Enhancing National Policies
This section describes the most recent investment-specific and investment-related measures per ASEAN member state.
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Thailand
Year Category Sub Category Description 2013 Overall Economic Policy Framework The Government’s economic policy on market, trade and investment announced in B.E. 2554 (2011) To promote free and fair competition policy in order to prevent a monopoly; to promote and improve the role of organisation involved in consumers’ protection; to amend laws and measures in order to create fairness for consumers; and to build enterprises’ confidence in Intellectual Property Rights’ protection, particularly for Thai goods and products in overseas markets. To build confidence for both local and foreign investors by improving laws and regulations related to trade and investment promotion in agriculture, industrial and service sectors; to improve the standard of import management in order to prevent unfair trade; to sustain the economic growth; and to spread out the economic benefits throughout the whole country in order to develop immunity to the dynamic world. To promote overseas investment in potential sectors, including setting up a manufacturing factory, concluding contract farming, setting up a branch, appointing a representative or a partner abroad for business network, and promoting Thai restaurants abroad in consistent with the policy called “Thailand: Kitchen of the World”. To improve investment promotion measures, covering the investment incentives in agricultural sector, industrial sector, tourism, sports and service sector, by focusing mainly on creativity, environmental friendly process, high technology, and social responsibility. To promote proactive market expansion by keeping the existing markets as well as to explore the new market, especially China, India, Middle East, Africa and East Europe; and to maintain the level of competitiveness in main existing markets, while preparing to be ready for global competition in terms of skills, technology and required knowledge, with an aim to promote Thai products and services to foreign consumers. To develop products and services which are new opportunities with high global demand, particularly products and services developed under the concept of creative economy with innovation, local knowledge, and awareness of environmental protection in order to enhance the import opportunity; to reduce cost by using distribution network, focusing on regional connectivity to become a regional gateway; and to develop and promote Thailand as a regional distribution hub for goods and services, as well as a global hub for Halal food. To expand trade and investment connectivity and markets under the framework of economic integration as well as bilateral and multilateral FTAs by stimulating enterprises to exploit benefits from existing FTAs with measures to handle negative impact that may occur as well as having a remedy for effected enterprises; and to educate Thai enterprises on economic integration in order to be able to develop their products and services in consistent with committed rules, regulations and standards. Investment Regime policy to restore disaster areas Thailand had experienced severe flood disasters in many areas, in 2011 and the Government therefore implemented policies to recover the disaster areas as well as necessary preventive measures. One of these policies is the promotion of reforestation which also extends to lands owned by the private sector. deforested forest areas The Government is in the process of promoting the plantation of economic trees and rehabilitation of denuded forest areas, for the interest of the Thai economy as well as for its water absorption quality which help preserve the ecosystem and this project has not yet fully implemented. Investment Reforms income tax Thailand has no new-emerging sectors, or new regulations that may affect the existing country reservation list.
As a means of improving the investment climate in Thailand, the government has reduced the corporate income tax from 23% in 2012 and further reduced to 20% in 2013.Investment-related Agreements or Arrangements bilateral No Investment Promotion and Protection Agreement have been signed since August 2012.
Thailand is currently negotiating bi-lateral agreements with Peru, Chile, India and European Union.2014 Overall Economic Policy Framework Strategy on Economic Restructure Towards Sustainable Development Strengthening the capacity of Thai entrepreneurs, especially SMEs, and leverage the role of Thai entrepreneurs in national economic development. Key measures include:
1. To restructure the trade and investment schemes in accordance with economic growth of Thailand, Asia, and Africa
2. To restructure services scheme in order to create more value to potential service sectors, which is environmental friendly and based on innovation
3. To develop creative economy, including the development of creative businesses, creative cities, and creative industries
4. To develop agricultural sectors with an aim to increase productivity and leverage the creation of value-added products with technology and environmental-friendly procedures
5. To develop quality industrial sectors by using sciences, technology, and creativity with an aim to build creative knowledge-based and environmental-friendly industries.Developing sciences, technology, research, and innovation to be driving tools for sustainable economic growth with the following guidelines:
1. To further develop creativity, local knowledge, Intellectual Property, and R&D for commercial, social, and community usage
2. To create supporting environment for the development and use of sciences, technology, research, and innovation, which will promote creativity and value -added creation in manufacturing sector
3. To develop basic infrastructure for sciences, technology, research, and innovation in form of cooperation between public and private sectors broadly and sufficiently in both quantitative and qualitative aspects.Developing competitiveness effectively, equally, and fairly with the following guidelines:
1. To develop financial market and capital market as well as workforces to support the economic restructure
2. To develop Intellectual Property management system
3. To develop local infrastructure and logistics to support the connectivity both intra-nationally and internationally with an aim to increase effectiveness and be consistent with international standard
4. To build energy security by promoting clean energy, developing alternative energy, and increasing effectiveness in energy consumption in every level
5. To review and amend laws, rules, and regulations relating to economy to promote the increase of competitiveness as well as to be consistent with the world’s changes.Strategy on Building Network within the Region for Economic and Social Stability 2.1 Develop transportation and logistics networks under the framework of sub-regional cooperation by improving services, relevant laws and regulations, and human resources in these particular sectors
2.2 Develop investment hub by increasing competitiveness in sub-regional level by promoting cross-border trade, developing economic zone along the borders
2.3 Prepare for the ASEAN Economic Community by developing co-operation between public and private entities, strengthening the educational system, leverage the quality of skilled-labours, and setting-up standards for products and services to prevent the importation of low-quality products
2.4 Play a creative role as a party to international and regional cooperation in global forum by taking part in shaping strategy as well as keeping balance between the relationship with super powers and emerging powers
2.5 Develop economic partnership in the region, focusing on human resource development, workforce movement, and the promotion of Thai overseas workforce
2.6 Participate significantly in creating international society with high quality of living
2.7 Strengthen international cooperation to promote economic growth in an ethically and environmental friendly way
2.8 Accelerate the utilization of enforced FTAs with the preparation for their impacts
2.9 Promote Thailand as an investment and business hub in Asia as well as a hub of cooperation on regional development
2.10 Improve and strengthen development network in local communities in order to create awareness on domestic and global changesInvestment Regime or Business Environment the liberalization of Forestry The previous government has decided to postpone the liberalization of Forestry from Forest Plantation due to severe flood disaster and the necessity of the rehabilitation of the forest areas. However, after the new government has been formed, the proposal on liberalization of Forestry from Forest Plantation shall be submitted to the Cabinet and Parliament for their approval. The Board of Investment (BOI) The Board of Investment (BOI) is in the process of reviewing its investment policy. The priorities of the BOI promotion policy will be knowledge-based, innovative and sustainable industries. Under the new policy draft, the BOI plans to shift its investment promotion focus to 10 target industries, including:
- Infrastructure and logistics
- Primary industries
- Medical & scientific equipment
- Renewable energy and environmental services
- Business support services
- Advanced core technologies
- Food and agricultural processing
- Hospitality & wellness
- Automotive and other transport equipment
- Electronics and appliances
The BOI promotes Thai overseas investment more actively in order to increase competitiveness of Thai businesses. The BOI has established a Thailand Overseas Investment Center to assist Thai nationals to invest abroad.
The BOI and the Joint Foreign Chambers of Commerce in Thailand (JFCCT) have organized the BOI-JFCCT Consultative Meeting on June 30, 2014. This forum has been aimed to be a platform for public and private participation, which would discuss in details about how to improve investment climate and investors’ confidence.The One Start One Stop Investment Center (OSOS) The One Start One Stop Investment Center (OSOS) has launched a new website to facilitate investors. The website osos.boi.go.th gives new investors a clear overview on how to start a business in Thailand. Over 20 agencies are available at the OSOS to help investors with different applications to make sure investors understand what is needed to register a company, obtain investment promotion privileges, obtain a foreign business license, complete an environmental impact assessment, request permission to use land for industrial operations, obtain utilities, etc. The Electronic Machine Tracking System (eMT Online) To improve the investment facilitation, the BOI offers several paperless transactions, i.e. The Electronic Machine Tracking System (eMT Online), the E-Expert System for foreign skill workers, BOI investment promotion online application. Policy, Regulatory or Institutional Reforms the Value Added Tax According to the current situation of global economic uncertainty, Thai economy has to rely more on domestic consumption and investment for economic growth. Therefore, the Cabinet has decided to postpone the planned increase in the Value Added Tax rate (from 7% to 10%) in 2014 to stimulate the domestic consumption and investment, which are essential for the recovery of the country’s economy. the corporate income tax In 2012, in order to improve the investment climate in Thailand the government has reduced the corporate income tax from 30% to 23% in 2012 and to 20% in 2013. The corporate income tax rate will remain at 20% in the upcoming year to continue improving Thailand’s competitiveness. 2015 Overall Economic Policy Framework Strategy on Economic Restructure Towards Sustainable Development 1.1. Strengthening the capacity of Thai entrepreneurs, especially SMEs, and leverage the
role of Thai entrepreneurs in national economic development. Key measures include:
1) To restructure the trade and investment schemes in accordance with economic
growth of Thailand, Asia, and Africa
2) To restructure services scheme in order to create more value to potential service
sectors, which is environmental friendly and based on innovation
3) To develop creative economy, including the development of creative businesses,
creative cities, and creative industries
4) To develop agricultural sectors with an aim to increase productivity and leverage
the creation of value-added products with technology and environmental-friendly
procedures
5) To develop quality industrial sectors by using sciences, technology, and creativity
with an aim to build creative knowledge-based and environmental-friendly
industries.1.2. Developing sciences, technology, research, and innovation to be driving tools for
sustainable economic growth with the following guidelines:
1) To further develop creativity, local knowledge, Intellectual Property, and R&D for
commercial, social, and community usage
2) To create supporting environment for the development and use of sciences,
technology, research, and innovation, which will promote creativity and value -
added creation in manufacturing sector
3) To develop basic infrastructure for sciences, technology, research, and innovation in
form of cooperation between public and private sectors broadly and sufficiently in
both quantitative and qualitative aspects.1.3. Developing competitiveness effectively, equally, and fairly with the following
guidelines:
1) To develop financial market and capital market as well as workforces to support the
economic restructure
2) To develop Intellectual Property management system
3) To develop local infrastructure and logistics to support the connectivity both intra-
nationally and internationally with an aim to increase effectiveness and be
consistent with international standard4) To build energy security by promoting clean energy, developing alternative energy,
and increasing effectiveness in energy consumption in every level
5) To review and amend laws, rules, and regulations relating to economy to promote
the increase of competitiveness as well as to be consistent with the world’s
changes.Strategy on Building Network within the Region for Economic and Social Stability 2.1 Develop transportation and logistics networks under the framework of sub-regional
cooperation by improving services, relevant laws and regulations, and human resources
in these particular sectors
2.2 Develop investment hub by increasing competitiveness in sub-regional level by
promoting cross-border trade, developing economic zone along the borders
2.3 Prepare for the ASEAN Economic Community by developing co-operation between
public and private entities, strengthening the educational system, leverage the quality
of skilled-labours, and setting-up standards for products and services to prevent the
importation of low-quality products
2.4 Play a creative role as a party to international and regional cooperation in global forum
by taking part in shaping strategy as well as keeping balance between the relationship
with super powers and emerging powers
2.5 Develop economic partnership in the region, focusing on human resource
development, workforce movement, and the promotion of Thai overseas workforce
2.6 Participate significantly in creating international society with high quality of living
2.7 Strengthen international cooperation to promote economic growth in an ethically and
environmental friendly way
2.8 Accelerate the utilization of enforced FTAs with the preparation for their impacts
2.9 Promote Thailand as an investment and business hub in Asia as well as a hub of
cooperation on regional development
2.10 Improve and strengthen development network in local communities in order to create
awareness on domestic and global changesSection 2: Improvement of Investment Regime or Business Environment In November 2014, the Board of Investment (BOI) has approved its “Seven-Year
Investment Strategy" (2015-2021), with a focus on promoting investments that create
value for Thailand and those that have a positive impact on society and the environment.
The new investment promotion policy will give priority to investments that are beneficial
to and supportive of the country’s overall development strategy. These industries include
high-tech and creative industries, service industries that support the development of a
digital economy, and industries that utilize local resources. The new policy is effective for
applications submitted from January 1, 2015BOI policy is divided into activity-based or merit-based incentives as follows:
- Activity-based incentives are ranked A1 to B2, with A1 offering the highest
incentive, including an un-capped 8 year CIT exemption; A2, an 8 year capped CIT;
A3 get and A4 get 5 year and 3 year exemptions, respectively.
- Merit-based incentives are offered to encourage competitiveness, decentralization
and industrial area development, and offer extended CIT exemptions and other
fiscal benefits. Merit-based incentives can be earned through activities such as
research and development; donations to a Technology and Human Resources
Development Fund, or product and packaging design, etc.The BOI zoning system will be abolished under the new policy, although investment
projects located in 20 lower-income provinces, as well as projects in industrial estates, will
be offered special incentives as follows:
- Projects located in one of Thailand’s more than 60 industrial estates or promoted
industrial zones are granted 1 additional year of corporate income tax exemption.
- If investors locate in one of 20 designated provinces, they can receive 3 additional
years of tax holiday.The list of eligible activities still includes most activities which are significant to the supply
chain and have the potential to be strengthened. In addition, the number of such activities
has not been significantly reduced, as there are still more than 200. Corporate income tax
privileges will be granted to 180 of them and the rest will receive non-tax incentives along
with exemption on import duties on machinery and raw materials used for export
productsThe Board agreed on a policy to enhance SME capacity building in order to strengthen
their competitiveness at the international level. 38 eligible activities from the Seven-Year
Investment Strategy will be selected for SMEs to receive incentives. The measure will offer
an additional two-year corporate income tax exemption to enhance their competitiveness
and encourage investment. This policy will be effective from January 1, 2015 – December
31, 2017The Board also agreed with the policy to promote investment in special border areas.
Investment projects located in the five Special Economic Development Zones (SEZ) will
receive an additional three-year corporate income tax exemption on top of basic
incentives. These special zones include areas within the five provinces of Tak, Trad, Sa
Kaeo, Songkhla and Mukdahan.The Board had agreed with the proposal made in a resolution adopted by the Special
Economic Development Policy Committee to 13 targeted industries covering 61 business
activities if they locate in one of the special economic zones, as follows:
1) Agro- industry, fisheries and related businesses
2) Ceramic products manufacturing
3) Textile, clothing, and leather manufacturing
4) Furniture manufacturing
5) Gems and jewelry manufacturing
6) Medical devices manufacturing
7) Automotive, machinery and parts manufacturing
8) Electronics and electrical appliances manufacturing
9) Plastics manufacturing
10) Pharmaceuticals manufacturing
11) Logistics businesses
12) Industrial zones or industrial estates
13) Businesses that support tourismThe Office of the Board of Investment will offer maximum incentives to these targeted
activities. The list of eligible activities will differ in each zone (Tak, Mukdahan, Sakaeo, Trat, and Songkhla) according to the respective potential, limitations, and needs in the
zone. Qualified projects investing in special economic zones will receive the maximum
incentives which include an 8-year corporate income tax exemption and an additional 5-
year 50% corporate income tax reduction. Businesses that are not one of the categories
listed above, but which are on the list of BOI promoted activities, are also eligible to apply
for additional incentives if they locate their facilities in a SEZ.The board also reviewed rules and regulations on utilizing imported used machinery in BOI
promoted projects and agreed to allow promoted projects to use machinery older than 5
years but not exceeding 10 years. On general cases, imported used machinery must not
exceed 10 years. In cases when a production base is relocated into Thailand machinery
over 10 years old will be allowed to be used in the project. In both cases, no offer of
import duty exemption on machinery will be made and the project will be required to
submit a performance certificate issued by a trusted institute identifying the efficiency of
the machinery, its environmental impact, safety standard and energy usage, as well as its
maintenance profile and its fair value must be obtainedFrom January – February 2015, the BOI has organized seminars to create an understanding
of the new strategies for Thai and foreign investors in 4 regions around Thailand, and will
also hold Road Shows in major countries to inform foreign investors about these new
strategiesSection 3: Policy, Regulatory or Institutional Reforms According to the current situation of global economic uncertainty, Thai economy has to
rely more on domestic consumption and investment for economic growth. Therefore, the
Cabinet has decided to postpone the planned increase in the Value Added Tax rate (from
7% to 10%) in 2014 to stimulate the domestic consumption and investment, which are
essential for the recovery of the country’s economy.Thailand has reduced the corporate income tax from 30% to 23% in 2012 and to 20% in
2013. The corporate income tax rate will remain at 20% in 2015 year to continue
improving Thailand’s competitiveness.Section 4: Investment-related Agreements or Arrangements No Investment Promotion and Protection Agreement have been signed since August 2012. Thailand is in the process of negotiation for the following bi-lateral agreements:
- Thailand - India FTA
- Thailand - EU FTA
- Thailand - Canada FTA
- Thailand – Turkey*
- Thailand – Peru
- Thailand – Pakistan*2016 Overall Economic Policy Framework Strategy on Economic Restructure Towards Sustainable Development 1.1.Strengthening the capacity of Thai entrepreneurs, especially SMEs, and leverage
the role of Thai entrepreneurs in national economic development. Key measures
include:
1) To restructure the trade and investment schemes in accordance with economic
growth of Thailand, Asia, and Africa
2) To restructure services scheme in order to create more value to potential
service sectors, which is environmental friendly and based on innovation
3) To develop creative economy, including the development of creative
businesses, creative cities, and creative industries
4) To develop agricultural sectors with an aim to increase productivity and leverage
the creation of value-added products with technology and environmental-friendly
procedures
5) To develop quality industrial sectors by using sciences, technology, and
creativity with an aim to build creative knowledge-based and environmental-
friendly industries.1.2.Developing sciences, technology, research, and innovation to be driving tools for
sustainable economic growth with the following guidelines:
1) To further develop creativity, local knowledge, Intellectual Property, and R&D for
commercial, social, and community usage
2) To create supporting environment for the development and use of sciences,
technology, research, and innovation, which will promote creativity and value -
added creation in manufacturing sector
3) To develop basic infrastructure for sciences, technology, research, and
innovation in form of cooperation between public and private sectors broadly
and sufficiently in both quantitative and qualitative aspects.1.3.Developing competitiveness effectively, equally, and fairly with the following
guidelines:
1) To develop financial market and capital market as well as workforces to support
the economic restructure
2) To develop Intellectual Property management system
3) To develop local infrastructure and logistics to support the connectivity both
intra-nationally and internationally with an aim to increase effectiveness and be
consistent with international standard
4) To build energy security by promoting clean energy, developing alternative
energy, and increasing effectiveness in energy consumption in every level
5) To review and amend laws, rules, and regulations relating to economy to
promote the increase of competitiveness as well as to be consistent with the
world’s changes.Strategy on Building Network within the Region for Economic and Social Stability 2.1 Develop transportation and logistics networks under the framework of sub-regional
cooperation by improving services, relevant laws and regulations, and human
resources in these particular sectors
2.2 Develop investment hub by increasing competitiveness in sub-regional level by
promoting cross-border trade, developing economic zone along the borders
2.3 Prepare for the ASEAN Economic Community by developing co-operation between
public and private entities, strengthening the educational system, leverage the
quality of skilled-labours, and setting-up standards for products and services to
prevent the importation of low-quality products
2.4 Play a creative role as a party to international and regional cooperation in global
forum by taking part in shaping strategy as well as keeping balance between the
relationship with super powers and emerging powers
2.5 Develop economic partnership in the region, focusing on human resource
development, workforce movement, and the promotion of Thai overseas workforce
2.6 Participate significantly in creating international society with high quality of living
2.7 Strengthen international cooperation to promote economic growth in an ethically
and environmental friendly way
2.8 Accelerate the utilization of enforced FTAs with the preparation for their impacts
2.9 Promote Thailand as an investment and business hub in Asia as well as a hub of
cooperation on regional development
2.10 Improve and strengthen development network in local communities in order to
create awareness on domestic and global changesImprovement of Investment Regime or Business Environment § Thailand’s target industries
- On November 17, 2015 the cabinet approved the 10 target industries as new
engines of growth and assigned BOI to conduct detail study in order to further
develop investment promotion policies.
1. Next – Generation Automotive
2. Smart Electronics
3. Affluent, Medical and Wellness Tourism
4. Agriculture and Biotechnolgy
5. Food for the Future
6. Robotics
7. Aviation and Logistics
8. Biofuels and Biochemicals
9. Digital
10. Medical Hub
- The 10 target industries are significant in mobilizing future economy. BOI is now
working on investment promotion measures to be in line with the aforementioned
industries.§ The Office of the Board of Investment (BOI) sets list of targeted industries to promote
in special economic zones
- The Board had agreed with the proposal made in a resolution adopted by the
Special Economic Development Policy Committee to 13 targeted industries covering 61 business activities if they locate in one of the special economic
zones, as follows:
1. Agro- industry, fisheries and related businesses
2. Ceramic products manufacturing
3. Textile, clothing, and leather manufacturing
4. Furniture manufacturing
5. Gems and jewelry manufacturing
6. Medical devices manufacturing
7. Automotive, machinery and parts manufacturing
8. Electronics and electrical appliances manufacturing
9. Plastics manufacturing
10. Pharmaceuticals manufacturing
11. Logistics businesses
12. Industrial zones or industrial estates
13. Businesses that support tourism
- The BOI will offer maximum incentives to these targeted activities
- The list of eligible activities will differ in each zone (Tak, Mukdahan, Sakaeo, Trat,
and Songkhla) according to the respective potential, limitations, and needs in the
zone. Qualified projects investing in special economic zones will receive the
maximum incentives which include an 8-year corporate income tax exemption and
an additional 5-year 50% corporate income tax reduction.
- Businesses that are not one of the categories listed above, but which are on the
list of BOI promoted activities, are also eligible to apply for additional incentives if
they locate their facilities in a SEZ.§ Relaxation of rules and regulations on utilization of used machinery
- The board reviewed rules and regulations on utilizing imported used machinery in
BOI promoted projects and agreed to allow promoted projects to use machinery
older than 5 years but not exceeding 10 years. On general cases, imported used
machinery must not exceed 10 years. In cases when a production base is
relocated into Thailand machinery over 10 years old will be allowed to be used in
the project. In both cases, no offer of import duty exemption on machinery will be
made and the project will be required to submit a performance certificate issued
by a trusted institute identifying the efficiency of the machinery, its environmental
impact, safety standard and energy usage, as well as its maintenance profile and
its fair value must be obtained.§ Thailand’s new incentive regimes on International Headquarters (IHQ) and
International Trading Centers (ITC)
- The Cabinet has approved the promotion scheme – along with supporting tax and
non-tax incentive packages – for companies that set up the International
Headquarters (IHQ) and International Trading Center (ITC) in Thailand.
- General Requirements for the IHQ and ITC regimes
§ Must be a Thai incorporated entity with a paid-up capital of at least THB 10
million in each accounting period
§ Must provide qualifying services to an overseas associated enterprise§ Must have annual operating expenses of at least THB 15 million which are
paid to recipients in Thailand
§ Must submit application and obtain the IHQ status from the Director-General
of the Thai
§ Revenue Department in accordance with the rules, procedures and
conditions as prescribed by the Director-General of the Thai Revenue
Department
§ Must comply with other rules, procedures and conditions as prescribed by
the Director General of the Thai Revenue Department
- Tax Incentives:
§ Foreign investors setting up an IHQ in Thailand will be entitled to a 10% cut
in corporate income tax available from services, rights and dividends from
local affiliated entities. They are exempted from withholding tax on dividends
received from/paid by the local headquarters to foreign entities.
§ There is also an exemption from income tax for sales available through the
purchasing and selling of goods abroad, and a 10% cut in income tax
charged on sales available through the purchase of raw
materials/intermediate products in the country that are sold to affiliate
branches abroad for production use. There would be many more non-tax
breaks, such as easier visa requirements.
§ Personal income tax of foreign experts and high-ranking executives working
for the IHQ are also cut to 15%. There are also exemptions from specific
business tax that are provided for lending to affiliated companies – both in
Thailand and abroad.
§ ITCs will enjoy exemption from corporate income tax from sales made
available through purchasing and selling goods abroad. There is a 10% cut
in income tax on sales from purchasing raw materials or intermediate goods
domestically for sale to foreign affiliates or branches for production
purposes. There is also an exemption from withholding tax on dividends paid
by the ITC to foreign entities.
- Non-Tax Incentives:
§ IHQ: Exemption of import duty on machinery used in R&D and training
activities
§ ITC: Exemption of import duty on machinery
§ Other non-tax incentives
- Permission to bring expatriates (and their spouses) into Thailand to work
on the BOI business activities for a period as deemed appropriate by the
BOI;
- Permission to own land for carrying BOI-promoted business activities;
- Permission to remit foreign currency abroad; and
- Permission to operate the restricted business under 100% foreign
ownership§ The Board of Investment (BOI) has introduced promotional measures to boost three
clusters of the future -- Food Innovation, Aviation, Automation and Robotics.
- To promote investment in Automation and Robotic clusters, projects can be
located in all area of Thailand. Targeted business in Automation and Robotic
cluster include manufacture of equipment and parts, automation system and
parts, robot’s structures and parts, and embedded software. - Food Innovation, Aviation, Automation and Robotic industries will be granted
super-clusters incentives, including eight-year corporate income tax exemption,
an additional five-year 50% reduction and import duty exemption on machinery
and raw materials.
- Interested investors must have corporation with educational institution, R&D
center, or C enter of Excellence and must submit their applications within
December 31, 2016.§ The BOI extends the Range of Its One Stop Service to cover IHQ ITC and SEZ with
the aim to improve investment climate.
- The center will extend its range of service to cover information and consultation
services for investors who are interested in investing in International
Headquarters (IHQ), International Trading Centers (ITC), and in the 10 Special
Economic Zones (SEZs) within 10 provinces including Tak, Kanchanaburi, Chiang
Rai, Nong khai, Mukdaharn, Nakorn Phanom, Trat, Sa Kaew, Songkhla, and
Narathiwas.
- Agencies represented at OSOS are as follows:
- Office of the Prime Minister
§ Office of the Board of Investment
- Ministry of Commerce
§ Department of Business Development
§ Department of International Trade Promotion
- Ministry of Finance
§ The Customs Department
§ The Revenue Department
§ The Excise Department
- Ministry of Energy
§ Department of Mineral Fuels
§ Department of Energy Business
§ Department of Alternative Energy Development and Efficiency
§ Office of the Energy Regulatory Commission
- Ministry of Industry
§ Department of Industrial Works
§ Department of Primary Industries and Mines
§ Industrial Estate Authority of Thailand
- Minister of Interior
§ Department of Lands
§ Department of Public Works and Town & Country Planning
§ Provincial Electricity Authority
§ Metropolitan Electricity Authority
§ Provincial Waterworks Authority
- Royal Thai Police
§ Immigration Bureau - Ministry of Labour
§ Department of Employment
§ Department of Labour Protection and Welfare
§ Social Security Office
- Ministry of Natural Resources and Environment
§ Office of Natural Resources and Environmental Policy and Planning
§ Royal Forest Department
- Ministry of Public Health
§ Food and Drug Administration
- Ministry of Transport
§ Department of Land Transport
- Ministry of Tourism and Sports
§ Department of Tourism
- Ministry of Science and Technology
§ National Innovation Agency
§ Thailand Science Park
§ Software Park Thailand
- Various One Stop Service Centers
§ One Stop Export Service Center
§ Service Link, Ministry of Industry
§ One Stop Service Center in Special Economic Zone
- Private Sectors
§ Banking Institutes
§ Industrial Parks
§ Telecommunication Service ProvidersPolicy, Regulatory or Institutional Reforms Thailand 4.0 Thailand 4.0: Thailand’s future industry direction
- Development of Thailand’s industry direction
§ Thailand 1.0: Agriculture-based industry
§ Thailand 2.0: Manufacturing-based industry
§ Thailand 3.0: FDI-based industry (Automotive, E&E, Petrochemicals)
§ Thailand 4.0: Knowledge-based Economy, Creative Industry, Green
Industry, Alternative Energy, Hospitality & Wellness, Logistics HubThe Information and Communication Technology (ICT) The Information and Communication Technology (ICT) Ministry will embark on
three strategic digital initiatives by the end of 2016 to facilitate the emergence of
"Thailand 4.0" -- a sustainable, value-based economy. Building digital
communities, establishing digital parks for small and medium-sized enterprises
(SMEs) and creating digital innovative start-up networks are the government's
three digital initiatives to be rolled out this year.The Board of Investment (BOI) The Board of Investment (BOI) has announced plans to introduce strategies to
propel Thailand into a new stage of economic development. According to the BOI,
there needs to be change, as there are many problems with our current economic
path which include:
§ Low competitiveness
§ Low investment in R & D
§ Growing labor shortages, both for skilled and unskilled workers
§ Increasing restrictions on heavy industry – with less land available and
tougher regulations
§ Potential problems in energy security
- The BOI’s aims to help Thailand become a high value economy and a regional
hub. The key ingredients include more research and development, a focus on
services and high-value industries, better care for the environment, and cross-
border regional clusters.2017 Amended Investment Promotion Act (No. 4) The Thailand Board of Investment (BOI) The Thailand Board of Investment (BOI) has amended its Investment Promotion Act which entered into force on January 25, 2017. Under this amendment technology and innovation development has been assigned as a new category eligible for investment promotion. Incentives will be granted to technology development activities which are divided in four groups, as follows:
1. Bio-Technology
2. Nano-Technology
3. Advanced Material Technology and
4. Digital Technology
Moreover, the BOI will exempt the import duty on imported material for research and development purposes.Special Economic Zones (SEZs)
(1) Development of SEZsThe Special Economic Development Zones (SEZ) are in border areas contiguous to Myanmar, at Kanchanaburi; the Lao PDR, at Chiang Rai, Mukdahan, Nhong Khai and Nakhon Phanom; Cambodia at Sa Kaeo, and Malaysia at Songkhla and Narathiwat.
Thai Government pays attention on border areas with neighboring countries to improve trade and investment, quality of life of people in the area, and preparing for AEC integration. The Special Economic Zones in ten locations in ten different provinces will be established and can be detailed into two phases, as follows:
Phase 1: There are 6 provinces - Tak, Nong Khai, Mukdahan, Sa Kaeo, Trad, and Nong Khai
Phase 2: There are 4 provinces – Narathiwat, Chiang Rai, Nakhon Phanom, and Kanchanaburi
Development of Basic Infrastructure
In targeted areas under the first phase of five SEZs, from 2015 to 2016, the Government is investing in the development of basic infrastructure, including public utilities, and customs checkpoints (6 checkpoints) with a budget of 10,000 million Baht.(2) Policies and Institutional Issues Projects investing in the Special Economic Development Zones (SEZ) will receive government support i.e. fiscal measures and government facilitation. Target activities will be entitled to fiscal incentives, which are measures under the Thailand Board of Investment (BOI) and measures under the Ministry of Finance.
Investment Promotion Measures under the Thailand Board of Investment
In reference to BOI Announcement No. 4/2557 dated 18 December 2014 regarding investment promotion in the Special Economic Development Zones, fiscal incentives are granted to projects investing in the SEZ in 2 cases, as follows:
If the activities carried out in the project are listed in the eligible list of activities under BOI Announcement No. 2/2557 regarding policy and criteria for investment promotion dated 3 December 2014
If the activities carried out in the project are as listed by the National Policy Committee on Special Economic Development
The BOI extends investment promotion incentives for SEZs to the end of 2018
Targeted Activities for Special Economic Development Zones
The National Policy Committee of Special Economic Development Zones has stipulated target industries for Special Economic Development Zones. Each zone will have different targeted activities depending on competencies, limitation and demands, which are categorized into 13 sectors, as follows:
Agricultural, fishery and related industries
Ceramic products
Textile, garment, and leather industries
Manufacture of furniture
Gems and jewelry
Medical equipment
Automotive, machinery, and parts
Electrical appliances and electronics
Plastics
Medicine
Logistics
Industrial estates/ zones
Tourism related industry
For further details please visit:
http://osos.boi.go.th/index.php?page=agency_detail&group_id=238
One Stop Service Center (OSS)
Every SEZ will have a One Stop Service Center (OSS) that is set up to facilitate investors by emphasizing trade and investment service, as well as labor issues, public health and security, in a fast and complete manner. Investors can contact many government agencies at one location, a One Stop Service Center providing information and coordination with related government agencies for submission of applications. Services provided by the OSS comprise of three forms, as follows:
Providing information and recommendations with database related to business operation in the SEZs, both regulation related information, database for carrying out business in the district and contacts of related government agencies.
Acceptance of matter, submission to concerned agencies and follow up.
Approval and Permission (only where the stationed official has the complete authority)Eastern Economic Corridor (EEC) Transportation systems for the distribution of goods and the transportation of passengers Air Transportation
U-Tapao Airport will be upgraded to an International Airport to accommodate more than three million passengers per year.
Aviation Maintenance Center with smart technology provides services with the most modern and eco-friendly technology.
Water Transportation
Laem Chabang deep-sea port (expansion to the 3rd phase) is the main sea port for containers and transportation of passenger cars and has the capacity of 18 million TEU and 3 million cars per year
Map Ta Phut deep-sea port (expansion to the 3rd phase) is a sea port mainly used to transport liquid and natural gas for energy production and to support the national petrochemical industry
Satahip commercial seaport is a port for modern cruises and connects tourists’ destinations of the Gulf of Thailand. This port will also accommodate ship building and oil platform building industries
Land Transportation
High-speed trains will connect three international airports: Donmuang, Suvarnabhumi and U-Tapao
Double-track railways for freight transport will connect Laem Chabang port to Map Ta Phut port
Motor-way extension project from Pattaya to Rayong will ease the transportation among these provincesBOI Incentives The BOI grants incentives to the nine following targeted industries and enabling services in the EEC.
9 Targeted industries
Next-Generation Automotive
Smart Electronics
Affluent Medical and Wellness Tourism
Food for the Future
Automation and Robotics
Aviation
Biochemical, Petrochemical & Eco-Friendly Products
Digital
Medical Hub
Enabling Services
Development of Infrastructure and Logistics
Development of Tourist Destinations
Research and Development
Technology Support Services
Investors invest in the above mentioned targeted industries and services in the EEC will receive a 50% reduction on the corporate income tax (CIT) for 5 years after the regular CIT exemption period has ended.
The application for the investment promotion incentives in the EEC must be submitted before December 29, 2017.Strategic Talent Center-STC STC Services (1) S&T Expert Search
Companies looking for S&T manpower to support their operations and investment can submit information on their requirements via STC’s website (www.boi.go.th/stc). Once the requirements have been submitted, the information will be transmitted to the agencies in the STC network. These agencies will then search for the required experts in their extensive databases and will produce a list of suggested experts and their profiles which will be sent to the requesting companies for further engagement.
The databases used in an expert search cover both existing researchers/experts working in the public sector who could be mobilized to work in the private sector and an available pool of new PhD graduates with research experience in Thailand or overseas.(2) Qualifications/ Expertise Recognition
Recognizing that foreign experts may be needed to mitigate the shortage of local expertise in certain areas, STC then offers the qualification/expertise recognition service so that recognized/ recognized foreign experts can have access to special arrangements for visas and work permits. The recognition of expertise/qualifications will be done by the relevant authorities in the STC network such as the Ministry of Digital Economy and Society (for IT experts) and the Ministry of Science and NRCT (for S&T experts).(3) Visa and Work Permit Facilitation
Experts who have been recognized by any institutions in the STC network will receive visa and work permit facilitation regardless of working in a BOI-promoted company or not. Therefore, STC recognized foreign experts working for a company not promoted by the BOI are entitled to BOI facilitation (under section 24 and 26 of the Investment Promotion Act) and can access services at the One Stop Service Center for Visa and Work Permit. Starting October 1, 2018, the Single Window System for Visas and Work Permits will also be applied to STC-recognized experts working under non-BOI companies.2018 Overall Economic Policy Framework Economic and Social development Economic and Social development during the period of the 12th National Economic and Social Development Plan (2017-2021) is anticipated to pursue four national agendas, as follows:
1. Alleviate poverty and income distribution imbalances
2. Enhance Thailand's competitiveness
3. Promote social capital development
4. Promote sustainable development
The implementation of the 12th Plan began on 1 October 2016 and will continue until 30 September 2021. The Office of the National Economic and Social Development Board reported that the 12th Plan was worked out in accordance with the 20-year national strategy, 2017-2036.
The 20-year national strategic plan consists of six areas, six primary strategies, and four supporting strategies. The six areas include:
1. Security
2. Competitiveness enhancement
3. Human resource development
4. Social equality
5. Green growth and
6. Rebalancing and public-sector development
The six primary strategies seek to enhance and develop the potential of human capital; ensure justice and reduce social disparities; strengthen the economy and enhance competitiveness on a sustainable basis; promote green growth for sustainable development; bring about national stability for national development toward prosperity and sustainability; and enhance the efficiency of public sector management and promote good governance.
As for the four supporting strategies for efficient national development, they involve:
1. Infrastructure development and the logistics system
2. Science and technology, research, and innovation
3. Urban, regional, and economic zone development and
I4. nternational cooperation for development
The 12th Plan will continue to focus on the Philosophy of Sufficiency Economy, which had become the guideline of the country’s development since the Ninth Plan, beginning in 2006. The philosophy aims to change the priority of economic policy from "growth" to "social development." The main objective is to improve the people's well-being.
It has been followed as a shared value by the Thai people, guiding the transformation to a new national management system, based on the goals of efficiency, quality of life, and sustainability and it is geared to reduce income disparity and poverty, strengthen the Thai economy and enhance the country’s competitiveness, promote natural capital and environmental quality.Policy, Regulatory or Institutional Reforms Thailand 4.0 Thailand is currently embarking on a major economic reformation process that includes a number of initiatives aimed at facilitating the business process and transforming business environment in the country. Technological advancement has been progressing very rapidly in exponential fashion. Many of the technologies such as robotic, machine learning, or Artificial Intelligence have entered in the new age of digital transformation and the Fourth Industrial Revolution.
The Thai government is striving to push Thailand forward to a new chapter or “Thailand 4.0”, where science, technology, innovation, value addition, and R&D are the central forces driving economic growth. Under this initiative, the government aims to strengthen internal economic fundamentals in all dimensions and to transform Thailand into a developed economy within 20 years. The government also aims to achieve a GDP per capita of $15,000 US dollar, an annual growth of between 5 and 6 percent per year, and a position of better than 20th in any competitiveness index rankings.
Thailand 4.0 focuses on four key areas:
Digital government transformation;
The amendment and revocation of laws and regulations that are not business-friendly, and the enactment of new ones that are beneficial to both Thai and foreign investors;
The simplification and review of the processes of obtaining approval and permits, and a reduction in the amount of paperwork by using standardized forms and digital channels;
The development of infrastructures and the country’s logistical structure in order to support domestic and regional business activities.Ease of doing business The World Bank announced the results of their latest Ease of Doing Business Index at the end of last year, it showed that Thailand’s ranking had improved by 20 positions, rising from 46th to 26th place. The results also confirm that Thailand is the second-most improved nation, with a strong hike in the rankings of six of the index’s sub-factors such as Starting a Business, Getting Electricity, Protecting Minority Investors and Enforcing Contracts.
The government has already abolished some of the minor requirements of the business registration process. These, and other similar measures, have led to a significant reduction in the number of days required to register a company, from 27.5 days to 4.5 days.Government e-services The government has focused our effort on increasing the utilization of existing government e-services. Online business registration is one example. The Department of Business Development under the Ministry of Commerce has developed an online portal for corporate registration and the submission of financial data, along with a name reservation system. As their functions are integrated, they will work together as a single system.
In terms of real estate registration, the Department of Lands, Ministry of Interior, has created the LandsMaps application. This application can provide all kinds of information related to a certain piece of land, including the plot chart, location, surface conditions, estimated market price, and associated fees or charges.
The National Single Window, which was jointly developed by the Thai Customs Department, the Port Authority of Thailand, and other privately-owned seaport companies, has been designed as a digital customs procedure. Functions that can be processed electronically through the National Single Window include the vessel-to-vessel transition of goods and cargo permit matching.
The Court of Justice has launched its e-Filing system, which allows lawsuits to be filed electronically. Although it is currently only on a trial run – limited only to certain courts and certain bodies of law – the government expects the system to be expanded to run nationwide once the final version is ready to be rolled out.Regulatory Guillotine Another issue, on which the government has placed significant emphasis on, is eliminating or amending laws and regulations that have become obstacles for businesses. It is called the “Regulatory Guillotine”. The Thai government is fully aware that, in order to achieve our goals, there must be an improvement in this particular area.
Over the past 20 years, many countries have enacted a great number of laws, the unintended impact of which has been that operating a business has become, in many ways, more difficult. Some countries have overcome this already by taking steps to simplify or even eliminate unnecessary laws and regulations. Such countries include, for example, South Korea and Mexico.
In Thailand, there are currently more than 700,000 manuals on business approval and license application, produced by local governments across the country. In an effort to bring this number down to a more reasonable level, the government is in the process of examining and revising all of the processes concerned. While it is a large undertaking, the government intends to reduce the number of licenses and associated manuals at the local-government level to an absolute minimum, and retain only licenses issued by the central government. Through this process, it is estimated that the number of licenses should be reduced to not much more than 6,000. Looking to the longer-term, the government hopes to be able to reduce this number further still to less than 1,000.Amendment of laws and regulations To ensure that the Thai laws and regulations are up to date, transparent, and in compliance with international standards, the government has already amended 268 acts for the business sectors. Another 288 acts are currently in the pipeline relating to the ease of doing business, intellectual property, and competition etc. PPP The new PPP Fast Track and Eastern Economic Corridor (EEC) Track channel has been created for Public-Private Partnership, or PPP, projects. Through these two channels, the time required for the approval process from project preparation phase to the selection of private partner has been brought down from 40 months to just 20 months for PPP projects in general and 8-10 months for PPP Projects in EEC area. Transportation and logistics system The basic infrastructure in different locations of the country will be linked through double-track rail networks, sea and river ports, and airports. Thh government is implementing this not only to connect various parts of Thailand but also to strengthen our connection with ASEAN, an
up-and-coming region that offers some of the most exciting business opportunities in the world over the next 15 years.2019 Overall Economic Policy Framework The 20-year National Strategy (2018 - 2037) The National Strategy (2018-2037) is the country’s first national long-term strategy developed pursuant to the Constitution. It shall be pursued to ensure that the country achieves its vision of becoming “a developed country with security, prosperity and sustainability in accordance with the Sufficiency Economy Philosophy” with the ultimate goal being all Thai people’s happiness and well-being. Vision, Goals and Indicators The country vision as stipulated in the National Strategy is “to become a developed country with security, prosperity and sustainability in accordance with the Sufficiency Economy Philosophy” with the goals aimed to maintain national security and ensure people’s welfare; boost multidimensional national competitiveness to ensure consistent economic growth; empower human capital at each and every stage of life to manifest competent and moral citizenry; broaden opportunities to improve social equality; promote environmentally-friendly growth with improved quality of life; and develop governmental administrative efficiency for greater public benefits. There are six groups of indicators which will be used to evaluate the National Strategy’s success, which are:
Well-being of Thai people and society
National competitiveness, economic growth and income distribution
Development of human capital
Social equality and equity
Sustainability of national biodiversity, environmental quality and natural resources
Government efficiency and better access to public services
National development during the Strategy’s time-frame shall focus on an appropriate balance between social and economic development and environmental stewardship. The six key strategies are:
national security;
national competitiveness enhancement;
human capital development and strengthening;
social cohesion and just society;
eco-friendly development and growth; and
public sector rebalancing and development.The 12th National Economic and Social Development Plan (2017-2021) Economic and Social development during the period of the 12th National Economic and Social Development Plan (2017-2021) is anticipated to pursue four national agendas, as follows:
Alleviate poverty and income distribution imbalances
Enhance Thailand's competitiveness
Promote social capital development
Promote sustainable development
The implementation of the 12th Plan began on 1 October 2016 and will continue until 30 September 2021. The Office of the National Economic and Social Development Board reported that the 12th Plan was worked out in accordance with the 20-year national strategy, 2017-2036.The 12th Plan will continue to focus on the Philosophy of Sufficiency Economy, which had become the guideline of the country’s development since the Ninth Plan, beginning in 2006. The philosophy aims to change the priority of economic policy from "growth" to "social development." The main objective is to improve the people's well-being.
It has been followed as a shared value by the Thai people, guiding the transformation to a new national management system, based on the goals of efficiency, quality of life, and sustainability and it is geared to reduce income disparity and poverty, strengthen the Thai economy and enhance the country’s competitiveness, promote natural capital and environmental quality.Investment Regime or Business Environment BOI’s Investment Promotion Measure in the EEC
The Board of Investment’s (BOI) investment promotion measure in the Eastern Economic Corridor (EEC) is especially designed to boost targeted investment activities in designated areas in three provinces: Chachoengsao, Chonburi and Rayong. Private sector is encouraged through this measure to involve in human resources development in the businesses.
The development of the EEC Area is one of the government’s policies to drive Thailand towards the new era of Thailand 4.0. Investments in targeted industries in the aforementioned areas are entitled to additional incentives.Short-term Measure to Accelerate Investments: Thailand Investment Year 2019 The BOI has launched a special measure to stimulate investment and enhance competitiveness in Thailand. The BOI introduces the “Thailand Investment Year” incentive package to promote large-scale investments in technology-advanced targeted industries that will strategically drive economic transformation of the country. The “Package” aims to attract investment projects with a minimum investment value of 1,000 million baht in targeted activities and these projects must follow all BOI’s stipulated timelines of project implementation. BOI’s Investment Promotion: Smart City Development In order to promote the development and management of the Smart City Development Projects as well as to raise the quality and standard of Thailand’s industrial estates or industrial zones to be able to provide smart services, the BOI announces Smart City Development activities which are eligible for promotion Ease of doing business The World Bank announced the results of their latest Ease of Doing Business Index, it showed that Thailand’s ranking had improved significantly over the past years, rising from 46th in 2017 to 27th in 2019. Thailand has made the second-highest number of reforms since first being ranked in the Doing Business survey in 2003 and has also made great strides in four areas -- starting a business, getting electricity, paying taxes and trading across borders -- through the new reforms. Starting a business was made less costly by introducing fixed registration fees, while getting electricity was made easier by streamlining the number of procedures needed to obtain a new connection, and making electricity tariff changes more transparent.
According to the World Bank’s “Doing Business 2019” report, Thailand earned the highest score in getting electricity with 98.75, followed by 92.72 for starting a business, 84.65 for trading across borders, 77.72 for paying taxes, 76.64 for resolving insolvency, 75 for protecting minority investors, 71.86 for dealing with construction permits, 70 for getting credit, 69.47 for registering property, and 67.91 for enforcing contracts.
With the digital infrastructure base being developed under the government's Thailand 4.0 policy, The Office of the Public Sector Development Commission (OPDC) expects to shorten the regulatory process by 50% by the end of 2019 and hence improving operational efficiency.IMD World Competitiveness Ranking Thailand's 5-rank rise in the 2019 IMD World Competitiveness Rankings reflects the business-friendly environment and the dynamism of the economy which are the key factors attracting foreign direct investment (FDI) to the country.
Overall, Thailand moved up to 25th, from the 30th rank in 2018, in rankings of a total of 63 countries issued by the Lausanne, Switzerland-based International Institute for Management Development, better known as IMD. Thailand’s new ranking shows sustained foreign investment and the improvements Thailand has made in the areas of knowledge, talent, training, technology, and regulatory framework in every part of the government’s Thailand 4.0 policy.
Thailand’s improved overall ranking, the highest in 10 years, was due to better marks in the areas of Economic Performance, notably due to an increase in international investment, Government Efficiency, and Infrastructure, according to IMD data. Thailand ranks 21st in the area of international investment, 6th in tax policy, 16th in public finance, and 6th in international trade. The country’s ranking in the area of Technology improved to 28th, from 38th five year ago, according to IMD’s country report.United Nations Sustainable Development Goals (SDGs) In 2019, Thailand advancing 19 places from 2018 to rank 40th globally and first in ASEAN in the United Nations Sustainable Development Goals (SDGs) Report bolsters the country’s competitiveness as more investors see sustainability performance as relevant to their business operation decisions.
According to the recently released report compiled by the New York-based Sustainable Development Solutions Network and Bertelsmann Stiftung, ranking how 162 countries are performing in their implementation of the 17 SDGs, Thailand scored 73 points in the SDG Index 2019. That places Thailand higher than the regional average score of 65.7.
Thailand’s performance is most outstanding in the areas of poverty reduction, where it scored 100 points, quality education (88.7 points), affordable and clean energy (82.9 points), decent work and economic growth (80.2 points), sustainable cities and communities (83.0 points) and climate action (93.9 points). Thailand’s achievement in SDGs is underpinned by the Sufficiency Economy Philosophy (SEP) which has been adopted as the core principle of the National Economic and Social Development Plan since 2002 and integrated in the 20-Year National Strategy Framework. Meanwhile, Thailand’s recent election as a member of the United Nations Economic and Social Council for the term 2020-2022 demonstrates the country’s strong commitment and active role in advancing social and development agendas on both the national and international fronts.Policy, Regulatory or Institutional Reforms Thailand 4.0 Thailand is currently embarking on a major economic reformation process that includes a number of initiatives aimed at facilitating the business process and transforming business environment in the country. Technological advancement has been progressing very rapidly in exponential fashion. Many of the technologies such as robotic, machine learning, or Artificial Intelligence have entered in the new age of digital transformation and the Fourth Industrial Revolution.
Since 2016, The Thai government has been striving to push Thailand forward to a new chapter or “Thailand 4.0”, where science, technology, innovation, value addition, and R&D are the central forces driving economic growth. Under this initiative, the government aims to strengthen internal economic fundamentals in all dimensions and to transform Thailand into a developed economy within 20 years. The government also aims to achieve a GNI per capita of 450,000 THB or approximately $14,632 US dollar, an annual growth 5 percent per year, and a position of better than 20th in any competitiveness index rankings.2020 Overall Economic Policy Framework The 20-year National Strategy (2018 - 2037) The National Strategy (2018-2037) is the country’s first national long-term strategy developed pursuant to the Constitution. It shall be pursued to ensure that the country achieves its vision of becoming “a developed country with security, prosperity and sustainability in accordance with the Sufficiency Economy Philosophy” with the ultimate goal being all Thai people’s happiness and well-being. Vision, Goals and Indicators The country vision as stipulated in the National Strategy is “to become a developed country with security, prosperity and sustainability in accordance with the Sufficiency Economy Philosophy” with the goals aimed to maintain national security and ensure people’s welfare; boost multidimensional national competitiveness to ensure consistent economic growth; empower human capital at each and every stage of life to manifest competent and moral citizenry; broaden opportunities to improve social equality; promote environmentally-friendly growth with improved quality of life; and develop governmental administrative efficiency for greater public benefits. There are six groups of indicators which will be used to evaluate the National Strategy’s success, which are:
1. Well-being of Thai people and society
2. National competitiveness, economic growth and income distribution
3. Development of human capital
4. Social equality and equity
5. Sustainability of national biodiversity, environmental quality and natural resources
6. Government efficiency and better access to public services
National development during the Strategy’s timeframe shall focus on an appropriate balance between social and economic development and environmental stewardship. The six key strategies are:
1) national security;
2) national competitiveness enhancement;
3) human capital development and strengthening;
4) social cohesion and just society;
5) eco-friendly development and growth; and
6) public sector rebalancing and development.The 12th National Economic and Social Development Plan (2017-2021) Economic and Social development during the period of the 12th National Economic and Social Development Plan (2017-2021) is anticipated to pursue four national agendas, as follows:
1) Alleviate poverty and income distribution imbalances
2) Enhance Thailand's competitiveness
3) Promote social capital development
4) Promote sustainable development
The implementation of the 12th Plan began on 1 October 2016 and will continue until 30 September 2021. The Office of the National Economic and Social Development Board reported that the 12th Plan was worked out in accordance with the 20-year national strategy, 2017-2036.
The 12th Plan will continue to focus on the Philosophy of Sufficiency Economy, which had become the guideline of the country’s development since the Ninth Plan, beginning in 2006. The philosophy aims to change the priority of economic policy from "growth" to "social development." The main objective is to improve the people's well-being.
It has been followed as a shared value by the Thai people, guiding the transformation to a new national management system, based on the goals of efficiency, quality of life, and sustainability and it is geared to reduce income disparity and poverty, strengthen the Thai economy and enhance the country’s competitiveness, promote natural capital and environmental quality. incentivePolicy, Regulatory or Institutional Reforms The Thailand’s Simple and Smart License (The SSL Project) In order to drive forward Thailand’s national policy as “Thailand 4.0”, the SSL project is implemented as a part of the urgent Law-Reforming Plan. This project will take actions by reviewing any legal acts, licenses, procedures or regulations which are no longer necessary, out-of-date and constraint on living and doing businesses in Thailand. The key principles for these revisions derive from the 20-Year National Strategy and National Reforming Plan.
Goals
- Result-oriented Law Reform.
- Facilitating people’s living and reducing difficulties in obligations.
- Enhancing Country’s Economic Competitiveness.
- Preventing Corruption and misconduct in Administrative Governance.
Objectives
- To revise or repeal any legal acts which are no longer necessary, out-of-date and constraint of living and doing business in Thailand.
- To enhance business sectors’ competitiveness and reduce high duties in public sectors management.
- To progress legal reviews in accordance with Thailand 4.0 policy.
- To drive forward Thailand’s National Strategy together with the National Reform Plan.
Major Benefits
- Cost-reduction
- Time-saving
- Transparency
Stakeholders
- Public Stakeholders: coordinating with Government agencies will be faster, more convenient, and cost-saving.
- Business: upgrading business working functions by reducing processing steps and documents. These improvements can save cost and increase productivity.
- Government Agencies: reducing working process and saving time. In addition, the database is prepared for further effective overview analysis on repealing the legal acts, licenses, and procedures.
5Cs Framework
After the reviews of licenses or procedures according to the Conceptual Framework and cost calculations from all the difficulties in obligations, Government agencies can utilize such information for revising the legal processes towards the objectives, goals, necessity, and suitability. These lead to the initiative development, consistency of chosen methods to problems or situations, and foster public interests. To achieve all aspects, recommendation papers for reviewing the licenses or procedures are based on the 5Cs Framework as follows:
- Cut: implies the repeal of legal acts, regulations, and related procedures.
- Change: refers to the improvement of legal acts, regulations, and related procedures.
- Combine: indicates the combination of legal acts, regulations, and related procedures.
Continue: tells the continuation of present legal acts, regulations, and related procedures.
Create: means drafting the new legal acts, regulations, and related procedures.Thailand’s regional leadership on responsible business conduct (RBC)
- In 2019, Thailand became the first country in Asia to adopt a standalone National Action Plan on Business and Human Rights (2019-2022) (NAP). The Thai NAP outlines four key priority areas, namely actions to address 1) labor; 2) community, land, natural resources and environment; 3) human rights defenders; and 4) cross-border investment and multinational enterprises. It also envisions an implementation plan and indicators for monitoring and evaluation. This is a significant achievement to promote RBC in Thailand and among Thai enterprises operating domestically and abroad. RBC-related activities in Thailand have also been undertaken by the private sector and civil society. Businesses and business associations, including the Joint Steering Committee on Commerce, Industry, and Banking, Federation of Thai Industry, Thai Bankers' Association and Stock Exchange of Thailand organized awareness raising events and workshops to familiarize businesses with international standards on RBC and to engage in the process of developing the Thai NAP.
- Thailand was the first country in Asia to ratify the ILO Work in Fishing Convention of 2007 (No.188), which is intended to protect the living and working conditions on board vessels.
- The Securities and Exchange Commission (SEC) was an early champion of sustainability, notably connecting the topics of corporate governance, environmental, social and governance (ESG), and anti-corruption, in the Sustainability Development Roadmap which was adopted as part of the SEC Strategic Plan 2013-2015. The SEC Strategic Plan 2020-2022 addresses the importance of sustainability as one of its five priorities.
- Thailand is also the first country in Southeast Asia to sign a country program with OECD, where promoting/enabling RBC on the basis of the OECD-RBC standards is included as a priority area of cooperation. The country program aligns with Thailand’s 20-Year National Strategy (2018-2037) and the 12th National Economic and Social Development Plan (NESDP 2017-2022).2021 Overall Economic Policy Framework The Thai Economy in 2020 The Thai economy in 2020 declined by 6.1 percent, compared with a growth of 2.3 percent in
2019. On the expenditure side, export of goods, private consumption, and investments contracted by 6.6 percent, 1.0 percent, and 4.8 percent, respectively. On the other hand, government consumption expenditure and public investment expanded by 0.8 percent and 5.7 percent, respectively. In terms of the production side, (1) agriculture, forestry production, and fishery sector, (2) manufacturing sector, (3) accommodation and food services sector, and (4) transport and storage services sector declined by 3.4 percent, 5.7 percent, 36.6 percent, and 21.0 percent, respectively. In 2020, GDP value at current prices was at 15.7 trillion baht (501.8 billion US dollar). GDP per capita was 225,913.8 baht per person per year (7,219.2 US dollar per person per year). For the economic stability, the headline inflation was at -0.8 percent and the current account registered a surplus of 3.3. percent of GDP.The Thai Economic Outlook for 2021 The Thai economy was projected to expand 1.8 percent in 2021 due to the more prolonged and severe third wave that affected domestic spending and foreign tourist figures. Nevertheless, additional fiscal stimulus from the new Emergency Decree, clearer plans for vaccine procurement and distribution, as well as strong merchandise export growth on the back of trading partners’ economies would help the Thai economy to avoid a sharp slowdown. Growth would pick up and expand 3.9 percent in 2022 underpinned by continuing support from government measures. Furthermore, herd immunity in Thailand was expected to be attained within the first half of 2022, facilitating a gradual resumption in economic activities and increasing foreign tourist admissions in 2022.
Headline inflation was projected to be 1.2 percent in both 2021 and 2022. For 2021, inflationary pressure would rise on account of supply-side factors. Energy prices increased in tandem with the rise in global crude oil prices, although the government measure to reduce electricity bills temporarily eased some of the price pressures. For 2022, headline inflation would be higher than previously assessed as the effects of measures to reduce electricity bills dissipate. Headline inflation would remain within the target range throughout the forecast horizon. Core inflation was revised down to 0.2 percent in 2021 and 0.3 percent in 2022 given that demand-pull inflationary pressure would be subdued and recover more slowly following recurring outbreaks.Policy, Regulatory or Institutional Reforms Thailand’s Bioeconomy, Circular Economy, and Green Economy (BCG) model A new model called BCG has been conceptualized to underpin Thailand 4.0 policy as a strategy to drive the economic and social development. BCG is an integration of bioeconomy, circular economy, and green economy.
Bioeconomy involves the production of renewable biological resources and the conversion of these resources into value added products.
Circular economy aims at reusing and recycling resources.
Green economy determines to keep economy, society and the environment in balance, leading to sustainable development.
It is believed that BCG model will enable Sustainable Development Goals (SCGs) through the promotion of sustainable agriculture, clean energy and responsible consumption and production, ensuring the conservation and sustainable utilization of biodiversity, and protecting environment and ecosystem.The 2021-2026 BCG Strategic Plan consists of the following strategies Strategy 1: Promoting sustainability of biological resources through balancing conservation and utilization.
Strategy 2: Strengthening communities and grassroots economy by employing resource capital, creativity, technology, biodiversity, and cultural diversity to create value to products and services, enabling the communities to move up the value chain.
Strategy 3: Upgrading and promoting sustainable competitiveness of Thai BCG industries with knowledge, technology and innovation focusing on green manufacturing.
Strategy 4: Building resilience to global changes.BCG Sectoral Development BCG model will focus on four following sectors:
Food and Agriculture: The goal is to migrate from low-value commodities to value-added and premium products, as well as diversify products.
Medical and Wellness: The goal is to build capacity on drug and biopharmaceutical production, medical devices and implants, precision medicine and become a hub of healthcare services and clinical research.
Bioenergy, Biomaterial and Biochemical: The goal is to achieve energy security and convert biomass to high-value commodities.
Tourism and Creative Economy: This sector aims to develop sustainable tourism, tourism destination management system, conserve the environment and link tourism with other service industry in order to advance to high-quality tourism such as wellness tourism, culinary tourism, eco-tourism, cultural tourism and sports tourism.
The Bio-Circular-Green Economy (BCG) Policy Board convened on 12 July 2021 with Prime Minister General Prayut Chan-o-cha serving as the board chairman. The meeting reviewed the performance of Thailand in the global stage with regards to BCG. Thailand’s Global Green Economy Index (GGEI) improved from the 45th position in 2014 to the 27th position in 2018, whereas its SDG Index rose from the 55th place in 2017 to the 43rd place in 2020.
Thailand Board of Investment (BOI) offers investment promotion incentives to a wide range of activities in BCG notably biotechnology, biochemical production, biogas and biomass energy generation, energy service companies (ESCO) and recycle facilities.Thailand 4.0 In Thailand, entrepreneurs are driving transformative innovation through the integration of value-added services and digitized processes. Improvements in technology and automation are being implemented to enhance and augment operational and manufacturing functions. The Thai government has created policies, including the “Thailand4.0” initiative, that support research and development, innovation, and advanced manufacturing methodologies to enable growth in several targeted industries. The Thailand 4.0 model is supported by investment incentives and human resource development efforts designed to accelerate growth in an innovation and technology-focused ecosystem.
In order for the country to achieve the goals of Thailand 4.0, there must be actions in 4 main areas, as follows:
1. Digital government transformation by using digital technology as a tool to bring equal access to public services of all citizens;
2. The amendment and revocation of laws and regulations that are not business-friendly, and the enactment of new ones that are beneficial to both Thai and foreign investors by reviewing, amending, revising certain existing laws, rules and regulations, and removing unnecessary ones, to improve Thailand’s ease of doing business.
3. The simplification and review of the processes of obtaining approval and permits, and a reduction in the amount of paperwork by using standardized forms and digital channels by determining the bottleneck of the review processes and working towards efficiency; and
4. The development of infrastructures and the country’s logistical structure in order to support domestic and regional business activities, by focusing on speed, reliability, accessibility and frequency.The Fourth Industrial Revolution: Opportunities for Thailand The rise of the Fourth Industrial Revolution (4IR) technologies brings substantial advanced manufacturing growth potential for Thai manufacturers. The integration of smart technology and innovation can be seen across industries in Thailand, including the next-generation automotive, healthcare, advanced agriculture, and biotechnology sectors. However, there are significant untapped opportunities to apply additional advanced technologies including the Internet of Things (IoT), Artificial Intelligence (AI), and Data Analytics, to name a few.
Thailand’s accelerating development has changed the way industries operate, creating significant opportunities in the following sectors:Smart Manufacturing
The application of big data, artificial intelligence (AI), Internet of Things (IoT), and automation and robotics have created great opportunities for a highly skilled and knowledge-centric workforce to enhance manufacturing and production processes across industries. For example, in a “connected factory”, an array of innovative technologies is used to enhance manufacturing operations to improve efficiency and achieve an integrated flow of centralized manufacturing management systems. Thai industries are working to connect engineers with machines using M2M technology, improving efficiency in operations and creating agility through the collaboration of systems, processes, and people to reduce risk and maximize industrial networking.Innovation and Digital-centric Development
Cognitive and embedded software has become the driving force behind smart manufacturing and high value services in a range of Thai industries. The advanced food manufacturing sector, the aviation and logistics industry, and the next-generation automotive sector have adopted cutting-edge technologies to enhance production and services by using equipment connectivity, algorithm development, and remote repair, diagnostics and maintenance (RRDM), as well as the adoption of advanced automation in machine technology.Research and Development
The utilization of smart integrators and builders in automation plants and the adoption of industrial and service robots are increasing the efficiency and productivity of the business landscape. The Thai government has created supportive policies, including both tax and non-tax incentives, to encourage manufacturing sector investment in advanced manufacturing research and development, real world application of advanced manufacturing technologies, and talent development to meet the needs of investors.Government Plans and Policies Under the Thailand 4.0 development model, the government outlined the key priorities to foster innovation, particularly in relation to skills enhancement and future workforce development. In fact, the Minister of Science and Technology (2018) specified three key drivers of transformation: Science, Technology & Innovation (STI). Technology and innovation are considered key contributors to the rapid transformation of targeted industries in Thailand. According to the BOI, the government’s investment promotion policy promotes the deployment of AI and robotics technology to enhance production efficiency and competitiveness of Thailand-based manufacturers. Due to Thailand’s rapid urbanization in the past decade, there is increasing potential for the application of new technologies to find effective urban solutions such as innovative farming, smart energy solutions, traffic management systems, and waste management. 2022 Fourth Industrial Revolution (4IR) Thailand 4.0 Thailand adopts “Thailand 4.0” as an economic model to transform the country into an innovation-driven economy, supported through 4 actions of (a) digital government transformation; (b) amendment and revocation of laws and regulations that are not business-friendly, and enactment of new ones that are beneficial to Thai and foreign investors; (c) simplification and review of approval and permit processes; and (d) development of infrastructures and logistical structures. Thai Board of Investment (BOI) is currently promoting the digital industry with a focus on software development, digital infrastructure and supporting digital ecosystem. 2023 Overall Economic Policy Framework The Thai Economy in 2022 According to the Office of the National Economic and Social Development Council (NESDC), the Thai economy in 2022 grew by 2.6 %, accelerating from a 1.5 % increase in 2021. On the expenditure side, export of service, private consumption and investment expanded by 10.5 %, 5.7 %, and 3.9 % respectively. In terms of the production side,
(1) Accommodation and food service activities sector (2) Agriculture, forestry, and fishing sector, and (3) Construction sector grew by 30.6 %, 3.6 %, and 2.6 % respectively.
On the contrary, manufacturing sector contracted by 4.9 %. In 2022, GDP value at current prices was 17.4 trillion baht (495 billion US dollars). GDP per capita was 248,635.3 baht per person per annum (7,089.7 US dollars per person per annum). For the economic stability,
the headline inflation was at 6.1 % and the current account registered a deficit of 3.4 %
of GDP.The Thai Economic Outlook for 2023 According to Bank of Thailand, the Thai economy is expected to continue expanding at
2.5 % in 2023 and 2.9 % in 2024 driven by a strong recovery in foreign tourist arrivals,
a continued recovery in private consumption, as well as a stronger recovery in merchandise exports in line with trading partners’ growth. Meanwhile, downside risks stemming from
the uncertainties in global economy and financial markets are yet to be monitored. Headline inflation is expected to be 2.9 % in 2023 and 2.4 % in 2024. The inflation outlook is subject to upside risks from higher cost passthrough from producers and higher demand-pull inflationary pressure from the recovery in tourism.Policy, Regulatory or Institutional Reforms Whole package incentives 1) Whole package incentives - tax benefits from the Board of Investment and the Ministry of Finance such as exemption of corporate income tax, as well as non-tax benefits such as granting permission for foreign nationals to enter the Kingdom to (1) study investment opportunities (2) bring in skilled workers/experts to work in the Kingdom, and (3) remit money abroad in foreign currency. End-to-end Services 2) End-to-end Services - assisting investors in conducting business in Thailand by providing investment information and advice, coordinating between investors and government agencies, and conducting business matching. Three services are provided at One Start One Stop Investment Center: OSOS, One Stop Service Center for Visa and Work Permit and Customer Service Unit: CSU. Ecosystem and Ease of Investment 3) Ecosystem and Ease of Investment
1. Manpower development through human resource development measures, STEM Platform to serve demands of high performance engineers and scientists, and support for advanced technology training for industries
2. Infrastructure development such as public utilities, logistics, science and technology district, Innovation Park and Data Center
3. Regulations and procedures improvement as well as linking information among government agencies to reduce redundancy in document submission
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