New BOI privileges to focus on sustainable development

The proposed BOI strategies will focus on restructuring the economy for sustainable development and to overcome the “middle-income trap” type of economic development. 

The new BOI strategy will aim to promote competitiveness in development and value creation in the industrial sector and to promote green industry to facilitate balanced and sustainable growth. 

The strategy will also promote new industrial clusters in different regions of Thailand to create new investment concentration and promote outbound investment to increase the competitiveness of Thai businesses, the BOI release said. 

As part of the new strategy, the BOI will grant investment-promotion privileges by prioritising the importance of the proposed activities and providing additional incentives based on the merits of the project such as environmental-protection standards, location of the factory in the industrial zone or estate, and research and development programmes. 

The BOI will also abolish the current system of basing investment promotion on zoning and replace it with new regional clusters. 

Clear guidelines on key performance indicators, outcome of the project and cost-effectiveness of the investment will be used in evaluating the new applications rather than monetary value of the investment. 

The BOI has classified target industries into 10 categories for granting investment promotion. These are basic infrastructure and logistics; basic industry (steel, petrochemicals, pulp and paper, etc); medical devices; scientific equipment; alternative energy and environmental services; services that support the industrial sector (R&D, human-resources development, engineering design, software development, etc); food and agricultural processing industries; hospitality and wellness; advance core technologies (biotechnology, nanotechnology, and others); and industries in which Thailand can be developed into a global manufacturing base such as automotive and transportation equipment and electrical appliances. 

The BOI plans to remove a number of activities from the current list of activities eligible for investment-promotion privileges. 

These are the activities that have low technology, low value-added output, less complex production processes, low linkage with other industry, and labour-intensive production. Also targeted for removal are activities that have high energy consumption and create environmental problems, have concessions or monopoly activities under state protection, or are in conflict with laws and regulations. 

The BOI’s new promotion package is expected to be finalised by July. There will be a transition period before the full implementation of the new strategy. The revised strategy will not have an impact on currently promoted companies. 

All new applications submitted before the new criteria come into effect will be approved based on the current BOI policy.