Thailand is the second largest economy in Southeast Asia and is a tech and industry hub in its own right
In addition to world-renown beaches and delicious food, it has become a centre for entrepreneurs and start-ups, a place where multinationals establish their offices and factories and investors look for growth.
Here are three reasons why Thailand attracts companies from around the world:
- A well-connected Indochina Hub – Thailand is perfectly located next to fast-growing Myanmar and Laos and Malaysia, with China just a short flight to the North. Thanks to its location it has become a regional hub for several industries and sectors, notably data centres, healthcare and manufacturing among others. Thailand’s healthcare spending is expected to exceed $30 billion by 2020 and attracts ‘healthcare tourists’ from Southeast Asia and the Middle East. When it comes to manufacturing Thailand is a centre for automotive, electronics, rubber, plastics and other goods which it exports around the world. While COVID-19 has put an end to travel, once the world starts opening up Thailand is very well connected with two international airports in Bangkok and a well-developed road network.
- Improving business environment – In the latest Ease of Doing Business rankings by the World Bank, Thailand jumped to 21, from 27 in 2019. The report specifically called out legislation that was passed to reduce the steps needed to secure building permits, as well as greater protections for minority shareholders. Numerous Thai governments have recognised the value a thriving private-sector plays and the importance of attracting foreign investment and so have taken steps to improve business and economic freedoms which have led to Thailand moving from a low-income to an upper-income country in a generation. While Thailand saw a sharp contraction in GDP in 2020 thanks to the COVID-19 pandemic, the World Bank expects GDP growth of 4.1% in 2021.
- Thailand 4.0 – The Thai government adopted the Thailand 4.0 economic model to transform the country into an innovation-driven economy based on automation technologies, aviation and logistics, medical industries, digital and biofuels. Much of the focus is being placed on innovation, especially in targeted industries, as well as developing human talent and capital. Partly as a result, we have seen a boom in start-ups making Thailand their home, with investment amounting to US$97.55 million from 32 deals in 2019 which included higher stage funding (such as Pomelo’s Series C funding). High tech adoption and robust digital infrastructure will attract more start-ups to Thailand in the coming years.
Before you decide to expand into or invest in Thailand, however, there are several things you need to know. For instance, in most sectors foreigners are allowed to own no more than 49% of the company’s shares and firms with foreign ownership are required to provide a minimum of 2 million THB in paid-up capital. Companies require a minimum of one Director and a minimum of three natural persons as initial shareholders
The corporate tax rate in Thailand stands at 20%, though SMEs with an annual turnover of less than 300,000 THB do not have to pay tax and companies with turnover of between 300,001 to 1 million THB are taxed at 15%.
For guidance on setting up a business, visa and immigration and other services in Thailand, contact Alpadis Group