The Board of Investment (BoI) is more upbeat about Thailand's investment prospects after approving some 700 projects with a combined investment cost of 110 billion baht in the first quarter.
Acting secretary-general Hiranya Sujinai said the BoI-promoted projects in the first quarter, combined with investment projects worth 700 billion baht approved by the BoI last year, would play a vital role in boosting the economy this year.
The BoI has set a target of approving 1,600 projects valued at 1.4 trillion baht in 2015.
Most approved projects in the first three months were small-scale developments mainly for software, cloud computing, medical appliances and auto parts, which comply with the BoI's new policy of promoting high technology and the service industry.
On Thursday, the BoI gave the nod to 10 projects worth 28 billion baht.
Prime Minister Prayut Chan-o-cha laid out a plan late last year to promote foreign direct investment from Jan 1, 2015 until the end of 2021. The focus will be on technology to support the government's planned digital economy, as the country must strengthen its competitiveness and overcome its reliance on low-cost labour.
Current promotional privileges from the BoI fall under zone-based incentives. The new strategy will base privileges on the type of project, favouring those that support the digital economy such as high technology, research and design.
Ms Hiranya said investment in special economic zones (SEZs) would also help to drive the regional economy next year.
The BoI meeting chaired by Gen Prayut approved 61 categories from 13 industries located in SEZs that will be granted the highest promotional privileges.
The industries are agriculture, fisheries and related industries; ceramics; textiles, garments and leather; furniture; jewellery and ornaments; medical appliances; automobiles, machinery and parts; electrical appliances and electronics; plastics; pharmaceuticals; logistics; industrial estates; and tourism-related industries.
Previous promotional privileges under the BoI fell under zone-based incentives.
Investment in SEZs will be entitled to generous privileges including corporate income tax exemption for eight years, a 50% tax reduction on net profit from investment over five years, double tax deductions for the cost of transport, electricity and water supply for 30 years and an additional 25% tax deduction for the cost of installation or construction of facilities in addition to normal depreciation costs.
Other privileges include exemption of import duties on machinery, a five-year exemption for raw or essential materials for use in the production of exports and a permit for the employment of unskilled foreign workers at promoted projects.
Ms Hiranya said the BoI also approved easing the requirements for the import of used machinery, extending the life of used machinery to not more than 10 years from five years now.
Isara Vongkusolkit, chairman of the Thai Chamber of Commerce, said the BoI's new strategy would help to drive the economy this year and especially aid the development of small and medium-sized enterprises, as the new policy offers them greater investment opportunities.
The government's revocation of martial law should improve the trade and investment climate and aid tourism, he said.
Suphan Mongkolsuthee, chairman of the Federation of Thai Industries, said the presence of Section 44 of the interim charter would benefit the meetings, incentives, conferences and exhibitions industry, as it gave the army the power to tighten security and tackle unrest quickly.