Thailand’s supportive investment environment: The key agencies (Part 1)

Apr 26th, 2021

The operative environment for foreign investors in Thailand is very clear-cut. There are two main entities which provide advice and support, the Thai Board of Investment (BOI), an agency under the Office of the Prime Minister, and the Industrial Estate Authority of Thailand (IEAT), a department of the Ministry of Industry.
Their role is to promote foreign investment in Thailand by providing information, services and incentives and accompany foreign investors as they venture into the country. The BOI has a generic purpose of informing foreign investors about eligible activities and criteria for investment promotion, while the IEAT is focused on industrial estates, having a more hands-on assignment of managing and operating both IEAT’s own managed sites and industrial estates that are jointly developed by private developers. IEAT therefore imposes specific laws and regulations industrial estates and manufacturers within have to comply with.

Latest BOI statistics show that the agency approved 923 foreign direct investment projects worth 252.2 billion baht ($8 billion) last year, more than the 876 foreign investment projects approved in the previous year despite the outbreak of Covid-19 at the beginning of 2020, but slightly down in value from 281.9 billion baht due to the pandemic. The busiest industries for foreign investment in terms of approved projects last year were metal products and machinery, services and electric and electronic, followed by chemicals and agriculture.
In terms of foreign direct investment by countries, Japan is by far the largest investor in Thailand with an investment application value of 76 billion baht last year out of a total of 213 billion baht, followed by China with 31.4 billion baht and the US with 24.5 billion baht. Other large investors come from Hong Kong, Singapore and Europe.
In addition to basic investment incentives such as tax and duty exemptions, the BOI also introduced merit-based incentives for competitiveness enhancement, decentralization and industrial area development. Eligible companies are granted additional corporate tax relief in case they achieve the latter.
The BOI has also set a focus on innovative sectors for higher incentives, including robotics, medical technology, electric vehicles, digital technology and innovations in telecommunication, eco-friendly petrochemicals and plastics and food innovation, among others.

 

Duangjai Asawachintachit, Secretary General of the Thailand Board of Investment (BOI)

Image source: BOI

Article copyright: Amata