Industry: Industry Region: Thailand Transaction Price: Not Disclosed Transaction Method: Equity Investment
Introduction: Thailand divides the 76 provinces into 3 investment areas according to the distance of the administrative region from Bangkok and the level of local income, and most of the industrial parks in each region (equivalent to the economic development zones of various countries) enjoy various preferential investment policies of the Thai government. Thailand's industrial parks are mainly divided into 3 types, the first is the general industrial park "General Industrial Zone (GIZ)", the second is the export processing zone "Export Processing Zone (EPZ)", the third type is the free trade zone "Free Trade Zone (FTZ)", most of which are general industrial parks and export processing zones, and some industrial zones are GIZ and EPZ. The number of free trade zones is small. Since 19 September 2002, Thailand has abolished the requirement for designated areas for investment projects, and projects that have been incentivized for investment can set up factories in all regions of the country, and tax exemptions are obtained in accordance with the regulations of the district where the factory is located. However, special provisions are made for items that have an impact on the environment.
Details: According to incomplete statistics, there are currently more than 100 large and small industrial parks in Thailand, of which about 60 are enjoying the incentive policies of the Investment Promotion Board of Thailand (BOI), and the rest are either because of the small area (Note: more than 500 rai can apply, about 1200 mu), or did not apply, do not enjoy the investment incentive policy. It should be noted that the investment incentive policies mentioned here are for investors in industrial parks, not for enterprises located in industrial parks, that is, enterprises stationed in industrial parks that enjoy incentive policies do not automatically enjoy relevant investment incentive policies. The incentives available to investment companies will be described later.
Of the above-mentioned more than 60 industrial zones with BOI incentive policies, 34 are entirely invested by the government, either by the government and private partnerships, or by private partnerships and operated by private partnerships, while the remaining 20 or so are completely established and operated by private individuals, with no input from the government other than the approval of land use rights.
The Industrial Estate Authority of Thailand (IEAT), a subsidiary of the Ministry of Industry of Thailand, implements government management functions for industrial parks. The Bureau approves the establishment of industrial zones in accordance with relevant laws and regulations of Thailand; Manage the construction of industrial parks, the improvement of supporting facilities, land allocation, etc.; Provide related services for land use, park operation, tax incentives, work permits and foreign workers in industrial parks. In addition, the Industrial Park Administration also grants special benefits to industrial parks in addition to the preferential policies of BOI, mainly related to the treatment of foreign investors in industrial parks on land ownership, labor and family members, and repatriation of profits abroad.
The Thailand Board of Investment (BOI) is also a subsidiary of the Ministry of Industry of Thailand, chaired by the Prime Minister of Thailand and vice-chaired by the Minister of Industry. BOI is fully responsible for investment promotion in Thailand, formulating relevant investment promotion incentive policies, and also responsible for attracting investment according to investment preferential policies and various investment-related service measures for investors. Its relationship with industrial parks is mainly to accept applications for preferential policies and review and approval of investment enterprises in industrial zones and industrial parks, and if investment enterprises apply for investment incentive policies, under normal circumstances, there will be agency services in industrial parks and unified declaration to BOI.
There are 3 investment preferential areas in the country, and industrial parks in different regions enjoy different investment preferential policies.
District 1: Consists of six central provinces, namely Bangkok, Nakhon Pathom, Nonthaburi, Pathom Thani, Samut Prakan, and Samut Sakhon. The above five provinces are surrounded by Bangkok, and the industrial zone located in them is the closest to Bangkok among the Thai industrial zones, about tens of kilometers, with convenient transportation and complete supporting facilities. There are a total of 10 industrial parks in District 1 that enjoy the BOI investment incentive policy.
District 2: It consists of 12 provinces, namely Kanchanaburi, Chapso Liu, Chonburi, Khun Siyuk, Ayutthaya, Phuket, Rayong, Lipi, Beibiao, Lam Gong, Suphan and Hung Tong. These 12 provinces are equivalent to the periphery of District 1, about 100-200 kilometers away from Bangkok, with convenient transportation and complete supporting facilities. There are a total of 34 industrial parks in District 2 that enjoy BOI investment incentives.
District 3: The remaining 58 provinces belong to District 3, which is located far from Bangkok and is the outermost of the industrial zones, but enjoys very favorable investment incentives. Among these 58 provinces, 22 low-income provinces are divided, which is different from the other 36 provinces in the third district, and is the area with the most preferential benefits among all industrial zones. There are a total of 15 industrial parks in the third district that enjoy the BOI investment incentive policy.
The incentives enjoyed by investment enterprises entering different areas are generally the farther away from Bangkok, the more favorable the better, that is, the conditions in the third zone are the best.
Thailand's market access policy for both domestic and foreign investors
According to Thailand's Foreign Enterprises Act, there are three types of industries in which foreign investment is restricted:
(1) Business in which investment by foreigners is prohibited for special reasons
1. Newspapers, radio stations, television stations
2. Rice planting, dryland planting, orchard planting
3. Animal husbandry
4. Forestry, log processing
5. Fishing in Thailand's territorial waters and Thailand's special economic zone
6. Thai medicinal herbs concocted
7. Business and auction involving Thai antiques or cultural relics of historical value
8. Buddha statues, bowls made or cast
9. Land transactions
(2) Investment business involving national security and stability or adversely affecting art and culture, customs and habits, folk handicrafts, natural resources, and ecological environment. It is an industry in which foreign investors may engage in industries that have been approved by the Minister of Commerce in accordance with a decision of the Cabinet
1. Production, sales and repair of military equipment and equipment
2. Domestic inland transportation, water, air and other transportation industries, including domestic aviation industry
3. Buying and selling of antiques and artworks involving traditional Thai crafts
4. Wood carving manufacturing
5. Sericulture, Thai silk production, Thai silk weaving, Thai silk pattern printing
6. Thai national musical instrument manufacturing
7. Goldware, silverware, black silver inlayware, stone-set goldware, lacquerware manufacturing
8. Sucrose production
9. Production of sea salt and mineral salt
10. Stone salt production
11. Mining, stone blasting or crushed stone processing
(3) Investment business in which a national does not have competitive ability with a foreigner is an industry that can be engaged in after approval by the Director of Commercial Registration of the Ministry of Commerce in accordance with the decision of the Foreign Business Business Committee.
1. Rice milling industry, rice flour and other plant flour processing
2. Aquaculture
3. Development and management of construction forests
4. Plywood, veneer, planed wood board, hardwood board manufacturing
5. Lime production
6. Accounting, legal, construction, engineering services
7. Publicity and advertising industry
8. Hotel industry
9. Tourism
10. Development of new plant varieties and variety improvement
Since the financial crisis in Thailand in 1997, in order to adapt to the changes in the world economy and investment situation and attract more foreign investment, BOI has successively announced new incentive policies and measures, and the latest policies and regulations to encourage investment were announced on August 1, 2000. However, some new policies and some regulatory changes will be added in the near future. The revision of preferential policies focuses on relaxing restrictions on the field of investment, focusing on supporting industrial policies, further reducing import tariffs on equipment and raw materials, further reducing enterprise income tax, relaxing restrictions on foreigners' shareholding, allowing foreigners to purchase real estate and encouraging export measures.
Thailand's preferential policies to encourage foreign investment are mainly divided into two categories: regional policies and industrial policies.