The delay of new Board of Investment (BoI) incentives is unlikely to affect foreign direct investment (FDI), as companies remain confident of continued support, say Japanese investors.
The BoI earlier this month postponed indefinitely the launch of Thailand's new five-year promotion policy from its original schedule of mid-year.
The delay will allow time to review issues such as zoning criteria and the types of projects that will see investment incentives abolished.
"I don't have any problems with the delay. I still believe the BoI will continue its support [of our business]," said Hiroji Kitada, the managing director of Daido PDM (Thailand) Co.
The new policy will replace zone-based criteria with industry preferences, with the BoI deciding which industries will be promoted under the 11th National Economic Development Plan.
The new policy will be aimed at 10 groups _ primary infrastructure and logistics, primary industries, medical and science tools, alternative energy and environmental services, industrial promotion services, advanced technology, food and processed agricultural goods, hospitality and wellness, automotive and transportation, and electronic and electrical goods.
Kan Trakulhoon, president and chief executive of the Siam Cement Group, urged Japanese investors to use Thailand as an Asean hub.
"Our common interest is Asean, and we [Thailand] have skilled labour while Japan can transfer its technology as well as research and development knowledge," said Mr Kan.
BoI secretary-general Udom Wongviwatchai said the government's planned 2-trillion-baht infrastructure spending will see huge benefits for investors.
The government will spend 300 billion baht on flood preventive measures alone.
Mr Udom said the Industry Ministry plans to add 10 more industrial estates to the existing 46.
Last year, FDI involved 1,584 projects worth a combined 647 billion baht. Japanese investment represented 58%, with 872 projects worth 37.4 billion.
For the first two months of this year, 205 foreign projects applied for investment incentives with a total value of 83.8 billion baht. These included 107 projects totalling 47.8 billion baht from Japan, mostly in the automobile and auto parts sectors, accounting for 57% of total FDI.
The BoI targets 600 billion baht in investment applications this year, half in the form of FDI.