����� �������� ��� ���������������������������������������������������������

������� ��� ������ ���� ��������������������������������������������

������ ���� ������������ �������� �������������������������������

����� ��� ���� ������������������������������������������������������������������

�����

�������� �� ��������� ����������������������������������������������

�� ���� � ��������� ����� ������� �����������������������������������

��� ����������� ������������������������������������������������������������������

������� ���������������������������������������������������������������������������������������

New Privileges for Electronics

he Board of Investmenthas approved new privi-leges for the electrical

and electronics industry conferringpremium privileges for projectswhich re-invest. The incentivesare expected to dramatically boostthe competitiveness of companiesinvesting in Thailand’s electronicsindustries and will encourage themto fill out their local supply chains.

The Board, chaired by DeputyPrime Minister and Minister ofCommerce Somkid Jatusripitak,passed the incentives to accelerateThailand’s dominance in electronics and solidify it as theelectronics hub of Southeast Asia. Thailand’s electronicsindustry, led by HDD and IC production, is a dynamic forcebehind the nation’s economy, comprising 12% ofmanufacturing output and 19% of exports.

The new incentives allow electrical and electronicscompanies to combine earlier projects into follow-onprojects, automatically extending corporate income taxexemption periods for operations begun in earlier phases.As a result, projects from earlier phases would, in effect, beable to receive more than the current maximum of 8 yearsincome tax holiday.

To be designated a long-term investment project, a planof at least 15 billion baht (US$375 million) of investmentsmust be submitted before operations of the first project begin.All projects in the plan must lie within the electrical andelectronics industry’s supply chain.

As a condition of being designated a long-terminvestment project, companies are required to participate in

T the BOI’s STI program, whichwas also revised during themeeting. Projects must makeinvestments in at least one ofthree activities that develop Skills,Technology and Innovation (STI)in Thailand: 1) R&D or design,2) advanced technology training,3) support for educational orresearch institutions. MinimumSTI investments required arecalculated based on the investmentlocation zone, ranging from 1-2%of total sales generated.

To help companies remainglobally competitive, the BOI has also granted projectlife-time duty exemptions for upgraded or replacement

����������������� �������� ��������������������� ������������ ������� �

�������������������������� ��������������������� ��

Continued on Page 11

Note: Priority activities, such as wafers and solar cells, maintain 8-yearcorporate income tax exemptions regardless of location. Long-terminvestment projects would be able to extend the above income taxexemptions by combining previous projects into follow-on projects.

Expanded Corporate Income Tax Exemptionsfor Electronics Projects

Zone 1 Zone 2 Zone 3

IE = Industrial Estate Outside Inside Outside Inside Outside InsideIE IE IE IE IE IE

Previous

Privileges

(# of years)

Electrical &Electronics

HDD & parts

ICsNew Privileges

(# of years)

- 3 3 7 8 8

4 4 6 6 8 8

4 4 6 7 8 8

5 5 6 7 8 8

2

The BOI Investment Review

����������������� ��

�������� � � ��������� ���������

��������������������� �� ��� ��������������������

��������������� �� ���� ���� �������������������

�������� �������

������������������������

���� ��!����"����

������!��������"

#����������"���� ����

$� �����%���������

��������������"

"���#��� $�����

&�$'!���������������� ���������(%����)(����!� ������ ��*���+��� ��+��",��)��������&�������$������!�� �%��+��(-� ���� ����%%�� �"�����"������%�()���� ������������

����.��� ��+��"+

������ � � ����������������������)������������%/���+)��+"�+��0�"�� �0 ���� 0)��1��� �%��1����+� �

�� ���%����� ��������&&'���������&�()* ��������*+,�����������*�&*-����������&,&�����������))�**)

����� ��

�"����������������� -*�����������./* ���������'(�������������-&. �+.�������������.)'

2����� 0���%�� )'�����������+&/ ���������)'�����������)�&)(�����������(.������������.�(/'��"��!��� ��� 0&3��� �-&�����������.*) ���������&)�������������(/*�����������*- ������������(-&����%����02��� ().���������)�.,+ ��������((.����������)�('&����������),,�����������.�('+���� ��"

���������0��������� )-(���������)�-*, ��������)-(�����������)�,'-����������).+�����������)�,)*��%���� 0���� ��,-����������)�.)/ ��������)/*�����������)�)&,����������)))����������)�').

����� �**�����������*,& ��������)/&������������'-.����������)))�������������,*-

���0��� ��

#���� .)&���������(�&-, ��������.+/�����������(�-+&���������./,�����������.�,,.4�������� ��+.���������)�)'& ���������.,�������������'')����������+*���������������)'.�� �� ���5!�

&����� ���������&*�����������),' ����������&)�������������(.. �+&�������������(&*

��6��"���" ���������)&�����������.)) ����������)'��������������&-�����������()��������������(&.������ ���������+'�����������)&. ����������(,��������������*. �.-���������������-/

�����"���� ���������&(�����������.&- ����������')������������--*�����������&,�������������.''�������4���� ���������*+������������,)) ����������,+�������������'/( �,&�������������*&.

�4�������"��% ���������),�����������-/' ����������(.��������������-/�����������),�������������)),��7�%��( ���������)*�������������(/ ����������()�������������)(&�����������)*��������������'.������8����� �����������.�������������)' ������������'�������������)(,�����������)&�������������.*+

��9���� ���������)/�������������), ����������)(���������������(+������������).���������������)/��5������� �����������,�����������(+) ����������)-�������������(*) �(.������������++(

���1��

:��; �)&.���������)�.&, ��������),+�������������,+.����������)'-�����������)�-&,

:��< �.'/���������.�-&, ��������.*-����������-�)//����������.'+�����������,�().

:��= )(-���������)�(*, ��������)'/�����������)�&.)���������)(*��������������,,/

��(//. ����������(//+ ����(//-�23����� 4

��������

����� �

����� ��������

����� �

����� ��������

����� ������

���� ��

)5�6�7�+/��8�

��������������

��� ������ ������������ � ������� � ��� �������� ��� �� �� ������ �� ���� �

����� �� ���� ��� ��������� �������� �!�����

0�������������

�����������������#������H y p e r m a r k e tCarrefour plans toopen eight to ten newstores next year, itsbiggest expansionsince the Frenchretail giant first

invested in Thailand 11 years ago. Regional director FredericLevy Perrault said the company invested between US$17.5to 25 million for each new store, depending on the size.

Carrefour’s plans include conventional stores with7,000 square meters of retail space as well as compactstores of 5,000 square meters. One of the new stores isdestined for Phuket. Earlier plans to open a store therewere shelved following the December 26 tsunami.

At present, Carrefour operates 23 outlets in Thailand.Its latest addition was opened early December in Bangkokon Itsaraphap Road. The retailer plans to spend aroundUS$12.5 to 17.5 million to renovate its existing stores,including product upgrades to Australia’s Red Earth chain,U.S. toy chain Toys “R” Us, and Hong Kong’s Bossini.

�#������� �� �������� ���� ���������)�������� #� �#���For the first time in Thai automotive history, annualautomotive production in November reached one millionvehicles. According to Thailand’s Automotive Club, thecountry will produce a total of 1.15 million vehicles thisyear, making it the 14th largest auto producer in the world.Auto exports are expected to climb by 40% this year.

Currently, 15 automobile assembly plants produce 21different brands in Thailand. The government anticipatescontinued growth in the automotive sector and has set aproduction target of 2 million units by 2010.

Meanwhile, Toyota held a stone-laying ceremony fora new production plant to be built in Ban Pho district,Chachoengsao Province. The facility plans to beginproduction of Hilux pickup trucks in 2007, producing100,000 units a year.

Thailand is the world’s second largest producer ofone-ton pickup trucks, which account for almost 60% ofits auto production.

����!�!�����9#�! ����� ��� ������:����Readers of Conde Nast Traveler have voted Bangkok thebest city in Asia and chose Phuket as its top resort island.Chiang Mai and Koh Samui were also highlighted in themagazine’s Annual Readers’ Choice Awards. The twodestinations were ranked fifth in their respective categories Top Asian Cities and Top Asian Islands.

In addition, five Thai resorts made the list of the Top 15Asian Resorts, while Thai Airways was voted one of theTop 10 International Airlines.

Nearly 28,000 readers voted in the magazine’s 18thAnnual Readers’ Choice Awards.

�

3

����������������� ���� ���������

������������� ������ ��

egor Group, a manufacturer in the production ofmaster alloys, metals and solders for the gold andsilver jewelry industry, has signed an agreement

with IGS Plc, owner and operator of Gemopolis gem andjewelry industrial estate, to set up a manufacturing base inThailand.

The world’s leader in the production of master alloys,Legor is the first alloy producer in the jewelry industryto established a production base in Southeast Asia.Headquartered in Vicenza, Italy, Legor’s new Thai subsidiarywill be the company’s second overseas venture after thelaunch of its Istanbul operations earlier this year.

“Our main reason for choosing to set up at Gemopolis(See Gemopolis, pp. 4-5) was not just to gain access to theThai market, but also because Bangkok is strategicallypositioned in the region to access our customers in otherregional markets such as Vietnam, Malaysia and Indonesia,”says Massimo Poliero, managing director of Legor Group.

“Alloys can be made from raw materials such as copper,zinc and silver. It’s a product that is tailor-made accordingto the specifications of the end-customer, and by being inThailand, it is that much easier for our technicians to meetwith and advise our clients on the best products andprocesses,” says Poliero.

Another strong factor for investing in Thailand, saidPoliero, was its economic stability and the ready infrastructureand tax incentives Gemopolis provided foreign investors.

Setting up at Gempolis entitles the company to a fiveyear corporate tax exemption as well as a number of‘downstream’ incentives, including exemptions on importduties of machinery, VAT exemptions on sales withinGemopolis and VAT exemptions on sales to all BOI-promotedand bonded warehouses. In addition, the Legor Group has a100% right in ownership of land and property withinGemopolis and permission to bring in foreign expatriates andtechnicians.

“Gemopolis estate is a fully integrated cluster ofinternational companies, and being located there provides uswith important access to new customers. Moreover,Gemopolis welcomes firms with marketing and distributionexpertise that can help us to break into new foreign marketsand share technology in Asia,” said Poliero.

Legor Group Thailand, which plans to begin constructionof its Thai facilities early next year, anticipates the factory

�

;��������������������� �#�����������!��:�#�:������������ ������������������������:�����#����#����#������������ ������������ ������<

will be ready to launch production by the end of 2006. Themaster alloy specialist will also use the Gemopolis facilitiesas a technological research and development center. Transferof technology will be a key issue for the company whichplans to set up a state-of-the-art laboratory on its Gemopolisplot.

Included in its research will be the monitoring of markettrends and customer requirements, while the laboratory willoversee the production process and provide quality controltesting on product batches and raw materials purchased bythe company. Research facilities will also be at the disposalof customers whenever they require outside technicalsupport on a particular product or process.

Over 15% of the company’s turnover is invested annuallyin the renewal of research equipment, financing of researchprojects and improvement of the production process.

For more information on Legor Group, visit their websiteat: www.legor.com

Massimo Poliero, managing director of Legor Group (left) shakeshands with Suttipong Damrongsakul, assistant managing director,IGS Plc, owner and operator of Gemopolis, during the signingceremony for Legor’s entrance to the estate.

4

s the first European-Thai business event of itskind, the EU-Thailand Partenariat, held inBangkok last month, has proven an important

step in encouraging both sides to develop stronger tradeand investment ties.

“Thailand is currently looking at more liberalization invarious sectors, and if this takes shape, it would increaseinvestment from the EU. The EU-Thai Partenariat istherefore an important event in establishing closer tradeand investment relations between the two sides,” saidFriedrich Hamburger, head of the Delegation of theEuropean Commission to Thailand. “Many European firmstaking part are positively surprised by the high level ofThailand’s technology expertise.”

Organized by the Thailand Board of Investment (BOI)with a grant from the European Commission’s Asia-InvestProgram, the two-day event hosted approximately3,000 one-on-one business match-making sessions andbrought together 282 Thai and 149 EU SMEs from sixkey industry sectors, including agribusiness andprocessing, machinery and parts, motor vehicles and parts,electronics and IT, fashion and design, and value-addedservices.

Per Sondergaard, managing director of PS Consultantfrom Denmark, who spoke during the EU-Thai Partenariat’sopening seminar on successful techniques for doingbusiness in the EU, said the event was “not just anothertraditional trade fair.

“The Partenariat uses unique software that enablescompanies to pro-actively accept or reject meetings withtheir counterparts this allows for easy planning whenseeking partners and has proven a very successful wayfor companies attending Partenariats to do business,” saidSondergaard.

�5�����������������David Ulfstrand, owner of the software company Firma

David Ulfstrand from Sweden, said he was amazed by thespeed with which Thailand’s technology sector wasdeveloping.

“Southeast Asia is a growing market when it comesto adopting new technologies and this is especially thecase in Thailand. If we want to survive, we have to be herein Asia,” said Ulfstrand, adding that out of the company’s10 match-making sessions three of them had been verypromising an indication of the meeting’s “good value formoney.”

Jose Blazquez, president of the Union of Employersfor Business Development (APECAL) a Spanish businessassociation representing 35 enterprises in industriesranging from construction and industrial elevators toagriculture and wine said the EU-Thai Partenariat hadbeen a true learning experience.

“As a result of the Partenariat my opinion of Thailandhas changed. I always thought of Thailand as being adeveloping country, but I see now that economically itis quite similar to Spain. The EU-Thai Partenariat willprove to be an important step in promoting closercooperation between European and Thai industry sectors,”

������������������

�������������������������

�

�#������=���������� ��#�� � #�5��#�������9�� ����� ������ ��� ������� ��������#��������������� ������ ������������ �� ����!�:� #�!���5������ ����� ����������������� #�����������:��������������� � ���������0#�������������<

�

5

said Blazquez.Guy Schiltz, CEO, Schiltz Architectes Ingenieurs from

Luxembourg, said his company had taken part in more than10 meetings with two “good sessions.” However, he addedthat the event seemed to be more export- and product-driven,and would like to have seen more service sector companies.

The EU remains a major trading partner with Thailand(together with the U.S., Japan and ASEAN) holding aconsistent share of approximately 15% in its total trade.During the first nine months of this year, trade between thetwo sides increased 13%, but investment figures from theBank of Thailand show that net investment flows from theEU to Thailand were only US$61 million last year, less thanboth the United States (US$156 million) and Japan (US$743million). This amounted to only 6% of the 25-nation bloc’sforeign investment, or about half of its investment in LatinAmerica.

Hamburger, who attributes this to protectionist measuresadopted by Asian governments following the 1997 financialcrisis, said markets in the region were now reopening. Thiswould lead to greater levels of investment from EUcompanies in coming years, he added.

Several legislative initiatives pending before Thailand’sParliament could also boost foreign investment. The first isa reduction in the corporate tax, while the other would boostforeign ownership in the telecommunications sector to 49%,up from the current level of 25%. While the legislationcovers major industry sectors, any sign of liberalization isalso likely to promote investment activity in other sectors.

� ���������Thai SMEs taking part hailed the EU-Thailand Partenariat

a success, but some hoped that future match-making eventswould provide more information about participating foreigncompanies and their products in the weeks leading up to theopening of the event.

Suthep Vichakyothin, managing director of DyntecDisc Production Co., Ltd., a Thai compact disk (CD)manufacturer with current distributors in Sweden, Italy,Russia and the U.S., was looking to expand exports to EUmarkets. However, he said online information provided aboutforeign company products was not detailed enough andadded that some Thai companies tended to perceive the eventas an exhibition rather than a meetings-orientated event.

Nevertheless, Costas Geronikolos, director ofElectronics Industry Plc, a Thai company which designs,manufactures and distributes discrete semiconductorproducts, said the EU-Thailand Partenariat was an invaluableopportunity to find EU customers.

“As the sole producer of transistors and diodes inThailand, this is a great opportunity for us to meet withEuropean companies in the electronics sector. We are luckyin that there are a large number of EU companies from thissector participating.”

Thai exports to the EU have grown by around 20% thisyear, reaching around US$11 billion over the first ninemonths (Jan-Sept). Thailand’s biggest EU trading partnersremain the UK, the Netherlands and Germany, while emergingpartners include the Czech Republic, Austria and Estonia.Main Thai exports to Europe include machinery, garments,motor vehicles and parts, and electronics. Imports consistmainly of machinery, electrical items and parts.

Asked whether the EU and Thailand would collaborateon a Partenariat in the future, Hamburger said Thailandshould consider similar events that would help to consolidatebusiness links with its neighbors. “If I were a consultant,I would advise the Thai government to diversify mymarkets for two or three years perhaps with Chinesecompanies or ASEAN neighbors and then come back toEurope and choose other successful industry sectors, whichwould in turn bring a new perspective to the EU-ThaiPartenariat.”

6

fter 13 years of steady growth, GemopolisIndustrial Estate (GIE) Thailand’s only indus-trial estate dedicated to the gem and jewelry

sector is now actively seeking foreign investors to helpbuild its “Gemopolis City,” Asia’s one-stop manufacturingand trading community for the gem and jewelry industry.

Located in a special industrial zone, the estate’sproximity to Bangkok’s new Suvarnabhumi InternationalAirport, only 3 kilometers away, promises to inject newlife into Gemopolis’ plans for expansion.

Designed on a grid of neat tree-lined streets, repletewith road signs and phone booths, GIE is home to a clusterof over 70 gem and jewelry businesses ranging from H&ACutting Works Ltd., one of the world’s leading producersof triple excellence diamonds, to Pandora Production, aspecialist high-end jewelry manufacturer.

“Currently Gemopolis comprises a 68-acre industrialestate only five minutes from the new airport, and we haveover 300 acres of land on which to expand,” says ChayutAssarasakorn, marketing director, Gemopolis. “The existingindustrial estate is the foundation for our Gemopoliscommunity.”

Present expansion within Gemopolis includes theconstruction of Gemopolis Mall a 200-meter coveredwalking street offering wholesale jewelry shopping atinternational gem and jewelry outlets. SMEs in the gemand jewelry industry located nearby are being encouraged

to take up one or more of the 300 sq.m. shop/productionunits.

“The first phase of our mall is completed and all unitshave been completely sold out. These outlets include retailspace on the ground floor with an additional 2 floors eitherfor office space or private residence,” says Chayut. Phase2 of the mall’s additional units is nearly complete andwill be followed by phase 3, a medium-sized conventioncenter built by the BMA (Bangkok MetropolitanAuthority) on land provided by GIE.

The idea is to create an OTOP (One Tambon OneProduct) exhibition and export center, approval of whichhas already been granted by the BMA. Construction isexpected to start sometime next year.

In addition to the 70-plus companies located atGemopolis, up to 50 outsourcing SMEs thrive on theactivities of the Gemopolis estate bringing to around12,000 the number of skilled jobs which the estate hasgenerated.

“Our goal is to encourage and attract SMEs locatednearby to move to Gemopolis to create more businessfor them and to develop a stronger cluster network withinour industry. We help match SMEs together with their larger‘brothers’ inside and assist them in securing financialsupport with the SME Bank, Exim Bank [Export-ImportBank of Thailand] or even OSMEP [Office of Small andMedium Enterprises Promotion],” says Chayut.

�!���� "�������������#���������$

�!�����%�������&��� ���

�

� #��������������

� ����������� ��� ���

���: #��"����������� ����

������ ������(/>�������

�#������ ������#������=�

��� #������ ���� ��� ���

����� ���� ������5�6-//

��������:�� #����������

�#�����������<

The Gemopolis Mall

7

In January Gemopolis joined an incubator project aimedat supporting new gem and jewelry business start-ups.Working in tandem with the SME Bank, OSMEP and theInstitute of SME Finance (ISMEF), Gemopolis providestraining and skills development courses to jewelryentrepreneurs. Space is then provided at low rates to SMEswanting to set up inside Gemopolis.

“We provide them with security in an environment closeto their customers at very low rates. SMEs joining theincubation project are better protected and less likely to beexploited by larger companies looking to undercut theirprices,” says Chayut.

Coordination efforts with the Customs Department toestablish Gemopolis as a duty-free zone are also close to

completion. Operating as a free trade zonewould encourage a greater flow of internationalcustomers and travelers, further boosting theattractiveness of Gemopolis to foreigninvestors.

However, expansion plans for Gemopolisdo not stop there. Discussions with investorsare underway to secure new investment in“phase 2” of Gemopolis.

Dubbed “Fashion Habitat,” Phase 2 isbeing marketed as an all-in-one ‘Work-Live-Learn-Shop-Play’ multicultural communitycomplete with exclusive residential areas forexpatriate workers, jewelry retail shops and

even a jewelry bourse. A one-stop exhibition and shoppingcenter, along with hotels and serviced apartments, wouldsupport both residents and visiting tourists.

In addition, Gemopolis is taking its investmentcampaign overseas to encourage gem and jewelry clustersin other countries to join Gemopolis and invest in newindustrial clusters that cater to their respective countries.

“We are actively seeking investors on a module basis.For example, a new industrial estate, a condominium ora hotel would constitute one module. We are open to alltypes of investment in industrial, residential or commercialsectors.” — By Paul Davies

Jewelry workers at Miki Siamese International Co., Ltd, one of the 70 majorcompanies with production facilities established at Gemopolis.

A special thanks to Kitti Wongchindawest, managing director of Miki Siamese, who kindy led Investment Reveiwreporters on a tour of the company's jewelry production facilities.

Gemopolis FDI IncentivesInvestment incentives enjoyed at Gemopolis include

duty-free import and re-export of merchandise, thanks tothe industrial estate’s Free Trade Zone (FTZ) status, pluscorporate income tax exemption for at least five years inthe case of start-ups, or eight years for relocatingbusinesses.

Additional privileges include exemption of VAT onimports of raw materials; exemption of import duties onimports of machinery; exemption of income tax on dividendincomes received for at least 5 or 8 years; exemption ofVAT on sales within Gemopolis; exemption of VAT forsales to all BOI-promoted and bonded warehouse zones;100% right in ownership of land and property withinGemopolis under foreign entity; and permission to bringin foreign expatriates and technicians. Gemopolis investorsalso have the privilege of buying residential property inthe next phase of development.

Thailand: The gem & jewelry capital ofSoutheast Asia

Exports of gems andjewelry to reach US$4.75 billion by 2008Double digit growtheven in ’97 Asian crisisLeading exporter ofcolored gems (exclud-ing diamonds)Number 2 exporter offine jewelry after ItalyApproximately 50-80%of world’s rubies and sapphires, worth US$400-600million in 2003, pass through ChantaburiRenowned expertise in diamond cuttingRenowned for design and precision assembly

For more information on Gemopolis visit www.gemopolis.com

8

ary Woollacott, president ofthe Australian-Thai Chamberof Commerce (AustCham) is

positive that the Thailand-AustraliaFree Trade Agreement (TAFTA) isopening up concrete opportunities forAustralian businesses.

Woollacott emphasized Thailand’sstrong competitive advantage overother countries in the region, which iswhy the Australian government wasvery keen on concluding its FTA withThailand. TAFTA, which came intoforce on January 1, 2005, representsa turning point in the two countries’economic relationship and is Australia’sfirst FTA with a developing country.

As the first point of contact for Australian companiesdoing business in Thailand, the Australian-Thai Chamberof Commerce offers a range of targeted services. One ofthe strongest trademarks of AustCham is its efforts tofacilitate business exchanges among its members.

“While our primary function is to assist Australian andThai companies looking to do business in the other’srespective market, we have also become an importantfacilitator of member-to-member business links,” saysWoollacott.

Networking functions organized by AustCham provideopportunities for members to meet and develop businessrelationships, while its regularly sponsored lunch briefingsare important platforms for discussions on trade andinvestment issues such as customs duties and the benefitsof TAFTA.

Briefings often feature top-level Thai and Australianofficials invited to speak on key investment and trade issues.Furthermore, AustCham’s fully-staffed research centerassists firms in conducting research on Thai industrysectors as well as market conditions throughout ASEAN.

According to Woollacott, AustCham is funded entirelyby membership and sponsorship fees, ensuring itsindependence. AustCham’s steadily growing membershipbase currently at more than 300 reflects rising Austra-lian optimism regarding business opportunities in Thailand.

“Our members are very positive about Thailand. Theyare very optimistic about the market size and the growthpotential here,” says Woollacott. “Thailand’s major

competitive advantages derive fromits stability and its democraticallyelected government. Its highly skilledworkforce, good supply chainnetwork, and ongoing infrastructuraldevelopment are other factors thatmake Thailand attractive toAustralian companies.”

By significantly reducing tariffbarriers, TAFTA has encouragedincreases in bilateral trade. BetweenJanuary and October 2005 Thaiautomotive exports increased by over75% from the same period last yearto US$1.2 billion. Exports of ironand steel products grew by 73% to

over US$190 million. In the same period, Thai importsfrom Australia rose by over 50% fueled by growth injewelry and crude oil imports.

While TAFTA guarantees the national treatment ofAustralian investors, it also permits majority ownershipby Australian firms in a range of sectors, includingdistribution services, construction, managementconsulting, and hospitality.

“As a result of TAFTA, Australian companies nowsee that there are real opportunities here,” adds Woollacott,urging Australian firms to take advantage of this newwindow of opportunity.— By Chrissa La Porte and Alisa Kukarja

�� �'��!��������������

�� ���������� ��� ������������

Gary Woollacott, president of AustCham

Ownership Rights for Australian Firms Under TAFTA

Sectors Maximum OwnershipMining 60%Distribution services* 100%Construction services 100%Management consulting services 100%Restaurants and hotels 60%Tertiary education institutions** 60%

Maritime cargo services 60%

* Distribution services for goods manufactured in Thailand** Institutions must specialize in science and technology and be located outside Bangkok.

Source: Australian Government

9

(���$ ����)��� ����!������ �����*�����+���!���

0�?�� ����#���*' #�?�� #���� #������ #�������#���?���������� �����#�������#��������

������ ���������������� #�:���������������������� #������������ ����?��������� <

uring a reign of almost 60 years, His MajestyKing Bhumibol Adulyadet of Thailand has pursuedover 3,000 royal development projects, the

majority of which are dedicated to combating poverty andencouraging greater self-sufficiency within ruralcommunities.

Based on the principle of ‘self-reliance,’ his projectsare intended to help communities support themselves inthe long-term. “We must understand the situation they areencountering and decide the means and extent to whichthey can be helped,” states His Majesty.

In line with this principle, many royal initiatives focuson agricultural and environmental conservation. HisMajesty’s hands-on approach visiting remote villagesand familiarizing himself with local customs enables himto develop practical solutions that help communities shiftto more efficient and sustainable agricultural practices.

One of his most well-known agricultural concepts isthe ‘New Theory,’ which provides Thai farmers withalternative guidelines for the management of land and waterresources. Uncontrollable factors such as poor soilconditions, climate and inconsistent rainfall patterns canbe better managed when applying such methods.

According to the theory, a piece of land owned by ahousehold is divided into four areas. About 30% isdesignated to water storage, 30% to rice cultivation duringthe rainy season, 30% to the cultivation of other cropsand the final 10% to housing, raising animals and otheractivities. Application of this model has provided farmerswith sufficient food and water for year-round consumptionand irrigation.

Like his other projects, the New Theory is practical,easy to implement, and affordable for farmers. TheChaipattana Foundation under His Majesty’s patronageoffers a realistic demonstration of this concept at WatMongkol Chaipattana temple in Saraburi Province and atBan Daen Samakkhee village in the Shao Wong District ofKalasin Province. Farmers and interested members of thepublic are encouraged to learn from these working modelsand to apply them within their own communities.

His Majesty also emphasizes the need to conserve andmanage natural resources. Many royal developmentprojects are therefore geared towards improving soilconditions and restoring forestland to its natural state.

The King’s royal development center in NarathiwatProvince conducts research and develops techniques aimed

�

at restoring acidity and salinity levels to soil compounds essential to productive agriculture. The reforestationproject under this scheme is located in Doi Tung, ChiangRai, and covers an area of over 37,000 square acres.

This year, the Chaipattana Foundation has broadenedits reach to assist victims of the Asian tsunami. The reliefefforts are managed on behalf of His Majesty by H.R.HPrincess Maha Chakri Sirindhorn, the foundation’s executivechairperson.

Working closely with the Thai Red Cross Society andWorld Vision Thailand, the foundation is helping to constructpermanent housing for villagers in Phangnga province. Aspart of the project, over 100 acres of land was purchasedin Kuraburi District to build permanent new homes for morethan 150 households. Public utilities located at the housingproject in Baan Thoong Rak village will include a childdevelopment center, a school and a health center.

The Chaipattana Foundation is also spearheading thereplacement of more than 3,000 fishing boats belonging tofishermen in Thailand’s six devastated provinces. The oldwooden boats have been replaced with fiberglass boats thatare not only more durable but less expensive to maintain.By the end of this year, around 500 boats will have beenhanded over to fishermen in Ranong, Phangnga, Krabi,Phuket, Trang and Stoon. — By Alisa Kukarja

10

By Vannipa Pipupchaiyasit, Polapat Naphavaranonth, Praorn Charoonrode and Alisa Kukarja

$� ��� ���@���� �����From October 23-30, Thailand Board of Investment(BOI) representatives visited Australian cities

Executive Investment Advisor Ajarin Pattanapanchai(center) presents a token of appreciation to PeterPedersen (left), general manager of Illawarra RegionalDevelopment Board (IRDE) and Mark Grimson, chiefexecutive officer, Illawarra Business Chamber onOctober 26.

$� ��� ���@����:��BOI’s Deputy Secretary General Sudjit Inthaiwong led a mission

to Taiwan on October 25-28 to gather information about the country’snational strategy for the automotive parts sector.

BOI delegates and Vallop Tiasiri, executive director of ThaiAutomotive Institute, visited the Taiwan Transport VehicleManufacturing Association (TTVMA) to learn about its policies onintegrating and supporting member firms in the automotive industry.

BOI delegates also met with representatives from the IndustrialDevelopment Bureau Taiwan’s investment promotion agency whoshared information about strategy for attracting automotiveinvestment.

The delegates then visited three Taiwanese automotive componentmanufacturers to study productivity and production processes as wellas to learn more about international marketing strategies.

$� ��� ���@�A� ���BOI delegates, led by Senior Executive Advisor Suchart

Phisitvanich, recently hosted a trip for Thai investors to Vietnam wherethey surveyed investment prospects in Hanoi, Hi Phong, Dong Naiand Ho Chi Minh City.

The visit provided Thai business people an opportunity to cementrelationships with key officials from the Thai Embassy in Hanoi, theThai Consulate in Ho Chi Minh City and the Ministry of Planning andInvestment (MPI) North Vietnam’s investment promotion agency.

The delegates also visited Amata Industrial Estate in Dong Nai tolearn about incentives for foreign investors. A number of smallerfactories within the estate were also visited.

The mission took place on November 22-25.

Sydney, Wollongong and Melbourne where they met withkey government and private sector organizations to discuss waysof attracting greater investment in a number of sectors, includingengineering, metal, legal services, electronics, and auto parts.

Executive Investment Advisor Ajarin Pattanapanchai spokeat business promotion seminars held in Sydney and Melbournewhere she briefed potential Australian investors on the incentiveadvantages of locating production bases in Thailand.

In Sydney, the delegation met with representatives of theThai-Australian Chamber of Commerce, and the NSW StateGovernment, to discuss cooperation in promoting bilateralinvestment.

BOI delegates also visited Investment Wollongong, apromotion agency in the heavy engineering sector. At theUniversity of Wollongong, during a meeting co-organized byIllawarra Business Chamber and Illawarra Regional DevelopmentBoard (IRDE), Ajarin presented Thailand’s business opportunitiesin heavy engineering to private corporations.

In Melbourne, BOI delegates provided information oninvestment incentives to members of the Australian Electricaland Electronic Manufacturers’ Association (AEEMA).

Deputy Secretary General Sudjit Inthaiwong(center) at a meeting with representatives from theIndustrial Development Bureau on October 28.

BOI delegates and Thai investors at the Royal ThaiEmbassy in Hanoi on November 22.

11

PURAC builds first lactic acid plant in ThailandThe Netherlands Ambassador to Thailand Pieter Marres (fourth right),CEO of PURAC CSM N.V. Worldwide Gilles van Nieuwenhuyzen(third right), BOI Secretary General Satit Sirirangkamanont(third left), and Vice President of PURAC (Thailand) Ruud Reichert(second right) witnessed the ground breaking ceremony for PURAC’sfirst lactic acid plant in Thailand at Asia Industrial Estate, RayongProvince.

EU-Thailand Partenariat 2005Minister of Industry Suriya Jungrungreangkit (right) presentsa token of appreciation to Ambassador Friedrich Hamburger(left), head of the delegation of the European Commissionto Thailand, at the opening ceremony of the EU-ThailandPartenariat 2005 on November 17. Suriya’s opening speechwas followed by welcoming remarks from Hamburger andBOI Secretary General Satit Sirirangkamanont.

Receive the Investment Review via E-mail!

���������

The monthly BOI Investment Reviewis now available in an electronic format. To subscribe, go to

www.boi.go.th

STEER Brings together Thai andSingaporean investorsSingapore Minister of Trade and IndustryLim Hng Kiang (left) and Thai Ministerof Industry Suriya Jungrungreangkit(right) presided over the secondSingapore-Thailand Enhanced EconomicRelationship (STEER) meeting onNovember 22-23. The two-day event wasaimed at strengthening Thailand andSingapore’s bilateral trade and investmentties. A match-making session for Thaiand Singaporean businesses was organizedby the BOI, and a seminar led by BOISecretary General Satit Sirirangkamanontwas held to brief Singaporean companieson Thai investment opportunities.

Chinese delegationvisits BOIWisanu Berananda, ThaiConsul to China’s FujianProvince, led a group ofChinese business peopledoing business in Xiamento meet with BOIrepresentatives in Bangkokon October 18. Thedelegation was briefed onBOI investment policiesaimed at encouraginggreater bilateral investmentbetween Thailand andcompanies in the Fujianregion.

Electronics, from page 1

machinery for all electrical and electronics projects.Non-BOI promoted companies which supply toexporters of electronics, plastics and automotivegoods are now eligible for duty-free raw materials.

The Board also granted longer corporateincome tax exemptions for investments inproduction of HDDs and parts, integrated circuits,and other electrical and electronic productsaccording to investment zone.— By Renee Santo

More information on the new and amendedprivileges approved at the December 8 BoardMeeting is available by contactinghead@boi.go.th.

Correction: November issue of Investment Review (Volume 14, No.11).At the bottom of our article entitled Thailand's Yachting Industry Charting New Waters, (p. 5), we wrongly stated that theRoyal Phuket Marina would offer "24-hour access" and "accommodate mega-yachts". This in fact is not the case weapologize for the error.