The Board of Investment (BOI) approved an investment promotion strategy for the next five years. The strategy involves encouraging technological advancement, a transition to smart and green industries, creativity and innovation, and talent development, aiming to strengthen the country’s status as a regional hub for trade, business, and logistics.
Staying Ahead of Changes
As a result of the volatile and highly competitive global setting, the Board of Investment adopted this strategy to stay ahead of unexpected changes and promote investment with outcomes that will materialize. Doing so can help lead Thailand into the new economic era. To reach this goal, the Board has to broaden its “Promoter” role of providing both tax and non-tax benefits, transitioning into becoming a “Facilitator” providing services, an “Integrator” of investment support tools, and a “Connector” linking industries to generate more business opportunities.
Implementing The Strategy
To materialize Thailand’s vision of this strategy toward the new economy, BOI sets forth its investment promotion policies through seven pillars:
- Upgrading existing industries and new ones established in Thailand, which has a high potential, and strengthening the supply chain
- Accelerating the industrial transition to green and smart industries through digital adoption, automation, and decarbonization investments
- Promoting Thailand as a business center and an international trade and investment gateway for the whole region
- Strengthening small and medium-sized enterprises and startups, ensuring they are linked to the global market and supply chain
- Promoting investments in the regions of Thailand that are suitable to the potential of each area, enabling inclusive growth
- Promoting investments that support communal and societal development
- Promoting foreign investment to strengthen business opportunities for Thai companies
Investment Trends in the First Nine Months of 2022
The Board acknowledged the pledges filed by foreign and local investors from January to September 2022. A total of 1,247 applications were filed, amounting to 439.1B THB. While there were 8.5 percent more applications than the 1,149 projects observed in the first nine months of 2021, the total value decreased by 14.1%, from 511B THB, reflecting a smaller project size. The Eastern Economic Corridor of Thailand represents 246.7B THB or 56.18 percent of the total value of the application in the first nine (9) months, as there were 376 projects that applied for promotion. The EEC is an area that includes three eastern provinces of Thailand, which the government promotes as a regional hub for investment, trade, and logistics.
Applications for foreign direct investment also decreased by 25% from the previous year. The primary sources of these applications in the first nine months were China (45B THB), Taiwan (39.3B THB), Japan (37.6B THB), the United States (34.3B THB), and Hong Kong (26.3B THB). The data for FDI applications in China, Hong Kong, and Taiwan included investments in the manufacturing of electric vehicles and parts.
Furthermore, the city-state attracted 286.7B THB in investments in targeted industries, namely automotive and parts (79.4B THB), electrical appliances and electronics (60.8B THB), and agriculture and food processing (54.7B THB).
The Board has issued promotion certificates to 1,101 projects from January to September. Compared to the certificates issued in 2021, the combined value of these certificates amounts to 357.6B THB (57 percent increase). The promotion certificates statistics are the closest data to actual investment, indicating that over the next year or two, there will be a noticeable increase in the actual investment flows.
Strengthening Economic Resilience
Investment patterns in Thailand reflect the global economy struggling with inflation, plummeting demand, supply chain issues, and sluggish growth in China, one of Thailand’s economic partners. This new five-year investment promotion policy reversing these trends in the short term is improbable, but it has the potential to strengthen the country’s economic resilience if appropriately reinforced. In the following weeks and months ahead, foreign investors may learn more about specific incentives and supportive policies put in place as part of the strategy.
Conclusion
Thailand’s five-year investment promotion strategy benefits local businesses and companies, thereby contributing to the country’s long-term development and competitiveness. So if you plan to register a thai company in line with innovative, hi-tech, and green industries, Reliance Consulting can help you register and establish it smoothly and effortlessly.
