Why Invest in Thailand?
Updated on Friday 07th August 2020
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The key to successful investment is knowing the business environment of a country. The main reasons why entrepreneurs find it profitable to invest in Thailand are exposed below by our company registration consultants:
1. Government incentives and support
The Thailand Board of Investments offers entrepreneurs plenty of tax incentives, support services and import duty exemptions or activity reductions which meet the objectives of the national development. Businesses that enjoy investment promotion privileges from the Board of Investment are not subjected to foreign equity constraints in certain industries and there are no local content conditions and no export conditions, as the investment system is in total compliance with World Trade Organization (WTO) regulations.
2. Centre of ASEAN
A key reason why one should invest in Thailand is because it is one of the founding members of ASEAN and played an important role in the formation and development of the ASEAN Free Trade Area (AFTA). AFTA was enforced in 2010 for the six original ASEAN members (Thailand, Singapore, Malaysia, Indonesia, Philippines and Brunei) having as main result the reduction of import duties to zero.
Thailand has been a promoter of free and fair trade, being chosen as a production location by leading international corporations because of different free trade agreements it offers. Our Thai company formation professionals can provide further information on this matter.
Thailand is located strategically, being a gateway to the center of Asia, which is another important reason why entrepreneurs choose to invest in Thailand. The country also confers profitable trade with China, India and the countries which are part of the Association of Southeast Asian Nations (ASEAN) and quick access to the sub-region of Greater Mekong, where newly developing markets offer high profit potential.
The country is conveniently located at the crossroads of Asia, with quick access to the dynamic markets of the area, as well as its own domestic consumer market of around 67.9 million inhabitants.
4. Rising economy of Thailand
The economy of Thailand is characterized by stable growth, robust exports and an exciting domestic consumer market. It takes advantage of rich natural resources and a qualified and cost-effective work force, which are also important reasons why one should invest in Thailand. In case you have decided to start a business in this country, our experts in company registration in Thailand can be of great help.
5. Thailand - a great country to live in
Thailand has won a strong reputation internationally for its welcoming culture. The friendliness of its people and vast Thai culture make guests feel at home and safe here. It has beautiful places and certainly low cost of living, making it an attractive destination for investors from all over the world.
If you want to invest in other great countries, such as Luxembourg, we can put you in touch with our local partners who offer company formation and legal services.
Most Attractive Investment Industries in Thailand
Thailand is the most economically significant country in the continental Southeast Asia and, because of its location, serves as center for the region, sharing its borders with several emerging and border markets. Actually, besides the much greater China, businesses in Thailand have the largest amount of foreign entrepreneurs in some of the area’s most dynamic economies like Myanmar, Cambodia and Laos. Because of the close location near these emerging nations, the future looks bright for Thailand and its investors. Here are the most attractive investment industries in Thailand presented by our experts in company registration in Thailand.
Automotive industry in Thailand
The world is barely aware that Thailand is a developing center for manufacturing well known car brands as Toyota, Mazda, Honda, Ford and Nissan. Businessmen who want to invest in Thailand should know that the automotive production is so big that out of the 2.45 million cars it produced in 2012, almost 50% were exported, making it one of the most attractive investment industries in Thailand. These numbers place Thailand on the seventh place in the world for exporting vehicles.
Its ability to yield vehicles by the bulk is a focused effort made by the government, by its generous investor enticements of its Board of Investments (BOI) and the wealthy local suppliers who are thought to be a haven by vehicle assemblers. One of the most attractive enticements initiated by the BOI is the lower corporate tax rate of 20%, a significant difference from Indonesia, Vietnam and Malaysia. Additionally, market research shows that the localization rate of Thailand is set at 80%, the highest in the entire Southeast Asia when it comes to the capacity of sourcing locally.
Production of jewelry and gem in Thailand
It is the second most attractive investment industry in Thailand. The country shows that cheap labor is not all the time the key for successful manufacturing. The jewelry producers and exporters of Thailand might not have the cheapest salaries in the region, however it still has a significant jewelry export business, with exports valued at USD 1.23 trillion in 2011. If you want to invest in Thailand in this business sector, our company registration consultants are ready to assist you.
Other profitable industries in Thailand
Besides the above mentioned most attractive investment industries in Thailand, the Thai government has highlighted five other sectors which are crucial for the development of the country. These are agriculture and agro-industry, alternative energy, electronics and information and communication technologies, fashion, and value-added services consisting of entertainment, healthcare and tourism. Our company formation professionals in Thailand can provide more details on these sectors.
Being one of the founding members of the ASEAN (the Association of Southeast Asian Nations), Thailand has proven over time it has the ability to get back up on its feet and these strong facts indicate there is no reason why it should not continue its economic growth in the future as well.
Investors who open a company in one of these industries should also choose trademark registration in Thailand to help distinguish their business.
Legislation for Foreign Investments in Thailand
Foreign investment plays an important role in Thailand’s economy, with the Board of Investment (BOI) granting certain incentives and tax reductions for foreign entrepreneurs in the country. The legislation for foreign investments in Thailand is generally represented by The Foreign Business Act, the Alien Employment Act and the Investment Promotion Act. Other issues related to foreign investments in Thailand are regulated by other different rules and regulations, like for example the immigration law, the import and export regulations and others. Our company formation agents in Thailand can offer the relevant details on the foreign investment legislation in the country.
Foreign direct investments in Thailand
Thailand is a significant foreign direct investment (FDI) center. It confers an attractive and contemporary legal framework and its economy is dynamic in all its regions. According to the World Investment Report 2015 of the UNCTAD (United Nations Conference on Trade and Development), Thailand has an FDI of USD 12.6 billion, ranking the 5th largest FDI receivers in East and Southeast Asia. In the second half of 2014, the number of FDI projects increased with 73%, with an increase of 117% in value, compared to the previous year, following the establishment of political stability and in expectancy of the new investment policy.
This year, the new seven-year strategy for investment stimulation is projected to increase even more the FDI in Thailand.
Advantages offered by the BOI of Thailand
The BOI of Thailand sets certain incentives in six industries for foreign investments, which consist of:
• Eight years of tax exemptions for businesses;
• 50% reduction on taxes for businesses for five years;
• Deductions on double transport, electricity (which can be a quite expensive commodity in Thailand) and re-supply;
• 25% deductions on net profits for establishment and construction expenses.
These six industries which receive the above mentioned incentives are:
• Food and agriculture;
• Electronics, information and communication technologies;
• High added value services, such as leisure, tourism and health.
• Renewable and alternative energies;
If you are interested in setting up a company in Thailand, we can help. Please contact us.