In this new series, “Doing Business In”, we asked our members about the current business climate in their country, investment opportunities and what others should know to do business there.
1. What is the current business climate in your jurisdiction, including the main political, economic and / or legal activities on the horizon in your country that could have a significant impact on business?
The global pandemic has affected certain sectors of the Thai economy, especially those related to tourism and real estate. This has resulted in an increase in debt rehabilitation works (particularly with regard to airlines). Investments in manufacturing and e-commerce remain strong. We are seeing renewed interest in investing again in real estate, including in the hotel sector. The Thai government is keen to become a high-tech country and encourages investment in so-called “S-curve” industries, including cars; innovative electronics; easy, medical and well-being tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; medical services; defense; and educational development. Given the incentives available, we anticipate further growth in these areas.
2. From which countries do you see the most inbound investment? What about outgoing?
Inbound investment: Traditionally, Japan has been one of the main investors in Thailand, especially in the manufacturing sector. We continue to advise Japanese investors on investing in a wide range of sectors. Due to the increase in e-commerce, there has been more interest in investing in logistics and warehousing. Besides Japan, Singapore and China are also the main investors in Thailand.
Outgoing investment: Thailand’s investments tend to be in Southeast Asia, especially Vietnam. The Thai energy sector has been one of the most active sectors for foreign investment. Other sectors include manufacturing, retail and hospitality. We are also seeing more overseas investment and funding by Thai banks in Southeast Asia.
3. In which sectors / industries do you see the most foreign investment opportunities?
In addition to traditional foreign investment sectors, including manufacturing, we expect investment growth in e-commerce, logistics and real estate.
4. What advantages and pitfalls should others know about doing business in your country?
The advantages and the pitfalls would depend on the sector in question. We recently produced a detailed guide called “Doing Business in Thailand” as a starting point. Our lawyers regularly advise foreign investors who invest in Thailand in various sectors and are therefore able to give practical advice depending on the nature of the investment.
5. What is a cultural fact or custom about your country that others should know about 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 Asian countries. It’s crucial to think about building long-term relationships and showing respect, especially to those in higher positions. As in many cultures, business relationships should be conducted in a way that does not make you lose face. Being patient is essential, regardless of the challenges encountered.
*Chandler MHM Limited