Thailand Board of Investment North America

(source: Thailand Investment Review, March 2016)

Digital Infrastructure Development Promotes Innovation

New digital trends such as big data, the internet of things, social media, mobile advertising and cloud computing are reshaping the way people interact with each other and transforming the business landscape. Given the speed at which information technologies are being integrated into our socioeconomic activities, an economy based on digital technologies, otherwise known as a digital economy, is rapidly becoming a reality. High-speed fixed and mobile networks will provide the foundation for applications and services, and all that progress relies on developing the necessary digital infrastructure.

Digital infrastructure includes information technology infrastructure, telecommunication infrastructure, broadcast infrastructure, and the convergence of the three to further develop digital computing technologies that will drive economic progress. Thailand’s vigorous efforts towards building a strong foundation for digital infrastructure can be seen in a variety of attractive incentives the Board of Investment (BOI) offers for rapidly-growing digital businesses such as data centers and cloud services.
Incentives for Data Center Projects

In order to support the government’s digital economy policy, the BOI has amended Activity Data Center and added Activity 7.10 Cloud Service to promote the expansion of Thailand’s digital hard infrastructure in order to sufficiently serve user needs, maintain standards and reinforce the stability of the infrastructure network. The development will also facilitate socioeconomic developmental activities to better support foreign investors looking to invest in Thailand in Information and Communication Technology (ICT)-related businesses, such as data centers, cloud services, telecommunication joint-ventures and software applications. The presence of quality high-speed telecommunication networks will also benet investors interested in other businesses.

Data center service providers offer their customers co-location facilities and fully managed services, a few of which include services such as backup and disaster recovery (DR). Projects planning to apply for BOI’s investment promotion incentives need to have at least 3,000 square meters of service area space. Co-location facilities are required to have temperature and humidity control systems, as well as re protection systems and other backup systems in case the utility power fails.

In order to enhance the competitiveness of data center service providers and put them on the same footing with international and regional players, providers are required to be certified with the ISO/IEC 27001 (data center) standard.

Incentives for Cloud Service Businesses

Cloud computing is typically associated with internet-based data storage such as the iCloud on Apple devices or the Google Drive app on Andriod, or the Dropbox le hosting service. This type of storage is just one of the resources that cloud computing providers offer to users and enterprises. Other cloud providers share resources that include applications, services and networks, to name a few. Cloud computing help users and businesses reduce set up costs and costs involving maintaining their own computing infrastructure and systems. This allows them to rapidly adapt to an ever-changing business environment and focus on developing business competitiveness.

The BOI also offers promotion incentives for Cloud service businesses. Projects wishing to apply for the promotion must be located in at least 2 data centers in Thailand that possess the ISO/IEC 27001 (data center) certification. These data centers are required to have a main communication network and a back-up network connecting all related data centers, with a minimum speed of 10 Gbps. Cloud service providers looking to apply for BOI incentives must be certified with the ISO/IEC 27001 (cloud security) and ISO/IEC 20000-1 (cloud service) standards, in order to increase business competency.

Why Thailand?

The BOI offers numerous tax and non-tax privileges under the ‘A1’ category. With the government’s plan to develop Thailand’s digital infrastructure well under way, data center and cloud service providers can look to reap the benefits of a positive investment environment. Thailand’s renowned position in the Hard Disk Drive (HDD) industry also helps support the government’s digital economy development plan. The country’s prominent role as one of the largest global producer and exporter of HDDs, (one of the main data storage units used in data centers), ensures a solid electrical and electronics supply chain, which investors looking to start a data center operation can easily utilize. Taking this into account, along with Thailand’s recognition of the importance of knowledge-based activities such as data centers and cloud services, the country is sure to retain its standing as a major center for regional operating hubs and Information Technology (IT) in ASEAN.  

© 2013 The Board of Investment of Thailand. All rights reserved.