Thailand is one of the few economies in the world quickly recovering from the harsh effect of COVID-19 on the international markets. The purpose of this article is to introduce you to the current scenario of the Thai market. To start a business in Thailand, we recommend you to read through this article for more clarity on the Thai Market.
Which Business in Thailand can survive fall during the COVID period?
Last year witnessed a great disruption in the leading industries of Thailand. Top contributors to the national GDP like agriculture, manufacturing and tourism were struck by economical retardation. But amidst all adversities, few secondary and tertiary sectors started to recover too fast which resulted in the overall recovery of the economy.
It is a fact that every crisis gives a chance, but it is not applicable for all types of business. Research and analysis stated that the following business can survive the strike of COVID in Thailand-
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Communication Business:
Even if people are locked down inside their home, they can never restrict their communication with their acquaintances. The communication can be over the phone or the internet. This makes the communication service providers carry on their business even at the peak of the COVID period.
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Retail Business:
As the communication business is continuing to provide its services, online ordering and purchase activities will surely increase. And people need their daily need items like food and household items to stay alive. Hence, the retail business, although mostly in online mode, will have the least effect during COVID.
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Food and Beverage Business:
Many times sandwiched with the retail industry, the food and beverage industry is most likely to be least affected. This falls in the category of the business which covers the most basic need of people. Therefore, the food and beverage business is expected to suffer the least during COVID times.
Now you might wonder as to why we are talking about businesses that are affected least due to COVID. The basic reason is that the Post-COVID era is gone as the entire globe is now witnessing the second wave of the pandemic. Hence, if you are planning for a business in Thailand now, you must have a clear idea of the businesses which survived the first wave.
The Impact Level of Businesses in Thailand Due to COVID
Now as we know that the above businesses are least or not affected due to COVID in Thailand, we should also know about the other businesses. Therefore, for this reason, we have categorized the leading business categories according to their exposure to COVID impact.
Low Exposure:
- Telecommunication
- Retail or Grocery
- Food and Beverages
Moderate Exposure:
- Petrochemicals
- Maritime Shipping
- Cargo Transportation
- Construction and Building Materials
- Electric Train
- Consumer Electronics and Appliances
High Exposure:
- HoReCa (Hotel, Restaurants and Cafe)
- Airlines
- Industrial Estates
- Steel
- Oil
- Non-Grocery Wholesale and Retail
- Automobile
The industries not mentioned in the above list are out of the scope of our study. It is due to drastic failure or bad performance during COVID.
BOI Announcements to Facilitate Business in Thailand
Like the rest of the world, Thailand is striving hard to fight back the adverse effects on the economy due to the first wave of COVID-19. During the natural pace, when the world had not faced the COVID crisis, Thailand always shows welcoming gestures to international investors. To continue with the same, the Board of Investment has announced various new policies promoting Foreign Direct Investment.
Inviting Foreign Business to BCG Economy Model in Thailand
The Bio-Circular-Green or BCG Economy Model of Thailand focuses on the following four industries:
- Agriculture and Farming
- Medicine and Clinical Systems
- Biotechnology, Biopetroleum and Biochemistry
- Tourism and Creative Economy
Any and all foreign businesses falling in the above four categorizations are eligible for special tax and non-tax privileges. The BOI has made the process of getting into Thailand to explore and invest in the BCG Economy model easier for foreign investors. Owing to this investor-friendly attitude, BOI has received 1717 applications from foreign investors in 2020.
Restructuring the Taxation Policies for Foreign Business in Thailand
Understanding the global crisis situation and the economic hardships companies are facing now, BOI Thailand has restructured the tax audit and payment process. The board has restructured the taxation policies in the following way:
- BOI has extended the tax filing deadlines by a significant amount of time.
- The extension is applicable for Personal Income Tax, Corporate Income Tax, VAT, and, Special Business Tax.
- Stamp duty exemptions for debtors and creditors for income arising from the sale, operation, or arranging of a debt restructuring instrument.
- The transfer fee for the transfer of immovable property in connection with debt restructuring is reduced from 2% to 0.01%.
SDG Initiative for Foreign Business in Thailand
Among the many diverse business prospects available in Thailand, the Royal Thai Government is paying attention to the Sustainable Development Goals (SDG). Financial services, food and beverage, consumer goods, environment, healthcare, transportation, electricity, and natural resources are all sustainable verticals in the relevant industry.
Thailand’s foreign business laws have undergone numerous changes and amendments in order to improve FDI factors. Starting a company in Thailand is now easier due to Royal Thai Government’s declaration of the following successful norms and regulations:
- The business setting-up process is now taking 6 days, which was initially a mandate for 29 days.
- It is offering more incentives on investment in technologies, innovative approaches and initiatives including research and development.
- The Investment Promotion Act and the Eastern Economic Corridor Act is providing benefits to investors in form of tax subsidies, the right to land ownership along with the issuance of visas.
- The regulatory bodies have strengthened the borrowing and crediting facilities and the system of land administration.
- Shareholder’s Power Index has risen to 8.0 assuring a higher level of investor protection.
Your Take!
So, this can be a very encouraging piece of information for you. It helps you to know that Thailand is in the process of reducing the quarantine period after any foreigner immigrates or visits the nation. They are in the process of issuance and acceptance of COVID Passports. Therefore, the government is not only inviting new foreign investments but also facilitating the sustenance of the existing ones.
The second wave of COVID 19 is on the verge of disrupting the business and trade harmony, but this may not affect the Thai market substantially. Therefore, if you are in the mood to invest in a business in Thailand, take this article to be your guide in selecting the correct industry for the same. For all types of legal and company formation guidance, shoot us a mail at [email protected]
