New strategy calls for BOI laws' revision

Changes likely to affect overseas investment, promotional period, tax

The laws governing the Board of Investment are set to be revised, in response to the agency's new strategies that will be implemented next year.

Potential revisions include those on promoting overseas investment by Thai companies, the lengthening of the maximum investment-promotion period, and tax issues concerning revenue repatriation from overseas business units.

The BOI is pushing a new investment-promotion strategy, to be implemented in January 2015, and is urging the Industry and Finance ministries to amend the Investment Promotion Act to make it more flexible and allow more competitiveness against neighbouring countries.

The BOI has approved investment promotional privileges for 11 projects, worth more than Bt40 billion.

Industry Minister Prasert Boonchaisuk revealed that during the BOI committee meeting, chaired by Finance Minister Kittiratt Na-Ranong, they were informed about progress in the draft of the five-year investment promotion strategy (2013-17), which will be finalised and submitted to the committee by this December and come into effect from January 2015.

The meeting also agreed to amend the Investment Promotion Act to be in line with the new promotion strategy by allowing the BOI's investment privileges to be more flexible and able to compete with rival countries in the region, which want to attract foreign investments for high-technology and high-value products.

Prasert said the current Investment Promotion Act provided corporate-income-tax exemption for eight years maximum, while rival countries provided exemptions of 12-15 years. The Industry and Finance ministries will hold further discussions on granting appropriate privileges.

BOI secretary-general Udom Wongwiwatchai said the amendment of the Investment Promotion Act would be in line with the new promotion strategy. The amendment will be completed by 2015, subject to Parliament's approval. After the amendment, the act will also increase the privileges given to local investors who expand overseas. Many local entrepreneurs who have invested abroad have been facing problems of tax duplication. Investors in countries that do not have a tax agreement with Thailand will need to pay corporate income tax only when they bring money back to the country.

According to the BOI secretariat, investment applications from January to April continued to grow. The BOI received 747 project applications for a combined investment value of Bt430 billion, an increase of 26 per cent (in terms of projects) over the same period last year and up by 80 per cent (in terms of value) compared with the first four months of 2012.

About 54 per cent of the BOI investment applications in the first four months of this year were related to expansion of previous projects in Thailand with combined investment value of Bt430 billion. This reflects confidence of both previous and new investors in Thailand's potential.

The industries that attracted the most interest from investors were in services and infrastructure, with a total of 167 projects and a combined investment value of Bt246 billion. Major projects were air transport, electricity generation from natural gas, ports for receiving natural gas, and industrial estates.

Industries ranking second in terms of interest from investors were metal products, machinery and transport equipment; 156 projects applied for BOI investment privileges, with combined investment value of Bt124.1 billion. Major projects comprised automobile assembly and engine-components manufacturing, diesel-engine manufacturing, pickup assembly, other automobile-components manufacturing and mould/plate manufacturing.

The agricultural sector ranked third in investor interest with a total of 210 projects and combined investment of Bt83.2 billion. Major projects comprised fruit juice beverages, rubber bars and mixed rubber, canned and frozen food products, animal foods/feeds, and animal-raising projects.

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Article source: http://www.thethailandlinks.com/2013/05/18/new-strategy-calls-for-boi-laws-revision/