New normal, new opportunities
As the world emerges from the shadow of COVID-19, now is the time for businesses to seize the opportunities and initiatives that are growing as the recovery takes hold. The pandemic has not only impacted people’s health and the economy, it has also shaped and changed the lifestyles of consumers around the world. According to a PwC survey, almost 80% of respondents said they have been making more eco-friendly, sustainable or ethical purchases since the start of the pandemic. To respond to these behavioral changes in support of sustainability, there is a growing and increased focus on green lifestyles within the investment community. First, Chinese sport utility vehicle maker Great Wall Motor (GWM) has invested more than THB 23 billion in Thailand to establish a regional production center for electric vehicles. Second, Asia’s largest coal miner, Banpu, has partnered with Thai car-sharing operator Haupcar to enter the electric vehicle business through an electric car rental business as the he company is diversifying into energy technologies that respect the environment. Finally, the Ministry of Industry and seven agencies under its jurisdiction joined SCG Packaging Plc. to recycle 8,000 kilograms of used paper into a range of products that will be donated for the benefit of the public. To further stimulate investment to fuel economic recovery, the Thailand Board of Investment (BOI) has approved a series of promotional measures to encourage investments that reduce environmental impacts, support sustainable development and contribute to the development of Bio , Circular and the green economy (BCG) as well as a reinforced system for electric vehicles.
Booming digital industry
The pandemic has accelerated the speed of adoption of digital technologies by years, and it’s clear that many of these changes are here for the long haul. Tools that were considered new 10 years ago, such as mobile internet, cloud computing and big data, have become essential elements in reshaping our society. According to global research firm Gartner, Thailand’s IT spending is expected to grow 6.4% year-on-year to 871 billion baht in 2022, with strong growth in enterprise software, driven by continued work hybrid and remote services. Unsurprisingly, the semiconductor industry has seen an increase in demand as companies seek increased resilience in the global supply chain. To further strengthen Thailand’s own electronics supply chain, the BOI has approved an improved investment promotion policy for the electronics industry, adding benefits for capital-intensive and technology-intensive manufacturing such as wafer manufacturing. , IC substrates, ICs and IC testing as well as large-scale middle and background manufacturing.
In terms of infrastructure, Thailand has already rolled out 5G technology and seen accelerated speeds in downloads and connectivity. With higher data processing capacity combined with more efficient connectivity channels thanks to network slicing, 5G has unleashed the potential for more than 9,000 factories in Thailand to become smart factories and move towards automation. industry 4.0. Additionally, as 5G infrastructure continues to be deployed, cloud infrastructure and communication networks are increasingly integrated and merged, the fuel for cloud applications worldwide. In addition, to drive innovation and cost savings in delivering advanced public services, Thailand’s Ministry of Digital Economy and Society is also planning to use Amazon Web Services (AWS), the fastest growing cloud offering. comprehensive and most widely adopted in the world, as part of the Government Data Center. and Cloud Service (GDCC). As Thailand aspires to become more innovation-driven, the BOI has approved an overhaul of its promotions for companies operating on the supply side of the digital economy by focusing on hiring and developing people. an IT workforce as well as upgrading businesses to relevant international standards. Additionally, given the strong growth momentum and growing demand for cloud services from businesses across Thailand, the BOI is offering several extremely attractive investment incentives, including import tax exemption on equipment and raw materials used in manufacturing for export and other non-tax measures. incentives such as BOI business facilitation services. Investments in data centers and cloud services may be eligible for an 8-year corporation tax (IRS). The BOI previously approved an investment request from Huawei Technology (Thailand) to build two data centers at a cost of 700 million baht in Thailand to offer cloud services to public and private customers.
Thrive into a new normal
With strong support from the private and public sectors, Thailand is moving towards a brighter and greener future after the pandemic. The BOI recognizes the need to proactively address global environmental challenges as well as rapid technological changes and strives to support all valuable investments, both in Thailand and abroad, to improve Thailand’s competitiveness. and drive economic recovery as the country transitions from COVID-19. The BOI offers tax and non-tax incentives for investments, especially in innovative sectors related to the bio-circular-green economy (BCG). In addition, the BOI also aims to attract investment in the 12 S-curve industries, including medical, smart electronics and digital industries, which have seen high levels of growth during the pandemic and are expected to play a role. increasingly important in the future of the country. The BOI will continue to initiate measures to promote investment in Thailand with a focus on increasing Thailand’s competitiveness and adapting to the new normal.