Bangkok Post : BoI plans incentives to triple overseas investment

INVESTMENT

The Board of Investment (BoI) is planning new incentives that it hopes will help Thai investment overseas triple in value over the next five years to US$10 billion.

BoI incentives currently apply only to projects in Thailand. The BoI's new role supporting investment overseas was recently initiated by the government.

"The government's move is aimed at getting local investors to tap into the opportunity overseas as the benefits and business opportunity are greater as a result of trade liberalisation through free trade agreements," said Atchaka Brimble, the BoI secretary-general.

By the end of 2014, she said, the BoI hoped to lift local investment overseas to $10 billion from $2.83 billion recorded in 2008.

Target industries as well as high-potential destinations have been identified, while a sub-committee on overseas investment promotion will work out approaches to better support the business sector.

The targeted industries have three categories, according to whether they seek markets, resources or skills.

Consumer products, petrochemicals, plastics, hotels, restaurants and food products need new markets. Mining, power generation and processing agricultural products could benefit from foreign resources. Garments and jewellery need foreign manufacturing capability, as they face shortages of labour at home and high labour costs.

Targeted investment destinations include Asean, China, Africa, the Middle East, India and Central Asia.

Sorayud Phettrakul, an adviser to the Industry Minister, said investors would be supported with tax and non-tax incentives, on which BoI will need input from other government agencies.

Involved agencies include the Export Promotion Department, the Foreign Ministry, the Thai Trade Representative Office and the Agriculture Ministry.

Some incentives may need new laws or amendments. The BoI board chaired by the prime minister will determine if new Finance Ministry regulations would be required for promoting investment overseas through tax incentives, he said.

The BoI may also seek support from the Export-Import Bank of Thailand to help investors with financial difficulties.

The BoI will also encourage small business operators to take up these incentives. Large corporations invest successfully overseas because of their capital strength so SMEs should invest in clusters, taking a similar approach to Japanese SMEs in Thailand, he said.

To better handle the new role, a new working unit will be set up under the BoI. It will act as an information centre that supports businesses planning for overseas investment and improves co-operation with foreign trade agencies to facilitate doing business abroad.