Ms. Ajarin PattanapanchaiDeputy Secretary General

Thailand Board of Investment

E-mail: Ajarin@boi.go.th

Thailand: A Prime Destination for

Doing Business in Southeast Asia

Mr. John F. KwantVice President, Government Affairs – Asia Pacific

The Ford Motor Company

E-mail: jkwant@ford.com

Date: May 21, 2014

Presented by:

Thailand: A Prime Destination for

Doing Business in Southeast Asia

Outline:• Facts & Figures

• Why Thailand

• BOI Investment Promotion Policy

• US Investment

• Investment Opportunity

Thailand’s Fast Facts

Thai population 67 million (2013)

Thailand’s GDPUS$385 billion (2013)

US$5,647 per capita GDP

Thai GDP by sector

Agriculture: 12%

Industry: 45%

Services: 43%

Thai labor force 39.13 million (2013)

Thai exports US$225.4 billion (2013)

Thai importsUS$219.0 billion (2013)

Source: NESDB as of Feb 17, 2014 and Pocket World in Figures 2014 Edition

THAILAND is the world’s

• 17th largest manufacturer output

• 28rd largest exporter

• 24th largest economy by

purchasing power

And the 2nd largest economy in

ASEAN

*Source: Economist Pocket Facts

Top 10 Exports in 2011 – 2014 (Jan-Feb)

2011 2012 2013

2014

(Jan-

Feb)

Growth

(yoy)

Motor cars, parts and accessories 17.5 24.2 25.2 4.3 10.35

Computer parts 17.5 20.1 18.4 3.3 17.09

Precious stones and jewellery 12.7 13.9 10.4 2.1 91.90

Refine fuels 10.4 13.6 13.2 1.8 -2.58

Plastics resin 9.1 9.0 9.3 1.7 12.78

Chemical products 8.5 9.0 9.4 1.6 4.44

Rubber 13.1 9.2 8.5 1.6 -5.51

Rubber products 8.6 8.9 8.8 1.5 7.17

Machinery and parts 6.3 6.6 7.0 1.2 13.70

Electronic integrated circuits 8.1 7.1 7.5 1.1 14.65

Others 117.3 120.4 118.5 20.0 4.06

Total 229.2 242.0 236.1 40.2 8.54

Unit: $ Billion

Source: www.moc.go.th as of Mar 27, 2014 Exchange rate: A$1=Bt29.27 in Q1, 2014

WHY THAILAND

Highly Ranked

UNCTAD Ranks Thailand 8th as a top prospective host economy 2013-2015

World Bank Ranks Thailand among the easiest places to do Business in Asia and 18th in the World

“Over the past 6 years, Thailand has suffered

bouts of political unrest on top of the global

financial crisis and severe flooding. Nevertheless,

the economy maintains solid economic

fundamentals that support its resilience, with high

international reserves, relatively low inflation, a

moderate amount of government and external

debt, and a strong manufacturing base.”

Asian Development Bank Outlook 2014

275

249

201

166 164

10583

71

4736 34

-

50

100

150

200

250

300

Prime Office Occupancy CostsA$/sq ft/annum

Source: CBRE Prime Office Occupancy Costs, Q3/2013 as of December 18, 2013

Note:US$1=Bt30.73 and A$1=Bt29.69 in 2013

Wage Comparison

92.4

54.849.6

42.8

33.3

21.5 20.917 14.6

8.5 8 7.9 7.6

0

10

20

30

40

50

60

70

80

90

100

Tok

yo

Seoul

Dubai

Hon

g K

ong

Tai

pei

Kual

a lu

mpur

Shangh

aiBei

jing

Ban

gkok

Mum

baiM

anila

Jaka

rta

Del

hi

Wa

ge

Lev

els

(US

$)

Gross

Net

4

Cities ranked according to gross value of index. New York = 100

Source: UBS/Prices & Earnings update September 2012

Low Corporate Income Tax 2013

Source: KPMG ASEAN Tax Guide, as of 2013

17

20 20

25 25 25 26

30 30

35

0

5

10

15

20

25

30

35

40

Percen

t

Singapore Thailand Cambodia

Vietnam Malaysia Indonesia

Top Destinations for

Expat Experience 2013

by HSBC

1.Thailand

Source: Expat Explorer Survey 2013, HSBC

Thailand offers Best Expat Experience

and a Low Cost of Living

Thailand has been chosen

as the best country in the

world for

Overall Expat Experience

& Overall Quality of Life

13

• Thailand has 8 intellectual property-related laws, all of which are consistent with international standards:

• Copyright Act of 1994

• Patent Act of 1979, as amended by the Patent Act (No.3) of 1999

• Trademark Act of 1991, as amended by the Trademark Act (No.2) of 2000)

• Act for the Protection of Layout-Designs of Integrated Circuits 2000

• Trade Secret Act of 2002

• Protection of Geographical Indication Act of 2003

• Plant Varieties Protection Act of 1999

• Traditional Medicine and Practice Act of 1999

IPR Framework

Infrastructure• 7 international airports In 2009, 53.9 million passengers, 1.1 million

tons of cargoes Suvarnabhumi Airport – Capacity: 45

million passengers and 3 million tons of cargo per year

• Over 70,000 km Highway Systems• 6 Deep Sea Ports & 2 International River Ports

Capacity over 10 million TEUs Laem Chabang Sea Port – Capacity: 10.8

million TEUs, with additional 8 million TEUs expansion

e-Customs facilities• 4,346 km Rail links to Malaysia & Singapore• 60 Industrial Estates

GMS InfrastructureDevelopment

Source: NESDB as of Jan 20,2009

North-South Corridor

North-Eastern Corridor

East-West Corridor

Southern Corridor

Central Corridor

Southern Coastal Corridor

Free Trade Agreement

Note: * Thailand, Malaysia, Indonesia, Philippines, Singapore and Brunei only.

ASEAN

•+570 million pop.

•US$1.3 trillion GDP (2007)

ASEAN+3

•+2 billion pop.

(1/3 world pop.)

•US$9trillion GDP

(16% of world GDP)

ASEAN+6

•3.3 billion pop.

(>50% world pop.)

•US$12.25 trillion GDP

Thai-Peru

Thai-Chile

ASEAN Economic Community(AEC) 2015

AEC A Single Market &

Production base

Source: Reaping the benefits of AEC & ,www.asean.org, as of December 2009

• Free flow of goods

• Free flow of services

• Free flow of investment

• Free flow of capital

• Free flow of skilled labor

Transform ASEAN into a

stable, prosperous and

highly competitive region

with equitable economic

development, and reduced

poverty and socio-economic

disparities

18

Investment Promotion Policy

BOI’s Liberal Investment Regime & Attractive Investment Incentives

Policy

100% foreign ownership

No local content requirements

No export requirements

No restriction on foreign currency

Tax

Import duty exemptions/ reductions

Corporate Income Tax/ Exemption up to 8 years

50% reduction of corporate income tax for up to 5 years

Double deduction on utility costs

Deductions for qualifying infrastructure costs

Non-Tax

Land ownership rights

Work permit & visa facilitation with in 3 hrs.

20

Overseas offices

Country desks

1-Stop for visas & work permits:work permits in 3 hours

Interaction with other govt. agencies

on behalf of investors

Industrial Subcontracting Services

Global Sourcing program

(BUILD Unit)

Intensive information

ASEAN Supporting Industry Database

BOI SUPPORT

SERVICES

21

US Investment

U.S Investment Applications

Totals by Sector: 2005 – 2014 (Q1)

Sector Projects US$ Million

Agriculture 35 257

Minerals and Ceramics 4 57

Light Industry 42 64

Auto and Metal Processing 82 3,142

Electrical and Electronics 101 1,601

Petrochemicals, Chemicals 73 2,774

Services and Infrastructure 94 224

TOTAL 431 8,119

Source: BOI, as of Apr 10, 2014 Note: US$1=Bt32.66 in Q1, 2014

Success Stories of US Companies

Sectors of Opportunity

Target Industries

Agriculture and food processing

Automotive

Machinery

Aerospace

Target Industries

Biotechnology

Alternative energy

E&E

Thailand’s Automotive Industry Overview

Source: TAI

(2013 produced

2.46 mil.units

exports 1.13

mil.units to 150

countries)

World’s Automotive Production 2013

(Units of production)World’s Production: 87.24 Million (+3.6%)

Thailand : 2.46 Million (+4.3%)

#9 in Worlds’ Automotive Production

#1 in ASEAN for Automotive Production

Source: OICA as of Mars, 2014

Brand 2012 Add Capacity 2015

Toyota 700,000 200,000 900,000

Ford & Mazda 500,000 - 500,000

Mitsubishi 400,000 100,000 500,000

Isuzu 220,000 100,000 320,000

Honda 240,000 180,000 420,000

Nissan 220,000 150,000 370,000

Suzuki 135,000 - 135,000

GM 160,000 - 160,000

Others 80,000 - 80,000

TOTAL 2,675,000 730,000 3,405,000

Estimate Production Capacity

Forecasted by

TAI

50. GKN Driveline

52. Goodyear56. Grupo Antolin58. Bayer59. TI Automotive65. Draexlmaier67. American Axle73. Rieter Auto.84. F-Tech86. Hayes Lammerz93. 3M

28

2. Denso4. Aisin Seiki13. Yazaki15. Sumitomo16. Toyota Boshoku18. Calsonic Kansei19. JTEKT20. Hitachi28. Toyoda Gosei33. NTN34. NSK35. Mitsubishi39. NHK Spring40. Koito41. TS Tech43. Takata

46. Bridgestone

49. Tokai Rika

57. Showa

61. Mitsuba

66. Asahi Glass

72. Stanley

74. Akebono Brake

82. Sanden

84. F-Tech

92. Alpine

94. Pioneer

98. Omron

Japanese Global Suppliers

28/29 Companies 29/71 Companies

Other Global Suppliers

1. Robert Bosch3. Continental6. Faurecia7. Johnson Control8. ZF11. TRW12. Delphi14. Lear17. BASF 21. Valeo22. Visteon23. Autoliv25. Mahle27. Dana31. BorgWarner36. Teneco44. Federal-Mogul47. Michelin

Top 100 Global Suppliers Active in Thai Automotive Industry

Strength of Thai Automotive Industry

Thailand Aerospace Industry

Asia overtook North America as the largest aviation market in

2009 and will account for 30% of air traffic by 2014, while

North America will slip to 23% of the total.

Full support from the government: Maximum tax incentives

from BOI

A capable and efficient skilled work force.

Many universities provide aerospace engineering degree

Civil Aviation Training Center provide training for high skill

personnel of aircraft maintenance and repair services

Other support industries are widely available: stainless steel

and aluminum fabrication, fiberglass and polymer supply

29

Major Companies in ThailandFor Parts Manufacturing & MRO

• Thailand is the 13th Export Rank in the World

• Thailand is the world’s largest producer of HDDs,

# 2 for Air conditioner

• A leading country in the manufacture of Integrated

Circuits and White Goods

• Strong supporting industries for electrical appliances

Compressors, motors, plastic and metal parts

Source:*E&E Intelligence Unit, as of Mar 10

Electronics & Electrical Industry

Major Industrial Sector of Thailand

Thailand’s E&E Exports 2012

19,387

6,9833,450

2,2791,987

1,4621,233

1,1661,025

981924

894893

780607

0 5,000 10,000 15,000 20,000 25,000

PCB

Washing Machine

Motor

Wire & Cable

Part of Telephone

Compressor

Power Supply

Colour TV

Teleprinter & Telephone

Refrigerator

Circuit Breaker

Radio Broadcast

ProductAir Conditioner

IC

Computer & HDD

US$

Million

Source : MOC

Incentives for Software Development

AnimationCartoons and charactersComputer-generated

imageryWeb-based applications Interactive applicationsGames

Wireless location based service content

Visual effects

Multimedia video conferencing applications

E-learning content via broadband & multimedia & computer-aided instruction

1. Enterprise Software (transaction processing, business solutions)

2. Embedded Software (mobile phones, microchips)

3. Digital content, including:

Max. Incentives: Duty-free machinery and 8 years

income tax exemption (including revenue from ASP )

Software Content

Benefit

- In 1st fiscal year, have one operating company in another

country; a second within 3rd year; a third within 5th year

- Have annual expenses in Thailand of Bt15 million, or have

invested at least Bt30 million in Thailand

- By end of 3rd year, 75% of ROH personnel to be qualified

staff, and 5 persons earning at least Bt2.5 million annual salary

and benefits per person

- All companies must be real operating companies with a

physical presence and staff

For portion of income from

OVERSEAS OPERATIONS

0% CORPORATE

INCOME TAX

for 15 years

Key Conditions

Benefit

For portion of income from

LOCAL OPERATIONS

10% CORPORATE

INCOME TAX

for 15 years

Regional Operating Headquarters

Benefit

In addition to conditions for

income from overseas and

local operations:

- Income generated from

services to overseas

companies must be at least

50% of total revenues

For income of

EXPATRIATE EMPLOYEES

15% PERSONAL

INCOME TAX

for 8 years

Key Conditions

(38)

Supports for US InvestorsBOI Office New York

61 Broadway, Suite 2810,

New York NY 10008 USA

Tel: (212) 422 9009

Fax: (212) 422 9119

E-mail: boiny@aol.com

nyc@boi.go.th

BOI Office Los Angeles

611 North Larchmont Blv.

3rd Floor

Los Angeles, CA 90004 USA

Tel: (323) 960 1199

Fax: (323) 960 1190

Email: boila@sbcglobal.net

U.S. Desk @ BOI Headquarters

555 Vibhavadi-Rangsit Rd.

Chatuchak, Bangkok 10900 Thailand

Tel: (66 2) 537-8111 Fax: (66 2) 537-8098

E-mail: head@boi.go.th

Mr. John F. KwantVice President, Government Affairs – Asia Pacific

The Ford Motor Company

E-mail: jkwant@ford.com

Experience in Doing Business in

Thailand

Q & A

Supports for US InvestorsBOI Office New York

250 Greenwich St., 34th Fl.

New York, NY 10007 USA

Tel: +1 (212) 422-9009

E-mail: nyc@boi.go.th

BOI Office Los Angeles

611 North Larchmont Blvd. 3rd Fl.

Los Angeles, CA 90004 USA

Tel: +1 (323) 960-1199

Email: boila@boi.go.th

U.S. Desk @ BOI Headquarters

555 Vibhavadi-Rangsit Rd.

Chatuchak, Bangkok 10900 Thailand

Tel: +66 2553-8111

E-mail: head@boi.go.th

www.boi.go.th

www.ThinkAsiaInvestThailand.com