Thailand’s robotics and automation industry moves forward

On the road towards an advanced economy under the Thailand 4.0 model, the public and private sectors have been making concerted efforts to accelerate the growth and development of the robotics and automation industries and technologies.

These efforts focus on human resources development, knowledge enhancement, information sharing and industrial support networks in tandem with tax and non-tax incentives provided through the Thailand Board of Investment (BOI).

Speaking to more than 300 participants at a recent seminar on “Driving Thai Economic Development through the Automation and Robotics Industry,” Chokdee Kaewsaeng, BOI’s Deputy Secretary General, explained that the government paid attention to both the demand and supply sides in designing effective investment incentives so as to create the right financial ecosystem in the Kingdom. Such incentive packages are offered for both existing and new investment projects.

A move towards robotics

Thailand’s bold moves up the value chain in the automotive space offer a blueprint for success in other innovation heavy sectors. The robotics industry is an obvious choice, given its growth prospects and how interlinked automation is with modern auto production. According to the International Labor Organization, 60% of top tier automakers in ASEAN are currently ramping up automation.

While low-skilled jobs will increasingly be replaced by more safe and consistent robotic devices, the Thai government understands there’s no need to fear automation. Instead, investments and incentives are being offered to attract robotics firms, with the aim of building jobs in servicing, manufacturing, and designing these new tools.

On the supply side BOI’s investment incentives are offered to a wide range of business activities related to the robotics and automation industries and technologies: conceptual design solutions; engineering designs and system integration methods to control system configurations; procurement and manufacturing; as well as assembly, installation and commissioning.

Supporting industries eligible for incentive packages include the production of telecommunication equipment and parts; the operation of electronic controls and measurements for industry, agriculture and medicine; the manufacturing of vehicular and scientific tools; the installation of security control systems; and the engineering of high-value software solutions.

Incentives provided to these businesses include exemptions of import duties on machinery as well as corporate income taxes, depending on the types of businesses and other incentives involved.

On the demand side incentives are afforded to both new investment projects and existing investments aimed at increasing current production efficiencies.

The incentives range from a waiving of corporate income taxes for three years on the current revenues of an existing project as well as exemptions of import duties on machinery when the tax exemption cap does not exceed 50 per cent of the investment capital. In case at least 30 per cent of the total investment capital has been made on local automation systems, corporate income tax exemptions will be expanded to 100 per cent of the investment capital. In addition, investors will be eligible for other incentives depending on their respective industry.