Population (2017): 69,037,510
GDP (2017): US$455,220,920,000
World Bank “Ease of Doing Business” Rank (2018): 26
Bilateral Trade with Singapore (2017): S$30,164,500,000
Trading Partner Rank (2017): 9
Thailand is the second largest economy in Southeast Asia, and it is an attractive market you should consider. With its central location in Indochina, Thailand is the ideal gateway to the growing economies of its neighbours and export trade partners in the Mekong region – Cambodia, Laos, Myanmar and Vietnam (CLMV).
Thailand and the CLMV countries want to take full advantage of their geographical proximity, and are constantly working to improve cross-border transport and logistics efficiency. In 2017, Thailand proposed a masterplan to boost trade and investment collaboration with the CLMV countries. This includes improving infrastructure development to link the region’s logistics network.1
By bringing your business to Thailand, your customer base can potentially become bigger than the country’s population of 69 million and extend to the 230 million in the CLMV markets.
1: “Thailand to develop master plan for closer ties with CLMV”, The Nation, 19 June 2017
Under Thailand’s National Digital Economy Masterplan, the Thai government has made it a priority to develop digital hard infrastructure.
The Masterplan lays out a 20-year strategy to capture growth opportunities in the rising digital economy. It aims to broaden the outreach of digital technology in Thailand and usher the country into the Thailand 4.0 era – a new digital economic model launched in 2016.
This makes Thailand an attractive market for Singapore tech companies in sectors such as agritech, e-commerce, enterprise services, fintech, and healthtech.
However, one of the key challenges for the Thai technology sector is a shortage of talent. Computer science graduates in Thailand are highly sought after by multinational corporations and other companies every year. This is an area Singapore companies can make up for, by providing related solutions in areas such as database management, software engineering, and systems & networking to bridge the market gaps.
Thailand is witnessing an infrastructure boom. Transport infrastructure development, in particular, is a key priority of the Thai government, which wants to boost its regional connectivity and strengthen its position as a manufacturing hub.
In 2017, Thailand announced a five-year public-private partnership (PPP) strategic plan worth 1.62 trillion baht (S$66.2 billion). Of the total budget, about 95% is for transport infrastructure investment, and the rest for education and public health2.
Here’s what you need to know – transport projects under the strategic plan will be divided into two groups: projects for which the government wants the private sector to contribute specific skills to, such as high-speed trains, rail systems in Bangkok and ports for shipping goods; and projects in which the government is encouraging the private sector to invest in, such as airports and motorways3.
Given our strong infrastructure ecosystem, Singapore companies are well-positioned to fill Thailand’s infrastructure gap. If you are a Singapore company in infrastructure development, you can look for opportunities to partner local conglomerates to bid for and participate in PPP infrastructure projects.
2: “Thailand plans 1.62t baht public-private partnership projects”, The Business Times, 30 August 2017
3: “Three projects look to get on PPP fast-track”, The Bangkok Post, 22 May 2018
If you are planning to venture to Thailand, pay close attention to the Eastern Economic Corridor (EEC), a mega project aimed at developing Thailand’s eastern provinces into an ASEAN economic zone.
The EEC straddles three eastern provinces of Thailand – Chonburi, Rayong, and Chachoengsao – off the coast of the Gulf of Thailand. Thailand hopes to complete the EEC by 2021, turning these provinces into a hub for technological manufacturing and services, with strong connectivity to its ASEAN neighbors by land, sea and air4.
The Thai government has also identified ten “S-Curve” industries, which refer to high growth sectors for the EEC, and announced attractive investment incentives and support schemes to encourage investors.
Singapore companies can find investment opportunities in these ten industries: agriculture & biotech, aviation & logistics, biofuels & biochemical, digital, food innovation, medical & wellness tourism, medical services & healthcare, next-generation automotive, robotics, and smart electronics.
Although the Thai government has yet to finalise a comprehensive list of incentives, it has announced a major cut in personal income tax to 17% for investors in the EEC, land leases of up to 50 years, and a free flow of foreign currencies in the three eastern provinces. Furthermore, a 50% reduction in corporate income tax over a period of five years is now on offer for investors in EEC’s three provinces.4
The upcoming Eastern Economic Corridor Bill – approved in principle in mid-April 2017 – will amend or suspend more than 100 Thai laws and regulations within the EEC which restrict foreign investment. This will improve the ease of doing business there4.
4: “Thailand’s Eastern Economic Corridor – What You Need to Know”, ASEAN Briefing, 29 June 2018