THAILAND: Your Partner for growing market in ASIA

THAILAND: Your Partner for growing market in ASIA Chanin khaochan Director- Frankfurt Office Thailand Board of Investment Chanin@boi.go.th

THAILAND IN BRIEF Capital Bangkok Land Area 514,000 sq.km Population 67.31 million Work Force : 39 Million Currency Baht GDP 345 (Bil. US$) in 2011 Per capita 5,112 $US/yr. (< 4x) GDP Growth average 4 5 % Unemployment Rate : < 1 % Religion : Buddhism >80 %

Thailand: the Crossroads of ASEAN ASEAN Economic Community Compared to Population 607 million > Europe Union (507 Million) GDP size $ 2.31 trillion UK ($2.44 trillion) (1/7 of EU s $16.6 trillion) International trade $ 1.6 trillion = 6 times of Thailand FDI $ 111.3 billion China ($ 111.7 Billion) International tourists Ranked 2 nd globally 65 million = next to France 3

Thailand: the Crossroads of ASEAN Statistics of AEC members in 2012 Year 2012 Population (Millions) GDP (USD Billion) FDI (USD Million) Indonesia 241 878 19,853 Philippine s 96 250 2,797 Vietnam 89 142 8,368 Thailand 70 366 8,607 Myanmar 55 55 2,243 Malaysia 29 304 10,074 Cambodia 15 14 1557 Lao PDR 6 9 294 Singapor e 5 275 56,651 Brunei 0.42 17 850 Total 607 2,310 111,294 Source: UNCTAD 4

Thailand: The Connectivity and Logistics Hub of AEC 55 million 35 million 47 million 89 6 million million 46 million 106 million 316 million GDP 1.82 Trillion USD 70 million 15 million Seamless Connectivity 607 million GDP 2.31 Trillion USD 96 million 29 million 5 million 241 million 5

Thailand: the Crossroads of ASEAN R3 B R3 A R 2 R 1 R1: Southern Economic Corridor (SEC) Bangkok Aranyaprathet Poipet Pratabong Phnom Penh-Ho Chi Minh Vung Tau R2: East-West Economic Corridor (EWEC) 1,320 km Malamang Mae Sot Tak Sukhothai Phitsanulok Khon Kaen Mukdahan Savannakhet Lao Bao Dong Ha Danung R3 North-South Economic Corridor (NSEC) R3A: Via Lao: Chiang Rai Chiang Kong Huay xai Luang Namtha Bohan Chiang Rung Kunming (1,090 km) R3B: Via Myanmar: Chiang Rai Mae Sai Takelek Chiang Tung Chiang Rung Kunming 6

Key Projects: Suvarnabhumi Airport Phase II Thailand's tourism sector will continue to play an important role in contributing to economic growth CAGR 2009-2012 = 16.5% International visitor arrivals (unit in million) 7.3 7.8 8.7 9.6 10.1 10.9 10.1 8.5 11.6 13.8 14.5 14.6 14.1 15.9 19.2 22.4 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Year Source: http://www.tourism.go.th/tourism/th/home/tourism.php?id=10

Free Trade Agreement 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 Note: * Thailand, Malaysia, Indonesia, Philippines, Singapore and d Brunei only.

Automotive Industry Thailand: Automotive Hub of Asia As of Feb 14, 2013

Thailand s Automotive Industry Overview Thailand: 9th largest automobile producer in the world in 2012* Target: To manufacture 3,000,000 units in 2017 Output: 14 assemblers with a combined production of more than 2,400,000 in 2012 High local content : 80-90% for pick-up and 30-70% for passenger car Source: OICA and TAI

Estimate Production Capacity 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 65,000 200,000 GM 160,000-160,000 Others 80,000-80,000 TOTAL 2,675,000 795,000 3,470,000

Thailand: Auto Hub of Asia Need more suppliers capacity to support 3 Million cars Year 2017 Want more machinery, Tooling, Automation

Opportunities in Machinery Thailand continues to industrialize, but is dependent on foreign industrial machinery for immediate future. High demand for: Food and farm machinery Alternative energy/energy conservation machinery Automotive production machinery Mould & Die Industry Industrial Automation Logistic Equipment

Unit : Thai Baths Thailand Import statistic : Metal Machinery + Machine Tool Metal Processing Machine, Mold &Die and Machine Tool Import Statistic china Germany Japan Korea SWITZERLAND Taiwan Total All Country 2006 1,817,707,833 1,495,390,403 32,002,610,692 2,368,576,319 849,234,285 6,061,836,460 51,258,486,828 2007 2,013,176,041 1,603,814,384 19,889,696,940 1,268,607,820 983,916,342 5,329,174,346 37,439,804,438 2008 2,825,446,015 2,348,128,285 25,766,509,552 1,381,417,247 1,233,637,189 4,974,587,621 44,514,989,582 2009 2,050,544,011 2,633,764,639 15,905,290,950 1,150,087,837 566,954,034 3,221,480,293 29,183,766,912 2010 3,255,462,370 1,254,082,684 25,940,584,570 2,261,161,942 561,176,209 4,963,106,209 44,408,077,167 2011 3,756,059,469 1,857,269,893 35,231,926,169 2,021,352,004 1,076,860,821 6,501,652,246 57,135,090,325 2012 8,211,376,157 2,098,159,555 65,926,832,780 2,992,518,450 1,762,295,840 9,824,584,395 100,343,159,310 Plastic and Rubber Import statistic 2007 1,895,742,206 2,073,774,537 7,367,361,739 351,355,687 85,477,663 1,959,733,853 17,117,834,292 2008 2,337,398,315 2,397,286,534 7,188,024,311 709,528,202 74,967,138 2,055,538,286 17,167,123,104 2009 2,387,982,864 1,406,448,829 6,637,853,627 640,395,562 77,648,213 2,608,151,733 15,902,755,226 2010 3,254,251,665 1,797,187,769 6,926,650,103 417,844,714 237,138,967 2,810,064,542 17,930,852,116 2011 4,966,637,263 2,575,144,679 9,992,709,236 775,714 324,655,170 2,841,162,617 24,448,138,157 2012 7,865,882,052 3,098,172,373 20,227,147,487 1,031,151,416 126,172,355 4,170,073,961 40,302,632,841 Source : www.customs.go.th

Source : www.customs.go.th Unit: million Baths

Source : www.customs.go.th Unit: million Baths

Unit: million Baths Plastic and Rubber Machinery Import Source : www.customs.go.th

Why Thailand 19

ASEAN Corporate Income Tax 30% 2013 25% 20% 15% 10% 5% 0% Singapore Thailand Vietnam Malaysia Indonesia Source: KPMG

Total Tax and Social Security Contributions as Percentage of Gross Wages 25 Sydney Shanghai 20 15 KL Singapore Taipei Jakarta Mumbai 10 Delhi Bangkok 5 0 Source: UBS Prices and Earnings 2009

US$/sq ft/annum 200 180 173 Affordable Office Space 160 140 120 100 117 105 99 80 60 64 49 48 47 40 29 24 20 0 Source: CBRE MarketView Asia Pacific Office, Q3 2012

WAGE COMPARISON INDEX 2011 Wage Levels (CA$) 100 90 80 70 60 50 40 30 20 10 0 Tokyo 79.4 42.03 41.04 36.98 35.4 34.81 Seoul Dubai Taipei Singapore Hong Kong Kuala lumpur 17.9 17.6 14.54 13.55 9.39 8.6 7.32 6.82 Shanghai Cities ranked according to gross value of index Source: UBS/Prices & Earnings, August 2011 Beijing Bangkok Delhi Jakarta Manila Gross Net Mumbai

Modern Industrial Estates Thailand has over 60 Industrial estates, zones and parks nationwide

IPR Framework IPR Framework 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 (25)

Expat Experience 2011 Country Rankings Thailand 1 Canada 2 South Africa 3 Malaysia 4 Philippines 5 Australia 6 Spain 7 New Zealand 8 Belgium 9 Thailand has been chosen as the best country in the world for expats to live For those looking for the best overall expat experience, our findings this year show Thailand as the top expat destination, being ranked as number one by our expats for ease of organizing healthcare, finding accommodation and the work environment. Last year this destination was ranked highly as a retirement hotspot so it s great to see the country develop in terms of its economic appeal. Lisa Wood, head of marketing at HSBC Bank United States 10 International Source: Expat Explorer Survey 2011, HSBC as of Nov 28, 2011 (3,385 respondents)

Market Access : Exhibition

Know Local customer service Training Loan Support

Service and support from Government

Roles of the BOI Facilitating market entry 100% foreign ownership in manufacturing and most services eligible for BOI promotion Reducing initial investment costs through provision of tax incentives Providing business-related services Information Site visits Subcontracting development Facilitating business operations Right to own land Visas and work permits Help Desk

Thailand and the BOI offer:

Facilitating market entry 100% foreign ownership in manufacturing and most services eligible for BOI promotion Reducing initial investment costs through provision of tax incentives Providing business-related services Information Site visits Subcontracting development Facilitating business operations Right to own land Visas and work permits Help Desk Roles of the BOI

Tax Incentives ü Corporate income tax holidays up to 8 yrs Additional 50% reductions of corporate income tax for 5 years ü Import duty reductions or exemptions on machinery and raw materials ü Double deduction of public utility costs ü Deductions for infrastructure construction/installation costs

Roles of the BOI Facilitating market entry 100% foreign ownership in manufacturing and most services eligible for BOI promotion Reducing initial investment costs through provision of tax incentives Providing business-related services Information Site visits Sourcing Facilitating business operations Right to own land Visas and work permits Help Desk

Roles of the BOI Facilitating market entry 100% foreign ownership in manufacturing and most services eligible for BOI promotion Reducing initial investment costs through provision of tax incentives Providing business-related services Information Site visits Subcontracting development Facilitating business operations Right to own land Visas and work permits Help Desk

One Start One Stop Investment Center More Convenience, less time, more efficiency! 18th Floor, Chamchuri Square Building 319 Phayathai Road, Pathumwan Domestic Call: 0 2209 1100, Inter. Call: (66 2) 209 1100 Email: osos@boi.go.th 36

BOI OFFICE IN GERMANY Mr. Chanin Khaochan Director Thailand Board of Investment, Frankfurt Office Bethmannstrasse 58, 60311 Frankfurt am Main, Germany Tel.: +49 69 929 1230 Fax: +49 69 929 123 20 Email: fra@boi.go.th Website: www.boi.go.th 37

THANK YOU Frankfurt Thailand Board of Investment Bethmannstr 58, 60311 Frankfurt am Main Germany Telephone: (49 69) 92 91 230 Fax: (49 69) 92 91 232 Email: fra@boi.go.th