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THAILAND BOARD OF INVESTMENT

Promotion programs for aerospace industry in Thailand and future plans". THAILAND BOARD OF INVESTMENT. Aerospace as a targeted S-curve Industry. 5 New S - Curve. Aviation & Logistics. Medical Hub. Food for The Future. Smart Electronics. 5 First S - Curve. Automation and Robotics.

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THAILAND BOARD OF INVESTMENT

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  1. Promotion programs for aerospace industry in Thailand and future plans" THAILAND BOARD OF INVESTMENT

  2. Aerospace as a targeted S-curve Industry 5 New S - Curve Aviation & Logistics Medical Hub Food for The Future Smart Electronics 5 First S - Curve Automation and Robotics Biofuels and Biochemical Affluent Medical and Wellness Tourism Agricultural and Biotechnology Digital Economy

  3. Thailand’s Key Success Factors to be a next Asia aerospace manufacturing and MRO Hub • Lower aircraft landing/takeoff/ parking fees than some countriessuch as Singapore • Linkage industries such as automotive and electronics • Competitive wage compared with Singapore and Malaysia • Obtain BOI privileges to reduce the financial burden of starting business • Strategic location for Asia’s MRO hub • Government strategic plan to improve U-Tapao as Asia’s MRO hub 3

  4. Thailand’s Targeted Sectors for MRO & OEM • Thailand’s Targeted Sectors • for MRO • Airframe MRO– Lightweight /Composite material structure MRO • Engine MRO – New generation engine MRO • Component MRO - Landing gear, Wheels and Brakes, APU, Engine Fuel and control and IFE MRO • Thailand’s Targeted Sectors • for OEM • Tier 2 & 3 – OEM Parts • Tier 4– Support Services/Raw Materials Source: Frost & Sullivan

  5. Value Chain of Aerospace industry Parts/ Equipment Manufacturing MRO 1st Tier Raw material 3rd Tier 2nd Tier • Airplane • UAV • Helicopter • Rocket • Blade • Vane • Aero Structure • Cable • Electrical Wire • Apparatus • Avionic • Engine • Propeller • Navigation • Titanium • Plastic • Composite • Advanced Fiber/ • Fabric Related Industries Supporting Industry Space Industry Service Industry Machine tools, measuring instruments /Testing • Air Transportation • Cargo • Logistics • Training Center • Laboratories Explore/navigation Electromagnetic interference Gauge machine Temperature durability tester Geo-informatics 5

  6. Supporting Investment Environment BOI’s Investment Incentives Work permit & visa facilitation Land ownership rights Tax Incentives Exemption of import duties on machinery / raw or essential materials imported for use in production for export and for R&D Up to 13 years of corporate income tax exemption Supporting Policies Non-tax Incentives 100% foreign ownership No local content requirements No export requirements No restriction on foreign currency 6

  7. Eligible Activities in the Aerospace Industry and Basic Incentives (1/4) Aircraft and Parts Corporate Income Tax Exemption (Years) Manufacturing Aircraft or Aircraft Parts 8 Aircraft parts such as fuselage, key airplane parts, equipment and other components Onboard Devices and Equipment (except disposable and reusable aircraft utilities and supplies) Onboard devices and equipmentsuch as seats, life vests, carts, cooking equipment, etc. 5 Repair Aircraft or Aircraft Parts 8 Aircraft parts such as fuselage, key airplane parts, equipment and other components Onboard Devices and Equipment (except disposable and reusable aircraft utilities and supplies) Onboard devices and equipment such as seats, life vests, carts, cooking equipment, etc. • 3

  8. Eligible Activities in the Aerospace Industry and Basic Incentives (2/4) Aerospace Corporate Income Tax Exemption (Years) Activities Conditions Space Devices and Equipment • Aerospace devices and equipment • e.g, Spacecraft/satellite/propulsion system/carrier rocket parts, electronic and communication devices, tracking devices, guidance, navigation, control devices, etc. • Must be approved by related agencies • e.g, Geo-Informatics and Space Technology Development Agency (Public Organization) 8 years tax holiday (A1) Space Operating Systems • Aerospace operating systems • e.g, Tracking systems, teleport or ground station systems, monitoring and evaluation systems, navigation systems, etc. • Must be approved by related agenciese.g, Geo-Informatics and Space Technology Development Agency (Public Organization) 8 years tax holiday (A1)

  9. Eligible Activities in the Aerospace Industry and Basic Incentives (3/4) Examples of Service Corporate Income Tax Exemption (Years) Activities Conditions • Must teach or train technical courses in specific fields, including design training center. • Must have necessary equipment, vocational training lab, and others. • Projects located in a promoted science and technology park or one that is approved by the Board • Will receive an additional 50 percent corporate income tax reduction from net profits for 5 years after the end of corporate income tax exemption period. Vocational training centers 8 years tax holiday (A1) Scientific laboratories • Projects located in a promoted science and technology park or one that is approved by the Board will receive an additional 50 percent corporate income tax reduction from net profits for 5 years after the end of its corporate income tax exemption period. 8 years tax holiday (A1) Calibration services • Projects located in a promoted science and technology park or one that is approved by the Board will receive an additional 50 percent corporate income tax reduction from net profits for 5 years after the end of its corporate income tax exemption period. 8 years tax holiday (A1) Source: BOI 9

  10. Eligible Activities in the Aerospace Industry and Basic Incentives (4/4) Industrial Zones or Industrial Estates Corporate Income Tax Exemption (Years) Activities Conditions Aircraft or Aerospace Industrial Zones or Industrial Estates The total area must not be <100 rai (16 Ha) Projects must allocate some or all area for bonded warehouses or free zones. Projects must have an area for aircraft and parts maintenance and repaircenters. Projects must have sufficient public utilities and facilities such as roads, rainwater drainage and flood prevention systems, waterworks, wastewater treatment system, telecommunications and electricity systems, fire protection system, industrial waste management system and an appropriate security system as approved by the Board. Must be approved by related agencies. 5 years tax holiday (A3) 10

  11. Eastern Aviation City The upgrade of U-tapao International Airport U-TapaoAirport Area: 6,500 rai (include its surroundings) New High-Speed Rail connection Runway2 New Free Trade zone 152 Ha (950 rai) Runway1 New Commercial area 110 Ha (675 rai ) 1St Phase Maintenance Repair Overhaul (MRO) 91 Ha (570 rai) New Passenger Terminal 224 Ha (1,400 rai) Full Phase Training Center 32 Ha (200 rai) Existing Terminal To Cruise and Ferry Port in 10 Minutes To Pattaya in 30 Minutes New Runway Existing Runway

  12. New Investment Promotion Measures in theEEC—starting January 1, 2018 • Applications must be submitted by the end of 2019 • Must have cooperation with academic institution / research institution / Center of Excellence to develop human resource and improve the level of technology • Incentives for targeted industries

  13. BOI Promoted companies BOI promoted companies • 25companies have been promoted under aircraft part manufacturing activity • 10 companies have been promoted under aircraft and part maintenance and repair activity Companies in the aircraft industry tend to look for lower cost parts for their manufacturing and repair plants. Thailand can offer this price advantage when compared with neighboring countries. Other regional locations, such as Singapore, may have a limitation regarding the ability to facilitate the expansion of aircraft part manufacturing investment.

  14. Robust Human Resource Aviation Training Centers Approved by CAAT2 Center Location Bangkok Bangkok Bangkok Bangkok Bangkok Chonburi Nakhonpanom Pathumthani • Civil Aviation Training Center (CATC) • Bangkok Aviation Training Center • Royal Skyways • Royal Thai Air Force Training Center Young Eagle Co., Ltd. • Thai Flight Training Co., Ltd. • Sri-racha Aviation Co., Ltd. • International Aviation College • Thai General Aviation Technology Academic Institutions • Kasetsart University • King Mongkut’s University of Technology • Suranaree University of Technology • Chulalongkorn University • Thammasat University • Assumption University • Rangsit University Other Aviation Training Centers Pan Am Academy Thai Airways Crew Training Center Source: 1Office of Transport and Traffic Policy and Planning (OTP), Ministry of Transport, 2 The Civil Aviation Authority of Thailand (CAAT)

  15. Existing Key Major Players Manufacturing Companies MRO Companies 15

  16. Thank You • THAILAND BOARD OF INVESTMENT555, Vibhavadi - Rangsit Rd., Chatuchak, Bangkok 10900, Thailand • Tel. (+66) 2553 8111 • Website: http://www.boi.go.th • E-Mail: head@boi.go.th

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