Boi.go.th Thailand Moving Ahead With Cluster Development

Thailand Board of Investmentwww.boi.go.thThailandMoving Ahead withCluster Development

ernment andPrivate InstitutesInstitutesTargeted Clusters inthe Initial urerGovernment andGPrivate OrganisationsWhat is the Cluster Policy?A cluster is concentration of interconnected businesses and related institutions thatoperate within the same geographic areas. The aim of promoting business clustersis to boost the level of support and cooperation in all facets of the business, bothvertical and horizontal, in order to strengthen the industrial value chain, enhancingThailand’s investment potentials and competitiveness, and expand socioeconomicdevelopment to regional and local levels.The government of Thailand has perceived the significance of cluster in thedevelopment of the nation’s economy. The cabinet and the Thailand Board ofInvestment, therefore, proposed the Cluster-based Special Economic DevelopmentZones Policy, or the Cluster Policy in short, which came into effect on September16, 2015.How the Cluster Policy Support the Investor?The cluster development policy aims at increasing industrial competitiveness in areaswith high potentials for targeted manufacture bases using advanced technologyClusters are crucial in linking manufacturers, suppliers, supporting industries, researchand academic institutions, and public and private organizations within the clusterareas. Strategic development is supported by government agencies in wide-rangingaspects, including human resources and technological developments, infrastructuredevelopment and logistics system, tax incentives and non-tax incentives, financialsupport, and amendments of rules and regulations to facilitate investment.These measures not only support the cluster development and its competency inthe international arena, but also give strategic advantage to investment projectsin the cluster areas.ManufacturerJGovernment andPrivate OrganisationsIn the initial stage of the Cluster Policy, the governmenthas targeted to develop 2 types of clusters: Super Clusterand other targeted clusters.1. Super Cluster includes clusters of businesses usingadvanced technology, and future industry, e.g.Automotive and Parts Cluster, Electrical Appliances,Electronics and Telecommunication EquipmentCluster, Eco-friendly Petrochemicals and ChemicalsCluster, Digital-based Cluster, Food Innopolis andMedical Hub.2. Other targeted clusters, e.g. Agro-processing ProductsCluster, Textiles and Garment Cluster.Super ClusterCluster for activities using advancetechnology and future industry e.g. Automotive and Parts Cluster(7 Provinces: Ayutthaya, PathumThani, Chonburi, Rayong,Chachoengsao, Prachinburi,Nakhon Ratchasima) Electrical Appliances, Electronicsand TelecommunicationEquipment Cluster (7 Provinces:Ayutthaya, Pathum Thani,Chonburi, Rayong, Chachoengsao,Prachinburi, Nakhon Ratchasima) Eco- friendly Petrochemicals andChemicals (2 Provinces: Chonburiand Rayong) Digital-based Cluster (2 Provinces:Chiang Mai and Phuket) Food Innopolis (Details are to beannounced) Medical Hub (Details are to beannounced)

Other Targeted ClustersOther industrial clusters withcompetencies e.g.Investment Incentives for Cluster-based SEZsIncentivesAgro-processing Productsจ นเว d areas are in different regionswhere raw materials are available asindicated in parentheses. Northern Region (vegetables andfruits, herbal products) Northeastern Region (livestock,tapioca, sugar cane, maize) Lower-Central Region (sugarcane, pineapple, rubber) Eastern Region (fruits, rubber) Southern Region (palm, seafood,rubber)Tax BOI West Corridor connectedto manufacturing source inMyanmarEast Corridor connected tomanufacturing source inCambodiaBangkok Design, Sourcing,Trading HubNon-Tax 3– 8 year corporate incometax exemption and anadditional 5-year 50%reductionImport duty exemption onmachinery Consideration of grantingPermanent Residence tothe leading specialistPermission for foreigners toown land to implement thepromoted activitiesSame as Super ClusterApproval Criteria for BOI ClusterIncentive Package มาเลเซ ย (Details are to be announced) For Future industries withsignificant importance,the Ministry of Finance willconsider granting 10-15years corporate income taxexemption Personal income taxexemption for internationalspecialists to work in thespecified area, both Thaiand foreign กัมพูชาCambodia8-year corporate income taxexemption and an additional5-year 50% reductionImport duty exemption onmachineryOther ClustersMinistry of FinanceTextiles and GarmentลาวSuper ClusterActivity classified under eligible BOI categoriesLocated in the designated provinces for each relevant clusterHave cooperation with academic institutions / research institutions / centersof excellence in the designated areas e.g.» Talent Mobility / Work-integrated Learning / Co-operative Education / Dualsystems» Cooperation in development of human resource or technology as approvedby the Board of InvestmentApplications to be submitted by end of 2016 and production to be started byend of 2017 (Extension may be possible if deemed appropriate.)

Areas and Targeted Activities in Each ClusterAutomotive and Parts Cluster7 ProvincesAyutthaya, Pathum Thani,Chonburi, Rayong, Chacheongsao,Prachinburi, Nakhon RatchasimaEligible ActivitiesManufacture of Motorcycle withEngine Size 248 CC.(only for projects with forming ofengine parts)Manufacture of Automobile EnginesManufacture of Important Partsthat are not Locally Produced orSufficiently Produced i.e. Parts using Advance Technology Safety and Energy Efficient System Equipment for Hybrid, EV, PHEVCars Fuel Injection Parts / Transmission /Engine SystemManufacture of Automobile TiresElectrical Appliances, Electronicand Telecommunication Cluster7 ProvincesAyutthaya, Pathum Thani, Chonburi,Rayong, Chacheongsao, Prachinburi,Nakhon RatchasimaEligible ActivitiesElectronic Design e.g. Microelectronics Design and Embedded SystemDesignElectronic Products and Parts using Advance technology e.g. TelecommunicationEquipment, Electronic Parts for Medical Devices / Automotive / Industrial Works,Hard Disk Drive, Solid State DriveMaterials for Microelectronics e.g. Wafers, Materials Based on Thin-film TechnologyAdvanced Technology Electrical Appliances e.g. Internet of Things

Digital Economy Cluster2 ProvincesChiang Mai and PhuketAgro-processingIndustrial ClusterEligible ActivitiesSoftware (Embedded Software,Enterprise Software, Digital Content)Cloud ServiceNorthern Region (ChiangMai, Chiang Rai, Lampangand Lamphun)Data CenterNortheastern Region(Khon Kaen, NakhonRatchasima, Chaiyaphum,Buriram)Software ParkMovie TownLower Central RegionThai Motion Picture Production andMotion Picture Supporting Services(Kanchanaburi, Ratchaburi,Phetchaburi, Prachuab KhiriKhan)Eastern Region (Rayong,Chanthaburi, Trad)Southern Region(Chumphon, Surat Thani,Krabi, Songkhla)Eco-friendly Petrochemicalsand Chemical Product Cluster2 ProvincesChonburi and RayongEligible ActivitiesEligible ActivitiesEco-friendly Chemicals or Polymers;or Products Made from Eco-friendlyPolymersSpecialty Polymers or SpecialtyChemicalsBioplastic-coated Paper PackagingPlant and Animal Breed ImprovementNatural Extracts / Product from ExtractsActive Ingredients from Natural Raw MaterialsMedical Food or Food SupplementGrading, Packaging and Storage of Plants, Vegetables, Fruits or FlowersUsing High TechnologyTrading Centers for Agricultural ProducesProducts Manufactured from Natural Rubber (Must be located in Rayong,Kanchanaburi, and Songkhla only.)Rubber Processing Industrial Estates / Zones (Must be located in Rayong,Kanchanaburi, and Songkhla only.)

Infrastructures to Support Cluster DevelopmentRegions and areas, in which the government has selected as cluster areas, aredeveloped and fully equipped with public utility and infrastructures crucial forinvestment projects. These include industrial estates, electricity, water supply,transportation and educational institutions of all levels. All of which significantlycontributes to the increase in an investment competitive advantage in clusterareas, in addition to tax incentives.Infrastructures in Cluster AreasPorts3Deep Seaports5Domestic Airports7International Airports6Industrial Estates14Electricity Generation CapacitySupport in Raw MaterialsTextiles and Garment Cluster9 ProvincesBangkok, Kanchanaburi, NakhonPathom, Ratchaburi, Samut Sakhon,Chonburi, Chachoengsao, Prachinburi,Sa KaeoEligible ActivitiesFunctional Fiber / Recycled FiberFunctional Yarn or FabricBleaching, Dyeing and FinishingGarments, Clothing Accessories, andHousehold TextilesCreative Product Design &Development CenterQuantityApproximately 37,000 MWMaximum Annual ProductionCapacityPlastic Resin Pallets (e.g. PP, PE, PET, PVC)10.6 million tonsBio-plastic Resin Pallets (e.g. PBS, PLA) *135,000 tonsIron4.6 million tonsSupport in human resourcesQuantityHigher Education Institutions129Vocational Education Institutions215Remarks* The total production capacity planned is 135,000 ton. By early 2016, the estimated maximum production capacitywill be 20,000 tons.