Thailand is not just an attractive tourist destination. It is also appealing to businesses, which are increasingly winning to invest in the newly industrialized nation. Shaken by a devastating flood in 2013 and a military coup in 2014, the country has seen an impressive recovery. The latest FDI figures confirm the spectacular improvement.
Volumes of direct foreign investment are increasing rapidly. In 2019, the Thailand Board of Investment confirmed a 69% growth over the first nine months of 2019 in comparison with a year prior. The trend was spurred by the government’s efforts to incentivise foreign investors and create a comfortable business climate.
Main Sources of Capital
Let’s look at the biggest contributors to the local economy. Where do most of the investments flow from? In terms of size, the primary players are Japan and Singapore — they account for over half of the total amount. Other important contributors are Mauritius and three EU states: the UK, the Netherlands, and Germany. The investors are mostly interested in the following industries:
- finances, and
These three sectors attract roughly 70% of total FDI. Other directions of investment include real estate and commerce, as well as information and communication.
Opportunities for Locals
The local population is increasingly engaged in the global currency exchange. Due to recent reforms in regulation, the country has become attractive to international brokerage firms. Operations in the Thai baht are still restricted, but traders have a wide range of instruments to use on the best Forex trading platform, which is provided by FXTM.
This is another sign of economic development and improvements in financial literacy. Thai traders may access major, minor, and exotic currency pairs, as well as stocks and complex derivatives. Through Contracts for Difference, they may profit from changes in global commodity markets. Online trading is booming.
Key Strengths of Thailand
Foreign investors are welcomed with a wide range of incentives and rewards. In general, Thailand is more appealing than most other locations in Asia. The government has been successful in implementing favourable regulations. Today, it is possible to distinguish several key points:
1. Welcoming for Business
Foreign companies note the comfortable business climate in the country. In 2018, Thailand occupied the 26th place in the World Bank’s rating of most attractive environments for international business.
2. Benefits of Economic Diversity
Unlike most oil-exporting nations, the country does not have over-exposure to a single sector of the economy. Aside from the agricultural produce, which is exported worldwide (rice, rubber, sugarcane, and fruit), Thailand has a strong auto industry. Electronic production, services and tourism are all important contributors to the nation’s budget.
3. Inexpensive Local Workforce
Many large corporations outsource to Thailand, as its workforce is cheaper than in the West. It is also diversified and highly skilled.
4. Advantages of Geography
Thailand rests in the heart of Asia. It is adjacent to the Greater Mekong Basin and the Southeast region. Both neighbouring locations have emerging markets with considerable potential.
5. Recent Policy Reforms
The government has been taking active steps to ramp up the influx of foreign investment. It encourages free trade, and regulations of export have been relaxed.
Key Weaknesses of Thailand
The military coup that shook the nation occurred just 6 years ago. It is only natural that long-term effects are still felt, although recovery has been rapid. The economic system has a few important imperfections. First, innovation and infrastructure are lagging behind other segments. Consumer debt is still high, and development is hampered by conflicting interests of political and economic factions.
Efforts by BOI
The Thai Board of Investment has done a lot to improve the investment climate. Many local industries offer the biggest incentives and benefits to foreign investors. These are tax deductions, exemptions and lower costs (e.g., for construction, establishment, transport, etc). The segments are:
- agriculture and food,
- renewable sources of energy,
- auto manufacturing,
- information and communication technologies,
- fashion, and
Positive Prospects Ahead
The progress achieved by the national government cannot be denied. The country has been rebuilding its economy since the latest political and natural disruptions. Today, it is an attractive destination for foreign capital, and FDI is only projected to grow.
Meanwhile, the local population is using technological advances to participate in the global financial markets. Opportunities for profit are vast. International brokers offer country-specific Forex bonus schemes and educate clients on the essentials of online trading.