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SMART ELECTRONICS, a Smart Investment Opportunity

SMART ELECTRONICS, a Smart Investment Opportunity

Vol. 29 l No. 2 l February 2019

SMART A SMART INVESTMENT OPPORTUNITY BOI Net Application 02 Company Interview 08 Consumer Products Cover Story 03 (Thailand): A Leading Global Producer of IoT: The Next Big thing Air-Conditioners and Smart Electronics in Smart Electronics News Bites 09 Focus 05 Smart Electronics: BOI’s Missions 10 A Smart Investment Opportunity and Events

Short Article 07 Thailand Economy 11 BOI Measures At-A-Glance to Support Growth in and Sectors About BOI 12

BOI NET APPLICATION January - December 2018

FOREIGN INVESTMENT BY TARGET SECTORS

Total Investment Digital Medical 1,626 Projects 138 Projects 238.15 M 14 Projects 112.62 M and Chemicals 69 Projects 10,778.87 M 28,313.09 Million Automotive and Electronics 108 Projects Biotechnology 78 Projects 628.89 M 2,369.39 M 35 Projects 272.34 M Total Foreign Automation Tourism Food Processing Investment and Robotics 10 Projects 442.10 M 29 Projects 193.72 M 1,040 Projects 3 Projects 4.21 M 18,290.68 Million Aerospace 2 Projects 203.77 M

FOREIGN INVESTMENT Netherlands Japan BY MAJOR 69 Projects 334 Projects M ECONOMIES 264.08 M 2,336.45

United States 38 Projects France China 10,485.24 M 23 Projects 131 Projects Hong Kong 248.29 M 1,741.76 M 44 Projects 638.02 M Taiwan THAILAND 48 Projects 188.98 M Malaysia Singapore 35 Projects 102 Projects 520.22 M 699.69 M Indonesia 4 Projects 223.36 M

Unit: US$ (US$ = 31.85 THB as of 21 January 2019)

Note: Investment projects with foreign equity participation from more than one country are reported in the figures for both countries. Statistics on net applications are adjusted whenever applications are returned to applicants due to insufficient information. For more details, please see link http://www.boi.go.th/ newboi/index.php?page=Report_investment

02 Thailand Investment Review COVER STORY

IOT: THE NEXT BIG THING IN SMART ELECTRONICS More than just a network of connected devices, the of Things (IoT) has become a game changer in 21st century industry. As the enables physical devices and everyday objects to communicate, interact and exchange data over the Internet, they can be monitored and controlled from anywhere and at any time. With this disruptive function, the IoT has forced both producers and consumers to question the traditional concepts of products, services, and even business models.

The disruption of the IoT are also crucial supporting features that company by introducing new product The increasing rate of take this technology to a whole new lines that embrace the IoT, including a subscriptions has provided the IoT with level by enabling customization of the set of smart blinds that can be opened greater opportunities to connect users user’s experience that is impossible and closed via remote and voice and devices via the internet. Facilitating with connectivity alone. As just one command. Previously, Ikea also launched remote operation and data collection, example, an IoT integrated air conditioner its smart LED bulbs in 2017 with distinct this way of interaction between users, can now calculate a cooling schedule features offering remote controlling and , and devices has disrupted that optimizes energy efficiency while brightness adjustment of up to 10 wireless various industries in the past few years. maintaining the desired temperature LEDs. With the continued momentum of An obvious example would be the way thanks to embedded and smart electronics, the company’s aim Uber converted old cars into connected remote control. is to reach “absolute convenience” that can be tracked, located, With industrial practices forever by expanding the integration of their and hired by users. disrupted, businesses are now integrating smart products with artificial intelligence While connectivity remains the this paradigm-shifting technology as devices, including the Apple Homekit, elemental foundation on which the IoT is a matter of survival. Ikea, for example, Alexa, and Google Assistant. built, computational power and sensors has repositioned itself as a smart home

Thailand Investment Review 03 COVER STORY

The rise of the IoT The future In response to the growing demands of development of IoT the consumer market, the cost of IoT With the imminent rise of IoT, the World products tumbles as more developers Economic Forum published a report enter the booming but increasingly earlier this year named Realizing the competitive market. Gartner, a global Internet of Things: A Framework for research and advisory company, predicted Collective Action. The report identified that 1 million IoT devices will be installed five essential pillars that will shape the hourly by 2021, while HP also forecast development of IoT: an 18% CAGR in machine-to-machine members to create an effective self- connections, reaching 27 billion by 2024. 1. Architecture and standards governance mechanism. In Thailand, it was estimated that the The report suggested that scalable, country’s IoT industry will reach a value future-proof and cost-effective architectural Offering the potential to make of Baht 33 billion by 2020, with research choices are important to the future of people’s daily lives safer, more efficient, showing that Thai enterprises lead the IoT, while it also indicated that reference and more convenient, the IoT is considered way across ASEAN in terms of developing architecture will help the IoT develop its to be a game-changing opportunity with and implementing IoT solutions. standards and best practices. the power to have a significant impact Even though electronics and the on businesses and society as a whole. smart home sectors have led the way 2. and privacy To ensure the sustainable growth of the in adopting the IoT, the technology is With issues and concern of cybersecurity IoT, concerns regarding security, trust, now expanding to create added value in being discussed widely in the past months, and transparency have to be addressed the sharing economy. On the streets of transparency and clarity in the data through constructive principles in order Beijing, for example, people no longer collecting policy of the IoT remain highly to eliminate unnecessary risks that may have to worry about where to park their relevant to its adoption rate. These hinder the growth of the industry in the bike or whether the bike will be stolen. challenges regarding public opinion on future. Companies like Ofo have adopted IoT IoT transparency have to be addressed In line with the Thailand 4.0 policy of technology to create a bike-sharing and assurances provided for its long- upgrading the country’s industry through that enables users to hire a term success. and , the Thai registered bike near to their current government has implemented a number location. The application incorporates 3. Shared value creation of measures to address these issues and an integrated system and online Budgetary and financial considerations facilitate the growth of the IoT industry. payment that allow users to scan, unlock, remain the constraints holding back IoT The Digital Agenda 2018 introduced and pay via the smartphones. This IoT investment in its early days. Overcoming by the Ministry of Digital Economy and integrated service has had an impact these challenges requires leadership and Society is designed to promote a digital that goes beyond just convenience. vision from businesses and governments. workforce and economy with a focus on The application can even calculate the smart cities and IoT development through calories each user has burned and the 4. Organizational development five key areas: digital infrastructure, digital carbon emission that each user has To enable full integration, the IoT requires government, digital manpower, cyber helped to reduce by using the bikes. a level of rethinking by businesses security and digital tech developments. that will promote widespread adoption The Ministry’s Smart Cities Framework within their . The report also aims to achieve 77 smart cities across suggests that achieving this requires Thailand by 2023. Defined as being fully the compliance of three components: working and sustainably operational executive leadership, a realignment of urban environments that are managed incentives, and massive upskilling. through digital , pilot smart cities are already being developed and 5. Ecosystem governance tested in certain provinces. To avoid issues among the key players, In the 21st century, it is no longer such as competing technology, competing enough to be connected. The growth vendors, or varying public opinion, the of the IoT means that every connection IoT ecosystem requires internal regulation is an opportunity to create a smarter and the collective attention of industry world.

04 Thailand Investment Review INDUSTRY FOCUS SMART ELECTRONICS: A SMART INVESTMENT OPPORTUNITY

On the back of seemingly relentless technological advancements, system continues to produce career- the electronics and IT industries have been experiencing a steady ready graduates, the Thai government growth in global production over the past few years. According has launched, among others, the “- to the Japan Electronics and Industries Integrated Learning Program” (WiL) Association (JEITA), it is estimated that the industry expanded by with the aim of supplying an additional 4% in 2018 to reach a value of USD 2,836.6 billion. 50,000 skilled workers to the industrial sector over the next five years. In line with the global growth in the the Observatory of Economic Complexity, electronics and IT industries, Asia with an export value worth USD 12 billion, Bright investment remains a strong base for electrical ICs accounted for 5.6% of Thailand’s opportunities and electronics (E&E) production, with total export value in 2017 with the main Smart electronic devices are increasingly China being the largest E&E producer export markets being China, Hong Kong, serving a variety of functions in modern globally. Asia is also the largest market and Singapore. homes and , including security, for E&E, accounting for around 55% energy efficiency, appliances, and of all according to the Electrical Thailand’s competitive . Through the Internet of and Electronics Global advantage things (IoT), devices and home appliances Market Report 2018 by Reportlinker. As reported by the of Industrial are equipped with software, sensors, Economics, nearly three quarters of the , and connectivity, allowing Strong production total output of Thailand’s appliances these devices to connect, interact, and export base is for the export market. Against and exchange data. For example, a With the largest E&E manufacturing this backdrop, Thailand’s Free Trade refrigerator with built-in sensors can base in the ASEAN region, Thailand agreements (FTAs) remain highly relevant alert inhabitants when the milk is about was ranked as the world’s 13th largest to the competitiveness of the industry. to run out. According to data and exporter in 2017, according to the The 12 Free Trade Agreements (FTAs) analytics firm, Global Data, the global of Thailand. The country was also implemented by Thailand enable IoT market is projected to reach USD reported to be among the world’s top businesses in the country to earn the 318 billion by 2023 at a compound 10 exporters for 6 electrical appliances, rewards of almost tariff-free trade annual growth rate (CAGR) of 20%, including air conditioners (2nd), washing with 17 different nations through both reflecting growing demand and higher machines (2nd), microwave ovens (3rd), bilateral and multilateral agreements. adoption rates among consumers compressors (6th), refrigerators (7th), Through these FTAs, almost all E&E worldwide. and rice cooker (8th). Apart from home parts can be imported tariff-free into While Thailand’s robust electronics appliances, Thailand is also one of FTA partner countries. industry enables it to keep pace with the world’s largest manufacturers of Apart from the FTAs, Thailand also the latest developments in smart hard disk drives (HDDs). In 2019, the offers a workforce that is not only cost electronics and IoT technology, the HDD segment is expected to reach competitive but also trained in the country’s strong digital infrastructure an approximate export value of USD relevant skills. More than 700,000 opens up a ready-made market. With 12.6-13.1 billion. workers are employed in the country’s an estimated 41 million people (around Another major product of Thailand’s E&E industry, including over 40,000 60% of the population) connected to electronics industry is integrated circuits graduates with diploma certificates or the internet, Thailand’s high Internet (ICs). The country is home to many global higher qualifications in , penetration provides huge potential IC producers operating with advanced manufacturing, and as of and a solid foundation for electronic assembling technology. According to 2017. To ensure Thailand’s products with IoT technology.

Thailand Investment Review 05 INDUSTRY FOCUS

. Activities involving electronics design, including design and embedded system design, may also receive an 8-year CIT exemption with no cap. Manufacturing telecommunication products is also eligible for at least a 5-year CIT exemption, while the manufacture of emission, transmission and reception devices used in fiber-optic and wireless systems is eligible for a higher-tier incentive with an 8-year CIT exemption. The incentives under section 5 also include the manufacturing of embedded software In addition, the Thai automotive process, such activity will receive a which qualifies for an 8-year CIT industry represents another promising 5-year CIT exemption. exemption with no cap, while digital industry contributing to the demand Apart from the incentives for services such as Software platforms, for electronics as the new generation activities involving the integration of digital architecture design services, or of cars are increasingly equipped with high technology, the manufacture of even Fintech will also receive a 5-year electronics such as smart sensors, car electrical parts and/or equipment used CIT exemption. Meanwhile, the BOI navigation systems, and airbags. In fact, for industry will receive a 5-year CIT also offers non-tax incentives including cars remain the product with the highest exemption under the condition that the the permission to own land, to acquire density of electronic components among activity has its own product design, with relevant visas/work permits for foreign all consumer machines. With that in a 3-year CIT exemption available if the staff, and to take out or remit money mind, Thailand’s massive automotive activity does not have its own product abroad in a foreign currency. production provides a huge market opportunity as the country produced 1.94 million units in 2017, while it was Activities Incentives reported by the Asia Times that over 5.1 Manufacture of electrical products 112 million sensors were used in the 5.1.1 Manufacture of advanced technology electrical products in Thailand in the 5.1.1.1 With own-design process of the product A 2 same year. 5.1.1.2 Without own-design process of the product A 3

The BOI’s incentives 5.2 Manufacture of parts and/or equipment used Under section 5 of the general list of for electrical products activities eligible for promotion, the 5.2.1 Manufacture of electrical parts and/or equipments used for industry: Power Inverter, , Thailand Board of Investment (BOI) Main Circuit Breaker offers various incentives aimed at 5.2.1.1 With own-design process of the product A 3 activities in the E&E industry. For 5.2.1.2 Without own-design process of the product A 4 example, activities involving the integration of high technology-such 5.3 Manufacture of electronic products as the manufacturing of advanced 5.3.2 Manufacture of telecommunication products technology electrical products with 5.3.2.1 Manufacture of emission, transmission and reception A 2 devices used in fiber-optic and wireless communication the ability to connect to the Internet systems of Things or with circuits or operation 5.3.2.2 Manufacture of other telecommunication products A 3 control systems, processing systems, embedded systems or embedded 5.6 Electronics design software-will be granted an 8-year 5.6.1 Microelectronics design A 1 corporate income tax (CIT) exemption 5.6.2 Embedded system design A 1 provided that the product has its own 5.7 Software design process. For the manufacturing 5.7.1 Embedded software A 1 of products without their own design A 1 = 8 years (No Cap), A 2 = 8 years, A 3 = 5 years, A 4 = 3 years

06 Thailand Investment Review SHORT ARTICLE BOI MEASURES TO SUPPORT GROWTH IN TOURISM AND TRANSPORT SECTORS A previous edition of the Thailand Investment Review started the year by summarizing Thailand’s economic success in 2018. This article follows up on that summary by examining the contributions from particular sectors and the role of the Thailand Board of Investment (BOI) in not only continuing to support growth in those sectors but also promoting economic activities in less commercially concentrated parts of the country. Recently released by the Office of the 68% of all tourists, while European visitors and Nakhon Ratchasima Province will National Economic and Social Development ranked second with more than 17% of receive an additional 5-year CIT exemption, Council (NESDC), Thailand’s Gross the market. In line with the upward trend while activities implemented outside Domestic Product (GDP) experienced in foreign tourists, the NESDC has also Bangkok, Khon Kaen Province, and an estimated 4.2% growth over the year, forecasted that Thailand will remain a Nakhon Ratchasima Province will receive with the number for the final quarter prominent destination for international an additional 3-year CIT exemption added put at 3.7%. These figures were mainly visitors, while it is estimated that the on to the granted period. These special attributed to growth in non-agricultural tourism industry will generate more than packages are expected to support the sectors, with tourist-related industries 2.24 trillion baht in 2019. national infrastructure plan to expand expanding at particularly high rates. To ensure the growth in the tourism the national rail network by more than Included under the wider tourism sector and transport sector continues, the BOI 6,000 kilometers nationwide as well as are the transport industry, which experienced has launched two new measures aimed to help kick-start the establishment of a a 6.1% expansion, as well as the at developing the country’s rail industry rail production hub in the northeastern and sector, which recorded and further enhancing its tourist destinations. region. 5.3% growth. On a more specific level, Expecting to stimulate investment in rail For the tourism industry, more transportation expanded by 4.9% in the development and related activities, the activities are being added to the existing 4th quarter of 2018. BOI offers an initial 100% exemption promotion list to attract extra investment Another tourism-related industry for the first 5-8 years of projects in in tourism infrastructure-related activities with a gradual growth is hospitality. rail system development and related as well as to support the creation of Thailand has experienced a rebound in activities provided the application is new tourist attractions, particularly in the number of foreign tourists visiting made by 30 December 2021. On top of second-tier provinces. Two newly-created the country, with the 38 million tourists that, a 50% corporate income tax (CIT) categories have been added to those reported in 2018 representing a 4.3% reduction for an additional 3-5 years eligible for the BOI’s incentives, namely growth from the previous year. According will also be granted after the expiry (1) cruise terminals and (2) large-scale to the Ministry of Tourism and Sports, of the initial exemption. Rail system tourist attractions with high standards. East-Asian countries remain the main development and related activities In addition, the BOI has also expanded source market, accounting for around implemented in Khon Kaen Province the scope of existing conditions to cover all types of museums with the aim of enhancing the inclusivity and variety of Thailand’s tourist attractions, particularly those in secondary provinces. The BOI firmly believes that the new measures put in place will help encourage the development of infrastructure to support Thailand’s tourism industry and its infrastructure in the longer run.

Thailand Investment Review 07 COMPANY INTERVIEW MITSUBISHI ELECTRIC CONSUMER PRODUCTS (THAILAND): A LEADING GLOBAL PRODUCER OF AIR-CONDITIONERS AND SMART ELECTRONICS

Mitsubishi Electric “ As part of our A period of expansion Consumer Products’ Since commencing operations in Thailand international operations corporate pledge of 30 years ago, MCP has become a With production plants in six countries ‘creating a better household name in air conditioner and across Europe, Asia and North America, tomorrow’, at Mitsubishi smart electronic manufacturing. With Mitsubishi Electric Consumer Products Electric Consumer rapid growth rates in these two sectors (MCP) is well known for creating a variety across the globe, expansions of high performance and reliable household Products (Thailand), within Thailand are currently underway products, with a particular focus on we are committed to to meet the increased demand. As air-conditioning units. At present, fostering high-quality MCP’s 178,400 m2 original site edged Thailand acts as the main production technological towards its maximum capacity, an center, primarily due to the country’s additional 244,000 m2 site was opened on reputation for offering high-quality that will benefit 1 December 2015. To ensure maximum human resources, a well-established consumers around efficiency, the original site will now infrastructure, global supply chain links, the world” focus on the production of room air and attractive government policies. With conditioners, while the newer site will Mr. Norikazu Ishikawa, a public commitment to sustainable President - Mitsubishi Electric primarily deliver commercial package air business practices, including via the Consumer Products (Thailand) Co., Ltd. conditioning units. If demand continues implementation of the United Nations’ to grow as expected, an additional factory Sustainable Development Goals (SDGs), is tentatively slated for construction in MCP prides itself on product offerings 2025. that are safe, reliable, and environmentally As MCP’s products have continued friendly. to advance, there has been a noticeable First established in Thailand on spike in demand from across the region 27 November 1989, MCP has developed and further afield. To capitalize on this an enviable reputation both at home interest, MCP has continued to invest in and abroad for its consistently strong ongoing technological improvements, financial performance. For example, in ensuring that it is able to provide superior the 2018 fiscal year (ending on 31 March air conditioning and smart electronic 2019), company sales are expected to product offerings. For example, artificial reach 14 billion baht, an increase of intelligence and Wi-Fi integration are approximately 4% from the previous now considered standard in both the year. This aligns with Thailand’s overall European and North American markets, GDP increase of 4.2% over the same and will soon be available for customers period. In the fiscal year 2019, sales are in Thailand. projected to increase by a further 10% Mr. Norikazu Ishikawa, President of to 15.5 billion Baht. Mitsubishi Electric Consumer Products (Thailand), notes that “with international growth continuing to boom, we are

08 Thailand Investment Review Appliances Industry’. Provided with the Appliances Industry’.Providedwiththe ‘Section 5: Electronics and Electrical has been granted support under of advancedtechnologyelectricalproducts the company’sproject on manufacture incentives fromtheBOI.Morerecently, from anassortmentoftaxandnon-tax over two decades,MCPhasbenefitted and electronic appliance industries. For operating environmentfortheelectronic Thailand continuestomaintainaconducive the BOI? received from Consumer Products Mitsubishi Electric has What support government forcompanieslike MCP. environment providedbytheThai testament totheconduciveoperating will soonreach140countries,atrue air-conditioning exports from Thailand a competitive price.” It is expectedthat we canprovideworld-classproductsat re-doubling oureffortstoensurethat NEWS BITES appliances will increaseby3.38%whileelectronics willincreaseby2.56%. the electrical and electronics industry was forecasted to rise in value by 2.97% in 2019. In particular, the electrical export shipmentswereprojected togrowby3.26%USD64.1billion.Athome,themanufacturing productionin at 9.03%(-0.49%).In2019,Thai at 11.5%(+12.2%) andChina 17.9% (-2.30%), Europeat14.5%(+8.64%),Japan destination, accountingfor 18.5% of the total value (+5.38% from theprevious year), followed bytheUnitedStates at at USD62.1 billion, a2.16% increase from 2017. Based onthe2018 data, SoutheastAsiawasthetopexport destinations. Formajor shipment in 2018stood value exports,thecountry’selectrical andelectronicsshipment and electronics industry isundergoingaperiodofcontinuedexpansionascanbeseenfrom the growth in most Hortrakul, Director of the Electrical and Electronics Institute (EEI),statedinabriefingthatthethriving Thai electrical Electrical andelectronics industry to thrive in2019: Prospect of Thailand’s homemarket: smart in 2020ataremarkableaverageannualgrowthof40%. which showsthattheSmart Home market valueisprojectedtohike from 645 millionbahtin2016 to 2.5billionbaht customer demandforinnovativeproducts.Healsoreferred to thedatafromareport by PricewaterhouseCoopers valued at73billionbaht.Thepremiumelectronics market isforecastedtogrow by 20% within thisyear due tohigher the market trendofconsumerelectronics in Thailand.Currently, Thailand’shomeelectronicsappliancemarket is During theconference,Mr.ChalermpongDarongsuwan,VicePresidentofThaiSamsungElectronics,presented for theSmart Home. the conferenceshowcasednewtechnologyandinnovativeelectronicproductsdesigned of 2019 underway withtheSamsungConsumer Electronic Conference. Under the conceptof“ConnectedLiving”,

activities. experts toworkininvestmentpromoted into theKingdomskilledworkers and as permissiontoownlandandbring and asuiteofnon-taxincentivessuch materials usedinproductionforexport, import dutieson machinery and on raw Other benefitsincludethe exemption of (from February 2021 to February 2027). income taxobligationsfor5years company willbeexempt fromcorporate BOI IncentiveinthecategoryofA3, per capita rising from USD 680 in 1980 to reach their full potential.WithGDP are yet within Thailand sales appliance exports, airconditioningandsmarthome Despite asignificantriseininternational Consumer Products? Mitsubishi Electric electronic industry and look like for Thailand’s What does the future Thai Electronics Co., Ltd. got the first quarter Thai Co., Ltd. gotthe first quarter COMPANY INTERVIEW many yearstocome. both domesticallyandinternationallyfor continue to hold a strong market position Mitsubishi ElectricConsumerProductswill market demands, it is anticipatedthat consumer prioritiesandfluctuating dedication towardsmeetingshifting to mediumterm.Asacompanywith expected to remain strong in the short appliances industryinThailandis in 2019,theelectronicandsmart with a4.0%economicgrowthprojection quarter of nationalexports.Combined industry constitutedapproximatelya the mediumtolongterm. rates may skyrocket ashigh80%in trajectory, it is anticipated that GDP expectedtocontinuetheirforward about 30%. However, with wagesand air conditioningownershiparestillat to USD 7,462 in 2018, overall rates of Thailand Investment Review On 7February 2019,Mr.Somboon As of2018, Thailand’s electronic 09

BOI’S MISSIONS AND EVENTS

On 9 February 2019, Ms. Bonggot Anuroj, Deputy Secretary General of the Thailand Board of Investment, joined a On 7 February 2019, the Thailand Board of Investment, led by seminar on “Investment and Trade Opportunities between its Secretary General, Ms. Duangjai Asawachintachit, held a Thailand and North East India”. Held at Centara Grand at consultative meeting with the Joint Foreign Chambers of Central World, Bangkok, the seminar was organized by the Commerce in Thailand (JFCCT), led by JFCCT Chairman, Embassy of India in Bangkok on the occasion of a group Mr. Stanley Kang. More than 100 representatives from foreign of entrepreneurs from North East India traveling to Thailand chambers of commerce and other relevant agencies joined the in order to study opportunities for business cooperation event at Centara Grand at Central Plaza Ladprao, Bangkok. In between companies from the two countries. the meeting, the BOI shared the latest updates on Thailand’s investment measures and policy, while the relevant parties took the opportunity to discuss ways of promoting Thailand as a more favorable investment destination for investors. On 11 February 2019, Ms. Duangjai Asawachintachit, Secretary General of the Thailand Board of Investment, gave a speech in a seminar entitled On 31 January 2019, Mr. Narit Therdsteerasukdi, Deputy “EEC and Thailand’s Law Reform Secretary General of the Thailand Board of Investment, Opportunity for New Investment” at participated in a High Level Panel Discussion as part of the the Thailand Institute of Justice (TIJ). 2nd official meeting of the France-Thailand Business Forum The speech was on the topic of Thailand’s policy direction at the Plaza Athénée Hotel, Bangkok. The primary aim of in promoting investment, especially in the special economic the forum was to promote collaboration between the two zones, as well as new investment promotion measures countries in terms of trade and investment, especially in and special measures being introduced to stimulate the Eastern Economic Corridor (EEC). The forum brought investment during the Thailand Investment Year. The together representatives from the Ministry of Energy, the seminar’s participants comprised approximately 100 Ministry of Commerce, the Ministry of Foreign Affairs and the Japanese investors in Thailand. National Innovation Agency as well as 60 French investors in the fields of transport infrastructure, smart city development, energy, bio-economy, agriculture, food and tourism.

On 24 January 2019, Mr. Chokedee Kaewsang, Deputy Secretary General of the Thailand Board of Investment, welcomed Mr. Yang Weiqun, Deputy Director General of the Department of Asian Affairs, Ministry of Commerce of the During 6-8 February 2019, Ms. Ratchanee Wattanawisitporn, People’s Republic of China, and a delegation of 6 officials Director of the BOI Frankfurt Office, along with other BOI from the Ministry who had come to discuss approaches to representatives, organized an investment promotion activity promoting Chinese investment in Thailand. The meeting at the Integrated System Europe (ISE) 2019 event, which took also included a discussion on the linkage between various place in Amsterdam, the Netherlands. The ISE is one of Europe’s industries under the Thailand 4.0 and Made in China 2025 largest exhibitions on digital technology and digital products. In plans in accordance with the Belt and Initiative of the event, the BOI representatives met with many companies in China, which will promote Thailand as a production base in the digital, electronics and energy industries, several of whom the ASEAN region. expressed an interest in investment opportunities in Thailand.

10 Thailand Investment Review THAILAND ECONOMY-AT-A-GLANCE

Key Economic Figures Unemployment Investment Growth GDP (2018*) 2018* $506.2 Billion 2017 2018* 0.9% 6.3% GDP per Capita (2018*) $7,462 1.2% GDP Growth Headline Inflation Export Value Growth 2018* 2017 2018* 2017 2018* 3.9% 4.2% 1.1% 9.8% 7.2% Note: *Estimated value l Source: NESDC Market Profile International Competitiveness (2018) Logistics Global World Digital Population Minimum Wage Performance Competitiveness Competitiveness 69.2 THB 308 - 330 Index Business Ranking Million $ Approximate $9.7 - 10.4 2016 : 45th 2017 : 40th 2017 : 41st 2018 : 32nd 2018 : 38th 2018 : 39th Time to set up business : 4.5 days Source: World Bank, WEF and IMD Export Figures Top 10 Export Markets (January - December 2018) Rank Value (USD Million) YoY Growth Share China 30,175 2.3% 12.0% US 28,016 5.4% 11.1% Export value (USD million) Japan 24,942 13.0% 9.9% Jan - Dec 2017 : 236,694.18 Vietnam 12,958 11.8% 5.1% Jan - Dec 2018 : 252,486.40 Hong Kong 12,524 1.8% 5.0% Year-on-year Growth : 6.7% Malaysia 11,627 12.4% 4.6% Australia 10,778 2.6% 4.3% Indonesia 10,069 13.9% 4.0% Singapore 9,416 13.6% 3.7% Philippines 7,898 13.7% 3.1% Top 10 Exports Value YoY Value YoY / Products (USD million) Growth Share Goods / Products (USD million) Growth Share 1: Motor cars and parts 28,952 7.1% 11.5% 6: Refined fuels 9,316 29.7% 3.7% 2: and parts 19,752 6.8% 7.8% 7: Chemical products 9,180 23.0% 3.6% 3: Precious stones and 11,978 -6.6% 4.7% 8: Electronic integrated circuits 8,334 0.8% 3.3% 4: Rubber products 11,024 7.5% 4.4% 9: Machinery and parts 8,202 8.3% 3.2% 5: Plastic beads 10,330 19.1% 4.1% 10: Steel and steel products 6,253 12.5% 2.5% Source: Ministry of Commerce

Exchange Rates Tax Rate (Data as of 21 January 2019) Corporate Income Tax: 0 - 20% Personal Income Tax: 5 - 35% THB 31.85 THB 41.55 THB 36.44 THB 29.35 THB 4.73 VAT: 7% Witholding Tax: 1 - 10% Source: Bank of Thailand Source: the Revenue Department

Thailand Investment Review 11 ABOUT BOI The Office of the Board of Investment (BOI) is the principle goverment agency that operates under the Prime Minister’s Office for the purpose of encouraging investment in Thailand. We at the BOI serve as the professional contact points for investors, providing them with useful investment information and services. We offer business support and investment incentive to foreign investors in Thailand, including tax and non-tax incentives. A few non-tax incentives include granting land ownership to foreigners and facilitating visas and work permits. Besides serving the needs of overseas investors, we also offer consultation services to Thai investors who are interested in investment opportunities abroad.

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Los Angeles Paris Seoul Beijing Thailand Board of Investment, Thailand Board of Investment, Thailand Board of Investment, Thailand Board of Investment, Los Angeles Office Paris Office Seoul Office Beijing Office Royal Thai Consulate-General, 8 Rue Greuze 75116 Paris, France #1804, 18th floor, Daeyungak tower 25-5, No.21 Guanghua Road, 611 North Larchmont Boulevard, Tel: 33(0)1 56 90 26 00-01 1-ga, Chungmu-to, Jung gu 100-706, Chaoyang District, Beijing, 3rd Floor Fax: 33(0) 1 56 90 26 02 Korea P.R. China 100600 Los Angeles CA 90004, USA E-: [email protected] Tel: (+82)2 319 9998 Tel: +86 10 85318755-57, Tel: +1 323 960-1199 Fax: (+82)2 319 9997 +86 10 85318753 Fax: +1 323 960-1190 Mumbai E-mail: [email protected] Fax: +86 10 85318758 E-mail : [email protected] Thailand Board of Investment, E-mail: [email protected] Mumbai Office Taipei New York Royal Thai Consulate-General Thailand Board of Investment, Sydney Thailand Board of Investment, 12th Floor, Express Towers, Taipei Office Thailand Board of Investment, New York Office Barrister Rajni Patel Marg, Nariman Point Taipei World Trade Center Room:3E40 Sydney Office 7 World Trade Center Mumbai 400021, India No.5 Xinyi Rd., Sec.5, Taipei110 Suite 101, Level 1, 234 George Street, 250 Greenwich Street, Suite 34F Tel: +91-22-2204-1589 Taiwan R.O.C. Sydney, NSW 2000, Australia New York, NY 10007, USA +91-22-2204-1590 Tel: (886)-2-2345-6663 Tel: +61 2 9252 4884 Tel: +1 212 422 9009 Fax: +91-22-2282-1525 FAX: (886) 2-2345-9223 E-mail: [email protected] Fax: +1 212 422 9119 Email: [email protected] E-mail: [email protected] E-mail: [email protected] Jakarta Osaka Guangzhou Thailand Board of Investment, Stockholm Thailand Board of Investment, Thailand Board of Investment, Jakarta Office Thailand Board of Investment, Osaka Office Guangzhou Office Royal Thai Embassy, Stockholm Office Royal Thai Consulate-General Royal Thai Consulate-General Jl. DR Ide Anak Agung Gde Agung Stureplan 4C, 4th Floor Bangkok Bank , 7th Floor No.36 Youhe Road, Haizhu District, Kav. E3.3 No.3 (Lot 8.8), 114 35 Stockholm, Sweden 1-9-16 Kyutaro-Machi, Chuo-ku Guangzhou 510310 P.R. China Kawasan Mega Kuningan, Tel: +46 8 463 1158, +46 8 463 1174 Osaka 541-0056, Japan Tel: +86-20-8385-8988 ext. 220-225, Jakarta 12950, Indonesia Fax: +46 8 463 1160 Tel: (81-6) 6271-1395 +86-20-8387-7770 (Direct Line) Email: [email protected] [email protected] Fax: (81-6) 6271-1394 Fax: +86-20-8387-2700 E-mail: [email protected] E-mail: [email protected] Hanoi Frankfurt Thailand Board of Investment, Thailand Board of Investment, Tokyo Shanghai Hanoi Office Frankfurt Office Thailand Board of Investment, Thailand Board of Investment, 26 Phan Boi Chau Str., Hoan Kiem, Investment Section, Tokyo Office Shanghai Office Hanoi, Vietnam Royal Thai Consulate-General 8th Floor, Fukuda Building West, Royal Thai Consulate General, No. 18, Tel: (84) 24 3823 5092-4 Bethmannstr. 58,5.0G 60311 2-11-3 Akasaka, Minato-ku, Wanshan Road, Changning District, Email: [email protected] Frankfurt am Main Tokyo 107-0052 Japan Shanghai 200336, P.R. China Federal Republic of Germany Tel: +81 3 3582 1806 Tel: +86-21-5260-9876, Tel: +49 (069) 92 91 230 Fax: 81 3 3589 5176 +86-21-5260-9877 Fax: +49 (069) 92 91 2320 E-Mail: [email protected] Fax: +86-21-5260-9873 Email: [email protected] Email: [email protected] www.boi.go.th

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