FRIDAY, March 29, 2024
nationthailand

BOI approves steps to ease Covid-19 impact, accelerate medical investment

BOI approves steps to ease Covid-19 impact, accelerate medical investment

The Board of Investment of Thailand (BOI) on Monday (April 13) approved more measures to soften the impact of coronavirus on business, including steps to encourage rapid investment in the manufacturing of medical equipment.

The board also approved incentives to promote technology-based "smart farming", as well as research and development in other sectors.
"In face of the unprecedented situation resulting from the virus outbreak, we have taken a range of measures to address the urgent needs of affected business sectors," Duangjai Asawachintachit, secretary-general of the BOI, said after a board meeting chaired by Prime Minister Gen Prayut Chan-o-cha in Bangkok.
"The measures for the medical sector aim to enable a rapid response to the situation, while paving the way for longer-term development."
To address increased demand for medical equipment and supplies resulting from the outbreak, the BOI approved amendments to BOI-eligible businesses and enhanced benefits related to the medical sector with a view to accelerating investment in production of medical equipment and supplies.
Support will also be given for the modification or transformation of existing production lines to boost availability of medical supplies, Duangjai told a press conference held online to respect social distancing rules.
Measures approved on Monday include the following.
Accelerating investment in medical sector:
1. Tax holidays of three to eight years and a 50 percent cut in corporate income tax for an additional three years for eligible investments in the medical sector. Examples include the production of medical devices and parts, non-woven fabric used as raw materials in the production of medical supplies, diagnostic test kits, drugs, and active pharmaceutical ingredients. This measure covers projects that apply between January 1 and June 30 and must start production and generate income by December 31 this year. Distribution or donation domestically of at least 50 percent of the output must take place in 2020-2021.
2. A measure to support the adjustment of existing production lines to manufacture medical devices or parts by exempting import duties on machinery on the condition the equipment is imported within 2020 and the application for production line adjustment is filed by September 2020.
3. Adjustments to benefits granted for production of raw materials used in the manufacture of medical products, to encourage a more complete value chain in Thailand. For instance, pharmaceutical grade alcohol production is now entitled to an eight-year corporate income tax exemption. Additional benefits granted for production of non-woven fabric used as raw materials for medical masks or medical devices, by expanding the corporate income tax exemption from three to five years.
Temporary relaxation of investment conditions:
The BOI agreed to relax deadlines in cases such as the duty-free importation of machinery and the full operation start-up, as well as waivers for applications for temporary cessations of operations for a period of more than two months.
Support for research and development:
The BOI broadened the scope of activities eligible for duty-free importation of materials used in research and development to cover all activities required to conduct R&D.
Encourage smart farming development:
To encourage investment in technologies supporting the modernisation of the agricultural sector and allow local start-up enterprises to participate in the overall development of digital platforms, the BOI simplified conditions of investment in smart farming while retaining attractive tax incentives.
Approval of Mitsubishi Motors' EV investment:
The BOI also approved an application from Mitsubishi Motors (Thailand) Co, Ltd with total investment of Bt5.48 billion to upgrade the company's existing car production line in Laem Chabang for the production of electric-powered cars. The project plans production of 39,000 vehicles per year, consisting of about 9,500 battery electric vehicles (BEV) and about 29,500 hybrids. The production, to launch in 2023, will aim at the local market and exports to other Asean countries.
Investment applications in January-March 2020
During the first quarter of 2020, the number of applications submitted to the BOI increased slightly to 378 from 368 in the same period last year. However, the lower average project size led to the total value of applications declining 44 percent to Bt71.38 billion on last year’s equivalent period. Foreign investment totalled Bt27.43 billion, representing 38 percent of total investments. The top three foreign investment sources were Japan, China and Hong Kong.

nationthailand