Why Expand Your Business Into Thailand?
In recent years, Thailand is seen as one of the most popular global business destinations. Let’s see why Thailand attracts businesses from all over the world.
1) Thailand – The Gateway to the Asian Market
Thailand is located at the heart of the majority of the ASEAN (Association of Southeast Asian Nations) countries. The main body of this country is surrounded by the Lao People’s Democratic Republic, Cambodia in the east, Myanmar in the west, Malaysia, Indonesia, and Singapore in the south.
Due to its distinctive strategic location, it serves as a foreign investors’ gateway to the Asian market. This means that it offers a way into the world’s largest growing economic market.
The country is also well-suited for convenient trade connections with China, India, and other ASEAN countries, with its smooth way into the Greater Mekong sub-region, where lies a huge business potential because of the recently emerging markets.
2) Ease of doing business
According to The World Bank’s Ease of Doing Business 2020 report, Thailand ranked 21st among 190 countries, with a score of 80.1. It progressed by six ranks in comparison to its previous year’s position. The report stated that this country exhibited huge improvement in its application process, the process of obtaining construction permits, and bureaucratic procedures by cutting down its number of steps, costs as well as time. The government constantly focuses on steps to diminish alleged ‘red-tape’ policies to ease FDI.
3) Fast-Growing Economy
Thailand is one of the dynamic and steadily growing economies of the world. As per the data presented by IMF in 2022, Thailand is Southeast Asia’s 2nd largest economy. With a $ 501.64 billion GDP in 2020, it is the world’s 24th largest economy. Although the country’s economy was brutally hit by the pandemic, it is in the process of recovering rapidly. It is anticipated that by the end of the year 2022, its economic activity will get back to its pre-pandemic status.
4) Availability of Qualified and Skilled Workforce
A finely educated and highly skilled workforce is necessary for the growth and success of any business. Thailand due to its rising number of educated citizens is an ample source of a highly versatile, well-qualified, skilled, and proficient workforce. Also, their pays are comparatively lower than that of western countries. Thus, hiring employees is a smooth process here.
5) Ease of Internet Access
In recent years, Thailand is seeing a continuous expansion of internet connectivity and huge growth in the number of its internet users. Even smaller towns have good internet access in this country. As of January 2022, there were nearly 54.50 million internet users here. A survey conducted in 2021 shows that Thailand stands 7th in the list of countries with the fastest broadband internet speed.
6) Reasonable Business Cost
The cost of doing business in Thailand is very low than that of other countries around the world.
7) Government’s Support and Incentives
The Board of Investment in Thailand in order to attract FDIs introduced an extensive range of tax incentives, support services as well as import duty exemptions to investors from other countries.
In 2021, Thailand’s cabinet approved and declared a resolution of immigration, tax, and land ownership incentives proposed for foreign investors as well as skilled professionals. The goal of these incentives is to revive the country’s economy which has been severely affected by the pandemic.
The incentives are divided into three types:
i) Immigration: A 10-year resident visa is offered to qualified immigration applicants as well as to their spouses and children. Through this recent kind of visa introduced, the qualified applicants also receive an automatic work permit to work in Thailand.
ii) Tax: The qualified applicants need to pay taxes at the same tax rates as the citizens of the country. They also receive tax exemptions for income made out of the country. They can also claim a 17 % fixed income tax rate according to the Eastern Economic Corridor scheme.
iii) Real estate: Through this incentive, the government relaxed the restrictions on foreign ownership as well as the rent of land and property to qualified candidates.
The cabinet also allowed the principles for four draft Royal Decrees regarding tax measures to encourage human resource development for “Industry 4.0”. It provides tax incentives through the “Thailand Plus Package” to encourage foreign investors to shift their production units here.
8) Good Corporate Governance
Thailand is known as the leader in corporate governance. It is also employing such principles in the public sector intending to improve transparency and liability.
9) Well-defined FDI policies
The government’s meticulous FDI policies aim at liberalization as well as free trade promotion all over the nation and with foreign countries.
10) Business Language
The language barrier is not an issue in Thailand because a majority of the universities in the nation impart education in the English language. Thus, the Thai employees can converse well in English and foreign companies can interact easily with their employees.
The above-listed reasons make Thailand one of the most preferred FDI destinations for foreign companies wanting to gain access to the Southeast Asia region.