The Big Picture: Auto & Electronics Investment Projects After Floods Yuthasak Kanasawat Executive Director of Investment Strategy & Policy Bureau Thailand Board of Investment (BOI) ASEAN Manufacturing Forum#1 Ballroom, Raffles Hotel Singapore March 8, 2012
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The Big Picture: Auto & Electronics Investment Projects After Floods Yuthasak Kanasawat Executive Director of Investment Strategy & Policy Bureau Thailand.
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The Big Picture: Auto & Electronics Investment Projects After Floods
Yuthasak KanasawatExecutive Director of Investment Strategy & Policy Bureau
Thailand Board of Investment (BOI)
ASEAN Manufacturing Forum#1Ballroom, Raffles Hotel Singapore
GDP in the 4th Quarter drastically change from forecasted 5% (annual rate) to -9% because of the flood, which makes GDP growth rate of Thailand at very low rate of 0.1% in 2011
Source: BOI, as of 14 Feb 2012Source: BOI, as of 14 Feb 2012
22 77
Investment 2012Investment 2012
Application for Investment Remains StrongApplication for investment promotion 251 billion baht in the 4th quarter of 2011, increase 50.3%, despite the great flood. The positive trend continued in Jan 2012
Investment Promotion Measures to Promote Industrial Rehabilitation
a) Tax exemption on machinery and equipment to replace those damaged by flood.
b) Normal investment promotion package to new projects
c) Special investment promotion package to BOI-promoted companies directly affected by the great flood that are still enjoying their tax holidays
Eligibility• Existing BOI-promoted projects directly affected by flood • Still have remaining unused corporate tax exemption period
Special Investment Promotion Package
Remaining Corporate Income
Tax Exemption
New Corporate Income Tax Holiday
1. Projects subject to a cap
stay at existing
province
Renew 8 years tax holiday (150% cap on new investment * + remaining unused cap)
Relocation Renew 8 years tax holiday (100% cap on new investment* + remaining unused cap)
2. Projects not subject to a cap
≤ 5 years left + 3 more years
> 5-6 years left + 2 more years & 2-year 50% tax reduction
> 6-7 years left + 1 more year & 4-year 50% tax reduction
> 7-8 years left + 5-year 50% tax reduction
Or choose new tax incentive scheme no. 1
*All fixed assets (except land) including repairs of existing machinery and replacement machinery previously imported under the BOI scheme*All fixed assets (except land) including repairs of existing machinery and replacement machinery previously imported under the BOI scheme
Measures to support construction of flood prevention systems by industrial estates
Industrial estates that invest in flood prevention systems are offered 8-year tax holidays with the corporate income
tax exemption ceiling of 200% of their investment excluding land cost and working capital.
Quick Recovery of Automotive & Quick Recovery of Automotive & Electronics IndustriesElectronics Industries
Number of Companies %
Total 867 100
Feb 2012 422 49.5
March 2012 506 58.4
April 2012 586 67.6
May 2012 595 68.6
June 2012 611 70.5
July 2012 620 71.5
Progress on Factories’ Rehabilitation in 7 industrial estates
Progress on Factories’ Rehabilitation in 7 industrial estates
Almost all industries have returned to normal in Jan 2012, except E&E, textile, & Apparel
Auto assembly -11.4% to 1.46m in 2011
750
928
327 411
459
584
389
434 525
559
158
1,177
1650
999
1458
533626
409
144
571485
589
363
296
218262
683
545
780 800
332
233180
42
17515213066
14821
539
534
900
734
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000ผลิ�ต จำ�� หน่�ยใ น่ประ เทศ ส่งออก
As automotive industry will return to normal in the 2nd quarter, auto assembly is forecasted to be at recorded level of 2 million in 2012. With flood impact was limited, motorcycle assembly increased 10% to 2.95 million in 2011
• Center of many strategic industries/services: food, automotive, petrochemical, HDD, white goods, tire, tourism, medical services, etc
• Competitive corporate income tax rate of 23% at present and will reduced to 20% from Jan 1, 2013
• Ease of doing business: # 17 out of 183 countries around the world / # 2 in South East Asia
Integrated water management system with single command will be implemented, including construction and upgrade of many reservoirs, flood ways or water diverting channels, preventive dikes, etc.