Thailand: A Leading Destination for Foreign Direct Investment
In this article we will cover some of the reasons why Thailand is in the center of the World’s Fastest-Growing Region
Foreign direct investment (FDI) is an important piece of Thailand’s economic puzzle. As such, the country actively courts foreign investment through its Board of Investment (BOI). The BOI promotions are paying off handsomely, as business-friendly Thailand is one of the leading FDI destinations in Southeast Asia.
In 2008, Foreign Direct Investment (FDI) in Thailand totaled US$95 billion. Fast-forward to 2018, and FDI stock had catapulted to $222.7 billion, or 48.9% of the country’s GDP.
In 2108, FDI flows rose to $US10.49 billion. After a slow start in 2019, the figure climbed higher through increased investment from Japan, Mauritius, and Hong Kong.
According to the BOI website, here is a snapshot of total FDI in the first quarter of 2019.
1 Jan 2019 – 31 Mar 2019
Total investment (number of projects) 387 / Total investment (million baht) 128,902
- Total Foreign Investment (number of projects) 245
- Total Foreign Investment Value (million baht) 84,104
- 100% Foreign (number of projects) 156
- 100% Foreign (million baht) 43,999
- Joint-Venture (number of projects) 90
- Joint-Venture (million baht) 61,197
- 100% Thai (number of projects) 114
- 100% Thai (million baht) 16,755
- Other Investment (number of projects) 27
- Other Investment (million baht) 6,951.34
Significant contributors to Thailand FDI are Japan and Singapore, representing slightly more than half of FDI inflows. Rounding out the major investors’ list are Hong Kong, the Netherlands, Germany, Mauritius, and the UK.
Nearly 70% of all FDI inflows target manufacturing, financial, and insurance activities. Other important investments involve real estate, commerce, information, and communication.
For a plethora of global multinational corporations, Thailand is already a second home. Global MNEs with a presence in Thailand include:
- Energy—ExxonMobil, Chevron, and Royal Dutch Shell
- Chemicals—Dow, Syngenta, DuPont, Bayer, and BASF
- Automotive—Honda, Mazda, Toyota, Nissan, Chevrolet, BMW, Volvo, Triumph, Isuzu, Volvo, and Mitsubishi
- Electronics—Samsung, HP, IBM, LG, GE, and Sony
Based on the Organization of Economic Cooperation and Development’s (OECD) forecast that Asia will remain the world’s fastest-growing region through 2030, Thailand should continue to be an FDI magnet solely by virtue of its location. Location is not the only factor in Thailand’s favor, however.
The country’s development of cutting-edge infrastructural facilities—such as the Eastern Economic Corridor’s Digital Park Thailand (EECd) data hub—opens up unmatched opportunities for entrepreneurs and established companies. Thailand’s economic growth, along with progressive incentives and forward-thinking policies, make the Land of Smiles a characteristically innovative, welcoming venue.
Are you looking to set up your business in Thailand and make your first hire? You can also check out this article on Navigating Thai Labor Law
