With a population of 69 million, Thailand is characterized by steady growth, strong exports, and a vibrant domestic consumer market. Abundant natural resources and a skilled and cost-effective work force help attract foreign investors and enable them to prosper and develop industry in Thailand. According to World Bank, Thailand is an upper-middle income country with an open economy and the second-largest economy in ASEAN after Indonesia, with a gross domestic product (GDP) of $529 billion and 4.1% annual growth in 2018. Moreover, Forbes ranked Thailand as the 8th best-emerging market of 2020.
Gateway to Asia
Thailand enjoys a strategic location and serves as a gateway into the heart of Asia – home to what is today the largest growing economic market. The country also offers convenient trade connections with China, India, and countries of the Association of Southeast Asian Nations (ASEAN), with easy access into the Greater Mekong sub-region, where newly emerging markets offer great business potential.
Hub of ASEAN
Thailand was one of the founding members of ASEAN and has been instrumental in the formation and development of the ASEAN Free Trade Area (AFTA) and the ASEAN Economic Community with a single market of over 640 million people covering 10 regional countries.
Thailand is ideally located at the crossroads of Asia, with easy access to the region’s dynamic markets, including its own booming domestic consumer market of 69 million people. Thailand has long been a proponent of free and fair trade and its attractiveness as a production base for leading international companies is enhanced by a number of free trade agreements, including those with China, Japan, South Korea, India, Australia and New Zealand.
Social and Political Stability
Thailand is an investor friendly country. The country's form of government is a constitutional monarchy, with a high reverence for the Thai Monarchy, and devotion to the teachings of Buddhism. And although most of the people in Thailand are Buddhist, all religions are welcome, and His Majesty the King is the patron of all religions.
In addition to a growing highway system that now connects not only every province in Thailand, but also to neighboring countries of Laos, Cambodia and Vietnam, Thailand also offers:
- 7 international airports
- Modern city-wide mass transit
- 4G/5G WiFi and broadband access
- 6 deep seaports and 2 international river ports, including containers, tank farms and liquid jetties
Thailand is the first ASEAN country to launch 5G in March 2020. Thailand’s development plans for the coming decade include a high-speed rail network that will connect itself with neighboring countries including Laos, Cambodia, Vietnam to the east, Myanmar to the west, Malaysian and Singapore to the south, as well as southern China to the north. The mass transit system is being expanded into the suburbs and air and marine transportation will be further strengthened to meet the pace of growing demand.
Eastern Economic Corridor (EEC) and Thailand 4.0
The Eastern Economic Corridor Development project aims to promote 10 targeted industries ranging from robotics and aviation, to wellness tourism or biotechnology. The project is part of the Thailand 4.0 strategy that seeks to modernize the country to help it become a developed country. To help develop these industries, the Thai government has also planned several big infrastructure projects, mainly the expansion of the Laem Chabang port, the expansion of U-Tapao airport, a high-speed connection between Bangkok and Rayong, double track railways to connect cities with ports and the development of the deep-sea port at Map Ta Phut. The plan also includes some urban development to build so-called smart cities, where digital technology would be integrated with the life of citizens. The EEC scheme covers 30 existing and new industrial zones, with an expected investment of US $55 billion in three eastern provinces — Chachoengsao, Chon Buri, and Rayong.
The Eastern Economic Corridor Bill was approved by the National Legislative Assembly (NLA) in early 2018, allowing the government to grant crucial tax and non-tax investment privileges to overseas lenders on Board of Investment (BOI)-promoted projects, including:
- Corporate income tax exemption for up to 13 years
- Exemption from import tariffs on parts, machinery, and raw materials for use in research & development
- The lowest personal income tax rate in the ASEAN region at 17%
- A one-stop service center for foreign investors
- Permission to own project land—otherwise restricted to 49.99% under the Foreign Business Act (FBA)
For further information about the EEC please visit the website of EEC at https://www.eeco.or.th/en
The Thai government has adopted a new economic model called Thailand 4.0 which is focused on transforming the country to become a value-based and innovation-driven economy by moving from producing commodities to innovative products and from a production-based to a service-based economy using technology, creativity, and innovation in focused industries
Under the Thailand 4.0 development plan, 10 targeted industries are focused and can be categorized into two groups which are existing targeted industries and new targeted industries. First is to develop existing industrial sectors by adding value through advanced technologies for five industries: Next-Generation Automotive; Smart Electronics; High-Income Tourism and Medical Tourism; Efficient Agriculture and Biotechnology; and Food Innovation. Another is to target on five additional growth engines to accelerate Thailand’s future growth: Automation and Robotics; Aerospace; Bioenergy and Bio-chemicals; Digital; and Medical and Healthcare.
According to Thailand's National Strategy Plan (2018-2037), sustainability and ‘Eco-Friendly Development and Growth’ are identified to enhance its socio-economic policies through sustainable development, while optimizing trade and investment. The BCG Model (Bioeconomy, Circular Economy and Green Economy) is considered to be one driver for economic growth without further damaging the environment This includes establishing institutional structures and implementing the right technologies to limit natural resource depletion and facilitate environmental and waste management.
Foreign Direct Investment (FDI) Policies
The country's well-defined investment policies focus on liberalization and encourage free trade. Foreign investments, especially those that contribute to the development of skills, technology and innovation are actively promoted by the government. Thailand consistently ranks among the most attractive investment locations in international surveys. The World Bank’s 2020 Ease of Doing Business Report places Thailand as the 21st easiest country in the world (and second-ranked country in Southeast Asia) in which to do business. Likewise, the U.S. News & World ranks Thailand as the 26th best country overall in the 2020 and No. 1 on the best countries to start a business in 2020.
Government Support and Incentives
Numerous government agencies support investors. Through the Board of Investment, the government offers a range of tax incentives, support services and import duty exemptions or reductions to an extensive list of promoted activities.
Companies receiving investment promotion privileges from the Board of Investment are not subject to foreign equity restrictions in the manufacturing sector, and there are no local content requirements nor export requirements, as Thailand's investment regime is in total compliance with WTO regulations.
The Board of Investment also coordinates the activity of the One-Stop Service Center for Visas and Work Permits, which enables foreign staff of BOI-promoted companies to obtain work permits and long-term visas within three hours or less.
The BOI also administers the One Start One Stop Investment Center, which opened in November 2009 to facilitate a full range of services and streamline investment procedures by bringing representatives from more than 20 government agencies under one roof.
In addition to the activities of the BOI, other government organizations, such as the Department of Export Promotion and international chambers of commerce, provide invaluable support and a host of other important services.
For further information about investment in Thailand including investment promotion, please visit the website of Thailand Board of Investment (BOI) at https://www.boi.go.th
Export and imports in Thailand
The Thai government has established a standard of custom operations and a “related procedures framework”, in line with the standards of the World Trade Organization and World Customs Organization.
A mutual recognition agreement (MRA) was established between Thailand and its regional partner countries to share the benefits of the Authorized Economic Operator standards. These grant a special privileges program to entrepreneurs.
The Thai government has also completed several new initiatives such as the Tariff Valuation and Rules of Origin rules, e-Tariff service and anti IUU Fishing application.
All these efforts have made Thailand a simpler country to import to, and export from.
Friendly and Rich culture
Thailand has gained a well-deserved reputation throughout the world for its gracious hospitality. The friendliness of its people and the diverse nature of Thai culture make visitors feel safe and at home in Thailand. Recently, 2019 Business Traveller China Awards announced Bangkok as Best “2019 Favorite Leisure City in the Word.”
According to Mastercard's 2019 Global Destination Cities Index, which ranks 200 cities around the world with the most international visitors, Bangkok was placed at the top of the list for the fourth consecutive year with the most international overnight visitors – 22 million in all.
Education and healthcare services
The education standards in Thailand are accepted by many international examining bodies, and a great number of international schools and colleges offer world-class education, while its universities are outstanding.
In terms of healthcare, the country has developed an excellent reputation globally, due to its internationally certified doctors and medical staff, and modern facilities and equipment. It is so good that one of the fastest-rising tourism sectors is medical tourism, with international patients visiting Thailand to take advantage of Thailand's world-class and extremely affordable health care system.