BOI frames new 5-year investment promotion strategy to pave way for new economy
Thailand’s Board of Investment (BOI) last week approved the framework of its new investment promotion strategy for the next five years, which will focus on entering the new economy era.
The strategy involves encouraging technological advancement, a transition to green and smart Industries, talent development, as well as creativity and innovation, to strengthen the country's status as a regional hub for business, trade and logistics.
The new investment promotion strategy (2023-27) aims to promote investment to restructure the country's economy around three core concepts: innovation, technology, and creativity; competitiveness and the ability to adapt quickly; and, inclusiveness, taking into account environmental and social sustainability.
"In view of the challenging, volatile and highly competitive global environment, the BOI will stay ahead of changes and keep promoting investment in a way that achieves concrete results, helping to lead Thailand into the new economy," Narit Therdsteerasukdi told reporters during his first press conference since taking over as secretary-general of the BOI on October 3.
"To reach that objective, the BOI will broaden its role from that of a ‘promoter’ providing tax and non-tax benefits, to focus on becoming an ‘integrator’ of investment support tools, a ‘facilitator’ providing services, and a ‘connector’ linking industries to create more business opportunities."
To implement the strategy and its vision of the new economy, the BOI will articulate its investment promotion policies around seven pillars:
● Upgrade existing industries, in parallel with the building of new industries in which Thailand has high potential, and an overall strengthening of the supply chain
● Acceleration of industrial transition to green and smart industries through investments in automation, digital adoption and decarbonisation
● Promotion of Thailand as a business centre, and an international trade and investment gateway for the region
● Strengthening SMEs and startups, ensuring they are connected to the global market and supply chain
● Promotion of investments in the different regions of Thailand that fits the potential of each area and enables inclusive growth
● Promotion of investments that will promote community and society development
● Promotion of Thailand's overseas investment to expand business opportunities for Thai companies
Further details of the policies and sector-specific incentive packages will be presented to the board and announced in coming weeks, Narit said.
During the first nine months of 2022, foreign and local investors filed with the BOI a total of 1,247 applications for investment promotion, worth a combined 439.1 billion baht (US$11.6 billion), Narit said.
While the number of applications rose 8.5 per cent when compared to the 1,149 projects seen in the first nine months of 2021, the combined value fell 14.1 per cent, from 511 billion baht, reflecting a smaller average project size.
Thailand's Eastern Economic Corridor (EEC) area saw 376 projects applying for promotion, representing a combined investment value of 246.7 billion baht, or 56 per cent of the total value of applications in the first nine months, Narit said. Most are investments in Rayong and Chonburi provinces.
Foreign direct investment (FDI) applications decreased 25 per cent year on year to 275.6 billion baht
The main source of FDI applications in the first nine months was China with 45 billion baht, followed by Taiwan (39.3 billion baht), Japan (37.6 billion baht), the US (34.3 billion baht), and Hong Kong (26.3 billion baht).
During the first nine months, FDI applications data for China, Hong Kong and Taiwan all included investments in the manufacturing of new electric vehicles (EV) and parts. Major EV investments announced in Thailand this year involve plants by BYD, whose investment is coming through its Hong Kong-based unit, and Foxconn.
Over the nine months to September, the BOI issued promotion certificates to 1,101 projects, an increase of 17 per cent year on year. The combined investment value of the certificates amounted to 357.6 billion baht, an increase of 57 per cent, Narit said.
"The promotion certificate statistics, the closest data we have to actual investment, are sending a clear signal that over the next one to two years, there will be a significant increase in actual investment flows," Narit said.