Are you willing to invest in Thailand?
That is undoubtedly a brilliant idea. But you should research thoroughly before doing so. It is because the COVID-19 outbreak has brought in a change in tides in the Thai Market.
It is true that the Thai GDP is witnessing a fast-paced recovery. But still, you must go through a deep analysis of the industry you are willing to invest in Thailand. However, this article can help you ascertaining and supporting your business decision with facts.
COVID-19 outbreak has been catastrophic for economies of all scale throughout the world. Thailand too is not an exception and some major industries did face business setbacks.
But surprisingly, many secondary and tertiary sectors came to the forefront to hold the nations GDP and prevented it from a crash.
Post COVID-19 Agriculture Industry to Invest in Thailand
According to the reports of World Bank, 2020, the Thai Agriculture and Farming sector contributed 8% of the GDP of the nation. It is noteworthy that, the same segment employed 31.2% of the active working population of the nation. But surprisingly, the contribution of the agriculture sector to the GDP is declining.
The country is the largest producer of natural rubber in the world. It is also one of the leading producers and exporters of rice. It also possesses sugar, corn, jute, cotton and tobacco among its major crops. Fisheries are one of the most vital trade entities of Thailand and this makes it one of the major exporters of farmed shrimp.
Post COVID-19 Manufacturing Industry to Invest in Thailand
The manufacturing sector is well-diversified and accounts for 33.4 per cent of Thai GDP. In 2020, it recruited 22.5 per cent of the working population (World Bank, 2020).
Electronics, steel, and automobiles are also emerging as Thailand’s main industries. Thailand is a major manufacturing centre for foreign automakers. Electrical components and appliances, computers, cement manufacturing, furniture, and plastic goods are all relevant industries.
The textile industry employs less than a quarter of the working population. But it is no longer as vibrant as tourism. For this reason, it has replaced agriculture as the primary source of foreign currency.
Tertiary Sectors to Invest in Thailand
World Bank credits the contribution of the tertiary sectors of the Thai economy in the GDP growth process. Firstly, this sector has contributed to 58.6% of the GDP. And secondly, it has employed 46.3% of the active population of Thailand.
Tourism is always one of the vital industries of strategic importance for Thailand. According to a report presented by the Ministry of Tourism, Thailand, the numbers of foreign visitors in 2019 increased by 3.3%.
The country welcomed 35.8 million foreign visitors in the year. Out of it, nearly 28.8% of the total visitors are from China. Thailand is gradually growing as one of the top 10 preferred international travel destinations of the world.
The Severe COVID-19 Effect
In 2020, the COVID-19 pandemic had a major effect on the global economy. According to International Monetary Fund (IMF), global economic activity contracted by 4.9 per cent in 2020.
On the other hand, World Economic Outlook (WEO) has reported that a 1.9 percentage drop is recorded only in April 2020. Both IMF and WEO supports the point that these records are worse than the global financial crisis.
The pandemic’s effect appears to have hit both sides of most industries and markets in Thailand. It has resulted in a collision of demand disturbances with supply issues. Therefore, this leaves a short-term outlook for agriculture, manufacturing, and services unclear.
Final Words
Therefore, by now, it must be clear that many leading industries of Thailand suffered a setback due to the COVID-19 pandemic, whereas, few over performed to fulfil the vacuum. To recover from the losses and boost the economic conditions, BOI Thailand is focusing greatly on Bio-Circular-Green or BCG Economy model. The BOI has announced various reductions and tax exemptions for the target industries of the BCG Model and Agriculture are one of them.
The BCG Model of Thailand not only promotes Agriculture, it is having 3 more industries on focus. They are Medicine and Clinical Facilities; Biotechnology, Bio-petroleum and Biochemicals; and, Tourism and Creative Economy. Thus, the nation has widened the scope of investment for foreigners and has planned well to attract Foreign Direct Investment.
If you are having any idea or business to invest in Thailand, feel free to communicate with us for a brief round of discussion. We assure you best and perfect legal guidance and support in registering your company in Thailand and help you with the accounting and taxation process thereafter and throughout. Feel free to request a brief and free consultation at [email protected].
