Promoting IPO business to make Thailand the world’s production base

      Thailand’s International Procurement Office (IPO) is an agency whose purpose is to manage the procurement of raw materials, parts, and components and facilitate the work of corporations located in Thailand. It buys raw materials, parts, and components from various sources for industrial customers or distributors in domestic and international wholesale or for export abroad, acting as a “sourcing unit” for industrial customers or distributors.

      The Board of Investment (BOI) has brought the IPO business back to promote investment because the Thai government is focused on making Thailand a center of trade and investment, as well as an important production base for the world, and it has recognized the importance of the IPO business, which is considered a business in the service sector that plays an important role in the domestic manufacturing sector, creating a complete supply chain, and thus becoming an important factor in promoting investment.

Accordingly, instead of manufacturers having to do this work themselves, the IPO business is a center for managing raw materials, parts, and components.  The advantages are clear:

• Increase trading flexibility;
• Reduce production costs;
• Creates business continuity between buyers and sellers;
• Leads to increased employment in the country.

Conditions and benefits of the promotion are specified as follows:

Conditions

1. Must be the procurement of raw materials, parts, and components used in the manufacturing industry;

2. A warehouse must be owned or rented, and inventory must be managed using information technology systems designed specifically for warehouse management;

3. Procurement and product management activities, such as product quality inspection and product packing, must be carried out;

4. There must be procurement sources from many suppliers, as well as procurement sources within the country;

5. There must be a wholesale trade in the country and/or export to another country;

6. A paid-up registered capital of at least 10 million baht is required;

7. Additional privileges and benefits are not available based on the project’s value.

Benefits

1. Exemption of import duty on machinery in every region;

2. Exemption of import duties on raw and essential materials imported for export production in accordance with Sections 36(1) and 36(2);

3. Other non-tax benefits such as importing foreign craftsmen and land ownership.