The Thailand Board of Investment (BOI) has revealed that local and foreign investors in 2020 filed a total of 1,717 applications for investment promotion, representing a combined investment value of 481.1 billion baht ($6 billion), led by projects in the electric and electronics and the agriculture and food processing sectors, and a surge in the medical sector.
“The coronavirus outbreak represented both a challenge and an opportunity, and while the overall economy registered a slowdown in 2020, businesses that could continue to expand during the crisis, such as the medical sector, witnessed an increased number of investment applications,” Ms Duangjai Asawach, Secretary General of the BOI, commented.
“The number of projects and the investment value reflect the success of the investment promotion measures we took in the past year to answer the needs of the market, especially in the medical masks, hygiene products, and medical rubber gloves segments.”
Applications for projects in the target industries, sectors of strategic importance for the country’s economic development, amounted to 230.7 billion baht, or 48% of the total value of applications.
The top five sectors by value were: 1) electrical appliances and electronics with 50.3 billion baht worth of applications; 2) Agriculture and food processing with 41.1 billion baht; 3) automotive and parts with 37.8 billion baht; 4) Petrochemicals and Chemicals with 36 billion baht; and 5) Biotechnology with 30 billion baht.
The medical sector saw a noticeable increase in the value of applications which grew 165% from 2019 to 22.3 billion baht as a result of special incentives offered by the BOI to this industry in support of Thailand’s efforts to manage the Covid-19 crisis. Investments in this sector came from both large companies and SMEs.
In regards to Foreign Direct Investment (FDI), some 907 project applications were filed in 2020 with a total investment value of 213.2 billion baht. The FDI was led by Japanese companies, which topped the ranking both in terms of the number of applications, 211 projects, and in terms of combined investment value, 75.9 billion baht. Investments from China came in second with 31.5 billion baht investment value, followed by the US with 24.6 billion baht investment value.
The Eastern Economic Corridor, or EEC area, comprising the provinces of Chonburi, Rayong and Chachoengsao, attracted 453 projects applications filed by both local and foreign investors, with a combined investment value of 208.7 billion baht.
At a recent board meeting chaired by Prime Minister Gen Prayut Chan-o-cha, the BOI approved to renew the incentives offered to BOI-promoted companies to list on the Stock Exchange of Thailand (SET) or the Market for Alternative Investment (MAI) in order to get access to new funding sources, while participating to strengthen Thailand’s capital market and economy.
The scheme grants companies going public an additional 100% corporate income tax (CIT) exemption on the value of their investment (excluding cost of land and working capital). Projects which have already been granted BOI promotion and have started to generate income can still apply for these additional privileges and benefits on the condition they still have valid CIT exemption rights.
To be granted these additional privileges and benefits, companies must submit their applications by the end of December 2022. The companies must get listed on the SET or MAI before applying for promotion, but companies listed prior to the announcement of the measure are not eligible to this scheme. – Media Release