Q Has the change in government made your job more difficult, given investor concerns over the political situation?
A We are experiencing hesitation from some investors, who want to wait and see what will happen next because, at this time, they do not know what developments will occur. As time goes by, the picture is getting clearer. People accept that we should have a general election very soon, and there is confidence that we will have a new government coming from several political parties – a coalition government, just as in the past, without any one party dominating the whole political scene.
No one thinks that Thailand is going to change much in terms of economic and investment policies. If a new government comes, they will find new missions to encourage people to invest more or to spend more.
Now is the right time for investors to consider investing for everything that needs building. It is always best to invest at the lower point. The costs of construction, of doing business, will gradually increase but, if you invest now, you get the advantage of the lowest cost. Some people are not waiting; they are continuing to invest in Thailand.
In the past five months, that has been confirmed very clearly. The overall investment that applied to the Board of Investment of Thailand (BOI) increased by 75% from 115bn baht ($3.86bn) to 200bn baht within the space of five months last year. In FDI we received 122bn baht in applications, which represents a 35.5% increase.
Q The revised investment law upset some businesses. How have you sought to reassure investors about the change and what it means for them?
A There are two basic laws involved in this. One is the so called Foreign Business Act. The other is the Investment Promotion Act. In principle, to invest according to BOI conditions for promotion, you are eligible for tax exemption under the Investment Promotion Act. It also allows you to gain a majority share without any questions asked. If you get this, you do not need another approval from the Foreign Business Act, just approval from the BOI. They are automatically issued a licence. Even though the Foreign Business Act has changed, it does not affect the activities we consider important to the Thai government, which are promotable activities.
There are some issues of concern for foreign investors regarding the Foreign Business Act.
One is the change of definition of foreign investors. The definition currently is based only on the number of shareholdings. With the new definition, a company will become a foreign business if it has more than 50% voting rights. That affects some companies that, in the past, may have used preferred shares to have more voting rights than common shares. Those companies will have to adjust themselves; their investment incentive allows them two years as a period of adjustment.
Existing companies will not be affected by the new legislation; it only applies to new activities and companies. Companies do not have to be concerned by the proposed amendment, which at present still has to be considered and debated by parliament.
Q How do you get Thailand to stand out from the pack for investors looking at countries all over the world?
A We have to offer a niche market to them by identifying what we are very good at. In the past, we identified ourselves clearly with the automotive sector. That has become our product champion and now proof that our direction can respond to the niches in the market. We have been successful at that and have identified that this is good for our economy, simply because we know that the problem of energy will be the big issue of the future. We have to build smaller cars.
Q In short, what is your message to investors?
A Have confidence in Thailand. If you are not sure, visit Thailand yourself, talk to the right people, observe the situation. It is not as bad as you imagine.