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Vol. 24 No.2
April - June 2007

ISSN 0125-0159

Editor’s Note
International Forum
Thailand Moving with ASEAN Towards a Caring and Sharing Society
Prayong Ronnarong: Prime Example of a Community Leader
BOI and Its Important Roles in Promoting Investors in Global Business Arenas
Special Feature
China - ASEAN Cooperation Program
Human Security
Protecting the Rights of Immigrant Workers
Foreign Relations
The Second Thai-Lao Friendship Bridge: A New Link between Thailand and Its Close Neighbors
Trends of Energy Use and Development in Thailand
Thai Touch
Ko Phra Thong: A Savanna Paradise

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BOI and Its Important Roles in Promoting Investors in Global Business Arenas

As Thailand is still waiting for a general election, many may expect an economic slowdown but that is a serious misunderstanding. In fact, local and foreign investors are continuously confident of the production potential of Thailand. In this article, Mr. Satit Chanjavanakul, the Secretary-General of the Board of Investment (BOI), elaborates on investors’ confidence in Thailand and BOI’s roles in promoting all industries, especially the manufacturing of automobiles and parts, for which Thailand is the biggest production base in Southeast Asia.

Political uncertainty may prompt many to anticipate slowing investments from overseas sources. Actually, investors focus on other factors that significantly affect their businesses, such as costs, competitiveness, and market demands. Political uncertainty causes concerns but has no impact on businesses because investors can proceed with their operations and exports as usual. Investments are not slowing down at all.

BOI is Thailand’s front agency welcoming investments. The government usually employs BOI’s promotional privileges as tools to stimulate investments. This means that BOI has to work closely with investors. Regular meetings with investors keep BOI abreast of their movements, problems, and obstacles, so it is ready to help them solve problems and let their businesses progress smoothly.

BOI assigned the Sasin Graduate Institute of Business Administration of Chulalongkorn University to study foreign investors’ confidence in Thailand in 2006 and 2007. The study shows that most investors are satisfied with their promotional privileges. Amendments to the Alien Business Act have no impacts on their investments because foreign investors who obtain promotional privileges from BOI can enjoy full ownership of their business, its assets, and land. BOI does not grant privileges to some kinds of businesses, such as those concerning agriculture, transportation, satellite-based communication, airlines, and national security. Thai ownership in these operations must exceed 50%. However, the business under this restriction are of a very small number compared with over 1,000 kinds of business that enjoy BOI’s promotional privileges. Therefore, it can be stated that BOI is promoting business in general, both locally and overseas.

The automotive industry has been steadily developing in Thailand for a long time. The country is now the largest automotive production base in Southeast Asia. The production used to serve only domestic demand but is now expanding for exports. Last year, automotive exports grew and accounted for 45% of total production. The country is also the world’s largest production base for one-ton pickup trucks, which are destined for over 100 nations worldwide. Automotive manufacturers also plan to develop automotive and parts research centers in Thailand to serve every stage of their production. Research centers situated overseas are not so effective in product development because they are so far away from the nations where production takes place. Plans to build automotive research centers in Thailand will develop the nation as a standard production base that will have experienced production personnel, competitiveness in the global automotive industry, and international recognition.

Realizing the importance of the automotive industry, BOI has established the BOI Unit for Industrial Linkage Development (BUILD) to promote local contents, reduce imports and support Thai small- and medium-scale enterprises (SMEs) that produce automotive parts as well as related machines and electronic components. For 15 years, BUILD has been successfully facilitating the trade of locally made automotive parts and supporting technology transfers to Thai subcontractors.

The BOI unit has organized events, including automotive parts markets where buyers meet sellers directly. It has also brought Thai automotive parts manufacturers to negotiations with buyers abroad. Early in May, BOI organized Subcon Thailand 2007, a large event where Thai automotive parts SMEs met leading product manufacturers. During the five days of the event, there were 1,036 negotiations with potential business partners. That number was double everyone’s expectations. The event resulted in confirmed orders worth 1,209 million baht and could lead to billions of baht worth of future orders. Leading product manufacturers expressed interest in ordering over 10 billion baht’s worth of Thai parts. These outcomes prove the great success of the event.

BOI promotes major industries that create jobs, conserve natural resources, develop infrastructure, and enhance Thailand’s industrial and technological strength, as well as industries that are in demand in Thailand and require high imports. It also supports industries that involve scientific technologies, such as the production of advanced automobiles and value-added electronic products, and industries that facilitate long-term technological development.

Besides, BOI promotes potential, forward-looking industries such as the production of eco-cars, which represent a new era of automobiles and should receive a warm welcome from markets. Eco-cars should successfully serve future demands because they will feature low fuel consumption and have slight impacts on the environment. BOI expects them to have bright prospects in both local and overseas markets. Additionally, since investors need research, BOI supports industrialists in doing research, with educational institutions and relevant research agencies to develop their industries, increase capacities, and come up with the innovations that markets will demand in the future. BOI offers incentives such as tax exemptions to industrialists with sound research projects.

BOI gives promotional privileges to local and overseas investment projects and to small-, medium-, and large-scale enterprises. It supports projects that are useful and valuable, such as those concerning power generation, infrastructure, transportation, hotels, tourism, and even amusement parks. It does not focus on any individual investor or the size of an industry. Interested parties can seek promotional privileges directly from the Office of the Board of Investment. BOI will advise and prepare investors to be ready to prosper steadily in global business arenas.

Story: Suvalux Khenkum
Photos: Board of Investment

Foreign Office
The Government Public Relations Department

Rama VI Road, Soi 30, Bangkok 10400, Thailand
Tel : (66-2) 618-2323 ext. 1700 Fax : (66-2) 618-2358 E-mail : prforeign@gmail.com