Exploring Investment Opportunities in Thailand
Both opportunities and challenges lie ahead for the Southeast Asian tiger economy of Thailand. Its 2024 investment landscape is notably promising.
Thus, the Thailand administration offers interesting incentives and schemes for potential investors around the globe, particularly those in the S-curve industries and people registered under the Eastern Economic Corridor (EEC).
The EEC is a tremendous development program with goals of increasing Thailand economic growth when push comes to shove.
Promoting Improvements of Infrastructure Through Foreign Investment
The EEC initiative covers a vast area spanning three Thai Eastern Provinces—Rayong, Chonburi, and Chachoengsao. It also aims to promote investment in key sectors such as digital industries, biofuels, advanced technology, aerospace, and innovation.
Through EEC, the government of Thailand is able to stimulate economic development, attract foreign investment, and enhance infrastructure all over Southeast Asia, thus placing the Kingdom of Thailand as a central hub for advanced industries in the region.
In fact, many key investments have been placed in the following industries and projects.
- Motorway Project (2 billion USD)
- High-Speed Train (2.5 billion USD)
- Double Track Railway (2.2 billion USD)
- U-Tapao Airport Expansion (7.1 million USD)
- Laem Chabang Deep Sea Port (1.1 billion USD)
- Expansion of the Ta Phut Deep Sea Port (350 million USD)
Learning about Thailand’s BOI and Its History
The Office of the Board of Investment (BOI) in Thailand is an agency of their government with a mission of promoting foreign investment in their kingdom or nation by providing incentives, services, and info to interested investors.
BOI works under the umbrella of the office of the prime minister and operates fourteen offices in major world cities as well as regional Thai offices.
The Bank of Thailand (BOT) claims that Thailand’s foreign direct investment (FDI) went down by 90 percent in value in the first half of 2016 by $347 million from its height of $4.2 billion back in 2015, leading to its lowest value since 2005.
The slowdown from 2020 to 2022 due to pandemic restrictions also affected Thailand tourist revenue because of the COVID-19 lockdowns.
Because of these major challenges in 2016 and 2020, Thailand has been providing more incentives that promote and pathways that facilitate foreign investments.
Learning about Thailand BOI Benefits and Incentives for Investors
Certain requirements and qualifications must be met by a foreign-owned Thailand business to benefit from a BOI scheme designed to incentivize investors to invest in the country.
Corporate Income Tax Exemptions and Reductions: For example, BOI offers tax incentives for qualified companies, up to 13-year exemption from corporate income tax.
For good measure, they also offer a 50-percent reduction of corporate income tax for 5 years, which is only available in certain investment promotional zones.
Incentives for Activity: BOI even announced merit-based and activity-based incentives for investment applications submitted from January 1, 2015, onwards.
Activity-based incentives are grouped based on priority. Group A are all the activities that receive raw materials, machinery, and corporate income tax incentives along with incentives not involving taxes.
Meanwhile, Group B includes activities that get only import duty incentives for raw materials and machinery as well as miscellaneous non-tax-related incentives.
Incentives for Merit: As for merit-based incentives, they’re additional incentives, classified into the following groups based on, as the name suggests, the merit of the project.
Research and Development: R&D is incentivized by BOI, which includes technology and innovation involving joint R&D with overseas companies, outsourced R&D in Thailand, and in-house R&D of a Thai company.
Donations on Technology and Human Development Funds: These BOI-approved incentives cover Thailand government agencies, research institutes, specialized training centers, and educational institutes in the field of Science and Technology.
IP Acquisition and Licensing Fees: Incentives are offered for licensing fees for the commercialization of Thailand-developed technology.
Advanced Technology Training: Incentives are offered for training the Thai workforce in advanced technology.
Development of Local Suppliers: Local suppliers with at least 51 percent of its shareholders being Thai citizens are incentivized for development in technical assistance and advanced tech.
Product and Packaging Design: Whether it’s outsourced in Thailand or developed in-house by a Thai company, merit-based incentives might be approved for them by BOI.
The Importance of Due Diligence and Comprehensive Research Before Investing
Before investing in Thailand, you must observe due diligence, which in turn is a research and investigation process you need to conduct to gather info and assess your risk vs. rewards in making that Thailand investment.
You can invest in Thailand by starting a company there or contributing to one of many promising infrastructure projects. A Thai investment can also come in the form of purchasing real estate through legal means.
Identifying Risks and Calculating If It’s Worth It
The due diligence process should help you as an investor identify the potential risks and opportunities of a Thailand investment, thus allowing you to make an informed decision or at least a calculated risk.
How much are you willing to lose? Are the potential gains from your Thai investment worth losses from bad luck or unforeseen events?
Answering these questions should ensure a profitable and smooth investment when push comes to shove.
Here are the key points of consideration:
Research Risk and Benefits: You should gather as much info as possible about the current economic state of Thailand and assess the risk and benefits of your choice of Thai investment.
Circumnavigating Legal Issues: You should engage a legal firm to help you circumnavigate through the legal issues of your investment as a foreigner while also avoiding potential financial risks.
Property Purchase in Thailand: Practicing due diligence is important when doing things like buying Thai property and knowing things like foreigners being forbidden to outright buy land in their name without caveats.
Legal Ownership: When it comes to property, due diligence involves verifying the land is legally owned by the seller.
Title Deed Search: You should have your lawyer search for the title to determine if the seller has the right to lease, own, or sell the property in question. It also confirms if any liens are needed.
A Quick Overview of the Economy of Thailand
In Southeast Asia, Indonesia remains the largest economy in the region. However, Thailand is still the second biggest one economics-wise. Thailand ranks fourth in terms of per capita measurements, though.
Its GDP growth has been averaging around 4 to 5 percent annually, with gains mostly originating from its huge rice and agricultural exports and its robust automotive industry.
It also has a cottage industry of medical and dental tourism that grows along with its tourism industry. There are many tourists who avail of Thailand’s world-class healthcare at affordable prices even when you take travel costs into consideration.
The State of the Nation of Thailand and Its 2024 Economy
If you’re thinking of making an investment in Thailand in 2024, you’re not alone. Thailand has been an emerging tiger economy as of late ever since the end of the pandemic, particularly in tourism terms.
Empirical evidence shows that there are many investment opportunities and avenues for investors to share with the growth and development of the Kingdom of Thailand thanks to their many property trends, growing industries, and developing infrastructure.
Current Economic Stability: So far in the first half of 2024, Thailand has enjoyed a measure of economic stability. The Fragile State Index reveals that Thailand has a 70 rating, which is particularly favorable for property investors.
On the Road to Recovery: Thailand’s average GDP per capita over the last five years has dropped to 0.9 percent because of the 2020 COVID-19 pandemic. Investors can therefore invest now affordably as Thailand’s GDP recovers from pandemic era drawbacks, leading to practically assured gains in the future.
Growth Projection: According to current data and the forecasts of the International Monetary Fund (IMF), the Thailand GDP is projected to grow over the next five years to 15.1 percent, leading to an average growth of GDP of 3 percent.
Lucrative Opportunities Galore: The expanding global exports and steadily growing population of Thailand serve as fuel for its economic recovery, thus presenting various lucrative opportunities and dynamic markets for foreign investors to invest in that ensure substantial returns when all is said and done.
The emergent, industrialized and relatively new market economy of Thailand has achieved attention from international investors from every corner of the world map who acknowledge its strong growth rate and economic trends.
Targeted Industries for Promotion by Thailand
The Thailand government promotes and supports 12 specific industries when it comes to driving the country’s growth and advancement.
They’ve progressed through multiple levels of construction and development, thus offering significant economic value to the country. The industries in question include the following.
- Digital Industry
- Medical Industry
- Defense Industry
- Smart Electronics
- Food for the Future
- Robotics for Industry
- Logistics and Aviation
- Education Development
- Biofuels and Biochemicals
- Next-Generation Automotive
- Agriculture and Biotechnology
- Affluent, Medical, and Wellness Tourism
We at Umpire Legal specialize in legal advice, counsel, and help for businesses and investors operating within these 12 industries promoted by Thailand’s Eastern Economic Corridor.
Our dependable agents and lawyers offer veteran experience in navigating through the legalities and legalese involved with foreign investments, thus ensuring you wide-ranging and broad legal support through even the most complex landscapes of such industries.
Thai Real Estate Market
One surefire way to acquire long-lasting assets and worthwhile investments is the purchase and sale of land in Thailand.
Of course, as an international investor, you need to do so with the caveat of foreigners being forbidden to buy land in their name outright in Thailand. Let us here at Umpire Legal handle the details and legal avenues for buying Thailand property.
A competent Thai legal team like ours is needed to make the proper condominium or villa sales using 30-year leasehold or a company buying on behalf of a foreign investor.
Real estate costs are always rising, thus ensuring that your real estate company will continue earning revenue for your investors when push comes to shove.
The Importation and Exportation Business
Thailand is Southeast Asia’s major importation, exportation, and transportation center. It’s regular used as a trading post or international liaison between Southeast Asian countries as a result.
An investor can start a successful export and/or import business in this private sector of the Thailand economic market for huge gains.
Investment companies can get into the importation of exportation of goods such as electrical machinery, smart electronics, raw materials, rubber, mineral fuels, and precious metals.
Just remember that legal counsel is particularly handy when acquiring the necessary licenses for this sector from the Thailand government.
The Information-Technology Industry in Thailand
You can also start or invest in a Thai Information Technology (IT) business as well. Many Thai companies are aware and depend on the digital world, which includes smart technology and the Internet, to conduct business in the modern age.
Thai companies are particularly dependent on their IT services to make deals with foreign companies, from Zoom calls to email correspondences.
International investors can therefore invest in a variety of ways to improve the Thailand IT service scene, particularly when it comes to improving their cloud security infrastructure and other digital business solutions.
IT companies and services also require licenses and legal issues smoothed out by agencies like us at Umpire Legal, even if it’s tangential businesses like marketing on digital platforms.
Immense growth is happening in the IT sector of Thailand, so invest now to reap huge rewards later on. Thailand’s entire business community will require some kind of IT service, from virtual assistants to serviced offices for startups.
The Importance of Having Competent Legal Counsel When Starting a Business
When investing in Thailand or any other country, it’s important to have legal representation, counsel, and guidance on hand. For instance, a law firm like ours at Umpire Legal can ensure you have all your visa and Business Entity requirements set up.
Legal consultation with us also nets you legal counsel that covers paperwork and legislative concerns no matter which method you choose to invest in the Kingdom of Thailand. We can even point you in the right direction as far as BOI incentives are concerned for good measure!
Contact Umpire Legal for any questions you may have about the new Thailand BOI incentives, starting or doing business in Thailand, or buying property in the country as a foreign investor.