The Japanese Business Federation or Keidanren remains confident in Thailand and is keen to continue investing here.
Of particular interest are industries promoted under the Board of Investment's (BoI) new strategy as well as development of infrastructure, high-speed trains and special economic zones.
"After discussions with a group of visiting Japanese businesses, a majority said they remained confident in Thailand's situation and wanted to invest here, particularly after the BoI announces its new high-technology strategy," Deputy Prime Minister Prawit Wongsuwon said after meeting yesterday with a Japanese business delegation.
"Thailand and Japan will also seek more economic cooperation to upgrade Thailand's high technology, innovation and R&D."
Prime Minister Prayut Chan-o-cha laid out a new plan late last year to promote foreign direct investment from Jan 1, 2015 until the end of 2021. It will focus on technology to support the government's planned digital economy, as the country must strengthen its competitiveness and overcome its reliance on low-cost labour.
Current promotional privileges from the BoI fall under zone-based incentives. The new strategy will base privileges on the type of project, favouring those that support the digital economy such as high technology, research and design.
"About 30 years ago, Japan relocated their production bases here, which played a vital role in transforming Thailand's industries," Gen Prawit said. "We do hope this time Japan will invest in and help to transform Thailand through high technology, innovation and R&D."
He said Thailand also proposed Keidanren invest jointly in the government's special industrial zones that were entitled to generous investment privileges including corporate income tax exemption for eight years, a 50% tax reduction on net profits from investment over five years, double tax deductions for the costs of transport, electricity and water supply for 30 years and an additional 25% tax deduction for the cost of installation or construction of facilities in addition to normal depreciation costs.
Other privileges include exemption of import duties on machinery, a five-year exemption for raw or essential materials for use in the production of exports and a permit for employment of unskilled foreign workers at promoted projects.
Gen Prawit said partnership was discussed on Thailand's high-speed rail development plan linking Bangkok with Chiang Mai and Kanchanaburi but noted further talks were needed to establish which routes Japan wanted to help with.
In a separate development, Deputy Prime Minister MR Pridiyathorn Devakula presided over the 23rd meeting of the Thailand-Japan Joint Trade and Economic Committee.
At the meeting, Supant Mongkolsuthee, president of the Federation of Thai Industries, said Thai businesses asked their Japanese counterparts to invest more in ageing-related companies and products in Thailand.
"This is a global trend, as we're going to have more elderly citizens," he said. "We think Thailand could become a production base for elderly products, given the existing skills, labour and resources."
However, Mr Supant said businesses remained concerned about the labour shortage in Thailand and being able to support Japanese industries in the future.