Thailand Investment Review, October 2014

CONTENTS
October 2014
Volume 24
No. 10
Prime Minister
Announces Policy
On 12 September Prime Minister Prayut delivered his Government’s policy
statement to the National Legislative Assembly, in which he outlined the policy
direction of Thailand’s new government. The statement covered 11 policy areas,
including upholding and protecting the institution of the monarchy; national
security and foreign affairs; reduction of social disparities and providing greater
access to state services; education, religion, art, and culture; public health quality
and people’s health; the enhancing of economic potential; Thailand’s role in the
ASEAN Community; the development and application of science, technology,
research and development, and innovations; natural resource security and the
creation of equilibrium between conservation and sustainable use of natural
resources; good governance and anti-corruption efforts; and law and justice.
“My working principles are act first, do it seriously, and act promptly” said the
Prime Minister.
The current government will promote royally initiated projects; it will work hard to
suppress international crime, and will try and find a resolution to the violence in
the South. To address social disparities it will promote the rights of the elderly,
marginalized people and the disabled. It will work to solve the problems of
landless farmers and address public land encroachment.
Page
Prime Minister Announces Policy 1
News Bites / BOI Net Applications 2
Industry Focus: Logistics 4
Thailand a Top-10 Destination 7
2015 ASEAN Business Outlook
Survey 8
Siam Commercial Bank’s EIC Report 10
BOI’s Missions and Events 11
Thailand Economy-At-A-Glance 12
Continued on P. 3

NEWS BITES BOI NET APPLICATIONS
Investment in Power
Generation to Cope with
Thailand’s Economic Growth
Thailand will invest more in the construction
of power plants in order the cope with the
growing demand for domestic consumption
and the country’s economic growth.
NCPO had approved investment projects
of the Electricity Generating Authority of
Thailand, the Provincial Electricity Authority,
and the Metropolitan Electricity Authority
to meet the needs of households and the
industrial sector and to promote energy
security in the future.
The Board of Investment (BOI) recently
approved promotional privileges for
investment in waste-to-energy facilities and
renewable energy power plants. It is intended
to encourage the use of energy generated
from waste and other renewable energy
sources.
Workforce Development
Four organizations, namely the Department
of Skill Development, the Office of the
Vocational Education Commission, the
Federation of Thai Industries, and the Thai
Autoparts Manufacturers Association, have
joined forces in developing workforce for
industries and helping ease labor shortages.
The objective is to develop the Thai workforce
in response to the market demand and in line
with the labor situation. A target has been set
for Thailand to produce 3.5 million vehicle units in 2020.
Thailand and China Boosting ASEAN
Connectivity
At the end of 2013, Thailand and China, along with Lao PDR
and the Asian Development Bank, completed the Fourth Mekong
Friendship Bridge. This bridge connects Lao PDR to the northern
part of Thailand at Chiang Khong in Chiang Rai province and
represents the last so-called “missing link” on Route No. 3A,
connecting Thailand to Lao PDR and on to Kunming in China
along the GMS North-South Economic Corridor.
Joint efforts are also being made with China and Lao PDR to
expedite the signing and implementation of a memorandum of
understanding (MOU) to facilitate the cross-border transport of
people and goods along Route No. 3A.
2013
(US$ = 31.57 THB)
2013 (Jan - Aug)
(US$ = 31.60 THB)
2014 (Jan - Aug)
(US$ = 32.00 THB)
Number of
projects Value Number of
projects Value Number of
projects Value
Total Investment 2,237 34,335 1,225 21,325 886 13,015
Total Foreign Investment 1,132 16,622 780 10,008 550 9,011
By Sector
Agricultural Products 6 101 51 592 25 185
Minerals / Ceramics 1 19 24 447 21 502
Light Industries / Textiles 6 20 41 282 24 262
Automotive /
Metal Processing 17 159 256 5,384 145 5,550
Electrical / Electronics 19 167 151 1,042 113 407
Chemicals / Paper 16 169 91 565 64 1,222
Services 15 157 166 1,695 158 883
By Economy
Japan 562 8,959 414 6,439 250 3,127
Europe 132 679 84 541 83 2,328
Taiwan 53 221 36 175 26 83
USA 55 368 40 258 20 1,271
Hong Kong 39 639 25 542 20 244
Singapore 93 722 53 426 41 349
By Zone
Zone 1 23 139 242 1,208 175 735
Zone 2 39 451 402 5,782 285 7,380
Zone 3 18 203 135 3,018 90 896
Unit: US$ Million
Note: Investment projects with foreign equity participation from more than one country are
reported in the figures for both countries.
October 2014
Page 2

Continued from P. 1
Also among the 11 policy areas set out by the current
administration is to reform the education system and promote
vocational training, as well as foreign language study and
understanding foreign cultures. “More scholarships will be
provided to support technology-related studies.”
The government will also work to overhaul national health security
in order to provide access to health care for all. “Monitoring
system of epidemics, emerging diseases, and re-emerging
diseases will be strengthened.” It should be noted that Thailand
is already a medical tourist destination with international standard
hospitals and cutting edge medical equipment. Expanding
access to all the people of Thailand will make investment in this
sector even more attractive.
To address the economic needs of the nation,” the Government
will stimulate national economy through acceleration of spending
of pending budget in investment for FY 2014, and use of the
Government’s budget. In 2015, the budget of 2.575 trillion Baht
will be allocated to every province according to their needs and
order of priorities.”
The Prime Minister also stated that “Energy prices will be
restructured as part of the energy reform. Taxes, state interests,
and private interests will be adjusted and balanced. The
Government will also promote alternative energy and renewable
energy, as well as provide new sources of energy.”
Also in the works is to approve qualified investment projects
that are pending, and to initiate public-private partnerships in
infrastructure projects with potential for suitable return. In the long
run, the government will develop infrastructure for transportation
by expanding the electric train in Bangkok and linking it with the
surrounding suburbs. Also, to improve Suvarnabhumi airport
through phase 2 development and implement improvements to
Don Muang airport.
The Prime Minister also said that the Government needs to
lay a foundation for the digital economy and ICT development.
He said that State-owned enterprises will have to adapt and
compete in creating new technologies. Also commented on was
October 2014
that the development of IT system,
analysis centers, laboratories,
research institutes and centers will
be established.
He said that research incentives
should be enhanced, that legal
barriers must be eliminated and
that IT development must be
feasible for commercial use.
Looking forward to the AEC, the
government plans to establish a
center for the purchase and export
of agricultural products from
neighboring countries. There will
also be an economic committee
at the ministerial level that will
meet on a regular basis to discuss
changing economic situations.”
Trade related regulations will be
adjusted and procedures will be
streamlined through a single-window
system.”
The government is aware of the need to reform the tax collection
system and will address this, in addition to managing public
debt that is now over 700,000 million baht. In this regard, the
government will also be promoting innovation and set expenditure
on research and development at not less than one percent
of national income, with a 30:70 proportion of public-private
investment, including the establishment of research centers.
The government will also be addressing the need to improve
infrastructure and transportation in Thailand, particularly through
mass transit projects in Bangkok, and at Suvarnabhumi and Don
Muang airports. In this category, the government will also work
to improve economic and transit links that promote trade and
investment in the various regions of the country.
The Prime Minister noted that the National Council for Peace and
Order (NCPO) would support Government operations, so that it
could move forward in accordance with the three-phase roadmap
set by NCPO.
In the short time it has been at the helm of government, the
country has returned to a stable path of development and with a
terrific and improving investment climate.
Page 3

INDUSTRY FOCUS
Logistics
Strategically located at the crossroads of mainland Southeast
Asia, the Kingdom of Thailand shares a common land border
with four neighboring countries totaling 5,582 kilometers. In
fact, there are 30 Thai provinces physically connected with
Myanmar, Laos, Cambodia, and Malaysia. Presently, Thailand
is linked to its neighbors through an extensive and functioning
network of roads, waterways, and air routes. Yet with the ASEAN
Economic Community looming in the distance and the Thai
government’s drive to lift the country out of the middle-income
trap, improvements need to be made in the field of logistics if the
Kingdom aims to achieve future progress and prosperity.
Over the past 20 years, Thailand’s international trade has
expanded over 600%. Manufacturing exports, in particular, have
increased to where they account for 86% of the country’s total
exports as of September 2014. Such growth, aided in part by the
Kingdom’s bilateral trade agreements with Japan, South Korea,
China, India, New Zealand, and Australia, has led the Thai
government to upgrade its logistics infrastructure and expertise.
Currently, foreign companies dominate the logistics industry in
Thailand. Its top 10 freight forwarders are Maersk Line, K&N,
DHL, UPS, Schenker, Panalpina, Phoenix International, BAX
Global, Agility, and UTI.
Totaling US$ 219 billion worth of goods, exports contributed
to 58% of Thailand’s GDP in 2013, and the transport sector
underpinned this notable performance. The export-dependent
nature of the Thai economy, with recent structural changes
toward a higher share of value-added manufactured goods and
level of global trading, requires a strong and integrated transport
and trade facilitation system. As a result, the government of
Thailand is working on improving its trade systems such as the
customs. An e-logistics system is currently being introduced,
to cut logistics cost, reduce paperwork, optimize routes and
flows, and increase the time management proficiency of freight
transport companies.
The logistics sector is a huge industry in Thailand. It contributes
about Bt300 billion to the economy annually, accounting for 3.2%
of the country’s total GDP and providing employment to some 3.5
million Thais. Furthermore, the Kingdom has been witnessing a
downward trend of logistics cost per GDP over the past decade,
from a range of 16-18% during 2001-2008 to a range of 14-15%
during 2009-2012. Transportation costs in Thailand remain
high due to a limited capacity of competitive alternative modes
of transport albeit the efforts of operators to apply IT to lower
hauling overheads. In addition, the sector still relies heavily on
land transport (accounting for 83% share) despite the elevated
price of oil. According to the 2014 Logistics Performance Index
conducted by the World Bank, Thailand ranks 35 in logistics
competency among all 160 countries, thereby demonstrating
its competitiveness in the region compared to other developing
countries.
It must be said that the Thai economy needs to improve the
efficiency of its logistics systems, which is revealed by its relatively
high costs in relation to its GDP. Having a direct impact on both
the industrial structure and spatial distribution of the economy,
October 2014
Page 4

October 2014
Continued on P. 6
the costs associated with logistics in Thailand have a direct
impact upon the sustainable development of the Thai economy.
While the government of Thailand has taken proactive measures
to reduce national logistics costs in relation to its GDP, it is now a
priority to craft the appropriate logistics policies in order to propel
forward the economic development of the Kingdom.
International trade largely has fueled Thailand’s industrial and
commercial growth. Given this dependence on global trade
linkages, freight logistics have played an important role in the
competitive edge of various Thai industries. From a macro-economic
perspective, outlays for logistics can be divided into
four categories: transportation costs, inventory-carrying costs,
administration costs, and infrastructure costs. Comprising
expenditures for service, fuel, vehicle repair and maintenance,
transportation costs usually account for over 49% of total
logistics outlays in developed economies. Moreover, inventory-carrying
costs consist of expenditures related to warehousing
and financing, while administration costs include employee
compensation and communications.
About 86% of Thailand’s cargo is currently moved by road, 12%
by ship, 2% by train and the rest via air freight. With a road density
of around 125.7 kilometers per thousand square kilometers, the
Kingdom possesses an extensive road network of urban and
rural roads. Likewise, with the possibility of a
Trans-Asian highway linking most countries
on the Asian mainland, this could be the key
contributor to Thailand becoming a regional
logistics hub of ASEAN. In addition, the
Kingdom is home to six international airports,
affording access to all regions. A state-of-the-
art facility located in the outskirts of
Bangkok, Suvarnabhumi currently services
over 100 commercial airlines. In 2013 alone
it handled some 50 million passengers as
well as 1.3 million metric tons of freight. Yet
its ongoing phase-two extension will uplift
capacity to 60 million passengers. Actually,
Suvarnabhumi has been ranked as the 6th
best airport globally by the 2013 ASQ Survey
for the year 2012 in the category of large
airports that provide service to more than 40
million passengers per annum.
As was reported in The Nation, Dr. Witoon
Simachokedee, permanent secretary
at the Ministry of Industry, declared that
Thailand’s master plan for industrial logistics
targeted a 15% reduction in logistics cost
for manufacturing and a 10% increase in
efficiency of logistics and supply-chain
management by 2016. It is worth noting
that last fiscal year (Oct. 2012-Sept.
2013), the Department received a budget
of Bt110.8 million under the strategic plan
for development of the country’s logistics
system. About 30 projects already have
been completed, which concentrated on 501
business operators, logistics-cost reduction
of at least Bt3 billion, human resource
development of at least 6,575 people and
linkage improvement of at least 28 supply
chains.
Indeed, the strategic plan consists of three main thrusts:
Producing logistics-management professionals for manufacturing
sites, promoting cooperation and linkages among business units
in manufacturing supply chains, and supporting factors to raise
the competitiveness of supply chains in specific industries.
The targeted industries are food, petrochemicals, electrical
appliances and electronics, automobiles and parts, textiles and
garments, and rubber and rubber products. Taken as a whole,
these industries hold 70% inventory.
Furthermore, it needs to be pointed out that Thai logistics costs
hover around 17% of production outlays, while the European
Union averages 8-9%. Accordingly, the Kingdom may employ the
European model, as Germany is the regional center in Europe
just like Thailand is for ASEAN. This advantage could be used
to manage logistics costs efficiently through railways, roads,
vessels and aviation. With the ASEAN Economic Community
taking shape in 2015, it becomes imperative that Thailand moves
ahead with its Bt2.4 trillion infrastructure project.
Some years ago, the Thai government adopted a policy known
as the “three economic rings and five trade gateways” in order to
maximize Thailand’s geographic position within Southeast Asia
and its well-developed infrastructure and logistics networks. To
Page 5

Continued from P. 5
explain, the three economic rings consist of ASEAN, ASEAN+3
(China, Japan and South Korea), and ASEAN+6 (China, Japan,
South Korea, India, Australia, and New Zealand). Meanwhile,
the five trade gateways refer to the Kingdom’s strong road and
rail linkages to neighboring countries and beyond. These include
the northern gateway, linking Thailand to Myanmar, Laos, and
southern China; the northeastern gateway, linking Thailand
to Laos, Vietnam, southern China, and East Asia; the eastern
gateway, linking Thailand to Cambodia, Laos, and Vietnam; the
western gateway, linking Thailand to several BIMSTEC countries,
particularly Bangladesh, India, and Myanmar; and the southern
gateway, linking Thailand to Malaysia, Singapore, and Indonesia.
In addition to the aforementioned plan, Thailand already has
in place a Logistics Development Strategy (2013-2017) that
revolves around three missions and seven strategies. The first
mission is supply chain competitiveness, which strives not only
to increase competitiveness in supply chain management and
potential business, but also to promote business related to
trade and services in border town areas. The second mission
concerns trade facilitation enhancement, which aims to develop
transport services and logistics networks, to improve facilitation
at gateways, and to promote services improvement and expand
LSP (layered service provider) networks. And finally, the third
mission deals with capacity building and policy driving factors,
which endeavors both to develop human resource development
systems and to create monitoring systems for self-improvement.
The ASEAN Economic Community will have a significant impact
on trade between the ten member states. From Thailand’s
perspective, the AEC will boost substantially the Kingdom’s
trade with bordering countries (Malaysia, Myanmar, Laos and
Cambodia) as well as countries further afield like China and
Vietnam. Regional integration through the AEC will increase the
demand for logistics services in Thailand. Raw materials, goods,
and labor will be exchanged more freely, especially for border and
transit trade, which are expected to expand substantially. Indeed,
the AEC is expected to bring various benefits for ASEAN’s
logistics industries in terms of regulations and other aspects such
as simplified and harmonized customs procedures, improved
transportation routes, and reduced tariffs.
Given the variety of logistics services – ranging from maritime
cargo handling services to warehousing to customs clearance
and more – the development of competitive logistics businesses
in Thailand will require not only financial capability, but also
technological know-how. As other ASEAN member states
increase their equity participation in Thai businesses to up to
70%, local players will need to develop their competencies in
order to compete effectively. As such, the Thai government has
been developing the capabilities of the country’s logistic service
providers through financial support and manpower training. It
also has encouraged the logistics service providers to build
networks that can interface seamlessly with logistic business
partners from other ASEAN and Asian countries.
Other actions taken by the Thai government to increase efficiency
of Thai logistics operations include development of e-logistics,
paperless customs procedures across the borders of the Greater
Mekong Subregion, and a One Stop Export Service Center,
where 15 export-related organizations are located at one place to
reduce the time required to obtain export documentation.
The National Economic and Social Development Board is aware
of the need to develop the local industry if the Kingdom seeks to
actualize its goal of becoming a regional logistics hub. To take
action, it has divided Thailand’s logistics sector into a business
framework across five types of activities: (1) cargo transportation
inside and outside the country, by road, rail, sea, or air; (2) cargo
storage, warehousing, packaging, and cargo distribution; (3)
customs formalities; (4) other auxiliary logistics works; and (5)
postal and parcel services.
Nonetheless, the logistics market in Thailand remains highly
fragmented. Yet, trends such as outsourcing logistics services
to 3PLs (Third-Party Logistics) to maximize cost efficiency and
to diversify risk, as well as greater usage of heavy commercial
vehicles/truck and long-haul transportation, are happening.
The high value of cross-border trade between Thailand and
its neighbors will provide numerous opportunities for relevant
businesses throughout the supply chain. At present, many
Thai corporations already have set up a logistics business in
neighboring countries. Siam Cement Group (SCG), for example,
has logistics and transport operations in Laos and Cambodia.
Meanwhile, Loxley, a listed Thai conglomerate, has gained a
foothold in Vietnam’s logistics market through a joint venture
with Japan’s NTT Docomo Incorporated to establish Mobile
Innovation.
Currently Thailand has the necessary infrastructure in place
to attract foreign investment and is in the process of launching
multi-purpose, low-cost logistics bases for companies. In order
to develop into a proper logistics hub for the ASEAN region the
Kingdom will need to start offering attractively priced logistics
services. As a result, the Thailand Board of Investment is at this
time granting generous tax and non-tax incentives to logistics
projects. Among the many eligible activities are container yards
or inland container depots (ICDs), loading/unloading facilities
for sea transport, commercial airports, mass transit systems
and transport of bulk goods including rail, pipeline and maritime
transportation services, and logistics service centers including
both domestic and international distribution centers (DCs and
IDCs). Any foreign investor, in particular 3PLs, interested in
entering the Thai market would be well-advised to take advantage
of these opportunities.
October 2014
Page 6

October 2014
Thailand a Top-10 Destination
The United Nations World Tourism Organization, in its Tourism
Highlights 2014 Edition, reports that international tourist arrivals
grew by 5% last year to a record 1087 million arrivals.
Although the global economy continues towards a slow recovery,
there were an additional 52 million international tourists last
year. The report notes that“…international tourism receipts in
destinations around the world grew 5% in real terms (taking
into account exchange rate fluctuations and inflation) to reach
US$ 1159 billion (euro 873 bn). Growth in receipts mirrored the
growth in international arrivals (also +5%), confirming the strong
correlation between these two key indicators of international
tourism.”
The UNWTO reports the Asia and Pacific region to have the
strongest prospects, with 6% growth in 2013 and similar growth
this year. Looking at earning, the Asia and Pacific region had ever
better 8% growth last year at US$ 359 billion; arrivals accounting
for 23% of the world’s total, receipts accounting for 31%. “As in
2012, South-East Asia was again the fastest growing subregion
both in the region and in the world in 2013, with an increase
of 11% in international tourist arrivals on the back of buoyant
intraregional demand. Thailand reported strong growth (+19%),
welcoming 27 million tourists, 4 million more than in 2012.”
The report also shows that Thailand has moved into the list of
the world’s top 10 tourism destinations, in terms of both visitor
numbers and visitor expenditure with record-breaking arrivals
in 2013. “Thailand moved up two positions in the ranking by
international receipts to 7th, while it entered the top 10 by arrivals
in 10th position, in a bumper 2013 when international arrivals
were up by 19 percent to 27 million and receipts by 23 percent to
42 billion US dollars.”
It is the first time that Thailand entered the top 10 list in terms of
arrivals. Thailand was ranked No. 11 in 2012, when the number
of tourists totaled 22.4 million. UNWTO referred to this
climb of five positions as an “amazing” development.
This year began with a slow start for tourism, for obvious
reasons, and from January to July 2014 Thailand saw
a 10% year on year drop with 13.6 million foreign
arrivals. Malaysia is Thailand’s largest tourist market,
followed by China and Russia.
According to the Tourism Authority of Thailand (TAT),
international arrivals for the year are expected to reach
25.5 million, bringing in 1.2 trillion baht, with about
one million Chinese tourists expected to visit Thailand
between August and October.
Europe also shows a positive trend as Thailand works
to encourage tourists, especially from France, Italy, and
Spain. A recent news report shows that confidence
remains strong among French tourists in particular,
as a report released by French travel website Le
Quotidien du Tourisme shows that Thailand is the most
searched for destination in online search engines. The
Tourism Authority of Thailand projects visitor numbers
from France to reach over 636,400 by the end of 2014.
In a move to boost tourism the Immigration Bureau has
allowed citizens of 48 countries and Hong Kong Special
Administrative Region to get a 30-day extension of
their stay in Thailand after the expiry of their normal
period of stay. The 49 tourist markets generate about
half of Thailand’s total visitor arrivals.
Page 7

2015 ASEAN Business
Outlook Survey
Since 2002 the U.S. Chamber of Commerce and the individual
American Chambers of Commerce in the ASEAN region have
compiled and disseminated the ASEAN Business Outlook
Survey on an annual basis. The report serves as the primary
indicator of US corporate sentiment in Southeast Asia. Its
findings are based upon the assessments and outlook of 588
business leaders representing small, medium, and large US
firms in all ten ASEAN member countries. Regarding the primary
activity of the respondents, the services sector accounted for
the largest portion with 55%, followed by manufacturing with
31%. Furthermore, the report provides timely and relevant data
on regional economic issues and trends to a broad and diverse
audience, from corporate executives to government leaders to
academics. The survey’s readers rely on it to gain an insight into
the opportunities and challenges that are present across ASEAN
for American enterprises.
Divided into several sections, the 2015 ASEAN Business
Outlook Survey covers a number of areas that are pertinent
for any company executive or manager based in Southeast
Asia. For instance, there is a section that revolves around a
series of questions about the region’s overall economic outlook,
and another that concentrates on the expansion plans of US
companies. Likewise, the report contains a section that examines
the responses of US enterprises to ASEAN regional economic
integration, and the region’s expanding economic ties with other
major trading partners, while the impact of multilateral free trade
agreements being negotiated is explored as well. Another part
looks at factors affecting expatriate recruitment and retention.
The final section breaks out the survey results on an individual
country basis.
Generally speaking, the report illustrates that US firms remain
optimistic about business prospects in ASEAN, as demonstrated
by their expectations for investment expansion, workforce growth,
and profit increases in 2014 and 2015. However, for each of these
factors, the percentages of respondents expecting increases is
slightly lower when compared to last year’s survey. With some
variation, confidence levels remain stable for all ten ASEAN
countries. Still, Indonesia, Vietnam, Myanmar, Malaysia, and
Thailand were recognized as the top five targets for investment
expansion. A significant minority of executives also expressed
plans for diversifying investments from China into the ASEAN
region over the next two years. For companies that intend to
expand operations in their current locations, diversification
of their customer base, availability of trained personnel, and
reasonable production costs were cited as the main reasons for
expected enlargement.
October 2014
Page 8

With the impending establishment of the ASEAN Economic
Community (AEC) in late 2015, US companies are focusing
on the prospects that will emerge from regional economic
integration, although most survey respondents hold the
position that the goals of the AEC will be reached by 2020
or later. Nonetheless, three quarters of the respondents
in Thailand indicated that the amount of company trade
and investment in ASEAN increased in the past two years
and even more expect this trend to continue in the next
five years. Overall, 78% of Thai-based American business
executives regard a single ASEAN market as important to
helping the bottom lines of their firms in the region.
As was noted in the survey, US companies are utilizing
ASEAN’s existing free trade agreements with major trading
partners including Australia and New Zealand, China, India,
Japan, and South Korea. Nearly half of manufacturing
sector respondents report making use of ASEAN FTAs
to export goods (e.g. electronics, consumer goods,
machinery & equipment, and oil &
petrochemicals) to partner countries,
with China leading the way at 49%.
Similar percentages of respondents
(43%-47%) employ each of the
other four FTAs. On the other hand,
relatively few of the respondents in
the services sector indicated that
they currently use the provisions of
these agreements. Having said that,
the services agreements with India
and Japan were not officially in place
when the survey was conducted.
It has been pointed out that the
existence of various agreements with
different tariff reduction schedules,
lists of exclusions, rules of origin,
and timelines, have created a wide
assortment of trade regimes across
the region. However, respondents normally are not concerned
about this particular issue, as 73% indicate that these agreements
have either a positive or neutral effect on their operations in
ASEAN.
Looking towards the future, about one-third of respondents
expect that the Regional Comprehensive Economic Partnership
(RCEP) will impact their company’s future investments in the
region, while 40% say the Trans-Pacific Partnership (TPP) will
impact future investment plans. The RCEP is a proposed free
trade agreement between the ten member states of ASEAN and
the six states with which ASEAN has existing FTAs (Australia,
China, India, Japan, South Korea and New Zealand). Meanwhile,
the TPP is a proposed regional free trade agreement being
negotiated at present by twelve countries throughout the Asia-
Pacific region, including the United States.
The 2015 ASEAN Business Outlook Survey takes note that
American executives report a number of positive attributes
of ASEAN’s investment environment, including high levels of
personal security and the generally welcoming attitude of locals
towards the US. Conversely, some of the negative aspects
they cite include unstable political conditions, corruption, weak
infrastructure, inadequate laws and regulations, and difficulties in
moving products through customs.
Focusing on Thailand specifically, respondents have an optimistic
outlook on the current business climate with the majority not
October 2014
facing significant financing constraints nor seeing higher cost
of borrowing. Business expansion remains high with 62% of
executives surveyed stating they expect their companies in
Thailand to expand, a dip since last year’s 75%, but the profit
outlook remains strong with 82% expecting increased profits.
On the other hand, American corporate executives in all ASEAN
countries most frequently identify customs as the government
agency with which they have the greatest levels of dissatisfaction.
Equally important, Thailand’s expat workforce generally is
satisfied with living and working in the Land of Smiles as 93%
report satisfaction with their assignments and 87% attempt to
extend their time in Thailand, citing personal security, absence of
hostility towards Americans, affordable housing costs, and good
infrastructure as the biggest benefits. There still are concerns
about the stability of the Thai government and political system,
which is an issue for 80% of respondents, but this is to be
expected given the recent political crisis that gripped the country
over a period of six months.
The 2015 ASEAN Business Outlook Survey is a resource based
upon the contemporary assessments and outlooks of senior
executives from firms with an American majority interest, in all
ten ASEAN member states. Indeed, the report offers a general
overview of how resident American business leaders view the
economic climate in Southeast Asia today and what they consider
to be crucial trends to follow during this period of transformation
for ASEAN.
Page 9

Siam Commercial Bank’s
EIC Report
Siam Commercial Bank’s Economic Intelligence Center (EIC), in
its report entitled Outlook, Quarter 3 2014, has forecast economic
growth in Thailand of 1.6% in 2014.
“Factors that will drive the economy’s growth are:
1. Increased political stability after the National Council for
Peace and Order (NCPO) came into power on 22 May
2014. Policy uncertainty has declined as NCPO has already
undertaken measures that have helped to strengthen private
sector sentiment, such as maintaining the VAT rate at 7%,
endorsing the reduction in tax rates on personal income and
corporate income; and fixing prices for diesel fuel and LPG.
2. Higher incomes resulting from the NCPO’s move to pay
farmers some THB 90 billion due under the rice pledging
scheme and from measures to encourage commercial
banks to increase credit to SMEs.
3. Speeding up disbursements of investment budget while
prioritizing stalled plans for investment in key infrastructure
projects.”
The contribution to the recovery from consumption will likely be
from non-durable goods such as food and other necessities,
whereas durable goods such as automotives and electronic
goods face spending constraints imposed by debt burdens.
In a positive note, EIC reports that private investment is now
expected to be better than previous estimates as the business
sentiment improves. “Moreover, regulatory changes on factory
permit issuance, as reflected in the shortening of approval period
from 90 days to within 30 days and the permit exemption for
solar rooftop projects smaller than 1 megawatt, will give a boost
to investor confidence.” In fact, EIC writes that capital spending
in the solar rooftop business could be as high as THB 12 billion.
Power generation, sugar and waste management businesses
are also seen to benefit from the change in the rule.
EIC also notes that the BOI will approve
projects for a total value of about 700 billion
Thai baht, with eco-car phase-2 identified as
an area to benefit.
Measures taken by the NCPO are seen to
restore budget disbursement for 2014 back to
historic levels, which is between 65 and 70%,
which is a considerable improvement over the
May 2014 level of 44.4%. EIC also notes the
high priority given by the NCPO to infrastructure
projects, including Suvarnabhumi Airport
Phase 2, the Bang Pa-In–Nakhon Ratchasima
Motorway, and the Rama 3–Dao Khanong–
Outer Ring Road expressway. Those projects
ready for investment, in the tender and
procurement stage, are:
• the green line BTS Skytrain extension
(Mo Chit – Saphan Mai – Khu Khot) valued at
THB58.59 billion
• t h e d u a l - t r a c k r a i l p r o j e c t
(Chachoengsao – Klong 19 – Kaeng Khoi)
valued at THB11.35 billion.
“Looking ahead to 2015, EIC forecasts growth in Thailand at
4.7%. Factors supporting this outlook include:
1. Continuous strengthening of private sector sentiment
following stabliziation of the political situation.
The improved sentiment will drive private consumption and
investment to expand by 3.6% and 13%, respectively.
2. Improving efficiency of government’s investment budget
disbursement and increasing state-owned enterprises
spending on infrastructure investment will result in public
investment growing by 16.5%.
3. Stronger global demand and a rebound in foreign tourist
confidence in Thailand should help merchandize export to
grow by 4%, while tourist arrivals should increase by 10%.”
All in all, the outlook for Thailand’s economy under the leadership
of the new government looks bright, with stable and sustained
investment and an improved business climate.
October 2014
Page 10

BOI’S MISSIONS AND EVENTS
Mrs. Hirunya Suchinai, senior executive investment advisor
of BOI, led a delegation from Bangkok and together with BOI
Osaka held a seminar “Thailand: A Destination of Investment
Opportunities” on 2 September 2014 at Kobe City, Japan.
Ms. Duangjai Asawaachintachit, deputy secretary general of BOI,
spoke at a seminar on “Thailand, New Markets, New Business
Models, New Opportunities” in Sydney, Australia, which was one
of three seminars held in the country from 23 -31 August 2014.
October 2014
Ms. Ajarin Pattanapanchai, senior executive advisor of BOI,
joined H.E. Mr. Pitchayaphant Charnbhumidol, ambaddador of
Thailand to Brazil, at a seminar on “Business Opportunities in
Thailand” on 4 September 2014 at FIEP, Curitiba, Brazil.
From 16 September to 19 September 2014 Ms. Bussarakum
Sriratana, director of International Affairs Bureau, led an
investment mission to the People’s Republic of China to the 11th
CAEXPO Roundtable Meeting on Investment Cooperation.
Mr. Udom Wongviwatchai, secretary general of BOI, presents
a souvenir to Mr. Eikei Suzuki, governor of Mie Prefecture,
on 11 September 2014. Mr. Suzuki led a business delegation
comprised of 25 members to explore business opportunities in
Thailand.
Mr. Udom Wongviwatchai, secretary general of BOI, welcomed
a delegation from the Government of Ethiopia, led by H.E.
Dewano Kedir Haji, state minister for foreign affairs, and H.E. Mr.
Peerasak Chantavarin, ambassador of Thailand to Ethiopia, on
17 September 2014.
Page 11

THAILAND ECONOMY-AT-A-GLANCE
Exchange Rate Trends
Source: Bank of Thailand
SET Monthly Closing Values
Source: Stock Exchange of Thailand
Industrial Capacity Utilization (%)
International Reserves / Short-term Debt (%)
Head Office, Office of the Board of Investment 555 Vibhavadi-Rangsit Road, Chatuchak, Bangkok 10900, Thailand
Tel: +66 (0) 2553 8111 Fax: +66 (0) 2553 8222 Website: www.boi.go.th E-mail: head@boi.go.th
BEIJING
FRANKFURT
GUANGZHOU
Thailand Board of Investment,
Beijing Office
Frankfurt Office
Guangzhou Office
Royal Thai Embassy
Bethmannstr. 58, 5.OG
Royal Thai Consulate-General
No.40 Guang Hua Road,
60311 Frankfurt am Main
Guangzhou
Beijing, 100600, P.R.China
Federal Republic of Germany
No.36 Youhe Road, Haizhu
Tel: (86-10) 6532-4510
Tel: (49 69) 92 91 230
District, Guangzhou, P.R.C
Fax: (86-10) 6532-1620
Fax: (49 69) 92 91 2320
510310
E-mail: beijing@boi.go.th
E-mail: fra@boi.go.th
Tel: +8620 8385 8988
Ext. 220-225
+8620 8387 7770 (Direct Line)
Fax: +8620 8387 2700
E-mail: guangzhou@boi.go.th
LOS ANGELES
Los Angeles Office
611 North Larchmont Boulevard,
3rd Floor, Los Angeles, CA
90004 USA
Tel: (1-323) 960 1199
Fax: (1-323) 960 1190
E-mail: boila@boi.go.th
MUMBAI
Mumbai Office
Royal Thai Consulate-General,
1st Floor, Dalalmal House,
Jamnalal Bajaj Marg,
Nariman Point, Mumbai
400 021 Republic of India
Tel: (9122) 2204 1589-90
Fax: (9122) 2282 1525
E-mail: mumbai@boi.go.th
NEW YORK
New York Office
7 World Trade Center,
34th Floor, Suite F, 250
Greenwich Street,
New York, NY 10007
Tel: (1-212) 422 9009
Fax: (1-212) 422 9119
E-mail: nyc@boi.go.th
OSAKA
Osaka Office
Royal Thai Consulate-General,
Osaka, Bangkok Bank Bldg.
7th Floor , 1-9-16 Kyutaro-
Machi, Chuo-Ku, Osaka
541-0056 Japan
Tel: (81-6) 6271-1395
Fax: (81-6) 6271-1394
E-mail: osaka@boi.go.th
PARIS
Paris Office
Ambassade Royale de
Thailande, 8, Rue Greuze
75116 Paris, France
Tel: (33 1) 5690 2600
(33 1) 5690 2601
Fax: (33 1) 5690 2602
E-mail: par@boi.go.th
SEOUL
Seoul Office
#1804, 18th Floor, Koryo
Daeyeongak Center,
97 Toegye-ro, Jung-gu, Seoul,
100-706, Korea
Tel: (822) 319-9998
Fax: (822) 319-9997
E-mail: seoul@boi.go.th
SHANGHAI
Shanghai Office
15 F., Crystal Century Tower,
567 Weihai Road, Shanghai,
200041, P.R.China
Tel: (86-21) 6288-9728,
(86-21) 6288-9729
Fax: (86-21) 6288-9730
E-mail: shanghai@boi.go.th
STOCKHOLM
Stockholm Office
Stureplan 4C 4th Floor
114 35 Stockholm, Sweden
Tel: +46 (0)8 463 1158
+46 (0)8 463 1172
+46 (0)8 463 1174 to 75
Fax: +46 (0)8 463 1160
E-mail: stockholm@boi.go.th
SYDNEY
Sydney Office
Suite 101, Level 1, 234
George Street, NSW 2000,
Australia
Tel: (+61) 2 9252 4884
Fax: (+61) 2 9252 2883
E-mail: sydney@boi.go.th
TAIPEI
Taipei Office
Taipei World Trade Center
3rd Floor, Room 3E39-40,
No.5, Xin-Yi Road, Sec.5
Taipei 110, Taiwan, R.O.C.
Tel: (886) 2-23456663
Fax: (886) 2-23459223
E-mail: taipei@boi.go.th
TOKYO
Tokyo Office
Royal Thai Embassy
8th Fl., Fukuda Building West,
2-11-3 Akasaka, Minato-ku,
Tokyo 107-0052 Japan
Tel: (81 3) 3582 1806
Fax: (81 3) 3589 5176
E-mail: tyo@boi.go.th
Facts about Thailand
Population (2010) 66 million
ASEAN Population 600 million
Literacy Rate 96%
Minimum Wage 300 Baht/day
GDP (2013) US$ 385 billion
GDP per Capita (2013) US$5,647
GDP Growth (2013) 2.9%
GDP Growth (2014, projected) 1.5-2.5%
Export Growth (2013) -0.2%
Export Growth (2014, projected) 3.7%
Trade Balance (2013) US$ 6.4 billion
Current Account Balance (2013) US$ -2.8 billion
International Reserves (2013) US$ 167.23 billion
Capacity Utilization (2013) 64.36%
Manufacturing Production Index (2013) 175.80
Core Inflation (2014, projected) 1.9-2.9
Headline Inflation (2014, projected) 1.9-2.9
Consumer Price Index (July 2014) 107.7
(2011=100)
Corporate Income Tax 10-20%
Withholding Tax 0-15%
Value Added Tax 7%
July Average Exchange Rates
US$1 = 32.10 baht
€1 = 43.46 baht
£1 = 54.82 baht
100 ¥ = 31.56 baht
CNY1 = 5.18 baht
Top 10 Exports 2014 (Jan-Jun)
Product Share Value
(US$ bn)
1 Motor cars, parts and accessories 10.78 12.15
2 Automatic data processing machines
and parts thereof
7.79 8.78
3 Precious stones and jewellery 4.93 5.56
4 Refine fuels 4.68 5.27
5 Polymers of ethylene, propylene, etc
in primary forms
4.35 4.90
6 Chemical products 3.89 4.39
7 Rubber products 3.53 3.98
8 Machinery and parts thereof 3.17 3.58
9 Electronic integrated circuits 3.12 3.51
10 Rubber 2.97 3.35
Total 112.70
Source: Ministry of Commerce
Source: Bank of Thailand
Source: Bank of Thailand BOI
October 2014
Page 12

Thailand Investment Review, October 2014

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Ähnlich wie Thailand Investment Review, October 2014

Ähnlich wie Thailand Investment Review, October 2014 (20)

Mehr von Thailand Board of Investment North America

Mehr von Thailand Board of Investment North America (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Thailand Investment Review, October 2014