Thailand’s Investment Growth Likely to Continue in 2012

(04/01/2012)

Investment in Thailand in 2012 is likely to continue to expand, as the Government has planned various activities throughout the year, both inside and outside the country, to stimulate confidence among investors. According to Industry Minister Wannarat Channukul, the first activity is the BOI Fair, to be held from January 5 to 20 at IMPACT Muang Thong Thani, Nonthaburi province. A number of business executives from abroad will attend the CEO Forum, where they will hear about the directions of Thailand’s economic development and investment policy. Other activities include road shows overseas to explain to foreign investors Thailand’s investment prospects and economic situation. The Government in August 2011 decided to designate 2012 the Year of Investment and Skill Development. In 2011, more than 1,000 projects from foreign direct investment, worth 390.9 billion baht, were carried out in Thailand. The number represented an increase of 18 percent, and the value rose by 67 percent over the previous year. Japan remained the largest foreign investor in Thailand, with 543 projects, worth 187.7 billion baht. Coming second was by China, followed by Singapore and Hong Kong. The Board of Investment (BOI), during its recent meeting, approved two major recovery measures to assist flood-hit businesses. The first measure involves entrepreneurs directly affected by the flooding. The second one is for industrial estates or industrial zones, both affected and unaffected by the severe flooding in 2011. Applications for both measures will be open until the end of 2012. In the first measure, projects that have received BOI promotional privileges and are subject to a tax-exemption limit will enjoy a new eight-year exemption. If they continue to invest in the same province, one that was affected by the flooding, they will enjoy a tax exemption up to 150 percent of their new investment, plus the effective value of tax exemption. The tax exemption for factories deciding to relocate to other provinces is only 100 percent of the investment value. Investment projects with privileges remaining for no more than three years will see the period extended up to eight years. Those with privileges remaining for no more than five years will be given additional privileges. In the second measure, industrial estates that invest in a flood-prevention system, including various infrastructural facilities for flood protection, will receive an eight-year tax waiver. The maximum tax exemption must not exceed 200 percent of the investment value. Industry Minister Wannarat, who supervises BOI, stated that investing in Thailand is still attractive, despite a slowdown in the past few months because of the damaging floods. However, in the overall picture, Thailand’s investment is expected to grow further in 2012.