Thailand offers lucid prospects for foreign investors owing to its rapidly developing economy. With a fast-rising population and exports, the country is experiencing healthy growth. With a boost of state investment, foreign demand, and local consumption, it records a significant GDP growth. Thailand’s economy is also the second-largest in Southeast Asia, after Indonesia, in terms of GDP. Therefore, it is worthy to state that there exists great investment opportunities in Thailand for foreigners.
The country has a versatile workforce, liberal economic policies, and a strategic location as an entrance gateway. It enables access to the broader Mekong region, making it one of the greatest possibilities for investment. Thailand offers a professional and sophisticated legislative framework for foreign investment, as well as government financial aid. The country is presently one of the most appealing destinations in the ASEAN Region. However, all this is possible due to new and investor-friendly business regulations and political stability.
Is it good to invest in Thailand Post-COVID?
According to research by the Global COVID-19 Index, Thailand recently stood second in the world, after Australia. The nation is first in Asia, among countries with the greatest COVID-19 recovery rate (GCI). This was only achievable because of the nation’s collective discipline and endurance.
The second part of the year will witness growth in many industries, assuming COVID-19 is already under control and recovering from the initial stagnation. However, with fresh incentives on the horizon from the Thai government, the country will comeback as early as the first quarter of 2022. This will initiate new businesses flooding in and Thailand beginning to recover.
What makes Thailand best for Investment?
In the Southeast Asian region, Thailand is currently a popular destination for foreign investment. The government’s proactive policies are forward-thinking and inventive, actively encouraging socioeconomic advancement and development. The Thai government vigorously encourages international investment in both the financial and local manufacturing sectors, and its open-door policies have welcomed foreign organizations and corporations in recent years.
The Thai government’s business-friendly policies are now providing several incentives to attract foreign companies. Tax exemptions and large concessions to import tariff exemptions, as well as authorization to own land, are examples of such incentives. Foreigners can still own land, but it is a complicated process.
Best Sectors to Invest in Thailand
Foreign investors are encouraged towards investment opportunities in Thailand to maintain economic growth under the new rules. The new framework includes a mix of merit and non-tax incentives, as well as the removal of zoning restrictions that apply to foreign investors and other perks. The implementation of these new investment policies will have a positive impact on foreigners’ investment decisions. All of these new rules are aimed at encouraging investment and reorganizing Thailand’s economy. Foreigners are expected to churn out of these investment opportunities in Thailand as a result of the investment policy.
Opening a business in Thailand is the ideal method to get professional respect and experience the Kingdom’s high-end business lifestyle. Rice, lumber, and precious and semi-precious stones are among Thailand’s enormous agricultural and natural resources. Manufacturing, jewelry, textiles, and processed foods are some of the fastest-growing business categories that contribute significantly to GDP.
Investment in Property
The majority of foreigners who visit Thailand and stay for a period of time acquire an interest in owning a property, whether it is a condominium, an apartment, or a landed house. Furthermore, because homeownership is prevalent in these nations, foreigners from the United States, the United Kingdom, and Europe are interested in purchasing a landed home in Thailand. As a result, investing in property markets or real estate is thought to be a good choice. There are numerous reasons to invest in Thai real estate:
- In comparison to most other nations, property prices are relatively attractive, and property owners can expect larger rental incomes.
- There are no taxes on property or inheritance. Furthermore, there are no confiscatory taxes on assets in the country.
- An investor can expect a minimum return on investment of 6% to 8%, as well as annual capital appreciation of 5% to 10%.
- The process of purchasing a home in Thailand is simple and hassle-free.
Foreign citizens are not allowed to buy land in the country. However, they are allowed to possess a freehold apartment. A foreign national may also invest in a leasehold property, which normally has a 30-year term and is renewable.
Investment Opportunity in Thailand Financial Market
Thailand’s stock market has done relatively well during the last decade. Thailand is currently a major export center, with strong growth and changing market conditions.
Blue Chip Thai stocks have a good track record of stability and development. The infrastructure, healthcare, and industrial sectors account for the majority of the good SET (Stock Exchange of Thailand) recommendations. Because of their historically below-average performance, Thai stocks and bonds have been good investment opportunities. This theory is based on the fact that Thai stocks and bonds have significant growth potential.
Investment Opportunity in Thailand in Electronics Industry
Thailand has produced 40% of the world’s hard disc drives over the last 20 years, and it is still the world’s second-largest exporter of air conditioners and washing machines. Integrated circuits, broadcasting equipment, telephones, computers, and a variety of other electrical appliances and equipment are among the other important export items. Around 70% of this sector’s output is destined for export. In this industry, there are roughly 400 manufacturers. Seagate, Panasonic, Mitsubishi, Samsung, Sony, Toshiba, and LG are among the notable brands.
Volume growth of 3-5 percent per year is predicted, with this increase based on both expanding domestic and foreign demand.
Investment in Automotive Industry
Thailand has been among the top ten vehicle producers in the world since the mid-1990s. Thailand is the world’s second-largest producer of light commercial vehicles (after the USA). The automobile industry employs over 500,000 people and provides nearly 12% of Thailand’s economic growth. Thailand manufactured approximately 2 million units in 2019, with over 80% of all parts made in the country. The kingdom is home to major manufacturing plants for all major vehicle companies. These companies are from from Japan, US, Europe, and India, including Toyota, Isuzu, Honda, Mercedes, Mitsubishi, Nissan, BMW, and Ford.
Thailand aspires to be one of the world’s leading countries in the electric vehicle (EV) manufacturing industry, as well as one of the world’s top automotive manufacturing centers. The majority of the big companies are already producing hybrid vehicles here and aim to do so with fully electric vehicles as well.
Production can increase by up to 2% YoY in 2020-2022. Some of those who purchased automobiles under the popular First Car Buyer Scheme ten years ago (with significant tax benefits) are likely to replace them, adding 300,000 to 400,000 units to demand (over the normal 1 million cars bought domestically). The yearly export volume is likely to remain around 1 million automobiles. The planned Thai EV regulation, as well as the generous investment incentives, will spur fresh investment in the lithium-ion battery life cycle and EV R&D.
Impact of Thailand 4.0
Thailand is strongly supporting new investments in the following areas as part of the Thailand 4.0 – Innovation-driven economy:
- Next-generation automotive
- Robotics and automation
- Smart electronics
- Advanced agriculture and biotechnology
- Biofuels and biochemical
- Aviation and logistics
Currently, there is transformation of Thai government operations into digital platforms. They are Single Window for Visa and Work Permit, e-Government, and living solutions, mostly to satisfy the consumer side of demand. No wonder Thailand climbed to 21st place out of over 190 nations evaluated in the World Bank’s annual “Ease of Doing Business” rankings, with plans to climb further in the years ahead.
Thailand is now World’s New Medical Destination
Thailand’s economy is led by a thriving, dynamic medical industry that is well-known both in Southeast Asia and internationally. Medical gadgets, academic research, medicines, and implants are among the rising areas, in addition to leading medical tourism. Entrepreneurs and investors looking for large-scale growth prospects in the medical profession can find plenty of options in the country’s medical business sector.
Thailand has a large healthcare sector in comparison to its neighbors and worldwide leaders, which is a strategic focus for the Thai government. With 14 percent of the government’s budget is for healthcare. For this reason, the country leads the ASEAN Region in terms of public healthcare spending. Despite the fact that western countries surpass all other countries in the region Thailand leads the Asian countries in terms of healthcare commitment.
The medical and biotechnology industries are BOI’s top priority, with large incentives available to encourage commercial partnerships and foreign investment. Biotechnology R&D and particular medical devices can have exclusion for up to 8 years from the corporate income tax bucket. Whereas, other medical devices could be exempt for 3-5 years. Furthermore, companies working in the medical or biotechnology industries are exempt from paying tariffs of components and raw materials on import.
Aside from the BOI promotion, the Thai government has a number of active programmes aiming to stimulate the development of novel drugs, equipment, and a variety of medical products and services. The NSTDA facilitates communication between Thai research institutes and the private sector. Thailand Science Park and the Thailand Centre of Excellence for Life Sciences were set up by the Thai government to promote research and development. The Thai National Innovation Agency provides interest-free financing to start-ups and supports up to 90% of research and development expenses for Thai enterprises.
The Bottomline
Most people never try to register a Thai company on their own because of the rules and paperwork involved. All government documents are in Thai script. Therefore, there is requirement of translations for many aspects of this process. Moreover, it is crucial for processes requiring completion of prior phases before implementation. If you aren’t familiar with it, it might be very difficult to comprehend.
Fortunately, hiring a Thailand market entrance expert isn’t incredibly expensive. They can assist you in getting everything legally and effortlessly registered. However, they can serve as your own ‘in-country’ assistance. They can connect you with the proper individuals and help you set up everything you need for your business.
Mail us at [email protected] for assistance in a startup or business registration in Thailand. Without thoroughly assessing your current programmes and operational demands, you will not be able to reach your startup goals. We understand the areas that need examination as well as those that have shown to be effective using proven methodologies. This allows us to design a plan of action that incorporates best practices from a variety of clients and industries.
