Robotics & Automation Industry– Investment Incentives

Chokedee Kaewsang

Deputy Secretary General

Thailand Board of Investment (BOI)

4th February 2020

2

➢ Robotics and Automation Industry

➢ BOI Incentives

for Robotics and Automation

➢ Investment Promotion Policy

Outline

3

10 Targeted S-curve Industries under Thailand 4.0

5 New S-Curve

5 First S-Curve

Food for The Future

Digital

EconomyMedical Hub

Automation

and Robotics

Aviation

and Logistics

Agricultural

and Biotechnology

Smart Electronics

Affluent Medical

and Wellness Tourism

Next-Generation Automotive

Biofuels and

Biochemical

*Forecast Source: World Robotics 2017 Industrial Robots (International Federation of Robotics, 2017) 4

Future Trend of Robots Adoption in Thailand

Key to advancing production

Growth of key industries

Highly intelligent robots are a key enabler of the production lines and

factories of tomorrow.

Growth of key industries in Thailand such as automotive, electronics, and

agriculture drive the demand for industrial robots.

Industrial robot shipment forecast 2017-2020

2,646 3,000 3,500 4,0005,000

0

2,000

4,000

6,000

8,000

2016 2017* 2018* 2019* 2020*

CAGR 2016-2020 = 17.2%

Actual data

Units

Source: Thailand Board of Investment 5

Supply Chain of Robotics & Automation Industry

System Integrator

Mechanism Brain & Software Developer

Parts & Components Manufacturers

Automation & Robotics Users

• Automotive

Manufacturers

• Electrical & Electronic

Manufacturers• Food Manufacturers

Manufacturing

Sales Office

Major International

Automation and Robotics

Companies in Thailand

Source: Robotics: State of Practice in Thailand (Djitt Laowattana, 2015) 6

Supply Chain for Robotics & Automation Industry

Parts & Components Manufacturers

• Robot structure, metal parts, plastic parts

• Motion / movement • Control equipment,

motors sensors

Mechanical Brain and Software Developers

• PLC• Embedded software• Software for controlling,

commanding and processing

System Integrators

• Installing automated or robotic systems for manufacturing process or services

Manufacturer Programing Design Engineering

Service Robots

Industrial Robots Automation

Source: Institute of Field Robotics, (FIBO) KMUTT 7

Mechanism for Development of Robotics and Automation Clusters in Thailand

Automation Buyers

Automation Service Provider

Automation Supplier

1. Demand Driven

(Incentive) Create the

demand of using robots

and automation (50% DTD)

2. Enhance

Competitiveness• Reduce cost of

local

manufacturers

• Import tax

restructuring:

reduce import tax

of spare parts to

the same level as products (0%)

3. Technology

Capability

Enhancement Center

of Excellence (CORE)

Technology transfer

mechanism

Outcome• Industries in Thailand

increase productivity

• Local robot manufacturers are able to be a technology owners

and brand owners• Local investment

results in business expansion

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BOI Incentives

Investment Tax Incentives

9

Corporate income tax exemption/ reduction

Exemption of import duties on machinery

Exemption of import duties on raw materials

used in the manufacture for exports

Exemption of import duties on materials

used for R&D purposes

Etc.

100% foreign ownership

Land ownership rights

Visa and Work permit

Facilitation

Non-Tax Incentives

BOI’s Support to Investors

BOI Investment Incentive Scheme

10

Standard Incentives

Technology-based

Activity-based

< 8 years CIT exemption

10 years CIT exemption

- Targeted Core Technologies -

+

Additional Incentives

• Research & Development (R&D)

• Support academic/research institutes, or technology and human resource development fund

• IP licensing fee• Advanced technology training• Development of local suppliers• Product and packaging design

• EEC 3 provinces• SEZ 10 provinces

• Southern border provinces• 20 provinces with lowest income• Industrial Estates/Zones

• Science and Technology Parks (TSP, Food Innopolis, Space Krenovation Park)

Merit-based

Area-based

Biotechnology

Nanotechnology

Advanced Material Technology

Digital Technology

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Investment Promotion Policy

for Robotics and Automation

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Investment Promotion in Robotics and Automation Industry

Support Supply Side

Encourage Demand Side

Robot & Automation

Activities withoutCIT exemption

Activities withCIT exemption

Group A Group BBOI promotes both robot &

automation Manufacturers and users.

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Investment Promotion for Robot and Automation Manufacturers

BOI Eligible Activities CIT Exemption*

Engineering design 8 years(without cap)

Manufacture of automation machinery/automation equipment with engineering design,including Automation System Integration Design and Control System Design

8 years(without cap)

Manufacture of automation machinery/automation equipment with engineering design,including Control System Design

8 years

Assembly of Robots or Automation Equipment or Parts 5 years

* In addition to the income tax, income, machinery and raw material import duty will be exempted for export, including rights and benefits not related to tax, such as possession of land, visa and work permit

Manufacturers (Supply Side)

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Investment Promotion in Robot and Automation Supply Side

DesignSolution Conceptual Design, Engineering Design & System

Integration Design

Control

System

Design

Procurement/

Making Parts

Assembly Installation &

Commissioning

8 years exemption

(without cap)

8 years exemption

5 years exemption

8 years exemption

(without cap)

Manufacture of automation machinery/automation equipment with engineering design including Automation System Integration Design and Control System Design

Manufacture of automation machinery/automation equipment with engineering design including Control System Design

Assembly of robots and automation equipment or parts

Engineering Design

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Investment Promotion for Users - Enhancing Productivity

Improve Existing Production Line / Services

Other types of improvement: CIT

exemption for 3 years

Domestic Industry Linkage

(Purchased from the domestic manufacturers

of more than 30% of the investment amount in automation)

Exempted financial amount is adjusted to be no more than 100% of the investment amount

in automation.

CIT exemption cap not exceeding 50% of the investment amount in automation

CIT exemption cap not exceeding 50% of the investment amount in automation

* If existing projects are

BOI promoted, the CIT exemption and/or reduction must expire.

Example: Manufacturing of food, automotive parts, or electrical appliance and electronics parts

Applied to the entire production line/service or certain processes such asAutomated Production Cell

Automation:

CIT exemption for 3 years

Users (Demand Side)

BOI eligible activities with CIT exemption *

Group A

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Investment Promotion for Users - Enhancing Productivity

New investment in the production/service line or Improvement to existing production line/service

Other types of improvement :

Not exempted from income tax

Domestic Industry Linkage

(Purchased from the domestic manufacturers

of more than 30% of the investment amount in automation)

Exempted financial amount is adjusted to be no more than 100% of the investment amount

in automation.

CIT exemption cap not exceeding 50% of the investment amount in automation

Example: Manufacturing factories of metal parts and plastic products for industries

Applies to the entire production line/service or certain processes such as Automated Production Cell (excluding individual machinery use)

Users (Demand Side)

BOI eligible activities without CIT exemption *

Group B

Automation:

CIT exemption for 3 years

Businesses not eligible for promotion under this

Measure

• Production: general vehicles, bicycles, Hybrid Electric Vehicles – HEV)

• Service: E-commerce, natural gas stations, co-working space, international business

center (IBC), trade and investment

supporting offices (TISO)

• Project: Promoted under production

efficiency improvement measures (in case of improvement of machinery)

FOR MORE INFORMATIONOffice of the Board of Investment555 Vibhavadi-Rangsit Road, Chatuchak, Bangkok 10900 Thailand

Tel. : (+66) 2553 8111Fax : (+66) 2553 8222E-mail : head@boi.go.thWebsite : http://www.boi.go.th/ GPS : 13.818517, 100.558074