Thailand is one of the fastest-growing economies in Southeast Asia being the second-largest business to consumer e-commerce market in the region after Indonesia (Economic Research, J.P. Morgan Chase Bank).
Thanks to its strategic location, stable economy, business-friendly environment and cost-effective labor, Thailand offers foreign investors a lot of benefits to make it one of the region’s most attractive to establish a business and make important connections (read our article).
Tourism: one of the top investment location
Tourism, which represents almost 20% of Thailand’s GDP, is the prefered investment location for many business owners (many have their Asian hub in Thailand) and industries because of its:
- Easiness of application procedure (21st easiest place in the world)
- Open and welcoming economy
- Reasonable taxation (from 10%-30%)
- Affordable business cost
- Skilled and well-educated workforce
- Convenient regional transportation
- Sufficient infrastructure (most importantly in digital)
- Ease of Internet connectivity
In this article we will see how Thailand is planning to keep its high rank as the most accessible place to invest and start a business.
The Eastern Economic Corridor (EEC)
The Eastern Economic Corridor (EEC) is a flagship megaproject that aims to become the ASEAN-leading economic zone for industrial, infrastructure, and urban development.
To ensure Thailand’s economy continues to develop over the next 20 years, the Thai government has adopted a new economic model called Thailand 4.0, which is focused on transforming Thailand into a value-based economy built upon science, technology, innovation, and creativity. To this end, five existing high potential industries and an additional five new targeted industries have been identified as the “New Engines of Growth” driving the country into the future.
Initially focused on the 3 Eastern provinces, namely Rayong, Chonburi, and Chachoengsao, the EEC’s 12 targeted S-curve industries are:
- smart electronics;
- affluent, medical and wellness tourism;
- agriculture and biotechnology;
- robotics for industry;
- logistics and aviation;
- biofuels and biochemicals;
- medical services;
- and education development.
The Board of Investment (BoI) and the EEC Office have been ordered to speed up rejigging promotional privileges for five new S-curve industries to make them more enticing for foreign investment.
Investment applications in 10 targeted industries (excluding defense and education development, data for which is not available yet) for January-May totaled 27.1 billion baht, making up 37% of the total.
They offer a promising opportunity for E&E investors looking for long-term yields. Companies wishing to reach the ASEAN marketplace should consider investing in the EEC because of the industry ecosystem, upgraded infrastructure, generous tax and non-tax incentives, and strong connectivity to regional and global markets.
The Covid outbreak has accelerated the digitalization in trade and services, and pushed a lot of firms to adopt digital technologies in order to fit the changing economic environment in the new normal era and allowed them to better meet the consumers’ needs.
With so many businesses playing in the same digital space, it becomes essential to establish a unique digital brand identity. Businesses have become more aware of the importance of digital presence to boost their sales and stay on top of their competitors. Therefore, Digital marketing agencies offering effective SEO strategies, display advertising, and other digital promotions are particularly in high demand.
Moreover, Thailand’s digital economy is expected to contribute 25% to Thailand’s GDP by 2027. The country is investing heavily in digital infrastructure such as improving domestic network bandwidth or developing a digital park.
The Industry Ministry aims to boost Thailand’s post-pandemic GDP with bio, circular and green (BCG) economic development and turn the country into an ASEAN bio-hub by 2027.
To encourage manufacturers to make and add value to products with no or minimal impact on the environment, the government is implementing tax privilege programs to make them more attractive to investors.
Thailand already has all the criteria to become the next Asian bio-hub with:
- Abundance of Bio-based Materials (like cassava, sugar cane and palm oil)
- Existing Infrastructure (Thailand hosts several facilities that are instrumental in developing the Thai bioeconomy)
- Strategic Location (like in Chonburi with Palm Biocomplex)
The Siam Kingdom also has a whole Roadmap on Plastic Waste Management to reduce at least 50% of Thailand plastic marine debris by 2027 with Circular Economy.
Thailand is one of Asia’s main transportation hubs, and shares great transportation avenues with other countries. Due to its large expat population, the country is a great market for foreign brands to import goods, especially those that are hard to find such as specific food brands. Locals and foreigners alike are willing to pay higher prices for Western goods.
Exporting Thai goods like handcrafts, clothing lines or jewelry is also a great business opportunity. Western countries are often looking for the level of quality that Thailand offers but at a cheaper price than what they can find in their own country.
Thailand is the 3rd biggest medical tourism destination in the world. It’s estimated that Thailand receives 350,000 dedicated Medical Tourists each year, spending an average of $1,700 in hospitals and clinics across the country, with Bangkok seeing the majority of this money.
With good health practitioners and surgeons, Thailand is mostly famous for plastic surgery operations.
Growing concerns of Covid 19 also positively affected the development of industries related to health. The Board of Investment (BoI) pushed measures to accelerate investment in the medical industry and hub with measures to mitigate the effects of the coronavirus outbreak.
Logistics (delivery business)
The Kasikorn Bank Research had estimated the food delivery business of the country to be worth 33-35 billion Thai baht during 2019, up 14% from the previous year. During the recent pandemic, the industry businesses have been boosted by more than 3 times more due to people being stuck during lockdown.
Food Panda, Lineman, and Grab Food are the predominant players in Thailand. With the new normal following the pandemic, the food delivery business has widened its scope beyond just restaurant takeaways and started catering to the traditional retail business.
According to Get Food, the latest player to enter the local online food delivery market, only 30% of their orders come from major restaurants while 70% come from small businesses or street food stalls. This suggests that even for street food, food delivery has become an essential part of their business profit.
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