Thailand

Thailand (historical name — Siam) is a kingdom of sandy beaches, tropical nature and exoticism in Southeast Asia. The outline of the country on the map resembles the head of an elephant, whose trunk is lowered down (Malacca Peninsula). Often the Thais themselves call Thailand the Country of the Elephant, and the white elephant is a royal symbol.

The official name of the state is the Kingdom of Thailand. The country occupies an area of ​​513,120 km² (50th in the world). The population is about 70,770,492 people (as of 2024).

Ethnic composition: Thais — 97.5%, Burmese — 1.3%, other ethnic groups are represented by Malays, Hmong, Khmer, and Vietnamese — 1.2%. Every seventh resident of Thailand is ethnic Chinese. The Chinese live throughout the country, but mostly separately, in separate neighborhoods.

Religious composition: Buddhism — 94.6%, Islam — 4.3%, Christianity — 1%, other religions — 0.1%.

The official language of Thailand is Thai. It is close to the Lao language and consists of several varieties spoken by different social strata of the population. Thai is a tonal language; it has five tones that are designated in writing to distinguish meanings: high, medium, low, rising and falling. Correct intonation in this language is of fundamental importance, as it affects the meaning of the words spoken. English is widely spoken, especially in tourist regions.

The national currency of the country is the Thai baht.

Bangkok (in Thailand it is called Krungthep or Krung Thep Maha Nakhon) is the capital and largest city of the country.

Bangkok is the economic center of Thailand and a port (due to its location on the Chao Phraya River). The country's stock exchange is also located in Bangkok. The city's main sources of income are rice and fish product exports, electronic component manufacturing, automobile manufacturing, oil refining, and shipbuilding. Tourism accounts for about 10%. Bangkok is the main residence of His Majesty the King of Thailand, recognized as the head of state, army, and all religions, including Buddhism.

Geographically, climatically, in terms of natural resources, diversity of relief forms, and even the ethnic composition of the population, Thailand is divided into five main regions: Central, Eastern, Northern, Northeastern, and Southern Thailand.

The country is divided into 77 provinces (changwat). In 2013, the municipality of Bangkok, the country's capital, received the status of an independent 77th province.

The more studied part of Thai history begins in 1238, when the first reliably known Thai state was founded - the kingdom of Sukhothai. This period of time includes the codification of Buddhism in the Thai version, as well as the creation of Thai writing. The kingdom of Sukhothai lasted about 150 years, after which it was absorbed by another, rapidly growing and powerful kingdom of Ayutthaya.

The Ayutthaya period of Thai history lasted four centuries, during which the system of government and the unique culture of Thailand were finally formed. During this period, the first contacts with Europeans took place. At this time, the most influential in the region were the Portuguese, from whom the Thais borrowed the method of making weapons. Siam became one of the first states to establish diplomatic relations with Europeans. In parallel with the kingdom in Ayutthaya, there was the kingdom of Chiang Mai in the north of modern Thailand. Both were constantly at war with Burma and the Khmer Empire. The Burmese invasion in 1569 resulted in the defeat of the Thais and the fall of Ayutthaya. But in the end, the Thai prince Naresuan managed to drive the invaders out of the country and rebuild the capital. Ayutthaya, a city with a developed economy and culture, was captured for the second time in 1767. This time, the Burmese burned the city to the ground and took thousands of people into slavery. Burmese rule was short-lived again. Under the leadership of General Piya Taksin, the Burmese were defeated. Pya Chakri was proclaimed king, thus becoming the founder of the current ruling Chakri dynasty. After his accession to the throne in 1782, the king moved the capital to Bangkok.

In the 19th century, Siam remained independent, maneuvering between various European powers. This led to the fact that neither France, nor Great Britain, nor any other country could colonize Siam. From 1809 to 1851, during the reigns of Kings Rama II and Rama III, Bangkok and all of Siam developed rapidly due to the policy of openness and international trade.

King Rama IV (1851-1868) initiated the modernization of the system of governance and the expansion of political contacts with European powers. His successor Rama V did much to strengthen and accept Siam into the world community as an independent country.

The reign of Rama V is considered the most significant in Thai history - he was the only one to receive the prefix "Great" to his name. The next king continued the reforms of Rama the Great and introduced a system of compulsory general education.

In 1932, a virtually bloodless revolution changed the system of government and Siam became a constitutional monarchy.

In 1939, Siam became Thailand, which means "land of the free" in Thai. During World War II, Thailand did not resist the Japanese troops, and the government became an ally of Japan. After the war, the army elite came to power in the country. For 20 years, Thailand became the arena of political coups and counter-coups, alternating with rare democratic experiments. In February 1991, a military junta removed the Chatichai government from power, but demonstrations in May 1992, which ended in bloodshed, eventually led to the restoration of democracy.

Thailand is now a democratic country, which is based not only on secular laws, but also on the generally accepted norms of Buddhism.

Thailand is located on the Indochina Peninsula. In the north and west, the country borders Myanmar (Burma), in the northeast - Laos, in the southeast - Cambodia, in the south - Malaysia. In the southeast, the country is washed by the Gulf of Thailand, in the southwest - the Andaman Sea. There are hundreds of clean sandy beaches on their coasts. In addition, there are about 102 national parks and reserves in Thailand, including 21 marine national parks. The state also owns many small and large islands located in the coastal zones of the Andaman and South China Seas. The largest of them are: Phuket (543 sq. km), Chang (417 sq. km), Samui (228 sq. km).

The country has a variety of geographic reliefs - both flat areas and hilly plateaus and mountains. Karst formations are developed in Thailand, including caves that house Buddhist sanctuaries. The largest of these caves is Phrawangdaeng, more than 13.5 km long.

The largest deposits of tin and tungsten are associated with Mesozoic granites. The Paleozoic structures contain deposits of antimony, fluorite, lead, zinc, barite, iron and manganese ores. There are reserves of brown coal, stone (center and south of the country) and potassium salts (on the Korat plateau). In the west there are deposits of ruby and sapphire.

The culture of Thailand is very strongly influenced by neighboring India. This can be seen in mythology, similar religion and some customs. Thai architecture originates from Cambodian.

The entire development of Thai artistic culture is connected with Buddhism, which in its Thai version also included some Hindu motifs.

The most striking example of Thai architectural creativity is the complex of temples and the Grand Royal Palace in Bangkok.

Traditional Thai dances and the Khon mask theater originated in the ancient kingdom of Ayutthaya. The skillful Khon dance was danced only in the king's palace, it was the most ancient theater in Siam. A special feature of the theater was the cast, which consisted only of men. They performed both male and female roles.

The history and traditions of Thailand have formed their own cultural features over the centuries. People here are very friendly and always smile, which is why Thailand is called the "Land of Smiles".

Never insult the king or his family! You cannot scold, speak disparagingly, mock, or even demonstratively crumple banknotes with the image of the monarch.

The Thai people are very superstitious. There are a number of cultural beliefs that Thais strictly adhere to. For example, you should not cross your legs while sitting, as this may not please your interlocutor. Do not forget to take off your shoes when entering a Thai's house, even if the host or hostess assures you that it is not necessary to take off your shoes. Never touch a Thai's head! You cannot stroke children's heads either. This part of the body is considered sacred. You cannot touch statues of Buddha or monks. If you decide to go into a temple, you must take off your shoes. If a service is in progress, you should sit facing the Buddha on your knees, in the Turkish style or in the lotus position, so as not to show the Buddha your feet.

Thailand's form of government is a constitutional monarchy.

The head of state is the king (Maha Vajiralongkorn). He is considered the ruler, the Supreme Commander of the Armed Forces, the patron of the country's religion and the symbol of national unity. The nationwide adoration of the royal family here is almost religious in nature. The Thai monarchy has developed over 800 years of absolute rule. According to the country's Constitution, the king is enthroned in reverence and awe, and this order must not be violated. No one can bring any accusations or lawsuits against the king.

The highest legislative body is the National Assembly (parliament), consisting of the House of Representatives and the Senate.

The executive branch is the government (Council of Ministers) headed by the Prime Minister. The highest judicial authority is the Supreme Court.

Thailand is an emerging economy and ranks second in Southeast Asia in terms of economic performance. According to the World Bank, Thailand's economic growth is expected to reach 3.2% in 2024. This is supported by a recovery in tourism and growth in merchandise exports, as well as robust private consumption, the World Bank report says.

The Ministry of Tourism and Sports expects at least 35 million foreign tourists to visit the Kingdom for tourism purposes this year. This will have a positive impact on local businesses and related services, as well as increase employment and income.

In the industrial sector, demand for land for the construction of large infrastructure and technology facilities will continue to grow: this is caused by plans by global tech giants to relocate their production to Thailand. The media reports that four of Japan's largest automakers are planning to invest 150 billion baht in Thailand over the next few years to develop the electric vehicle industry.

Thailand's dynamic and steadily growing economy, strong tourism industry and strategic location have long made it a popular destination for foreign investment.

Thai officials note that Japanese automakers have already confirmed their intention to use Thailand as a major manufacturing base in the region. The Federation of Thai Industries estimates that Thailand will produce 2.5 million vehicles by 2030, 70% of which will be new-generation vehicles based on internal combustion engine technology and the rest will be zero-emission vehicles in the electric vehicle segment.

In the real estate sector, the growth of tourism, the growing middle class of the country and the active arrival of foreign investors will fuel demand for residential and commercial real estate, especially for high-yield assets that can be rented out.

Combined with a competitive and highly skilled workforce, Thailand is striving to transform itself into an economy based on digital technologies.

The basis of the country's economy is the service sector and tourism (accounting for about 50% of GDP), industry (40%), agriculture (10%). In terms of mineral reserves and industrial development, the Kingdom ranks 4th in the region. The country's economy is largely dependent on exports - it accounts for about 2/3 of GDP. Electrical appliance manufacturing is Thailand's largest export sector, accounting for about 15% of total exports.

Thailand is the leader in ASEAN in automobile production and sales (the world's largest supplier of pickup trucks), with exports reaching 200,000 units per year. The country also serves as a base economy for neighboring developing Laos, Myanmar, and Cambodia, which have large-scale manufacturing operations. Compared to other ASEAN countries, Thailand is the largest importer of liquefied natural gas (LNG), and needs to continue this trend to generate electricity. The Thai government has developed an Alternative Energy Development Plan that sets targets to increase renewable energy capacity to nearly 30,000 MW by 2037.

In addition to its membership in ASEAN, Thailand also has Free Trade Agreements with Australia, Chile, China, Hong Kong, India, Japan, New Zealand, Peru, and South Korea. It also completed ratification of the Regional Comprehensive Economic Partnership (RCEP) - a free trade bloc of 15 Indo-Pacific countries, which entered into force in January 2022. In 2024, Thailand was invited to join the BRICS partner countries.

The country is one of the largest suppliers of tin and tungsten to the world market, and ranks second after Canada in gypsum exports. It occupies a leading position in the world in the export of shrimp, coconuts, corn, soybeans and sugar cane. Extensive exports of fish and seafood have become possible due to the active development of the fishing fleet and food processing enterprises. Such industries as textiles, jewelry (processing of precious stones), and electronics also play a significant role in the country's economy.

Main import items:

• electrical machinery and equipment;
• mineral fuel, including oil;
• industrial equipment;
• jewelry and precious metals;
• ferrous metals, including steel;
• vehicles;
• plastics, including products made from them;
• products made from ferrous metals;
• optical, technical, medical. equipment;
• organic chemicals.

Relations with Russia

Trade and economic relations are an important component of relations between Russia and Thailand.

They are based on such intergovernmental bilateral treaties as the Trade Agreement of December 25, 1970, the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income of September 23, 1999.

In addition, there is the Cooperation Agreement between the Chamber of Commerce and Industry of Russia and the Chamber of Commerce and Industry of Thailand of 1997, the Cooperation Agreement between the Russian Union of Industrialists and Entrepreneurs and the Federation of Thai Industries of 2003, as well as the Cooperation Agreement between the Russian-Thai Business Council and the Thai-Russian Business Council, the Memorandum of Understanding and Partnership between the Ministry of Economic Development of Russia and the Board of Investment of the Kingdom of Thailand Thailand from 2015, Memorandum of Understanding between the Ministry of Energy of Russia and the Ministry of Energy of the Kingdom of Thailand on cooperation in the field of energy from 2015, memorandums of understanding between the ministries of agriculture, the ministries of natural resources and environment, the Ministry of Economic Development of Russia and the Ministry of Commerce of Thailand from 2016.

According to the Federal Customs Service of Russia, in 2022, the volume of Russian-Thai trade turnover amounted to 1,972.06 million US dollars, while Russian exports amounted to 467.4 million US dollars, imports 1,504.6 million US dollars. USA.

The bulk of Russian exports were metals and metal products (38.4%), chemical products, rubber (23.5%), mineral products (10.1%), precious stones, food products and agricultural raw materials (3.9%), wood and pulp and paper products (2.8%).

Investment cooperation is developing. The largest investment of Thai capital in the Russian economy is the investment project implemented by Charoen Pokpand Foods (CPF) to build a feed mill in the Lukhovitsky District and 12 pig farms in the Moscow, Kaluga, Kaliningrad and other regions. CPF management intends to expand the company's economic presence in the Russian market, including by implementing plans to grow and process soybeans in the Russian Far East.

Contacts are maintained between Thailand's largest state energy company RTT and Rosneft, Gazprom and Novatek.

The Joint Russian-Thai Commission on Bilateral Cooperation remains an important mechanism for bilateral cooperation.

The Russian-Thai (since October 2006) and Thai-Russian (since November 2007) business councils have been formed and are operating. The Russian-Thai Business Council unites about 40 Russian companies. The Thai-Russian Business Council includes the Trade Council of Thailand, the Federation of Thai Industries, the Thai Bankers Association, as well as representatives of government agencies and business circles of the country.

The Russian Trade Mission operates in Bangkok, and the Trade Department of the Embassy of Thailand operates in Moscow.

The business environment in Thailand is generally favorable. The legal framework is relatively modern, and the level of government regulation is low.

The tax system is fairly transparent. Both residents and non-residents of Thailand pay tax on income from employment and business in the country, regardless of where the remuneration is received.

Thai companies pay corporate income tax on their worldwide income, while foreign companies pay corporate income tax on income from sources in Thailand. The standard corporate income tax rate is 20%.

Profits from the sale of assets are included in total taxable income.

The standard VAT rate is 10%.

Social contributions are generally paid at a rate of 5% of the employee's salary, but not more than 750 TBH per month. Contributions are paid by both the employer and the employee.

Thailand has a large skilled labor market. A modern business infrastructure has been created, including a developed and competitive banking system, transport, logistics, widespread use of information and communication technologies (ICT), and other business-related services.

The government is implementing a broad program to modernize the transport infrastructure based on joint public-private financing.

To attract foreign investment, a broad system of incentives has also been created for encouraged industries, including export-oriented manufacturing, energy (primarily renewable energy sources), new technologies (including ICT, biotechnology, nanotechnology), agriculture, the hotel and resort business, etc.

Foreigners with a temporary residence permit have the right to purchase property in Thailand, including cars.

Local laws prohibit foreign individuals and legal entities from owning land. In this regard, private houses and villas are often purchased in the name of Thai citizens or legal entities registered in the country. As for apartments, foreigners are allowed to own up to 49% of the living space in condominiums.

Thailand is an upper-middle-income country with a half-trillion-dollar economy, generally pro-investment policies, and a well-developed infrastructure. Thailand continues to encourage foreign direct investment as a means of promoting economic development, employment, and technology transfer.

As a regional economic hub with all its many advantages, Thailand has become a second home to numerous global MNEs and a supply chain hub for major industries. These foreign investment activities have been made possible by streamlined government regulations, a growing domestic market, and access to resources such as finance and technical expertise.

Thailand continues to welcome investment from all countries. However, the Foreign Business Act (FBA) prescribes a wide range of activities that foreigners cannot conduct without additional licenses or exemptions. The term “foreigner” includes companies registered in Thailand in which half or more of the capital is owned by non-Thai nationals, and companies registered overseas.

The Board of Investment (BOI) helps Thai and foreign investors set up and operate businesses in targeted sectors of the economy by offering both tax and non-tax incentives. In recent years, Thailand has taken steps to reform its business regulations, improving processes and reducing the time it takes to start a business from 29 days to 6 days. Thai officials regularly make themselves available to investors through discussions with foreign chambers of commerce.

Thai business regulations are governed primarily by criminal law, rather than civil law. Foreigners are rarely jailed for improper business practices, but violations of business regulations can result in severe criminal penalties. Thailand has an independent judiciary, and government agencies are generally not allowed to interfere with the court system once a case is pending.

Various Thai laws place restrictions on foreign ownership in certain sectors. These restrictions primarily affect services such as banking, insurance, and telecommunications. The FBA details the types of business activities reserved for Thai nationals. Foreign investment in these businesses must be less than 50% of the share capital, unless specifically permitted or otherwise exempted. Activities restricted by the FBA for foreigners include:

List 1. Newspaper and radio stations and businesses; agricultural business; forestry and timber processing from natural forests; fishing in Thai territorial waters and special economic zones; extraction of Thai medicinal herbs; trading and auctioning of antiques or items of historical value from Thailand; making or casting Buddha images and alms bowls; trading in land.

List 2. It contains activities related to national security, arts and culture, traditional industries, folk crafts, natural resources and the environment. Restrictions apply to the manufacture, distribution and servicing of firearms and weapons; domestic transport by land, water and air; trading in Thai antiques or art objects; mining, including blasting and stone crushing; and processing wood for the production of furniture and utensils.

A foreign majority-owned company may engage in activities from List 2 if Thai citizens or legal entities own at least 40% of the total shares and the number of Thai directors is at least two-fifths of the total number of directors. Foreign companies also require prior approval and a license from the Council of Ministers (Cabinet). However, by decision of the Cabinet, the Minister of Commerce may change these requirements, but under no circumstances may the percentage of Thai participation in a List 2 business be less than 25%.

List 3. The restricted activities in this list include accounting, legal, architectural and engineering services; retail and wholesale trade; advertising business; hotels; sightseeing tours; sale of food and beverages; and other service activities. A foreign company may engage in activities in List 3 if the majority of shares of the limited liability company are owned by Thai nationals. Any company with a majority foreign shareholder (more than 50%) cannot engage in List 3 activities unless it obtains an exemption from the Ministry of Commerce (MOC) through its Foreign Business License (FBL) application.

Apart from these general categories, Thailand does not maintain a national security screening mechanism for investments, and investors may receive additional incentives/privileges if they invest in priority areas such as high-tech industries.

To conduct restricted businesses as defined in Lists 2 and 3 of the FBA, non-Thai entities must obtain a Foreign Business License. These licenses are approved by the Council of Ministers (Cabinet) and/or the Director-General of the Business Development Department (MOC), depending on the business category.

The MOC reviews the FBA restricted business categories annually.

In Thailand, there are a number of organizations and programs to support business and attract investment aimed at simplifying access to financing, tax incentives and consulting services. Here are the main structures and mechanisms for supporting business and investment:

1. Board of Investment of Thailand (BOI)

• BOI offers significant tax and customs incentives, consults companies, assists in obtaining necessary licenses and permits, and provides fast-track visas and work permits for foreigners.
• BOI actively promotes investment in certain priority sectors (technology, manufacturing, medicine, etc.), providing tax incentives (up to 8 years) and duty exemptions on imported equipment.
• Additional incentives are provided under the Special Economic Zones program and the EEC (Eastern Economic Corridor) program to support high-tech and innovative sectors.

2. Eastern Economic Corridor (EEC)

• EEC aims to develop industry in the eastern part of Thailand and includes the provinces of Chonburi, Rayong and Chachoengsao. The EEC aims to use advanced infrastructure, tax incentives and regulatory concessions to promote the development of high-tech and other advanced industries. Targeted sectors include: next-generation automobile manufacturing; smart electronics; advanced agriculture and biotechnology; food processing; tourism; advanced robotics and automation; digital technology; integrated aviation; medical center and general health services; biofuels/biochemicals; defense manufacturing; and human resource development.
• Ports, airports, logistics and industrial parks are being built and upgraded, making the EEC attractive to manufacturing and logistics companies.

3. Thailand Small and Medium Enterprise Bank (SME Bank)

• This state-owned bank offers special credit products, including low-interest loans and support programs for start-up entrepreneurs. The bank also provides educational programs and advisory services.
• SME Bank, in collaboration with BOI and other government agencies, offers low-interest lending programs, which is especially important for start-ups and small businesses.

4. National Innovation Agencies (NIA)

• NIA supports entrepreneurs engaged in innovative technologies, including the IT, biotech, medtech and sustainable development sectors. It provides grants, consultancy and access to research resources.
• It oversees several government funds to stimulate research and development in priority sectors.

5. Export and Investment Promotion Centers

• Department of International Trade (DITP): DITP provides advice on entering international markets, assists in participating in international exhibitions, and organizes business missions to attract foreign buyers and partners.
• Thai Trade Offices Abroad: Trade offices help attract foreign investment and support Thai exporters in overseas markets.

6. Startup Support Centers and Business Incubators

• Thailand has several active private and public incubators that support early-stage startups, including True Incube, InnoSpace, TechGrind, and Thailand Startup Fund. These incubators offer startups access to funding, mentoring, networking, and investment assistance.

7. Programs and Grants from the Ministry of Digital Economy and Society (MDES)

• MDES actively supports projects in the field of digital technologies and IT services by providing grants for research and development of new technologies.
• The ministry is implementing programs aimed at improving the digital infrastructure, making Thailand a hub for digital innovation in Southeast Asia.

8. International Organizations and Partnerships

• Thailand Trade Council: works with international chambers of commerce and provides support in finding partners and developing business ties.
• International Banks and Funds: Thailand cooperates with banks such as the World Bank and the Asian Development Bank to attract foreign investment in infrastructure projects.

These structures allow Thailand not only to attract investment, but also to create a favorable business environment for local and foreign entrepreneurs, which has a positive effect on the country's economic growth.