Thailand’s Eastern Economic Corridor (EEC) is arguably the most ambitious connectivity project in mainland Southeast Asia. Also, the region has the potential to connect the Asia Pacific region with the Indian Ocean Rim and beyond. Apart from the strategic location, the region has many more benefits for the incorporation and continuity of a business. Due to these reasons, this region is gradually becoming a hub of business in Thailand for foreigners. This article broadly explains you the reasons.
From the Eastern Seaboard to the Eastern Economic Corridor
Thailand’s strategic location in the heart of mainland Southeast Asia has long aided its economic development. The Thai government launched the “Eastern Seaboard” project in the 1980s. This was to accelerate national economic development and promote industry, manufacturing, and export growth.
Thailand has long benefited from its strategic location at the heart of mainland Southeast Asia to drive its economic development. The “Eastern Seaboard” project of the Thai Government is contributing national economic development greatly since the 1980s. Additionally, it is promoting the growth of industry, manufacturing, and exports. The Eastern Seaboard went on to become one of the region’s resounding success stories. As a result, there was increase in foreign investments in the automotive industry, manufacturing, petrochemical and heavy industries. There was also increase in logistics and shipping at Laem Chabang. Between the 1990s-2000s, Thailand’s exports grew from USD 30 billion to 70 billion. This boost was mainly for Southeast Asia, Japan, Europe and the US.
Development of the EEC Region for Business in Thailand for Foreigners
There was a dramatic shift in the global economic landscape at the start of the 21st century. Led by the rapid rise of China and India, the mainland Southeast Asia became an investment destination. To capitalize on this reality, the Thai government established the EEC. This phenomena was on the success of the Eastern Seaboard. EEC has the goal of creating a next-generation “growth area” to realize the “Thailand 4.0” strategy. This strategy aims to promote sustainable economic growth. This growth-plan is on the basis of the “New S-Curve” industries, which include research, innovation, and the digital economy.
The three main activities of the EEC project are as follows:
- There is an upgrade in Thailand’s transportation and logistics infrastructure. This is to provide a solid connectivity platform that connects the EEC region to markets across Asia, the Indian Ocean Rim, and beyond.
- Creating investment focus areas in the “New S-Curve” industries, such as “EECi” for innovation and “EECd” for digital economy. EEC Office has the goal to facilitate investments and provide incentives in addition to those of the Board of Investment.
- To improve quality of life, areas for sustainable economic and social development are being created through the use of new and environmentally friendly technologies.
A number of major global firms have established and expanded operations in the EEC area. Additionally, they can take advantage of the new incentives provided by the EEC Act. Normally, these incentives range from new land ownership rules to generous tax and non-tax incentives. Already, there is a USD 53 billion worth investment promotion applications since EEC’s inception in 2016.
Infrastructure Upgrades for New Industries
The three “flagship” infrastructure mega-projects are the highlight of EEC plans to upgrade transportation and logistics infrastructure:
- Bangkok’s international airports of Don Mueang and Suvarnabhumi will connect to the emerging aerospace hub of U-Tapao International Airport by high-speed rail. A consortium of Thai, Chinese, and Japanese contractors will soon begin construction. When completed in 2025, it will connect Bangkok to the future “Aerotropolis” at U-Tapao in a seamless manner.
- There will be utilization of an automated system and advanced full-scale services. This will be for Phase 3 Upgrade of the Laem Cha Bang deep sea port. The purpose of this upgrade is to handle cargo capacity of 18.1 million TEU per year.
- Developing U-Tapao International Airport and its “Aerotropolis,” a business incubator for aerospace and aviation-related businesses. The Thai government is in talks with major international aerospace companies about developing aircraft maintenance and related facilities.
The EEC’s vision of becoming an ASEAN technological, manufacturing, and service hub. It also intends to build up strong connectivity to its neighbors, the ASEAN region, and beyond. This intention is being realized through a USD 650 billion public-private partnership.
Smart Cities and Smart Industries
The EEC aims to bring innovation to improve the quality of life in the region through “7 Smarts” solutions:
a. Smart Mobility,
b. Smart People,
c. Smart Living,
d. Smart Economy,
e. Smart Governance,
f. Smart Energy, and,
g. Smart Environment.
The overall goal is to create a “Livable Smart City” for residents and investors. This is where there will be technological integration, low carbon emissions, a circular economy. Additionally, there will be access to high-quality public healthcare and education. This will not only foster innovation but also promote sustainable living.
EECi and EECd for Smart Living and Business in Thailand for Foreigners
With the establishment of a world-class international research institution – KVIS – the EEC’s plans to create a hub for innovation (EECi) are already taking shape in Wang Chan Valley. The Valley is expected to be at the center of the region’s smart living environment development.
After Thailand’s 5G spectrum auction was completed in February 2020, the Digital Park Thailand (EECd) is also moving forward.
This will lead the country’s adoption of 5G technology, with Thailand aiming to be the first ASEAN country to do so. It will also support the country’s digital technology development while attracting digital businesses, particularly e-commerce and related logistics services.
Biomedicine is one of the most important areas for future development, as it will complement Thailand’s strong public health system, which is ranked 6th in the 2019 World Health Care Index. Through the new ambitious venture “Genomics Thailand” genome sequencing center, the EEC is expected to further develop research and development capabilities in genomic science, advancing Thailand’s role as the region’s medical hub.
With over 2 million skilled workers already in the EEC, the Thai government aims to improve the productivity of its workforce in order to prepare for the Fourth Industrial Revolution (4IR) by promoting collaboration with international partners such as Carnegie Mellon University (USA), Les Roches Institute (Switzerland), Pearson Education (UK), and Kosen College (Japan) to develop international-standard curriculum to reskill and upskill laborers to meet industry needs.
South East Asia’s and Foreign Investors’ New Growth Engine
In the coming decades, the Asia Pacific region, particularly Southeast Asia, is expected to continue to grow. It is well suited to take advantage of new opportunities arising from the growth of the digital economy and e-commerce because it is one of the world’s most connected regions. Thailand’s EEC project aims to become Southeast Asia’s hub for future growth industries, while also providing an environment that encourages innovation and the production of new products. With plans for new infrastructure and new incentives to encourage further investment, the EEC will be the most appealing area for those looking to invest and do business in the future.
Therefore, now is a good time to start business in Thailand for Foreigners. As a foreigner, you will need local legal and accounting help in the process of starting your company in Thailand. Let us know your requirement through a free round of consultation with our specialists. You may also email us your concern at [email protected].
