On February 10, 2021, the Thailand Board of Investment (BOI) announced that 1,717 applications are submitted in 2020. The investment worth of these applications is 481.1 billion baht (USD16 billion). Ventures in the electric and communications, agriculture and food processing industries, and a surge in the medical sector lead the way.
Secretary-General speaks on Thailand BOI Applications –
“The coronavirus epidemic posed both a threat and an opportunity,” said Ms Duangjai Asawach, Secretary-General of the BOI. The overall economy slowed in 2020. Industries such as the food and medical industry can continue to grow through the crisis. For that reason, they saw a rise in investment applications.”
“The number of projects and investment value represents the success of the investment promotion steps we took last year. We did it to respond to consumer needs, especially in the surgical masks, hygiene products, and medical rubber gloves segments,” says Ms Duangjai.
Thailand BOI Applications 2020 Classifications:
Applications for projects in the focus markets, vital to the country’s economic growth, totalled 230.7 billion baht. It is 48% of the overall volume of applications. Let us have a segregated view of the total investment industry-wise:
- Applications for the electrical equipment and machinery led terms of the value of 50.3 billion baht;
- Agriculture and food manufacturing came in second with 41.1 billion baht;
- Automobiles and components came in third with 37.8 billion baht;
- Petrochemicals and chemicals came in fourth with 36 billion baht; and
- Biotechnology came in fifth with 30 billion baht.
In percentage, investments for electrical equipment and machinery contributed to 21.8% of the total investment value. The same for agriculture and food manufacturing is 17.8%. This makes them the leading industries in terms of attracting Foreign Direct Investment (FDI) for new business ventures in Thailand.
As a result of BOI provided special benefits to these industries. BOI did this in favour of Thailand’s attempts to handle the COVID-19 crisis. The volume of applications in the medical sector increased by 165 per cent from 2019 to 22.3 billion baht. Both big companies and SMEs have made investments in this sector.
In terms of Foreign Direct Investment (FDI), 907 project proposals worth a total of 213.2 billion baht were submitted in 2020. Japanese firms lead the way in terms of FDI. There are 211 Japanese ventures and a net investment volume of 75.9 billion baht.
There has always been a good relationship between Japan and Thailand in terms of business owing to JETRO and BOI collaborations.
The Eastern Economic Corridor, or EEC, includes the provinces of Chonburi, Rayong, and Chachoengsao. This region received 453 project proposals from both local and international investors totalling 208.7 billion baht in investment value.
Renewal of the measures for a public listing of BOI-promoted companies:
The BOI approved renewing the incentives given to BOI-promoted companies. It intended to list such companies on the Stock Exchange of Thailand (SET). It also focused on the Market for Alternative Investment (MAI) in order to obtain access to new financing sources.
BOI expects this to lead to the strengthening of Thailand’s capital market and economy. The announcements were made at a board meeting chaired by Prime Minister Gen Prayut Chan-o-Cha today.
Public companies are eligible for a 100 per cent corporate income tax (CIT) exemption. It is on the amount of their contribution under the programme, but excluding the cost of land and working capital. Projects under BOI promotion and operating are eligible for these extra privileges and benefits.
Companies must submit their applications before the end of December 2022 for these new rights and benefits. Companies must be included on the SET or MAI before applying for promotion, although companies that were listed previously in the measure’s announcement are not exempt.
The BCG prospects for Royal Thai Government are gradually shaping up for better results. The count of the applications and categories of investment clearly signifies this.
BOI announced that the BCG Model of Thailand would be based on four focus industries. They are agriculture, healthcare, biotechnology and tourism primarily. That is the exciting part that applications for businesses in these sectors are having the prominent lead.
So, if you are also thinking of investing in the BCG model of Thailand, feel free to write us at [email protected]
