Thailand: A business-friendly gateway to Asia

Thailand’s GDP is worth over US$500 billion and its population of over 70 million people provides a large consumer base and workforce. Its economy provides an environment in which businesses of all sizes can thrive. While other countries have rolled out steep increases in interest rates, Thailand’s central bank has been more patient, despite rising inflation.¹

While other countries have rolled out steep interest rates, Thailand has taken a more gradual and measured approach to monetary tightening.

This is part of a suite of proactive, forward-thinking policies designed to encourage economic activity in the country and attract outside investment.

Automotive powerhouse

Thailand leads the electric vehicle market in the region² and is seen as a key investment destination by Chinese electric vehicle (EV) makers like BYD, Great Wall Motor, and Hozon.³ It also leads the automotive market in the Association of Southeast Asian Nations (ASEAN) area, and exports to more than 100 countries from manufacturers such as BMW, Mercedes, Honda, and Toyota.⁴

Agricultural opportunities

Thanks to its bountiful natural resources, Thailand has a strong agricultural sector, which employs around one-third of the country’s workforce.⁵ However, agriculture only represents 6% of the country’s total GDP, in part due to a lack of technical development; this provides significant opportunities for entrepreneurs and technological companies operating in the country.⁶

Business incentives

Thailand has introduced tax incentives to encourage investment in R&D, semiconductor manufacturing, biomedicine, and digital technologies. The country is a major semiconductor manufacturer in Southeast Asia, and the industry is projected to grow by a compound rate of 6.1% until 2028.⁷

Gateway to Asia

A substantial advantage of locating your business in Thailand is that it affords you access to Southeast Asia and the wider Asian region, trade corridors that Thailand is keen to further develop.

Thailand established the Eastern Economic Corridor in 2018, with plans to develop its eastern provinces into a leading economic zone, with a planned investment of US$43 billion.⁸ It is also part of the International Land-Sea Trade Corridor, a major channel connecting the country to China’s western provinces.⁹ Thailand also helped introduce the Bio-Circular-Green (BCG) Economy initiative – which is supported by China – and seeks to secure a post-pandemic growth strategy that will support sustainable growth in the Asia-Pacific region.¹⁰

Thailand has particularly strong trade corridors with Japan, which has historically been a significant source of foreign direct investment (FDI) in the country. It also has a strong trading relationship with the United States, with two-way trade of $63.7 billion in 2021.¹¹

Thailand established a Joint Economic and Trade Committee (JETCO) with the United Kingdom in 2022, in a boost to bilateral trade arrangements between the two countries¹² and the European Union (EU) is Thailand’s fourth largest trading partner.¹³ It also initiated a bilateral trading partnership that will positively impact the EU-Thailand trade relationship for years to come.¹⁴ Inside the EU, Thailand has an especially strong trading relationship with Germany with which it has diplomatic relations stretching back to 1858.¹⁵

Challenges for businesses moving to Thailand

Thailand’s Board of Investment (BOI) offers a range of incentives and investment packages for businesses, including a five-year corporate income tax (CIT) exemption for companies that are relocating to the country.¹⁶ However, companies applying for these incentives will need support from consulting firms to navigate the complex application process. HSBC can connect your business with professional intermediaries experienced with expediting foreign investment in Thailand. HSBC has a strong relationship with the BOI and is able to recommend qualified businesses to the board for consultation over investment strategy.

Navigating your fiscal obligations can be extremely complex, with CIT and VAT obligations taking the most time to complete.¹⁷ However, the BOI is aware of the need to streamline the processes new businesses need to go through to establish operations and is working on solutions to address this.

Thailand ranks near the bottom of the English Proficiency Index,¹⁸ so it’s vital to have local language support on the ground. Our local HSBC team collectively, speaks 24 languages and is adept at navigating the linguistic and cultural challenges of operating in a new country. We can also connect you with staffing agencies that help you onboard employees with appropriate language skills for your needs.

International Subsidiary Banking (ISB)

Thailand offers a unique business culture— to make the most of the opportunities it is important to partner with a bank that has a deep understanding of both the local regulations and the local people. We can offer you the right people, as well as a range of products and services tailored to meet the needs of doing business across borders. Our skilled team members are seasoned experts, and we have nine sector heads with highly specialised expertise on hand to provide a seamless banking experience.

Our International Subsidiary Banking (ISB) model helps your business expand into new countries like Thailand while benefiting from being part of an international bank. This helps with account consolidation and enables you to leverage your global credit position across your subsidiaries.

When you choose to bank with HSBC, you gain a partner that can help you navigate the complexities of the Thai market while reaping the many benefits of moving your business to the country. We also leverage our network to help you build relationships with key business contacts in your industry who have experience of operating in Thailand.

Our ISB team is structured to mirror your own team, with dedicated ISB managers for your subsidiaries and a global relationship manager for your parent company. Together, we help you assess your global objectives and align them with your local needs in new markets.

Why choose HSBC?

We are proud to have had a presence in Thailand for over 130 years—we established the first commercial bank there in 1888. We have been a major driving force for Thailand’s economy, offering a wide range of financial and banking services to our corporate customers.

Looking to the future, it is vital to keep up with the pace of change in technology, regulation and the economy With HSBC’s online banking solutions, you have access to a range of intuitive and powerful online tools to help improve cash flow management, reduce manual processes, and cut costs while maximising surplus funds.

While our FX Everywhere system uses Distributed Ledger Technology (DLT) that transforms intra-company foreign exchange processes, reducing the risk of discrepancies and delay, and helping you seamlessly manage cross-border foreign exchange flows in 50 countries via a single banking platform.

From digital banking to local market expertise, HSBC gives you the support you need to unlock the many business opportunities that Thailand has to offer.