Investors ‘keen on R&D’, says BOI

The Commerce Ministry also aims at developing a network of innovation- and creativity-based start-ups, focusing on adding value with innovation, technology and creativity.
Hiranya Sujinai, secretary-general of the BOI, said that after the board shifted its policy to promoting investment in science, technology and innovation, several Thai investors and companies had applied for privileges to expand in these businesses.
More are expected to follow suit.
R&D projects that add value with the BOI’s investment promotions extend from parts for electric cars to bacteria for vaccine production.
“The BOI does not look forward to having colossal investment in the groups of R&D and biotechnology, as their expected benefits do not go for money, but the country’s innovation that could aid people’s living in terms of food, medication and vaccination,” she said.
Almost all projects have seen collaboration with leading educational institutions, Hiranya said.
The amendment of the Investment Promotion Act is designed to make it more attractive by extending the corporate-income-tax exemption from up to eight years to 13 years.
The 50-per-cent tax reduction will also be extended to up to 10 years.
The privileges are limited to projects using high technology, high innovation and R&D in production.
The bill also includes a waiver of duties for products imported for R&D purposes.
Under the Competitiveness Enhancement Act, a board will consider and screen projects that are eligible to obtain financial support from the Bt1-trillion fund.
The board can offer corporate-income-tax exemptions for up to 15 years and capital to support investments with specific criteria.
Both bills have passed the Cabinet and Council of State and are now under deliberation by the National Legislative Assembly.
Since last year, the BOI has been focusing on promoting investments that use advanced technology and innovation as well as those under the Policy to Promote Science, Technology and Innovation, which had the most project applications from January to July.
For the first seven months, the “digital economy” scheme had 143 project applications worth Bt3.68 billion. This is an increase of 85.7 per cent in applications and 237.6 per cent in value from the same period last year.
Under the Policy to Promote Science, Technology, and Innovation, there were 133 project applications worth Bt32.17 billion. This is an increase of 160.7 per cent for applications and 409.8 per cent for investment.
Chantira Jimreivat Vivatrat, deputy secretary-general of the Department of International Trade Promotion, said Thailand needed to see an economic restructuring of “Thailand 4.0”, an economic model focusing on creating value-added products with innovation, technology and creativity.
At a recent conference on Asia design and innovation at the “Thailand Innovation and Design Expo”, she said the Commerce Ministry had expedited its development of innovation- and creativity-based start-ups to build up the country’s creativity industry.
In 2014, Thailand’s creativity industry was valued at Bt1.61 trillion or 13.18 per cent of gross domestic product, with 359,515 small and medium-sized enterprises and 860,654 employees.
“Upgrading the existing creativity industry to a new S-curve will need a new strategy in digital technology, biotechnology and groups of start-ups,” Chantira said.
The government might need to develop creative people, creative products and creative places with infrastructure improvement that could attract foreigners to invest in Thailand, she said.
While legal issues that obstruct business operations in Thailand may need amendment, measures to develop people through creative thinking for new products and services for future living like the ageing society may also have to be launched.
“Thailand’s one advantage in competitiveness is a wide variety of biology, culture and creativity. If they are seriously developed with the new strategy, it’s sure that Thailand’s overall economic picture will be strengthened,” she said.
The Commerce Ministry will hold a “Creative Thailand” event during the Bangkok International Gift Fair and Bangkok International Houseware Fair at the Bangkok International Trade and Exhibition Centre (Bitec) from October 19-23.