Many of the companies operating in Thailand are used to more or less political instability, hence there are different views on the current government, not being democratically elected. It is a priority from the govenment to improve the relations with the international community to promote trade and investment. The EU Free Trade negotiations with Thailand has stalled since the current government took power in may 2014. The EU’s Generalized System of Preferences (GSP) ended the 1st of January 2015. Thailand was the second largest beneficiary of the EU GSP after India, Commission figures show.

UNCTAD Ranks Thailand 8th as a top prospective host economy 2013-2015. World Bank Ranked Thailand among the easiest places to do Business in Asia and 26th in the World (3rd in ASEAN). Thailand was number 11 in the 2013 Global Manufacturing Competitiveness Index by Deloitte

Thailand still is the third largest FDI recipient in ASEAN, even though it fell from 96 (2013) – 86 (2014) BSEK. Still Thailand is the:

  • 17th largest manufacturer
  • 23rd largest industrial output
  • 24th biggest economy by purchase power
  • 28th biggest exporter (as % of total world goods)

It is important to know that all investment doesn’t need approval from Thailand Board of Investment (BOI). Only those that need government assistance like tax benefits etc. Japan is the largest investor in Thailand. BOI have received 70 investment applications from Swedish companies in the period 2004-2014. This is not all Swedish investments since all are not in need of government assistance, primarily in the service sector.

  • In services you have the right to have 100% or majority foreign ownership with some restrictions for agriculture, mining, telecom and some other industries.
  • For manufacturing 100% foreign ownership is allowed even if you sell to the local market.
  • Owning land as a company requires BOI approval. There is no time restriction – though if the operations are discontinued then the land has to be sold within 12 months to someone that has the right to own land.

A Swedish perspective on business in Thailand:

  • 87% of Swedish companies Established in Thailand expect revenue growth next 3 years.
    • 69% are in Thailand to sell to the local market, but many (43%) also manufacture.
    • 69% expect the climate to be favorable the next three years
    • 87% expect revenue growth the next three years
    • 88% see the large local market as the most attractive opportunity
  • Swedish companies not yet established in Thailand are in need of support to reach goals
    • 85% expect revenue growth the next three years – but most did not past years
    • 75% entered Thailand withouth analysis, and 65% chose partner without evaluation
    • 50% are less than fully satisfied with their current partner
    • 32% have partner communication issues and 20% have presence issues.

Emerging business opportunities New transportation development strategies 2015-2022

  1. Inter-city rail network investments:
    • Upgrade rail infrastructure and overall system
    • Build double-track in 6 main rails with their extension to respective borders
  2. Capacity enhancement for highway network to link key areas in the country with neighboring countries. Road network investments:
    • Develop 4 lane-road networks linking Thailand’s key economic regions and border areas
    • Construct new motor ways
    • Develop facilities along the main roads such as container yards
  3. Public transportation network development plan for Bangkok Metropolitan Region. Investment in Mass Transit in Bangkok and vicinity:
    • Extend mass transit reailway system in Bangkok and vicinity
    • Improve quality of service and safety of mass transit bus as well as to enhance its environment standard.
  4. Air transport capacity enhancement and Maritime transport development. Coming investments:
    • Improve seaport on both Thai gulf and Andaman sea
    • Enhance capacity of airports to be the regional center of air transportaion
    • Establish the aviation industrial estates

Industries that the Thai government focus on and has good potential for foreign companies:

  1. Automotive – No 12 in the world, 1,8 Million cars are produced – Many Tier one companies are producing in Thailand.
  2. Machinery – Increasing need for automation within a number of manufacturing industries
  3. Renewable energy – A large focus from the government to increase the renewable energy sector and decrease dependence on fossil fuels
  4. Aerospace – Bangkok is an aviation center
  5. Digital Economy & ICT sector – Many tax incentives are available for companies investing in this sector – strong focus from Thai government.
  6. Medical Device Industry – Most medical equipment is imported, primarily to private hospitals and to certain extent to University hospitals with the need of more advanced equipment. Thailand is the largest medical tourist destination in the world.

Thailand is exhibiting growth and is an attractive access point to Asia and ASEAN. It is important to do your homework when doing business in foreign market and specifically in faraway complex markets, like Thailand or other markets in the region. It is important to get a good understanding of the market and which strategy to use, regardless if you are importing or exporting. Working with advisors that has real understanding of the market is essential. They should be able to offer scalable project models at reasonable investments. Tick Tock Consulting can offer projects based on Success fee or Fixed fee models with clear decision points to ensure that the return on investment is fast and certain.   Some of the above information is compiled from todays (22nd of September) seminar  “Thailand – Land of investments”. The seminar was organised by Thailand Board of Investment (BOI) and presenters were:

  • The Thai Embassy – Khun Kiattakhun Chartprasert Ambassador to Sweden
  • Thailand Board of Investment – Khun Duangjai Asawachintachit and Mr. Mats Gerlam
  • European Association for Business and Commerce
  • Business Sweden
  • Electrolux
  • Peas and understanding
  • Diakrit International
  • EKN