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Overview
 Thailand’s
government maintains an open, market-oriented economy and encourages
foreign direct investment as a means of promoting economic development,
employment and technology transfer. Foreign investment in Thailand
significantly influenced the buoyant economic growth of the last
15 years, spurring Thailand’s transformation from an agriculture-based
economy, to one balanced with industry and manufacturing.
The
government promotes foreign investment in Thailand through the Board
of Investment (BOI), which was established in 1977. The BOI lists
seven categories of economic activities, covering hundreds of types
of businesses that are eligible for investment incentives. Potential
investors who meet any or all the following criteria are eligible
for BOI incentives:
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Significantly
strengthen Thailand’s balance of payments position, especially
through production for export
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Support
the development of the country’s resources |
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Increase
employment |
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Locate
operations in provinces outside the Bangkok metropolitan area |
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Conserve
energy or replace imported energy supplies |
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Establish
or develop industries that form the base for further technological
supplies |
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Are
considered important and necessary by the government |
 Promotions
offered to investors by the BOI are categorized as either tax incentives,
or non-tax privileges. Corporate income tax and import tariff incentives
are offered to businesses whose activities fall under the BOI’s
priority industries, or who operate in Export Processing Zones (EPZ).
Non-tax privileges including guarantees, protection, permissions
and services, which are offered to all BOI-Promoted projects. EPZ’s
fall within Thailand’s network of Industrial Estates, which offer
incentives to foreign and domestic businesses who operate within
the designated estate area.
Many
aspects of Thailand’s economy have slowed considerably since the
economic meltdown, including foreign investment. The value of projects
approved by the BOI in 1997 was U.S. $ 9.2 billion, falling to 6.4
billion in 1998 and reduced further the following year to 4.2 billion.
Leading foreign investors in Thailand include Japan, the USA, Singapore,
the UK and the Netherlands.
Thailand’s
investment promotion policy is likely to face significant challenges
in the future to comply with obligations they have made to the World
Trade Organization. A revamp of promotional zones along with a plan
to allow more foreign-owned companies access to investment incentives
is likely in store.
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