BACK BOI Accelerates Investment Attraction, Preparing to Embrace Future Technology Trends
As technology permeates every aspect of daily life, it has become a catalyst for countless conveniences, shaping various activities and industries. Among the most promising trends in future technology is digital advancement, a driver of transformation across industrial systems worldwide. Consequently, businesses must anticipate these global shifts, aligning their investments to stay competitive in both the Thai and global marketplaces.
Trends in Technological Investment in Thailand's Future
According to the Thailand Digital Technology 2035 forecast from the Digital Economy Promotion Agency (DEPA), there are eleven key technological trends expected to impact Thailand’s and the world’s digital economy. These include Industry 4.0, the rise of smart cities and ecosystems, big data, the growth of e-commerce, enhanced connectivity versus reduced privacy, an aging society, dwindling natural resources, potential shifts in economic power, climate change, and new work patterns. The emphasis on technology is as significant as the focus on sustainable, energy-efficient practices.
BOI’s New Investment Promotion Measures and Industry Coverage
The 5-year Investment Promotion Strategy (2023-2027), passed by the resolution of the Board of Investment (BOI) meeting, shifts the focus of Thai industries to the "New Economy" era, emphasizing environmental protection to create a sustainably developed society. It includes nine new measures aimed at promoting investment, covering multiple industries, including:
1. Investment Promotion Measures for Key Industries Vital to National Development
BOI has expanded the eligible industries from 7 to 10, including EV production, future food, and hydrogen energy. Incentives vary by group:
Category A: Enjoys corporate income tax exemption for 3 to 13 years.
Category B: Does not enjoy corporate income tax incentives.
Category A1+: High-tech sectors capable of transferring technology to educational and research institutions.
2. Competitiveness Enhancement Measures
2. Competitiveness Enhancement Measures
Increase benefits to boost industry competitiveness in areas like design, R&D, and talent development. This benefit allows corporate tax exemption to be set at up to 200% of the investment or expense amount.
3. Retention and Expansion Program
Adding preferential policies to attract investors to continue using Thailand as a production base and expand investment. Conditions include being an enterprise that has received investment promotion in the past 15 years (from 2008 to 2022), with at least three projects totaling not less than 10 billion baht.
4. Comprehensive Relocation Program
A new policy aimed at encouraging enterprises to fully relocate their production base to Thailand. This policy includes three parts: production plants, regional offices, and R&D centers. If a full business relocation is carried out, the production enterprise will receive an additional 5-year corporate income tax exemption. Applications must be submitted within 2023. (Currently extended: Applications will be open from the first working day of 2025 until the end of 2025.)
5. Economic Recovery Investment Stimulus Measures
Setting preferential policies to stimulate large-scale investments, applicable from 2023 to 2024. If the investment is not less than 1 billion baht and completed within 12 months, a 50% corporate income tax reduction will be granted for five years.
6. Smart and Sustainable Industry Upgrade Measures
Encourage investors to adopt digital production, energy-saving machinery, or renewable energy. A 3-year corporate tax exemption applies to 50% or 100% of the investment on income from existing operations.
7. SME Investment Promotion Measures:
Increase benefits and clarify the qualifications for SMEs by offering a corporate income tax exemption for 3 to 8 years (depending on the type of business), with the corporate income tax exemption amount reaching up to 200% of the investment, as well as the ability to gain additional benefits under other measures.
8. Investment Promotion Measures in Target Areas
Increasing investment in industrial estates or zones in economic corridor areas (including the northern, northeastern, central, western, and eastern regions). If talent development and R&D are conducted in Category A1+ target industries, an additional 2-year income tax exemption is granted. Industries already receiving 3 to 8 years of corporate income tax exemption can receive an additional 3-year, 50% tax reduction.
9. Investment Promotion Measures for Community and Social Development
Providing more preferential treatment for community investments. Investors must invest at least 5 million baht in supporting community projects, product development, tourism, water resources, and agricultural systems. They must also support education, public health, and environmental protection by donating at least 500,000 baht per organization to local entities, receiving a corporate income tax exemption amount equivalent to 200% of the donation.
Why Did Western Digital Choose Thailand as Its Global Production Base?
Western Digital (WD), a major player in the global hard drive market with a 40% market share, has maintained a manufacturing base in Thailand since 1997, employing over 28,000 people. Thailand’s WD plant is the only location where hard drives are assembled to the final stage. In August, BOI approved WD’s new investment in Thailand for expanding hard drive and related equipment production at Bang Pa-In Industrial Estate and 304 Industrial Park, with an investment of 23.5 billion baht. This expansion aims to support cloud and data center technology, requiring high-capacity storage solutions, highlighting the global demand for hard drives.
Thailand’s Readiness for Future-Focused Industry
Thailand is actively inviting business investments of all sizes, from large corporations to SMEs and start-ups. With benefits for those prioritizing technology, environmental sustainability, and community development, Thailand provides a strong foundation for businesses aiming to build successful, enduring operations.
Confidence in Investment with 304 Industrial Park's One-Stop Service
If you are looking for a sustainable industrial base, the 304 Industrial Park is suitable for all industries. Its One-Stop Service provide comprehensive consulting services and assistance, and support foreign investors to establish businesses in Thailand. Additionally, with the support of the Board of Investment (BOI), it helps foreign investors obtain land ownership within industrial parks and zones.
Information Sources:
- DEPA การคาดการณ์อนาคต เทคโนโลยีดิจิทัลประเทศไทย 2035 https://www.depa.or.th › app › file
- https://ic.or.th/th/about-us/boi-news/1399-บีโอไอเผยลงทุนครึ่งปีแรกพุ่ง-4-5-แสนล้าน-เร่งโรดโชว์ดึงลงทุน-พร้อมปรับโครงสร้างการผลิตให้แข่งขันได้.html
- https://www.boi.go.th/index.php?page=press_releases_detail&topic_id=133321
- https://www.blockdit.com/posts/66cc1b5bab415d9782994b31
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