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BOI encouraging Thai companies to invest abroad

Dr Atchaka Sibunruang is Secretary General of Thailand’s Board of Investment (BOI) and the public face of Thailand’s investment agency responsible for the proposal and co-ordination of incentives and policies attractive to Thai and foreign investors alike.

Boris Sullivan

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Dr. Atchaka Sibunruang, secretary general of the Thailand Board of Investment (BOI)

Dr Atchaka Sibunruang is Secretary General of Thailand’s Board of Investment (BOI) and the public face of Thailand’s investment agency responsible for the proposal and co-ordination of incentives and policies attractive to Thai and foreign investors alike.

A career civil servant and lecturer in economics for 20 years, Dr Atchaka was previously Senior Executive Investment Advisor at the BOI and Director General of the Office of Industrial Economics at the Ministry of Industry, before being appointed Secretary General in September 2008.

Once synonymous with drawing investors to Thailand, the BOI is undergoing a change in policy and direction. No longer fixed on inbound Foreign Direct Investment (IFDI), it is assuming a new role, encouraging Thai companies to invest abroad – not that it has done badly in its original mission.

The BOI attracted THB447.4 billion (USD14.7 billion) worth of investment through 1,591 projects in 2010 alone. Granted, this was a substantial drop of 32.7 per cent on the previous year’s dollar value, but given the year’s events, the drop is unsurprising. Yet this underscores the importance of foreign expansion in the BOI’s latest direction.

To survive, compete and grow, businesses in Thailand needs to look beyond its borders. A fact readily acknowledged by big business, but others are still in need of encouragement.

Moreover, Dr Atchaka spans the gulf between government policy and private sector investor demands. It is an unenviable and relentless task given the political realities in the last five years, exacerbated at times by individual ministry agendas. Yet the BOI has enjoyed its successes and Dr Atchaka looks to bolster Thailand’s investment profile again, but this time by also taking Thai money abroad. Many Thai companies, both state and privately owned, are exploring and aggressively expanding into foreign markets.

The rest is here:
Bridging the public-private divide

 

The Foreign Business Act (FBA) lays out the overall framework governing foreign investment inThailand. Under the FBA, a foreigner, defined as a person or company of non-Thai nationality or acompany where foreign ownership accounts for 50 percent or more of total shares and/or registered, needsto obtain an alien business license from the relevant Ministry before commencement of its business if in asector restricted by the FBA.

Although the FBA prohibits majority foreign ownership of investment inmost sectors, Thailand makes an exception for U.S. investors pursuant to the Treaty of Amity andEconomic Relations (AER Treaty). Under the AER, Thailand may limit U.S. investment only in thefollowing areas: “communications, transportation, fiduciary functions, banking involving depositoryfunctions, the exploitation of land or other natural resources, and domestic trade in indigenousagricultural products.”

Thailand’s obligation to accord national treatment to U.S. investors in all othersectors does not extend to “the practice of professions, or callings reserved for Thai nationals”.

Highlights of Thai Capital Market
2008 2009 2010
No. of Securities Business Licensees
Securities Companies 41 41 41
Asset Management Companies 22 21 22
Venture Capital Management Companies 3 3 2
Securities Offerings
Equities (USD mil.) 1,215 970 3,056
Government Debt Securities (USD mil.) 288,993 298,176 350,573
Corporate Debt Securities (USD mil.) 37,069 30,042 31,544
Foreign Bonds (Baht Bonds) (USD mil.) 521 360 400
Equity Market
SET Index 449.96 734.54 1032.76
MAI Index 162.93 215.3 272.79
No. of Listed Companies 525 535 540
Market Capitalization (USD mil.) 103,350 177,278 279,381
Daily Average Trading Value (USD mil.) 460 547 968
Foreign Investors
– Percentage of Buying and Selling Value (%) 29 21 18
– Net Trading Value (USD mil.) -4,673 1,140 2,711

 

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