Thai government selflessly devotes its resources for effective nation building and supporting its people. It is an attractive business development centre of Asia. With a population of 69 million people, a steadily-growing economy and business-friendly policies, Thailand is an attractive destination for foreign investors and multinational corporations (MNCs). Setting up a company in Thailand is comparatively easy due to its foreigner friendly policy and it’s laid out world class ready infrastructure making it less cumbersome to set up a new business without teething problems.
As per the World Bank’s 2020 ranking which includes Ease of Doing business from the bureaucratic procedures and the application process and costs involved Thailand is ranked as the 21st easiest place for doing business in the entire world. According to the 31 October 2018 report, Thailand reached a score of 78.45, up from 77.39 in 2019, meaning Thailand consistently remains in the top 30 of 190 economies in the Ease of Doing Business ranking. In the Asia region it is regarded as a favorable destination to start up business and continue progressing. Thailand’s improvement is largely due to the government’s consistent efforts to improve both the regulatory environment and business incentives.
Starting a business in Thailand is lucrative
Foreign investors and MNCs find favour with Thailand’s e-Registration system, a new initiative by the Department of Business Development. Moving forward, foreign businesses can appoint a representative to act on their behalf to register their businesses in Thailand. They also can choose to pay via various channels, and put together, these tweaks make the procedure more flexible. The registration of a company has been made less costly: the registration fee has been reduced to the fixed fee of THB 5,500 only.
The Thai government is planning to revise the Bangkok Act for Construction Permit Applications (1982), to reduce the inspection processes to only three stages, and also reduce the permit issuance timeline to only 10 days. If this is successfully implemented, it will be a huge win for businesses.
Export and imports in Thailand
The Thai government has relentlessly worked to set a standard of custom operations and a “related procedures framework”, in line with the World Trade Organisation and World Customs Organisation’s standards. A mutual recognition agreement (MRA) was established between Thailand and its regional partner countries to share the benefits of the Authorized Economic Operator standards. These facilitate a special privileges program for interested as well as existing entrepreneurs.
The country has amended its tax administrative structure to improve its tax system – not least by making filing online easier. This is a further step to ease administration for hard-pressed international businesses. Further, Thailand’s tax rate structure is very investor friendly and competitive ranging between 10-30% depending upon the income earned. Taxes on the lower side make investment a lucrative proposition.
The Digital Thailand 4.0 program has been initiated to digitalize social system with an integrated digital business. This program has helped rural-based small and medium firms to make use of e-markets and e-payments for selling their products. Thai Government has special incentive schemes for business owners who would like to invest in manufacturing or is in the technology space.
The main characteristics of the program includes a digitalized social system with an integrated digital business. This program has helped rural-based small and medium firms to make use of e-markets and e-payments for selling their products.
The government is encouraging small and medium enterprises to make use of the internet. The Thailand 4.0 program is supposed to boost the e-commerce business because it is facilitating the use of digital payment modes and e-marketing both inside and outside the country. The program has an agenda that includes the following: strengthening the internet connection, enhancing the infrastructure and logistics services, Promoting trade relations with neighboring countries like Vietnam, Cambodia, etc.
Thai Government has special incentive schemes for business owners who would like to invest in manufacturing or is in the technology space through the Board of Investments (BOI). It has also made work permits and visas for foreigners to be easier by introducing the Smart Visa which enables people to have longer visas and work comfortably.
The government is also ensuring that the small and the medium businesses and the fast-changing industries like telecom and financial sectors are maintaining international standards.
The Eastern Economic Corridor: The Catalyst for Economic Development
Several initiatives are being taken by the government to strengthen the transport system overall. One of the major components of the Thailand 4.0 program is the Eastern Economic Corridor. The government has sanctioned sufficient funds amounting for the construction of railways, roads, shipping, and aviation infrastructure in large and medium scale and to help in bringing improvements in the so-called smart cities to make it further progressive. The two most important smart cities developed by Amata are generating more than 10% of the nation’s GDP. The new transport infrastructure will connect south of Thailand and to regions beyond Singapore and Malaysia thus bridging the gap between the Bay of Bengal and the South China Sea. This infrastructure will also connect with the road initiative and the ambitious belt of China thus connecting China with Europe, Central Asia, India, Russia, and Southeast Asia. This will open new channels for having entry to newer markets. This will also encourage foreign investors to start a business in Thailand. And business will see the growth curve in short span of time.
Affordable Business Cost
Operational costs are extremely competitive and such costs which include rent of office space is on the lower side compared to other countries making it a more viable option for investment by different commercial entities.
A Step towards full integration of the smart cities
The greatest initiatives of the EEC and Thailand 4.0 is the development of smart cities. These cities provide scope and opportunities to the clients for participating in this new model in order to deliver smart solutions the economic growth of Thailand has been expanding from the last few decades with steady progress in steel, automobiles, and petroleum. Thailand 3.0 has brought huge success in the past 30 years and now the 4.0 program is introducing cutting edge facilities, new technologies and innovations, inter connectivity. Internet connectivity is 100% nearly in the entire country and at top most speed which gives business prospects the much needed global connectivity and reduces cost of communication while increasing efficiency.
The main center of technological growth and smart manufacturing will be Eastern Economic Corridor which covers a total area of 13,000 square kilometers.
Thai business prospect will be moving forward thus contributing more to the GDP of the nation and will help the nation to boost up its success and development. However, there is a need to bring cooperation between the private and the public sectors so that international and domestic investment can be attracted. Work on various strategies are in progress.
Reforms made in Thailand in making business easier
The strategic situation and mixed population where the people are known for their polite behavior, creativity, hospitality, and an energizing spirit to collaborate effectively. The Thailand Convention and Exhibition Bureau (TCEB) is a great initiative taken to redefine the business events.
Doing business in Thailand has become easy because of the business friendly environment. It helps in bringing a lot of foreign and private investment and this is one of the main reasons why Thailand attracts entrepreneurs from all over the world to set up a business. The friendly environment along with supportive government initiatives have made it easier for the startups and the investors to make an easy entry and succeed.
The customs act has been updated to international standards, the introduction of electronic ID’s and essential steps have been taken to simplify the requirements of the bureaucracy. Some of the major key reforms have been brought by the government to simplify the process of paying taxes. The Thailand market entry process has been made easier which has also attracted a lot of foreign investors. It has also started paying credit scores to financial and bank institutions. Trading has been made easier and the reforms related to trade are also gaining priority. With the support of the World Bank Group, the government has identified ten essential areas to improve the business environment and to make it easier for those doing business in Thailand. It includes the following:
- getting credit
- paying taxes
- dealing with the permits of construction
- starting a business
- registering properties
- getting electricity
- giving protection to the minority investors
- trading abroad
- to resolve insolvency
- enforcing agreements
- a specified debt to enquiry ration
The whole crux lies on the idea of growth and make the place business development friendly. The majority of the reforms are focused on making it easier to enter businesses, reducing complexions, easy operation for small and medium enterprises, securing the property rights, enhancing transparency, and increasing access to credit.
Stable Law & Order:
Thailand has maintained a stable law and order. A healthy law and order environment builds more investor confidence, as then it’s clear that the work environment will not be hindered due to any miscreant activity. Safety is a primary requisite for a workable environment for business.
The crux of the matter is that Thailand is much more than an idyllic beach resort. It is a country with a welcoming investment climate. It knows its own strengths and weaknesses. It isn’t a big mass of land or people. But it does understand what the need of the times are. So it focusses on building infrastructure, educate and offer technically sound and competent man power, make easier laws of the land to make it a preferred destination for investors. So while some decide to take a flight to the pristine white sands, quite a few might stay on making it their next business destination.
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