[authors: Jessada Sawatdipong, Chisako Takaya, Arkrapol Pichedvanichok]*
In this new series, “Doing Business In,” we asked our members about the current business climate in their countries, investment opportunities, and what others should know about doing business there.
1. What is the current business climate in your jurisdiction, including major political, economic, and/or legal activities on the horizon in your country that could significantly impact businesses?
The global pandemic has impacted some sectors of the Thai economy, including those related to tourism and real estate. The consequence of this has been an increase in debt rehabilitation work (particularly concerning airlines). Investment in manufacturing and e-commerce remains strong. We see renewed interest in investing in real estate again, including in the hotel sector. The Thai government is keen to move towards becoming a high technology country and is encouraging investment in the so-called “S-curve” industries, including cars; innovative electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; medical services; defense; and education development. Given the incentives available, we expect to see further growth in these areas.
2. From what countries do you see the most inbound investment? What about outbound?
Inbound investment: Traditionally, Japan has been one of the top investors in Thailand, particularly in the manufacturing sector. We continue to advise Japanese investors on investment in a wide range of industries. Due to the increase of e-commerce, there has been more interest in investment in logistics and warehousing. In addition to Japan, Singapore and China are also top investors in Thailand.
Outbound investment: Investment from Thailand tends to be into Southeast Asia, especially Vietnam. The Thai energy sector has been one of the most active sectors for overseas investment. Other sectors include manufacturing, retail, and hospitality. We also see more outbound investment and financing by Thai banks into Southeast Asia.
3. In what industries/sectors are you seeing the most opportunity for foreign investment?
Aside from traditional sectors for foreign investment, including manufacturing, we expect to see growth in investment in e-commerce, logistics, and real estate.
4. What advantages and pitfalls should others know about doing business in your country?
The advantages and pitfalls would depend on the sector in question. We recently produced a detailed guide titled “Doing Business in Thailand,” as a starting point. Our lawyers routinely advise foreign investors investing in Thailand across a range of sectors and are therefore able to give practice advice according to the nature of the investment.
5. What is one cultural fact or custom about your country that others should know when doing business there?
Thailand encourages foreign investment, and as a result, many foreign nationals live and work in Thailand. English is widely spoken in the Thai business community. Some aspects of Thai culture are similar to other countries in Asia. It is crucial to think about building long-term relationships and showing respect, particularly to those in more senior positions. As with many cultures, business dealings should be conducted in a manner that does not cause loss of face. Being patient is essential, no matter the challenges faced.
*Chandler MHM Limited