Invest Asia Group in Thailand
Last Update: 20th September 2020
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Grand Palace in Bangkok, Thailand
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The Kingdom of Thailand, also simply known as Thailand or the 'Land of Smiles' is a large country in South East Asia. During the mid to late 20th century, Thailand experienced the world's highest economic growth rate - averaging 12.4% during the late 1980s and early 1990s, however, the Asian Financial Crisis heavily impacted the economy.
However, in the years that followed, the economy bounced back due to a strong uptick in exports combined with increased infrastructure expenditure. Whilst Thailand has experienced a large number of military coups and political upheaval in its recent History and it's one of the world's most unequal countries (in terms of wealth), it offers a multitude of opportunities for international investors.
However, in the years that followed, the economy bounced back due to a strong uptick in exports combined with increased infrastructure expenditure. Whilst Thailand has experienced a large number of military coups and political upheaval in its recent History and it's one of the world's most unequal countries (in terms of wealth), it offers a multitude of opportunities for international investors.
Thailand: Overview
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Thailand is a diverse country, both geographically and economically with major differences between the capital city of Bangkok, the beach resorts and Northern regions, to name a few. Located in the center of South East Asia, Thailand's land borders a number of neighboring countries including Malaysia, Cambodia, Laos and Myanmar. Maritime borders include Vietnam, Indonesia and India.
Whilst the capital city, Bangkok, offers the best local talent pool of high skilled, multilingual employees to choose from, the associated costs are higher. This is in contrast to the central and northern regions of Thailand where the labor pool is less skilled but costs are subsequently lower. Thailand is a founding member of ASEAN, the second largest economy in South East Asia, a major ally in South East Asia of the USA and classified as a newly industrialized economy with strong manufacturing and tourism sectors. |
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Thailand Cities
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Thailand has a number of different sized cities throughout the country ranging from its international metropolis to an array of smaller cities throughout the different regions. For the purposes of this article, we have outlined Thailand's top 5 cities (by population) but other cities might also be relevant depending upon the specific type of business/investment type/sector under consideration within Thailand. For further details, please contact the team at Invest Asia Group to find out more.
Top 5 Cities in Thailand (by approximate population in 2020)
Aside from these top cities by population, other popular cities within Thailand for investment purposes include Pattaya, Chiang Mai, Chiang Rai and the various different island resorts (e.g. Phuket, Samui, Koh Samet etc.). Bangkok is Thailand's only international standard city and is popular among investors as well as expats. |
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Thailand Regions
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Depending upon the specific system used, Thailand is grouped into either six or four regions. For the purposes of this Thailand country overview, we've outlined the six regions as below.
The Central Thailand region contributes (by far) the largest percentage growth to Thailand's GDP and is home to the capital city of Bangkok. |
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Thailand Provinces
Within Thailand, there are 77 provinces throughout the country with many of the provinces dating back historically to semi-independent kingdoms (which made up the Ayutthaya Kingdom). Details of these provinces are outlined below.
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Northern Thailand
Northeast Thailand
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Western Thailand
Central Thailand
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Eastern Thailand
Southern Thailand
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Business Operations in Thailand
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Operating a business in Thailand presents an array of opportunities as well as challenges. Aside from obvious business related risks, understanding and working within a foreign system presents numerous challenges to investors.
However, with a relevant strategy, professional advice and local team, these risks can be mitigated. Whilst details are quite complex, we’ve summarized accordingly so readers can gain an understanding of the different options and processes involved in operating a business in Thailand. |
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Forming a Company in Thailand
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Establishing a company in Thailand is not a simple process and depending upon your specific business objectives, there can be alternative options to establishing an Thailand domiciled company (depending upon specific objectives).
There are 3 x main different business structures within Thailand and these are as follows:
Typically, most foreign investors choose to incorporate a (Private) Limited Company in Thailand, whereby 100% share ownership is permitted but industry/sector restrictions do apply. |
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Company Formation Procedure
The Company Formation Procedure for establishing a company within Thailand is outlined below.
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Invest Asia Group strongly advises investors to engage either an experienced local consulting company or an international law firm to navigate these processes.
International Investors Whilst there are certain restrictions, international investors/companies can operate businesses in Thailand. A large number of foreign owned companies operate throughout the Kingdom. Moreover with ongoing reforms, the number of restricted industries that foreign investors are able to operate is continually being reduced on an annual basis.
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Corporate Taxes
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There are a couple of different corporate taxes within Thailand as outlined below:
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Where to establish
This depends upon your business type and goals for doing business in Thailand. The capital city of Bangkok offers the offer the best labor force (most skilled) but with much higher competition, resulting in higher costs. Please advise your business type and specific goals for Thailand when contacting our team.
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Tax-Friendly Policies
Yes – a number of tax-friendly investment policies exist to encourage investment within specific sectors and industries. Further details can be provided, depending upon your specific inquiry.
Financial Markets in Thailand
Thailand's stock markets are relatively young, compared to their international peers but sizeable throughout the ASEAN region being home to the most actively traded exchange. Within Thailand, there is only one stock exchange - the Stock Exchange of Thailand. A brief overview of this stock exchange and further details are outlined below
Stock Exchange of Thailand (SET)
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The Stock Exchange of Thailand was first established in 1975 and as at June 2020 has a market capitalization of over USD $470 billion. Being the second most traded exchange (by daily turnover) in South East Asia as well as second largest by market capitalization, the SET is also the biggest IPO market within the region.
With over 500 companies listed on the exchange, investors vary from large pension funds, retail, institutions and banks. |
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Stock Exchange of Thailand (SET) Products
On the Stock Exchange of Thailand, there are a number of different listed securities products available to trade including the following:
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Other ways to get exposure to Thailand Stocks
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Aside from the aforementioned ways to gain exposure to Thailand companies, investors also have options to invest in Index Funds and Thailand companies/stocks listing in various overseas markets. There are a number of different Thailand related Exchange Traded Funds (ETFs) and some of the larger individual Thai stocks including Banks listing on American stock exchanges.
Most brokers will offer access to Thailand exposure ETFs and individual stocks listed in the US markets. Despite an array of different challenges, Thailand's growth should continue to outpace the developed Western economies and offer a number of attractive investment options. |
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Foreign Exchange
The Thailand Baht (THB) is the national currency of Thailand and among one of the world's most used currencies, ranking number 10 according to SWIFT. As one of Asia's leading currencies, the Thai Baht is freely convertible and has been a free floating currency (non pegged) since 1997.
Please note, there are some restrictions on currency exchange depending upon specific investment purposes and subject to taxation. For further details, please contact the Invest Asia Group team directly to find out more. |
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Commodities
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Being the world’s 20th largest economy and as a newly industrialized country, Thailand imports and exports a range of different commodities. Notably, Thailand is the world's largest exporter of natural rubber, controlling approximately 35% of the global export market.
Some of the top commodities Thailand exports include:
Other important exports include Fish Exports, Shrimp, Coconuts, Tapioca, Soybeans and Sugarcane. Some other notable exports (non agriculture/fishing) also include computers, delivery trucks, integrated circuits, telephones and jewelry. |
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Thailand's main industries contributing a larger portion towards GDP across the entire economy include:
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Within Thailand, the Thailand Futures Exchange (TFEX), offers a number of different futures products including:
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Cryptocurrency in Thailand
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Cryptocurrency is regulated within Thailand according to the Royal Decress on Digital Asset Businesses. These businesses are classified into three different types:
There are also detailed differences between both cryptocurrencies and digital tokens. Overall, Thailand has embraced cryptocurrencies and popularity is increasing throughout the populace. For the latest news and details relating to cryptocurrency opportunities within Thailand, please contact the Invest Asia Group team and we can assist. |
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Property in Thailand
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Thailand's property market is diverse and varied from the capital city of Bangkok to the Northern City of Chiang Mai and islands throughout the South. There are some restrictions among investors whereby land cannot be owned by foreign investors but other options are available.
Due to the size of the country and differences in development across regions, the property market within Thailand is fragmented across regions. Therefore, the best way to analyse the property market is on a local level as opposed to via a country-wide analysis. Pricing in Bangkok is substantially different to that of Chiang Mai as well as resorts in Southern Thailand. |
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International Investors & Property in Thailand
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Yes and no. Thailand has varied ownership laws where foreign investors are only permitted to own freehold ownership of property per the following options:
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For high net-worth investors, another legal avenue to bypass the land ownership restrictions is via prescribed investment of state enterprises (e.g. government bonds) or banks at an equivalent amount of approximately USD $1.25 million. Following receiving permission, the foreign investor can own up to 1 'Rai' (1,600 square meters) of land. The Thailand Board of Investment also offers pathways for qualified foreign investors.
For specific details and assistance, please contact the team at Invest Asia Group to find out how we can assist your requirements in Thailand. |
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Property Taxes
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The property market in Thailand is one of the major causes of wealth inquality throughout the country. Pricing varies substantially whereby a luxury condominium in central Bangkok is priced substantially differently to Isan in North Eastern Thailand.
When purchasing a condominium in Thailand there are a few fees associated in doing so and buyers fees are relatively low compared to neighboring countries.
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Best Locations to Purchase Property
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The Thai property market is a fairly mature market within South East Asia and experienced different waves of investment throughout the late 20th century. Japanese investors were major players in the property market whilst in recent years, investment from China has been substantial.
Generally, the best location to purchase in Thailand depends upon an investors objectives and goals in doing so. Numerous retirees choose to live in Thailand and there's a divergence between the condominium options in Bangkok compared to those in the island resorts and northern region. |
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Overall, the most popular areas in Thailand among foreign investors has been (and continues to be) the following cities/areas:
For further details regarding other areas of Thailand to consider, please contact the Invest Asia Group team today. |
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Venture Capital/Private Equity in Thailand
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As at 2020, Thailand hasn't yet produced a 'unicorn' startup, which is recognized worldwide. However, the government has invested and provided favorable conditions to support startups throughout the country. Moreover, private equity and venture capital is widespread consisting of local and international companies with a big startup scene in Bangkok across the various cowork spaces and to a lesser extent in Chiang Mai.
Some of the successful Thai startups include the following:
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