Thailand's emerging industrial economy is attracting the attention of international investors, who are noting the country's high growth rates.
Empirical evidence shows that there are many investment opportunities and avenues for investors to take advantage of as the Kingdom of Thailand grows and develops.
The Board of Investment (BOI) offers investment incentives to qualified domestic and foreign investors. To upgrade Thailand's technological capabilities, the BOI is now focusing more on applications in high-tech, innovative and sustainable industries. These include digital technologies, “smart agriculture” and biotechnology, aviation and logistics, automation and robotics, medical and health tourism and other high-value services.
The most significant privileges granted by BOI for promoted projects include:
The Thai government is drafting a new National Energy Plan that will set a 20% target for renewable energy by 2037, and established a special committee under the leadership of the Deputy Prime Minister and the Minister of Energy to support increased investment in clean energy, electric vehicles and related industries.
In support of this policy, power producers can access tax and non-tax incentives from the BOI of Thailand. Tax incentives include a corporate income tax holiday for six or eight years depending on the type of power generation used in generating electricity. And also include an exemption from customs duties on the import of new equipment.
Thailand also has a feed-in tariff (FiT) program and additional tax and investment incentives to achieve 20% renewable energy supply by 2037. Launched in 2015, the FiT program replaced the previously proposed “adder” scheme. Given the falling investment costs of various renewable energy technologies, especially solar and onshore wind installations, the government moved to competitive bidding in 2015 with the FiT set as the maximum price.
In February 2022, Thailand joined the Clean Energy Demand Initiative, under which the Thai government agreed to implement policies that will increase access to alternative energy for the private sector.
Electric vehicles are another key focus for the Thai government. In 2022, the Thai government approved a package of measures to boost foreign investment in electric vehicles, including a range of tax incentives, subsidies and other mechanisms.
Investment projects with a significant component of R&D, innovation or human resource development may also qualify for additional grants and incentives. In addition, grants are provided to support the development of targeted technologies under the Competitiveness Enhancement Act. In addition, the BOI offers one-stop services to expedite a variety of business processes for investors.
The aerospace industry has seen strong growth. The air travel industry has grown exponentially over the past 30 years due to the growing global demand for travel. Air passenger traffic has doubled every 15 years since the early 1980s and is expected to grow at a CAGR of 3.8% over the next 20 years, reaching 7 billion passengers by 2034.
The Asia Pacific region has huge economic prospects. The region as a whole is expected to account for 42% of the world’s passenger traffic by 2034, with an additional 1.8 billion passengers. Given its huge growth potential and promising opportunities, many world-class aerospace companies are looking to expand and locate their business in the Asia Pacific region.
Thailand is well positioned to become the medical hub of Asia. With an outstanding healthcare base that includes top-notch medical services, qualified healthcare professionals and various internationally accredited medical institutions, Thai healthcare services are renowned worldwide, leading to rapid growth in supporting industries such as pharmaceuticals, laboratory testing and clinical research and development.
The government is pursuing progressive policies to help the country achieve the status of “Thailand, a hub for wellness and medical services” within ten years. The Ten-Year Strategic Plan, which will run from 2016 to 2025, proposes to develop Thailand into a medical hub in four key areas: wellness, medical services, academics and products.
Thailand’s healthcare sector is one of the fastest growing sectors, driven by growing domestic demand. Like many other countries in Asia, Thailand is moving towards an aging society. In 2020, the proportion of citizens aged 65 and above was 13%, and it is expected to increase to 30% by 2050. The growing ageing population is associated with the demand for healthcare services in the coming decades. As the number of elderly people increases, they tend to develop certain conditions, ranging from heart disease to blood clots, diabetes and cancer. In this regard, biopharmaceutical products such as tissue plasminogen activator, insulin and therapeutic antibodies are needed to treat these diseases.
Apart from domestic factors, the global pandemic has highlighted the need for the biopharmaceutical industry. The demand for vaccines has increased dramatically. Thailand is leveraging these opportunities and its potential to become a manufacturing base for vaccines, rapid tests and genomic products. The country has managed to attract investors such as AstraZeneca, KinGen Biotech and Apsalagen.
Thailand is well positioned to become a global hub for bioplastics. The country is a leading producer of the raw materials needed to synthesize bioplastics and is well equipped with advanced technology and technical expertise at all stages of the supply chain. The Kingdom’s strategic location in the heart of Southeast Asia provides market access to consumers across the region, and strong government support policies have been implemented to stimulate growth in the sector. All of these factors highlight Thailand’s readiness to become a leading global manufacturer in this field.
Thailand is working to embrace digital transformation and embrace innovation to become a leading economic powerhouse. The country’s journey to digitalization begins with the “Thailand 4.0” economic model, which focuses on significant advances and digital improvements to enhance the quality of life, productivity, and efficiency of Thais.
In the case of digital infrastructure, this has resulted in significant advances in technology, particularly in smartphone support and broadband. Thailand has invested 15 billion baht to launch a nationwide village broadband network that will provide affordable high-speed internet access to more than 25,000 villages across the Kingdom.
Another major development project is Digital Park Thai, which is located on 284 acres in Chonburi Province, on the country’s east coast. The park supports economic development by facilitating access to an undersea cable system, a landing station, and a data center. In addition, the National Science and Technology Development Agency (NSTDA) established the Thailand Software Park in Nonthaburi to support and strengthen the competitiveness of Thailand’s software entrepreneurs by facilitating technology transfer, providing IT training courses, supporting local and international collaboration, and providing office space and conference, meeting and training facilities for software companies.
In addition, enhanced incentives have been provided by the Board of Investment of Thailand (BOI) to encourage greater investment in research and development (R&D), greater industry involvement in human resource development (HRD), and to attract additional investment in the growing semiconductor and digital industries.
The digital economy is expected to play a vital role in all industrial sectors in Thailand and is estimated to contribute 25% to the country’s GDP by 2027.
Thailand has long been known as the “kitchen of the world” due to its abundant natural resources, highly skilled workforce, and research and development. The food industry contributes about 23% to the country’s GDP. The Kingdom is also one of the largest food exporting countries in the world and the second largest in Asia.
Utilizing its geography with local agricultural resources, the Thai government has identified the food industry as one of the ten key growth engines under its “Thailand 4.0” economic model. The government has also created an industrial park specifically optimized for food, known as Food Innopolis.
One of the reliable ways to acquire long-term assets and profitable investments is to this is buying and selling land in Thailand.
But it is worth considering that foreigners are prohibited from buying land in their own name directly in Thailand.
Premium office space in Bangkok, the capital of Thailand, is an outstanding value. Compared to other leading cities in the region, the cost of Bangkok is almost half 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.
According to the Central Bank of Thailand, real estate is increasing in price by 4-5% annually. The fastest growing in price are popular tourist locations. And among them, the most developed and balanced market is Phuket. In addition to the obvious tourist appeal, it has two important advantages for investors: a shortage of land and restrictions on mass high-rise construction. High tourist flow, stable economy and currency, year-round season and low taxes make investments in this industry very attractive.
Thailand is the largest import, export and transportation hub in Southeast Asia. As a result, it is regularly used as a trading post or international intermediary between Southeast Asian countries. An investor can start a successful export and/or import business in this private sector of Thailand's economic market and reap huge profits. Investment companies can engage in the import or export of goods such as electrical equipment, smart electronics, raw materials, rubber, mineral fuels and precious metals.
Many Thai companies are aware of and depend on the digital world, which includes smart technology and the Internet, to conduct business in the modern era. Thai companies especially depend on their IT services to conduct transactions with foreign companies - from Zoom calls to email correspondence. Therefore, international investors can invest in various ways to improve the IT services sector in Thailand, especially when it comes to improving the security infrastructure of cloud computing and other digital business solutions. IT companies and services require licenses, even if it involves indirect business such as marketing on digital platforms.