The Board of Investment has agreed to cut down foreigners' right to hold stakes in sensitive businesses from 100 per cent to 49 per cent in a bid to minimise the impact from the liberalisation of investment in Asean.
After the BoI's monthly meeting at Government House yesterday, secretary-general Atchaka Sibunruang Brimble said sensitive lists mostly covered local plant breeding and species improvement for rice, orchid, herbs fruit and other plants.
"The agricultural activities are listed in Annex 1 of the BOI Act, which the board agreed to revise in terms of size, investment conditions and privileges based on the country's interest, since Thai operators are not competitive enough to go against other countries," she said.
The act also does not allow foreigners to hold more than 49 per cent in the forestry and livestock, including aquatic animal, businesses.
"Our limits will not impact on foreigners' investment because such business activities are normally protected in most agriculture-based countries. We are the first government agency to revise our promotion criteria to protect local people, while other agencies are considering the revision too," she said.
The BOI also gave the green light to exempt revenue on carbon credit trading from corporate income tax since it wants to encourage manufacturers to invest in clean development mechanism (CDM) projects and boost awareness to stop global climate change.
All types of CDM projects could apply for tax privileges from the BoI. The CDM projects cover renewable energy - such as wind turbine, biomass and biogas power plants - as well as energy-efficiency improvement in factories and office buildings.
The carbon credit value is about ¤12 per tonne, which is forecast to rise to ¤15-¤20 per tonne by year-end due to increasing demand from rapidly growing countries like China and India.
The BOI also revealed the results of its April-June survey on foreigners' confidence and plans to invest in Thailand.
About 60 per cent of respondents had no new investment plan, 30 per cent had plans to expand their investment here and the remaining 10 per cent would reduce their investment in the wake of the financial meltdown and political instability.
The BOI has received 929 investment applications worth Bt333.4 billion in the first 10 months, down 9 per cent from the same period last year. However, applications from Asia particularly China, South Korea and India, were markedly strong.
The investment on expansions was mostly for small- and medium-scale projects in electronics, machinery and power generation.
The BOI also approved extending tax incentives to 57 types of SMEs from 10 types.
"Over the past five years, only 146 SMEs projects won our incentives with a combined investment value of Bt8.414 billion. This revision, which covers almost all business types, will help enhance Thai SME's competitiveness and improve their production to meet international standards," she said.
Three investment projects won privileges from the BoI. They were submitted by Sharp Appliance (Thailand), Power Generation Supply and Mermaid Offshore Services.