Board of Investment approves 700 projects
The Board of Investment (BoI) is certainly playing its role in attempting to stimulate economic growth in Thailand, recently announcing it had stamped approval for 700 projects with a combined investment of 110 billion baht in the first quarter of this year.
This is on top of the 700 billion baht’s worth of projects the BoI approved in 2014, all of which would help to play a key role in boosting economic activity and hopefully spur general recovery.
The BoI has set itself a target of approving 1,600 projects for 2015, with an estimated investment value of 1.4 trillion baht.
The BoI noted that most of the projects it approved in the first quarter were small-scale developments, mainly for software, cloud computing, auto parts and medical appliances, all of which complied with the BoI’s policy of promoting the high technology and service industries.
The government of prime minister Prayut Chan-Ocha had announced towards the end of last year a plan designed to promote foreign investment over a six-year period, starting in 2015.
The government and industry in general realises Thailand needs to overcome its reliance on low-cost labour, especially as emerging economies nearby are able to undercut the Thai model. Industry leaders and senior government officials well understand the need for Thailand to move towards a more digital economy and strengthen its competitiveness if it is to remain a leader in the Asean region.
In attempts to drive the regional economy, the government has instructed the BoI to base its privileges on the type of project, especially those that are in the high-tech, design and research areas and those prepared to set up in a series of special economic zones (SEZs).
The incentives to become established in SEZs include exemption from corporate income tax for eight years, a 50 percent reduction on net profit from investment over five years, double tax deductions for the cost of transport, electricity and water supply for 30 years and an additional tax deduction of 25 percent for the cost of installation or construction of facilities. That deduction is in addition to the normal costs of depreciation.
Other privileges include exemptions on import duties for machinery, a five-year hiatus on raw and essential materials used in the production of exports and permission to hire unskilled foreign workers for promoted projects.
The BoI has also approved extending the life of used machinery to 10 years, up from the present five-year time limit.
The BoI is especially keen to promote what it views as 13 key industries from tourism to pharmaceuticals, plastics, machinery and parts, agriculture (including fisheries), textiles, medical appliances, automobiles (machinery and parts), electrical appliances and electronics in general, and industrial estates.