THAILAND, with its population of 66 million, stands at the heart of the ASEAN Economic Community, a 10-nation Southeast Asian common market of 671.7 million consumers. It has the 2nd largest economy in Southeast Asia. The IMF data shows that Thailand's GDP per capita, based on purchasing power parity (PPP), was estimated to be US$23,708 in 2024. In addition to its excellent connections with the fast-growing neighboring CLMV (Cambodia, Laos, Myanmar and Vietnam) countries, the powerhouse economies of nearby China and India are also easily reachable from Thailand by virtue of its world-class infrastructure for air, land, sea and rail transportation. It also boasts excellent digital connectivity, a highly skilled labor force and an excellent standard of living, making Thailand an outstanding value when considering its overall cost effectiveness. These factors, together with the Thai government’s comprehensive policies and investment incentives, make Thailand the preferred investment location in the region.
TRADE SPOTLIGHT
Thailand stands as one of the foremost export hubs within the ASEAN region, boasting a prominent position as the world’s primary source of food and agricultural commodities, including rice and natural rubber. As per the Commerce Ministry's data, despite a marginal decrease of -1.0% in 2023, Thai exports remained formidable, amounting to US$284.6 billion, while imports experienced a -3.7% downturn, totaling US$289.8 billion. Thailand's top 5 export categories in 2023 were motor cars, parts and accessories, automatic data processing machine, precious stones and jewelry, rubber products, and refine fuels. Thailand's top 10 major trading partners in order from largest to smallest comprised the USA, China, Japan, Australia, Malaysia, Vietnam, Hong Kong, Singapore, India, and Indonesia.
LOCATION & MARKET ACCESS
Thailand is well-connected to the fast-growing CLMV sub-region by excellent transportation infrastructure, including rail, road, water and airways. Businesses based in Thailand have access to a domestic market of 66 million people, with 52 million middle class consumers. Additionally, the CLMV region includes 175.28 million consumers located within 1,000 kilometers, ASEAN provides 671.7 million consumers all within 3,000 kilometers, while all of Asia within 5,000 kilometers includes 4.77 billion consumers. Ongoing national investment in and rapid development of Thailand’s logistics systems are helping to integrate the country’s transportation system with those of other emerging economies. This brings vast opportunities for cross-border trade and investment, making Thailand an ideal investment destination.
Thailand offers the rewards of almost tariff-free trade with 18 different nations, including major global economies such as Australia, China, New Zealand and South Korea, as well as the ASEAN community. Thailand has signed 14 FTAs. In 2021, Thailand has ratified the Regional Comprehensive Economic Partnership (RCEP) agreement which officially enters into force on January 1st, 2022 and covers nearly one third of the world economy and population.
DIGITAL INFRASTRUCTURE
The government of Thailand has been emphasizing its digital development for a number of years through its focus on the Thailand 4.0 economic model, which seeks to move the country past previous economic development models which focused on agriculture (1.0), light industry (2.0) and advanced industry (3.0). It seeks to transform Thailand into a “value-based” digital economy. The four main objectives of Thailand 4.0 are economic prosperity, social well-being, raising human values and protecting the environment. In the case of digital infrastructure, this has translated into major advances in technology, particularly in support of smartphones and broadband connectivity. Thailand has invested Baht 15 billion to launch a country-wide village broadband network to provide affordable high-speed internet to over 25,000 villages across Thailand.
Another major development project is the Digital Park Thailand, which is located on 284 acres in Chonburi province, on the country's eastern seaboard coast. The park supports economic development by facilitating access to the submarine cable system, landing station and data center. Additionally, the National Science and Technology Development Agency (NSTDA) has established the Software Park Thailand in Nonthaburi to support and strengthen Thailand's software entrepreneurs competitiveness by promoting technology transfers, providing courses for the training of IT professionals, supporting local and international collaborations, and providing office facilities and rooms for conferences, meeting and training for software companies.
Moreover, enhanced incentives from the Thailand Board of Investment (BOI) have been established to encourage more investment in research and development (R&D) and engage the industry more actively in human resource development (HRD), and to attract additional investments in the growing semiconductor and digital industries.
THE EASTERN ECONOMIC CORRIDOR (EEC)
Building on the success of the Eastern Seaboard, the Thai government is presently developing the Eastern Economic Corridor (EEC), a flagship megaproject that aims to become the ASEAN-leading economic zone for industrial, infrastructure, and urban development. Spanning over 13,000 sq.km. across the three provinces of Chonburi, Rayong, and Chachoengsao, the EEC has designated areas including the Eastern Airport City (EECa), the Eastern Economic Corridor of Innovation (EECi), Digital Park Thailand (EECd), Thammasat Integrated Medical Innovation Center (Pattaya) (EECmd), and additional promoted industrial estates/industrial zones. During the first five years, approximately US$ 50 billion of combined public and private investment projects are expected in the EEC. To further support innovation-led business within the EEC, the investment environment features numerous tax and non-tax incentives.
COMPETITIVE BUSINESS COSTS
Prime office space in Bangkok, Thailand’s capital, is an outstanding value. As compared to other leading cities in the region, Bangkok is nearly half of the cost of Ho Chi Minh City, only 40% of the cost of Seoul and Singapore, and a quarter of the cost of New Delhi, Tokyo and Beijing. Wages are also quite reasonable for such a highly trained and educated workforce. As wages across the ASEAN region rise due to economic growth, the wage inflation rate in Thailand is among the lowest in the ASEAN region.
In addition to capital infrastructure, the Thai government is committed to capacity building in human resource development, especially in a Science, Technology, Engineering and Mathematics (STEM) education as part of its comprehensive strategy to become a regional leader in ASEAN. Thailand’s Ministry of Education partnered with the Southeast Asian Ministers of Education Organization (SEAMEO) to host the first two SEAMEO regional centers for STEM education and for Sufficiency Economy Philosophy for Sustainability.
As well, the government has designed a wide range of vocational education programs, including Dual Vocational Education and Training, Cooperative Education, Work-Integrated Learning (WiL) and Talent Mobility (TM), to ensure that Thai workforce has the right skills and is able to meet the requirements of future jobs, especially in emerging technologies such as robotics, automation and AI.
THE SECOND HOME OF INTERNATIONAL COMPANIES
As a regional economic center, with all its numerous advantages, it should come as no surprise that Thailand has become the second home for numerous global MNEs, and a supply chain hub for major industries. These foreign investment activities have been enabled by streamlining of government legislation, a growing domestic market, and access to resources such as finance and technical knowledge.
Source: Why Thailand Brochure, Office of National Economic and Social Development Council, Information Technology and Communication Center, Ministry of Commerce, ASEANstats and The IMF
As of February 18th, 2024
Gateway to Asia
Thailand enjoys a strategic location and serves as a gateway into the heart of Asia – home to
what is today the largest growing economic market.
The country also offers convenient trade with China, India and the countries of the Association of Southeast Asian Nations (ASEAN), and easy access into the Greater Mekong sub-region, where newly emerging markets offer great business potential.
Hub of ASEAN
Thailand was one of the founding members of ASEAN and has been instrumental in the formation and development of the ASEAN Free Trade Area (AFTA).
AFTA entered into force on 1 January 2010 for the six original ASEAN (ASEAN-6) members (Thailand, Singapore, Malaysia, Indonesia, Philippines, and Brunei) thereby reducing import duties to zero; the so-called CLMV countries (Cambodia, Laos, Myanmar and Vietnam) will follow suit in 2015.
Thailand has forged close economic cooperation with other ASEAN member nations, and Thai manufactured products and services have access to their markets, which includes all 10 ASEAN countries. ASEAN is home to more than half a billion people GDP in excess of US$1.5 trillion and total trade of well more than US$1 trillion per year.
Social and political stability
Thailand is a foreigner friendly and welcoming Buddhist country. The country's form of government is a constitutional monarchy, with a high reverence for the Thai Monarchy, and devotion to the teachings of Buddhism. And although the vast majority of the people in Thailand are Buddhist, all religions are welcome, and His Majesty the King is the patron of all religions.
Growing economy
Economically, this country of 67 million people is characterized by steady growth, strong exports and a vibrant domestic consumer market. Abundant natural resources and a skilled and cost-effective work force help attract foreign investors, and enable them to prosper and develop industry in Thailand.
Sufficient infrastructure
Thailand has good infrastructure with modernized transportation facilities, as well as upgraded communications and IT networks that ensure optimum business and living conditions. World-class industrial estates boast sophisticated facilities and support services to meet the needs of multinationals and SMEs alike.
FDI policies
The country's well-defined investment policies focus on liberalization and encourage free trade. Foreign investments, especially those that contribute to the development of skills, technology and innovation are actively promoted by the government. Thailand consistently ranks among the most attractive investment locations in international surveys, and the World Bank’s 2010 Ease of Doing Business report places Thailand as the 12th easiest country in the world in which to do business.
Government support and incentives
Numerous government agencies support investors. Through the Board of Investment, the government offers a range of tax incentives, support services and import duty exemptions or reductions to an extensive list of promoted activities.
Companies receiving investment promotion privileges from the Board of Investment are not subject to foreign equity restrictions in the manufacturing sector, and there are no local content requirements nor export requirements, as Thailand's investment regime is in total compliance with WTO regulations.
The Board of Investment also coordinates the activity of the One-Stop Service Center for Visas and Work Permits, which enables foreign staff of BOI-promoted companies to obtain work permits and long-term visas within three hours or less.
The BOI also administers the One Start One Stop Investment Center, which opened in November 2009 to facilitate a full range of services and streamline investment procedures by bringing representatives from more than 20 government agencies under one roof.
In addition to the activities of the BOI, other government organizations, such as the Department of Export Promotion and international chambers of commerce, provide invaluable support and a host of other important services.
Long–established and newly emerging industries
With steady economic development and strong support industries, the country's industrial production has grown and diversified rapidly both in long–established and newly emerging industries.
The government has emphasized attracting investment in six sectors that have been determined to be key to the country's developmental objectives. These six target industries include: agriculture and agro-industry, alternative energy, automotive, electronics and ICT, fashion, and value-added services including entertainment, healthcare and tourism.
Friendly and rich culture
Thailand has gained a well-deserved reputation throughout the world for its gracious hospitality. The friendliness of its people and the diverse nature of Thai culture make visitors feel safe and at home in Thailand.
Education and healthcare services
The education standards in Thailand are accepted by many international examining bodies, and a great number of international schools and colleges offer world-class education, while its universities are outstanding.
In terms of healthcare, the country has developed an excellent reputation globally, due to its internationally-certified doctors and medical staff, and modern facilities and equipment. It is so good that one of the fastest-rising tourism sectors is medical tourism, with international patients visiting Thailand to take advantage of Thailand's world-class and extremely affordable health care system.
