The Thailand Board of Investment (BOI) Secretary General is advising investors to concentrate on increasing competitiveness and quality through automation and human resource development. They can do so by taking advantage of the main promotion initiatives open to them, in order to prepare for the anticipated economic recovery and creating investment opportunities in 2021.
“We are now focusing not only on attracting new investment projects, but given the economic situation, we believe it is also necessary to make existing ones more efficient, to have a higher level of productivity, which is a critical issue for Thailand to move forward,” Ms Duangjai Asawachintachit, Secretary General of the BOI, said during a Webinar titled “Support Measures for Economic Recovery,” which was co-hosted by the Joint Foreign Chamber of Commerce in Thailand (JFCCT).
Thailand’s Finance Ministry expects an 8.1 percent decline in GDP in 2020, with a steady recovery starting in the third quarter that could lead to a turnaround in 2021. The third quarter also witnessed a significant rise in the exports which counter balanced the deficit nicely. It is a new call of creating new investment opportunities in 2021 in Thailand in the Manufacturing Industry.
“Looking ahead, I believe we should expect the economy to steadily improve in the second half of this year,” said Pisit Puapan, Director of the Thai Finance Ministry’s Macroeconomic Policy Bureau. The Thai economy is expected to recover in 2021, with an optimistic growth rate of 4-5 percent, according to Pisit. This option of creating new investment opportunities in 2021 for foreigners can help in this recovery process.
After the outbreak of COVID-19 earlier this year, the BOI has been swift to implement steps to ease current operations, such as extending deadlines and providing incentives for increased production, as well as measures to encourage new foreign direct investment (FDI) in sectors with high potential in the post-COVID world. Additional tax incentives, as well as non-tax incentives, have been offered by the BOI to sectors that have become more relevant as a result of the health crisis, such as medical equipment and food security programmes, creating new investment opportunities in 2021 in Thailand.
“I believe the COVID-19 crisis has reaffirmed the need for us to move forward with more automation and robotics, so we are urging businesses to invest in automation to become more effective or to manufacture quality goods at lower costs,” Ms Duangjai said. “As a result, we are now giving tax incentives to firms who plan to invest in new equipment or replace old machinery in order to save resources, consume less energy, or reduce their environmental impact.”
Another important field for promotion is human resource development and advancement, with a focus on both new and ongoing programmes. “By incentivizing businesses to invest more on recruitment, we are motivating them to do so,” Duangjai said. “As a result, businesses will benefit from a higher corporate income tax deduction if they invest in manpower development.”
The danger of burgeoning unemployment in the coming months or years is significant, while the severity of the economic effects was no longer felt in the second quarter of 2020 as a result of the lock-downs in April-May in reaction to the COVID-19 pandemic, and the threat of burgeoning unemployment in the coming months or years is real.
However, even if GDP growth picks up in 2021, Thailand’s economy, which is highly dependent on exports and international tourism, should brace for a “new standard” post-COVID, according to Charl Kengchon, Executive Chairman of the Kasikorn Research Center and a representative of the Thai Bankers Association at the Webinar.
We believe Thailand will be thrust into an entirely different world. Deglobalization has already occurred, according to Charl. “Pandemic and fear of pandemic after COVID will not improve global trade because gradually more governments will realize that public health is in reality a kind of national security problem, and they will impose safeguards on health care, and there will be non-tariff barriers as a result,” he added.
One clear barrier to attracting FDI during COVID’s tenure has been the difficulties prospective investors have in accessing the country and, if they do, being obliged to stay in quarantine for 14 days. Ms Duangjai stated that the BOI is currently collaborating with other Thai government agencies as well as a select group of countries to identify solutions that will enable business travel to Thailand to resume.
All the statements made by the authorities of top repute from premium organizations and bodies of Thailand indicates towards a speedy and effective recovery of Thai economy from the retardation it faced due to the COVID-19 distress. This makes the Thai market a very appropriate investment avenue and most eligible of creating a multitude of avenues for investment opportunities in 2021. If you are having any plan or business ready to be implemented on the Thai economy, feel free to communicate with us for best legal solutions and guidelines.
