investment opportunities in thailand -...
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Ms. Ajarin PattanapanchaiThailand Board of Investment
April 2006
Investment Opportunitiesin Thailand
“Incentives for BIO-TECH Business”
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• Why Thailand
• Thailand Investment Statistics
• BOI Incentives for Biotech Business
• Investment Opportunities
ThailandThailand: : Where Success Stories BeginWhere Success Stories Begin
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Why ThailandWhy Thailand::
• International Rankings• Ease of Doing Business• Low costs
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● UNCTAD survey of world’s 325largest transnational corporations
● Asian region has most positive FDI prospects
● Overall, Thailand ranked #9 in world VietnamTop 4
South KoreaTop 5
THAILANDTHAILANDTop Top 33
IndiaTop 2
ChinaTop 1
RANKING OF FDI PROSPECTS IN ASIA
2005-8
Thailand Rated #Thailand Rated #3 3 Most Most Attractive FDI Location Attractive FDI Location
in Asia in Asia by UNCTAD Surveyby UNCTAD Survey
UNCTAD Global Investments Prospects Assessment, Sept. 2005
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Improved CompetitivenessImproved Competitiveness: : 20052005 World RankingsWorld Rankings
3439India2431China3529Korea1628Malaysia29#27Thailand2321Japan1211Taiwan23Singapore62Hong Kong
2004Rank 2005
Source: IMD Institute for Management Development
Improved government efficiency &Economic
performanceAdaptability of govt policy
to economic changesGov’t leaders understand
business challenges for effective policies
High growth of labor force productivity
Low VAT 7%Internet $ 15/mo
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ThailandThailand20Japan10
Germany19United Kingdom
9
Belgium18Denmark8
Switzerland17Hong Kong7
Estonia16Australia6
Lithuania15Norway5
Sweden14Canada4
Finland13United States3
Iceland12Singapore2
Ireland11New Zealand1
World Bank Top World Bank Top 20 20 Ease of Doing BusinessEase of Doing Business
Note: The ease of doing business measure is an average of the country’s ranking in each of the 10 areas of business measured in Doing Business in 2006 by the World Bank.
Trading across borders
Dealing with licenses
Paying taxes
FOR 10 BUSINESS AREAS:
Investor protection
Registering property
Closing a business
Access to credit
Enforcing contracts
Hiring and firing workers
Starting a business
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YEAR GDP % 2003 6.82004 6.22005 4.52006 Projection
Bank of Thailand 4.75 - 5.75Finance Ministry 4.5 - 5.5World Bank 5
ThailandThailand’’s Economic Growths Economic Growth
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Developed InfrastructureDeveloped Infrastructure
7 international airportsairports moving 700,000 tons of cargo and 25 million passengers per year
HighwayHighway system: 64,000 km to all provinces
Deep sea ports: : capacity over capacity over 5 5 million TEUmillion TEU44,,000 000 km railkm rail, links to Malaysia, Singapore5757 industrial estatesindustrial estates
World-class, WiWi--FiFi capabilities andinexpensive broadband broadband widely available
24 24 million mobile phonemillion mobile phone users in 2003, growing 6 million/yr
Suvarnabhumi Intl. Airport: 45 million passengers/year
7 international airportsairports move 800,000 tons of cargo and 35 million passengers per year
Low CBD Office rent: $12.5/sq. ft./year
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Thai Graduates in Science and Engineering
1 Source: Ministry of Education
74,616(Total for
all technical
fields)
26,9871,80325,184Computer Science
7,841
7,216
Postgraduate (2002)
37,057
52,667
TOTAL(2002)
29,216
45,451
Undergraduate (2002)
Technical School Degrees (2003)
Natural Sciences
Engineering
Thai Universities With Engineering Programs:22 Public 14 Private
TOTALSTOTALS: : 99,85199,851 16,86016,860 116,711116,711
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IPR FrameworkIPR Framework• Thailand has 8 intellectual property-related
laws, all of which are consistent with international standards: – Copyright Act of 1994– Patent Act of 1979, as amended by the Patent Act
(No.3) of 1999– Trademark Act of 1991, as amended by the
Trademark Act (No.2) of 2000– Act for the Protection of Layout-Designs of
Integrated Circuits 2000– Trade Secret Act of 2002– Protection of Geographical Indication Act of 2003– Plant Varieties Protection Act of 1999– Traditional Medicine and Practice Act of 1999
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Science ParkScience Park• Thailand’s Science Park Serves as an
incubation Center for Science-Related Investment
• Support Includes:– Joint investment (i.e. joint ventures)– Assistance in finding and acquiring
technology– Analytical and technical services– Intellectual property services– Quality management services– Maximum BOI Incentives
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ASEANASEAN: : 550 550 million million AFTAAFTA
AustraliaAustralia: : 20 20 million million TAFTATAFTA
ChinaChina: : 1.31.3 billion billion Early Harvest Early Harvest ::ChinaChina--ThailandThailand
ChinaChina--ASEAN FTA ASEAN FTA
IndiaIndia: : 11..1 1 billion billion Early Harvest AgreementEarly Harvest Agreement
JapanJapan: : 128 128 million million JapanJapan--Thailand Economic Thailand Economic Partnership AgreementPartnership Agreement
TaiwanTaiwan: : 23 23 millionmillion
ThailandThailand: : 6464 millionmillionNoNo. . of Tourists >of Tourists >13 13 millionmillion//yryr
Strategic Location to Asian MarketsStrategic Location to Asian Markets((Countries and populationsCountries and populations))
New ZealandNew Zealand: : 4 4 million million Closer Economic PartnershipCloser Economic Partnership
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Thailand Thailand Investment Promotion StatisticsInvestment Promotion Statistics
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Value of Net Applications Increasing
Unit: US$ Billion 17.49
2002 2003 2004 2005
16.29
7.686.16
44%25%
112%
Total investment applications
7%
FDI increases62% to 12.4 billion
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Total Foreign 668 5,988 749 7,624 849 12,388100% Foreign 255 2,557 334 2,722 426 3,259By CountryJapan 261 2,561 340 2,529 387 4,353U.S.A. 38 1,142 39 875 52 195Taiwan 56 191 61 231 54 284Hong Kong 11 299 18 64 25 278Singapore 46 351 81 554 82 351E.U. 67 877 94 796 121 887
2003 2004 2005Number Value of Number Value of Number Value of
of Investment of Investment of InvestmentProjects (mil. US$) Projects (mil. US$) Projects (mil. US$)
Note 1: Investment projects with foreign equity participation from more than one country are reported in the figures for each country Note 2: 2002 US$=43.00 baht; 2003 US$=41.53 baht; 2004 US$=40.27
Net Applications by CountryNet Applications by Country
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BOI IncentivesBOI Incentives
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TAX INCENTIVES
• Corporate income tax holidays up to 8 years
• Import duty reductions or exemptions on machinery and raw materials
NON-TAX INCENTIVES
• Land ownership rights for foreign investors
• Permission to bring in foreign experts and technicians
• Work permit/visa facilitation
Role of BOI in Promoting InvestmentRole of BOI in Promoting InvestmentBasic BOI privileges and incentivesBasic BOI privileges and incentives
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ZonesZones Sector Matrix:Incentives to strengthen
COMPETITIVENESS
Strategic or Priority Industries
Maximum incentives regardless of zone or
location
Example : R&D
Zone-Based Incentives:• Zone 1• Zone 2• Zone 3 Higher incentives
Lower incentives
Zone and Sector Matrix
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Incentives for Biotech BusinessIncentives for Biotech Business
Priority Activity Incentives • Exemption on machinery import duties
• 8 years corporate income tax holiday• Additional incentive if locate in Science Park
• Research & Development• Scientific Laboratories
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Example of Promoted Biotech Example of Promoted Biotech ProjectProject
Health Concepts International Ltd.(Subsidiary of Concept Foundation)• HIV serum bank and Cyclofem QC lab • HIV testing service & contract testing for
research organization• Plasma sample for R&D• Locate in Science Park
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Incentives for AgroIncentives for Agro--Base BiotechBase Biotech
Priority Activity Incentives • Exemption on machinery import duties
• 8 years corporate income tax holiday
• Plant Propagation & Seed Grading• Inspection & Analysis of Diseases of Crops, Livestock or Aquatic Animals, Soil or Water for Agriculture Usage
• Inspection & Analysis and Certifying of Quality Standards of Agriculture Products
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Manufacturing of Scientific Equipment Manufacturing of Medical Supplies or Medical Equipment
Incentives for Additional Incentives for Additional Biotech BusinessBiotech Business
Priority Activity Incentives • Exemption on machinery import duties
• 8 years corporate income tax holiday
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Amended Privileges for Standard
Investment Projects (1)
New Incentives for Pharmaceuticals
Zone 38 Yrs
Zone 26-7 Yrs
Zone 15 Yrs
Exemption of corporate income tax (Years)
Must achieve GMP (Good ManufacturingPractice) standards corresponding with PIC/S
(Inspection Cooperation Scheme) within 2 years of beginning operations.
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Investment Opportunities Investment Opportunities in in BiotechBiotech
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Thailand: World’s Leader in Agro-Based Products
Strong Agro-based Industries Total Export Value : US$7.5Billion/ year Top five net food exporter in the world Leading exporter of natural rubber, rice, cassava, sugar, seafood, canned tuna, canned pineapplesRubber-based industry : World’s largest rubber producerTapioca : abundance of raw material Tapioca 5 mil. tons Alcohol, bio fuel, food additivesUse Thailand as the production base of agro-base bio-tech
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Strengths and Opportunity in Medical Strengths and Opportunity in Medical BiotechBiotech
• Most private hospitals are gearing toward capturing patients from other countries/serving more than 1,200,000patients in 2005
• Thai doctors study abroad, speak international languages and are among the best in the region
Thailand: Regional Medical Hub