In this post, we're going to be taking a look at Thailand as an investment destination. Before we delve into the main discussion Kindly note that there are plenty of solid business opportunities in Thailand to take advantage of by both people who are looking to expand their existing company in their home country into Asia and those who are planning to start an entirely new type of business in Thailand.
Top investment opportunities in Thailand:
- Shipping
- Real Estate
- Tourism
- Jewelry production
- Infrastructural development
Advantages of Foreign Direct Investment in Thailand include: The Thai economy's strengths lie primarily in its diversity: agriculture with 40 percent of world production of natural rubber but also rice, sugarcane, and fruits, industry in automotive, food processing electronics, services, and tourism are highly developed.
The workforce is inexpensive, skilled, and above all diversified. also, the country's location in the heart of Asia makes it a gateway to Southeast Asia and the Greater Mekong Basin region, where new emerging markets have great economic potential. Government policy is generally in favor of investment and encourages free trade: there are, for example, no restrictions in the manufacturing sector or export conditions, just as there are many government agencies helping foreign and domestic investors.
Reasons Why You Should Consider Investing In Thailand
LOCATION: Situated in the heart of Asia, Thailand enjoys convenient and beneficial trading opportunities with India, China, and the members of the Association of Southeast Asian Nations. This helps Thailand expand its business ties, grow its economy and provide better investment chances to ex-pats.
WELCOMING THAI GOVERNMENT: Producing crops has been the primary source of livelihood in Thailand. It is only in the recent past that industries have developed and the government is welcoming foreigners to invest in the Thai economy. Through the Board of Investment, the government offers various tax incentive schemes to its investors.
INFRASTRUCTURE: A country like Thailand which has abundant natural resources, improved IT networks, skilled workforce, modern transportation and communication facilities provide the best business and living conditions and indeed attractive investment opportunities for foreigners.
FDI POLICIES: Foreign direct investment plays a major role in Thailand’s economic development and is beneficial for both the government and investors. Investments done in the fields of skill development, technology, and innovation enjoy active backing from the government and liberalization.
AFTA: Thailand is one of the founding members of the ASEAN group and a key developer of the ASEAN Free Trade Association which aims to reduce the import duties to zero. Thus, it is correctly said that Thailand promotes free and fair trade which is a great opportunity for foreign investors.
SAFE AND PROTECTED: Recognizing and respecting the international rules like the Paris Convention, The Patent Co-operation Treaty, etc; Thailand's government too, has worked towards protecting the global brands registered in its country. By providing such benefits to ex-pats and luring them to invest in different markets of Thailand, the country in the upcoming years will continue to hold a strong and stabilized position as an important investment destination in South East Asia.
Here is a selection of some of the best business opportunities in Thailand.
Shipping: Thailand is one of the main transportation hubs of Asia and the nation shares excellent transportation links with countries throughout the region via air, road, rail, and sea. There are lots of great options for establishing a successful shipping company in Thailand and the route that you choose to take will depend on your personal experience, connections, and preferences.
Real Estate Investment: The real estate sector in Thailand accounts for 6 percent of Thailand’s GDP and is significant for Thailand’s industry growth as it supports increasing levels of employment and income.
Buying and selling land is big business in Thailand and the cost of real estate throughout the country is constantly rising and can provide great business opportunities. Foreigners who wish to start a business and need to purchase a property or a piece of land often find that the process is rather long and complicated. For this reason, they often turn to a real estate agent, who will take care of the purchase for them for a fee.
People who are interested in establishing a real estate business in Thailand will find that there are plenty of great opportunities across all parts of the country and there’s lots of money to be made. The secret to success is hiring a competent Thai team who can liaise with Thai owners and help to make sure that every aspect of the sale goes smoothly.
Both Thai and foreign owners who wish to sell their real estate also often make use of a real estate agent to help find the buyer for them and in exchange for this service, they will pay a commission. This commission is usually ten percent of the asking price and in the case of large resorts and hotels that sell for millions of baht, the commissions can be extremely high.
The main task of the real estate agent is advertising properties to put them in the best possible light, meeting with potential buyers, and showing them the properties. People who have a strong background in sales and marketing combined with plenty of energy and the drive to make money are likely to find that they thrive in this type of business in Thailand.
Tourism: Thailand has one of the most developed tourism markets in Asia. The Land of Smiles is known for its hospitality, beautiful beaches, historical places and eco-attractions, its world-famous cuisine, good infrastructure, and affordable accommodation. The tourism industry is one of Thailand’s main economic sectors, accounting for 6 to 7 percent of its GDP.
Many tourists who travel to Thailand arrange package tours in their own country and in recent years that has been a surge of international companies opening branches in Thailand so that they can serve their customers on both sides of the world. While many Thai companies offer travel and tour services in Thailand, one of the main advantages for international companies is that they can offer services that cater to the unique needs of their international clients, including guided tours in their language of choice.
The number of visitors in Thailand is expected to increase in the coming years to more than 40 million by 2021. Most visitors will continue to come from the Asia Pacific region.
Jewelry production: Thailand is considered one of the world’s most prominent centers for gems and jewelry. The richness traces back to history as Thailand has abundant natural resources, especially ruby and sapphire found extensively in the nation. Experienced craftsman has been handing over their skills over generations to make this industry prosper.
At present many production facilities are located in tax-free zones such as Gemopolis, on the outskirts of Bangkok. Here, foreign companies benefit from strong infrastructure, easy procurable raw material, and a skilled workforce capable of highly efficient craftsmanship.
Silver and semi-precious stones are readily available in Thailand and the costs for these materials tend to be much cheaper than in many other countries around the world. There are lots of flourishing silver mines in the north of Thailand, while gemstones are typically mined in the west of the country, especially close to the Burmese border.
The relatively low cost of raw materials combined with the high demand for unique and attractive jewelry both among Thai people and Westerners makes establishing a jewelry company in Thailand an excellent opportunity. The nation boasts a large number of talented artisans who can create intricate pieces of jewelry both on a wholesale basis and according to the specifications of individual clients.
The Key Sectors of the Thailand Economy available for investment include Automotive, agriculture, rubber, seafood, rice, cane sugar, fruit, electronic components, computers, organic chemistry, and tourism.
High Potential Sectors: All sectors related to rail, road, airport, and electrical infrastructure are offering great business opportunities for foreign investors.
Thailand is a Southeast Asian country. It's known for tropical beaches, opulent royal palaces, ancient ruins, and ornate temples displaying figures of Buddha. In Bangkok, the capital, an ultramodern cityscape rises next to quiet canalside communities and the iconic temples of Wat Arun, Wat Pho, and the Emerald Buddha Temple. Nearby beach resorts include bustling Pattaya and fashionable Hua Hin.
Officially as the Kingdom of Thailand spans 513,120 square kilometers with a population of almost 70 million people. Thailand is bordered to the north by Myanmar and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and the west by the Andaman Sea and Myanmar. It also shares maritime borders with Vietnam in the Gulf of Thailand to the southeast, and Indonesia and India in the Andaman Sea to the southwest. Bangkok is the nation's capital and largest city. Nominally, Thailand is a constitutional monarchy and parliamentary democracy; however, in recent history, its government has experienced multiple coups and periods of military dictatorships.
In 2020, the value of foreign direct investment net inflows in Thailand contracted approximately a 4.8 billion U.S. dollar decrease. This was a significant reduction of the value from the previous years.
Foreign direct investment is an important element of Thailand's economic development, and the country is one of the major FDI destinations in its region. However, the global economic crisis triggered by the Covid 19 pandemic has affected the country's attractiveness. According to UNCTAD's World Investment Report 2021, FDI flows are FDI has fallen to 6 billion dollars down from 3 billion dollars in 2019, partly driven by the sale of Tesco to a group of Thai investors for USD 10 billion. The stock of FDI stood at USD 272 billion in 2020. Japan and Singapore are by far the largest investors in the country, accounting for just over half of FDI inflows. Hong Kong, the US, the Netherlands, China, and Mauritius are also among the top investors.
Manufacturing and financial and insurance activities attract almost 70 percent of all FDI inflows. Investments in real estate, trade and information, and communication are also substantial. On the other hand, outward FDI from Thailand has more than doubled to USD 17 billion in 2020 from USD 8 billion in 2019, mainly in financial services and manufacturing in neighboring countries. Thai companies have actively pursued cross-border M and A purchases, for example, Bangkok Bank acquired Bank Permata in Indonesia for 2.3 billion dollars.
Thailand is among the countries with the most reforms in business regulation over the past few years, which have facilitated the setting up processes and reduced the time to start a business from 29 days to 6 days.
The country has improved considerably its ranking in the World Bank's Doing Business, and it occupies the 21st position in the Doing Business 2020 ranking, gaining six positions from the previous year. The rights of borrowers and creditors have been strengthened as well as the system of land administration. The country has taken steps to clarify corporate governance, ownership, and control structures by enacting legislation requiring companies to appoint independent members of the board of directors and to establish an audit committee. Thailand continues to offer more incentives to invest in advanced technologies, innovative activities, and research and development through the Investment Promotion Act, and the Eastern Economic Corridor Act, which offer benefits to investors in this zone including tax subsidies, right to land ownership, issuing of visas, should provide further support to FDI flows in the upcoming years. The junta's continuing grip on power has reassured many foreign investors previously deterred by potential instability. Growing regional competition risks, however, risk diminishing Thailand's attractiveness as an investment destination.
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Conclusion
Thailand occupies the 21st position in the World Bank's Doing Business ranking. Tourism industry is one of Thailand's main economic sectors, accounting for 6 to 7 percent of its GDP. The nation boasts a large number of talented artisans who can create intricate pieces of jewelry.
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