThaieconomyisnolonger For example, Thailand’s the country’s mechanisms, such as benefiting from labor advantages vehicle production, in which it is a carbon credits and policies that and low-technology production. regional leader, is shifting toward have increased the country’s clean Instead, it is developing the capacity electric vehicles and those powered energy production. Thailand currently of industries in the new “S” curve by future energy sources such as has the capacity to produce clean that aligns with our strengths such hydrogen from internal combustion energy equivalent to 12% of the as digital and BCG. Overall, we are engines. To expedite these shifts, country’s total energy consumption, heading toward a green, clean and the FTI will discuss increased which is higher than its neighboring sustainable supply chain. financial and tax incentives with Southeast Asian countries. the Thai government. FTI is focusing on these opportunities, which align with the 1 7Thailand Investment Review

COMPANY INTERVIEW FTI has launched the “Smart Q: What is FTI’s priority Thai government in attracting Agri Industry” (SAI) project which, for supporting this investment, we are also working asitsnamesuggests,isacombination transformation? closely with those in the foreign of the “smart industry” and “agriculture business community who have industry”. SAI’s goal is to match A: As well as large corporations, already invested locally as well as agricultural production in terms of the FTI works with small and with other potential investors. quantity and quality with demand medium-sized businesses, which from the BCG industry, a strategy account for more than 80% of our Q: Do you have any final known as agriculture on demand. members. We have an “SMEs thoughts for investors We have demonstrated SAI in large Institute” which is working towards considering Thailand as cities such as Bangkok through a transforming companies into a potential investment pilot project that involves growing “smart SMEs”. Our framework destination? protein-rich plants in cities in order includes three measures: 1) “Go to meet the demand for plant-based digital,” which encourages SMEs A: Both the public and private food. This project’s agricultural to use digital channels to reach sectors in Thailand are fully aware complexes are designed to have customers and counterparts, that we must continue to improve low carbon footprints. The project 2) “Go innovative,” and 3) “Go our competitiveness and cost- will be implemented across the global,” which emphasizes effectiveness as a global supply country’s key regions. compliance with internationally chain investment destination. In the accepted standards. face of growing global uncertainty, FTI understands that global we are transforming crises into businesses are dealing with critical opportunities. To achieve this, challenges, and that Thailand is we emphasize the green, clean, also competing for investment. and sustainable economy of the Although Thailand has advantages future, such as the conversion to in many areas of investment clean and renewable energy. In competitiveness and people’s addition, we are revising our rules livelihoods, we are working closely and regulations in order to improve with the government to accelerate the ease of doing business and improvements in infrastructure create a more accommodating and facility efficiency, legal reform, environment. As president of and ease of doing business, all the FTI, I am proud to say that of which will further promote the public and private sectors in Thailand’s attractiveness. Thailand are working together In order to meet the needs as “Team Thailand” to welcome of investors and assist the investors. 18 Thailand Investment Review

THAI ECONOMY AT A GLANCE Key Economic Figures Unemployment Investment Growth Market Profile Dec 2022 GDP (2022*) 230.42%1 2022* (2022) USD 500.5 Billion 1.2% 2.6% Po6p6u.la0t9ion GDP per Capita (2022*) USD 7,165.1 / Year Million GDP Growth Inflation Export Value of Goods Growth MTinHiBm3u2m8-W35a4ge 210.52%1 (2022*) UUSS$DA9p.p3r8o-x1i0m.1a3te 230.22%2* 1200.42%1 2022* 1.2% Source: Ministry of Labour 8.2% Note: *Estimated value l Source: NESDC Source: National Statistical Office, Note: *Estimated value l Source: NESDC (Data as of December 2022) MDES (Data as of December 2022) Top 10 Export Markets (January-December 2022) Export Figures Rank Value Share (USD Million) Export value (USD million) United States 16.58% China 49,921.93 11.97% Jan-Dec 2020: 217,550.70 Japan   36,053.05 8.60% Jan-Dec 2021: 259,506.00 Vietnam   25,905.40 4.62% Jan-Dec 2022: 301,158.58 Malaysia   13,909.35 4.42% Australia   13,315.03 3.90% India   11,732.83 3.66% Indonesia   11,030.11 3.59% Singapore   10,813.96 3.57% Hongkong   10,737.59 3.51%   10,559.36 Share Top 10 Exports (January-December 2022) 9.87% Goods / Products Value 7.20% (US$ million) 5.21% Vehicles and Parts 4.83% Computers and Parts   29,723.29 3.71% Jewelry Products   21,674.71 3.52% Rubber Products   15,675.49 3.33% Plastic Pellets   14,544.25 3.26% Refined Fuel   11,168.54 3.05% Chemical Products   10,585.75 2.45% Integrated Circuits   10,024.30 Machinery and Parts     9,805.35 Air-conditioner and Parts     9,176.28     7,377.43 Exchange Rates Tax Rate Corporate Income Tax: 0 - 20% (As of 23 January 2023) Personal Income Tax: 5 - 35% VAT: 7% THB 33.02 THB 41.10 THB 35.96 (T1H00BY2en5).88 THB 4.93 Witholding Tax: 1 - 15% Source: Bank of Thailand Source: the Revenue Department (As of January 2023) 1 9Thailand Investment Review

ABOUT BOI The Office of the Board of Investment (BOI) is the principle goverment agency that operates under the Prime Minister’s Office for the purpose of encouraging investment in Thailand. We at the BOI serve as the professional contact points for investors, providing them with useful investment information and services. We offer business support and investment incentive to foreign investors in Thailand, including tax and non-tax incentives. A few non-tax incentives include granting land ownership to foreigners and facilitating visas and work permits. Besides serving the needs of overseas investors, we also offer consultation services to Thai investors who are interested in investment opportunities abroad. BOI OVERSEAS OFFICES Hanoi Beijing Shanghai Seoul Tokyo Osaka Taipei Guangzhou Jakarta Head Office, Office Of The Board Of Investment Osaka Shanghai Thailand Board of Investment, Thailand Board of Investment, 555 Vibhavadi-Rangsit Road, Chatuchak, Bangkok 10900 Thailand Osaka Office: Shanghai Office: Tel: +66 2553 8111 Fax: (+66) +66 2553 8315 E-mail: [email protected] Royal Thai Consulate-General, Royal Thai Consulate General 2nd fl., Bangkok Bank Building, 7th Floor, 18 Wanshan Road, Changning District, Los Angeles Stockholm 1-9-16 Kyutaro-Machi, Chuo-Ku, Shanghai 200336, P.R. China Thailand Board of Investment, Thailand Board of Investment, Osaka 541-0056, Japan Tel: +86 21 5260 9876, Los Angeles Office: Stockholm Office: Tel: +81 6 6271 1395 +86 21 5260 9877 Royal Thai Consulate-General, Östermalmstorg 1, 4th Floor Fax: +81 6 6271 1394 Fax: +86 21 5260 9873 611 North Larchmont Boulevard, 114 42 Stockholm, Sweden E-mail: [email protected] E-mail: [email protected] 3rd Floor Los Angeles CA 90004, USA Tel: +46 8 5025 6558, +46 8 5025 6559 Tokyo Beijing Los Angeles CA 90004, USA Fax: +46 8 5025 6500 Thailand Board of Investment, Thailand Board of Investment, Tel: +1 323 960 1199 E-mail: [email protected] Tokyo Office: Beijing Office: Fax: +1 323 960 1190 Frankfurt Royal Thai Embassy, 8th Fl., Royal Thai Embassy, No.21 E-mail: [email protected] Thailand Board of Investment, Fukuda Building West, 2-11-3 Akasaka, Guanghua Road, Chaoyang District, New York Frankfurt Office: Minato-ku, Tokyo 107-0052 Japan Beijing, 100600 P.R. China 100600 Thailand Board of Investment, Investment Section, Tel: +81 3 3582 1806 Tel: +86 10 8531 8755 to 87, New York Office: Royal Thai Consulate-General Fax: +81 3 3589 5176 +86 10 8531-8753 7 World Trade Center, 34th Floor, Liebfrauenberg 26, 60313 E-mail: [email protected] Fax: +86 10 8531 8758 Suite F, 250 Greenwich Street, Frankfurt am Main, Seoul E-mail: [email protected] New York 10007, U.S.A. Federal Republic of Germany Thailand Board of Investment, Sydney Tel: +1 212 422 9009 Tel: +49 069 9291 230 Seoul Office: Thailand Board of Investment, Fax: +1 212 422 9119 Fax: +49 069 9291 2320 #1804,18th Floor,KoryoDaeyeongakCenter, Sydney Office: E-mail: [email protected] E-mail: [email protected] 97 Toegye-ro, Jung-gu, Seoul, 100-706, Suite 101, Level 1, 234 George Street, Paris Republic of Korea Sydney New South Wales 2000, BOI Marketing Thailand Board of Investment, Tel: +82 2 319 9998 Australia Paris Office: Fax: +82 2 319 9997 Tel: +61 2 9252 4884 www.boi.go.th Ambassade Royale de Thaïlande 8, E-mail: [email protected] Fax: +61 2 9252 4882 Rue Greuze, 75116 Paris, France Taipei E-mail: [email protected] Tel: +33 1 56 90 26 00-01 Thailand Board of Investment, Jakarta Fax: +33 1 56 90 26 02 Taipei Office: Thailand Board of Investment, E-mail: [email protected] Taipei World Trade Center, 3rd Floor, Jakarta Office: Mumbai Room 3E 39-40 No.5 Xin-Yi Road, Royal Thai Embassy Thailand Board of Investment, Sec. 5 Taipei 110, Taiwan R.O.C. JI. DR Ide anak Agung Gde Agung, Mumbai Office: Tel: +88 6 2 2345 6663 Kav. E3.3 No.3 (Lot 8.8) Express Tower, 12th Floor, FAX: +88 6 2 2345 9223 Kawasan Mega Kuningan, Barrister Rajni Patel Marg, E-mail: [email protected] Jakarta 12950, Indonesia Nariman Point, Mumbai, Maharashtra Guangzhou Tel: +62 817 9800 203 400021, India Thailand Board of Investment, E-mail: [email protected] Tel: +91 22 2204 1589-90 Guangzhou Office: Hanoi Fax: +91 22 2282 1525 Investment Promotion Section, Thailand Board of Investment, E-mail: [email protected] RoyalThaiConsulate-General, Guangzhou Hanoi Office: No. 36 Youhe Road, Haizhu District, Royal Thai Embassy Guangzhou 510310, P.R. China 26 Phan Boi Chau Street, Tel: +86 20 8385 8988 ext. 220-225, Hoan Kiem District, Hanoi City, + 86 20 8387 7770 (Direct Line) Viet Nam Fax: +86 20 8387 2700 Tel: +84 24 3823 5092-4 E-mail: [email protected] E-mail: [email protected]