Introduction:
The global robotics and automation market is experiencing rapid growth, and Thailand is poised to become a major player. With a booming manufacturing sector, a strong government push towards innovation, and a skilled workforce, Thailand offers a wealth of opportunities for companies looking to invest in this transformative technology.
In this blog post, we will take a look at the opportunities available in the robotics and automation sector in Thailand, exploring the key drivers of growth and highlighting the various avenues for investment and collaboration.
Key Points
- Thailand’s well-developed manufacturing ecosystem, skilled workforce, and government support make it an attractive hub for robotics and automation businesses.
- The Board of Investment (BOI) offers various incentives, including tax exemptions, duty reductions, and land ownership rights, to promote investment in the robotics and automation sector.
- Additional incentives like corporate income tax exemptions and reductions are available for eligible projects located in specialised zones like the Eastern Economic Corridor of Innovation (EECi) and Digital Park Thailand (EECd).
- The BOI provides incentives under the Measures for Improvement of Production Efficiency, encouraging businesses to upgrade their technology and machinery for automation.
- Businesses in the robotics and automation sector can benefit from Thailand’s robust education system, which offers high-level university programs and produces a skilled engineering workforce.
What is Thailand’s Current Robotics and Automation Environment Like?
Thailand’s robotics and automation sector has seen remarkable growth over recent years, fueled by both domestic and international demand alongside its well-developed ecosystem. Thailand’s rapidly developing foundation strengthens the country’s globally competitive supply chains, particularly in automotive, food processing, and electronics. Businesses across these sectors and others are embracing automation and robotics by taking advantage of their ability to help boost productivity.
Why is Thailand a Good Option for Robotics and Automation Businesses?
Thailand has positioned itself a leader in the global automotive and electronics and electrical appliance industries. This is important as these two industries are the main contributors to the global robotics and automation sectors.
Thailand is also the world’s second-largest global producer and exporter of hard-disk drives and the world’s sixth-largest commercial vehicle producer, which require the heavy use of robotics and automation technology. With this knowledge and experience Thailand is looking to develop its own more advanced technology to support the transformation of its economy under the Thailand 4.0 model.
To support this goal, Thailand has developed a robust infrastructure and ecosystem to support the robotics and automation industry. As part of Thailand 4.0, the government is actively promoting this sector, including it in its future industry plans.
In order to attract foreign investment, the Government agencies of the Eastern Economic Corridor and the Board of Investment both offer attractive tax breaks and other benefits, including:
- 100% foreign ownership of the business
- corporate income tax exemptions,
- import duty reductions,
- streamlined procedures for foreign workers and;
- land ownership.
Thailand also boasts a highly skilled talent pool within this sector as there are several educational institutions offering high level university programs for robotics and automation. King Mongkut’s University of Technology, for example, offers undergraduate and postgraduate programs in robotics engineering.
Thailand’s strong engineering education is further evident through the following statistics which represent the number of Thai nationals with an engineering related education qualification:
Total – 37,526 Units
Vocational Degree – 21,885 units
Bachelor’s Degree – 14,277 units
Master’s Degree or Higher -1,364 units
Board of Investment Promotions (BOI) for Robotics and Automation
Thailand’s Board of Investment (BOI) has identified robotics and automation as a key industry for support and development. The BOI aims to solidify Thailand’s position as an increasingly influential player in the global robotics and automation sector.
Through the BOI’s incentive programs for the robotics and automation sector, the BOI demonstrates its commitment to long-term economic diversification and sustainable development. The targeted initiatives not only attract international investment but also encourage domestic expertise, bolstering Thailand’s competitiveness on the global stage.
With its strategic investments and business-friendly policies, the BOI is paving the way for Thailand to emerge as a regional leader in robotic technologies. This proactive approach ensures the country remains ahead of the curve in an era defined by rapid technological disruption across industries.
What Business Activities are Eligible for a BOI Promotion?
The following activities are eligible for a BOI promotion in the Robotics and Automation sector.
- Automation machinery and/or automation equipment with engineering design, including automation system integration and control system configuration
- Embedded software
- Engineering design
- Scientific laboratories
- Calibration services
- High value-added software
- Develop and provide analysis and data management software services, including big data, data analytics and predictive analytics software
- Develop system software for advanced-technology devices, including business process management
- Automation machinery and/or automation equipment with engineering design, including control system configuration
- Assembling of Robots or Automation Equipment and/or Automation Parts
- Machinery, equipment and parts and/ or repair of mould and die
What Incentives Does the BOI Offer for Robotics and Automation?
Obtaining BOI certification provides the following benefits for investors:
100% Foreign Ownership: While regular Thai Limited companies are typically limited to 49.9% foreign ownership due to the Foreign Business Act, BOI-promoted companies face no such restriction, allowing complete foreign ownership.
Foreign Business Certificate: BOI-promoted firms receive a Foreign Business Certificate, exempting them from the 50+ restricted business categories under the Foreign Business Act. This opens up opportunities for a wider range of business activities in Thailand.
No Employee Quotas: Unlike other structures, BOI-promoted companies face no quotas when hiring foreign skilled employees. For example, Thai Limited Companies typically need a 4:1 ratio of Thai to foreign employees, but this requirement doesn’t apply to BOI-promoted businesses. Additionally, the process of obtaining visas for foreign employees is significantly more straightforward with BOI approval.
Eligible companies are also able to benefit from significant tax benefits, including:
- Up to 8 year Corporation Income Tax exemption on machinery and raw materials used in production of exported products.
- Exemption of Import Duties.
BOI Incentives for Measure for the Improvement of Production Efficiency
To further encourage the use of automation and robotics systems, the BOI also offers
incentives under the Measures for Improvement of Production Efficiency. These incentives are available to businesses that upgrade their technology and machinery for manufacturing.
To qualify for these incentives, eligible applicants must submit an investment plan for the development of the proposed automation system to the BOI. Please note that eligible projects may be either BOI or non-BOI promoted projects.
Businesses that are approved for this promotion by the BOI will be eligible for the following incentives:
- Exemption of Import Duty on Machinery.
- 3-year CIT exemption on the revenue of an existing project, with a CIT exemption cap not exceeding 50 percent of the investment capital (excluding the cost of land and working capital).
- In case of investments in automation systems, the CIT exemption cap will be raised to 100 percent of the investment capital (excluding the cost of land and working capital), on the meeting of certain conditions regarding the linkage to the automation industry.
Robotics and Automation and the Eastern Economic Corridor (EEC)
Recognising the importance of strategic location for promoting growth in key industries, Thailand’s Board of Investment (BOI) offers additional incentives to encourage investment in the Eastern Economic Corridor (EEC). This approach aims to promote investment in the specialised zones that have been created across Thailand.
Two good examples of the BOI’s targeted investment promotion initiatives for the Robotic and Automation sector are the Eastern Economic Corridor of Innovation (EECi) and Digital Park Thailand (EECd). Companies engaged in eligible activities within these designated zones can benefit from additional incentives on top of the BOI’s basic incentive packages.
For more detailed information about the EEC, please see our article here.
What Business Activities for Robotics and Automation are Eligible for Incentives Within the EEC Zones?
The business activities eligible to receive incentives for robotics and automation businesses differ, depending on whether they are located within the Eastern Economic Corridor of Innovation (EECi) or Digital Park Thailand (EECd).
Eligible Business Activities based in the Eastern Economic Corridor of Innovation:
- Automation machinery and/or automation equipment with engineering design
- Embedded software
- High value-added software
- Assembling of robots or automation equipment and/or automation parts
- Machinery, equipment and parts and/or repair of mould and die
Eligible Activities for projects based in the Digital Park Thailand:
- Embedded software
- High value-added software
- Research and development
- Engineering design
- Scientific laboratories
- Calibration services
What Incentives are Available for EEC Promotions in Robotics and Automation?
Much like the business activities, the incentives on offer for eligible projects depends upon where the business is based within the EEC.
Incentives for Projects based in the Eastern Economic Corridor of Innovation:
- Up to 4 years of Corporate Income Tax exemption (total duration is dependent on business activity).
- 5-year 50% Corporate Income Tax reduction for certain business activities.
Incentives for Projects based in Digital Park Thailand:
- 4 year Corporate Income Tax exemption
Incentives for projects established in other EEC promoted zones:
The above mentioned activities may also be eligible for a 3-year CIT reduction in addition to the basic package if located in one of the following promoted industrial estates or zones:
- Pinthong Industrial Estate (PIP4) (Chonburi)
- Pinthong Industrial Estate (PIP5) (Chonburi)
- Amata City Chonburi Industrial Estate (Chonburi)
- Amata City Chonburi Industrial Estate (Project 2) (Chonburi)
- WHA 36 Industrial Estate (Rayong)
- WHA Eastern Seaboard Industrial Estate 1 (Rayong)
- WHA Eastern Seaboard Industrial Estate 2 (Chonburi)
- WHA Eastern Seaboard Industrial Estate 3 (Chonburi)
- WHA Eastern Seaboard Industrial Estate 4 (Rayong)
- Smart Park Industrial Estate (Rayong)
General EEC incentives
The following incentives from the EEC are available to all projects that are eligible:
- Ownership of land in the promotional zone.
- Ownership of a condominium in the EEC area.
- Permit to bring in skilled workers and experts to work into the Kingdom.
- Right to obtain EEC Work Permit.
Our Thoughts
Thailand’s comprehensive infrastructure and incentives available to eligible projects make a compelling case for businesses to invest or expand their robotics and automation operations in the country. The government’s forward-thinking measures, including specialised economic zones like the Eastern Economic Corridor, along with tailored incentive programs from the Board of Investment (BOI), have established an environment to promote innovation and growth in the targeted industries.
The extensive range of BOI incentives, such as corporate tax exemptions, duty reductions, facilitated land ownership, and streamlined procedures for foreign talent, provide a significant competitive advantage. These incentives remove operational burdens, enabling businesses to allocate more resources toward driving innovation. Moreover, the expertise on offer within the specialised zones allows companies to accelerate growth, foster collaborations, and stay ahead in an increasingly competitive global landscape. With a deep talent pool in engineering and related disciplines, Thailand offers a robust foundation for skilled labour to propel robotics and automation initiatives. By taking advantage of these incentives, businesses can streamline operations, accelerate innovation, and position themselves as leaders in an industry shaping manufacturing and technology’s future globally.
