Did you know that Thailand is now listed as one of the newly industrialised countries in Asia?
This growth was achieved due to the country’s exponential growth in exports in recent years. In fact, Thailand’s total exports products increased by 107.2% from 2016 to 2017 [World’s Top Exports].
In the past, this country’s main export products are derived mainly from agriculture. But in recent years, it offers diversified to high demand products such as computers and optical readers, integrated circuits, and automobiles. This influx of innovations resulted in an unprecedented growth in the country’s GDP.
Due to the past development models which place emphasis on agriculture, “light industry” and “advanced industry”, there are some challenges like “middle-income trap” starts to arise. Thus, the local government proposed Thailand 4.0. Its aim is to address several economic challenges by focusing on innovate solutions and high-value services and potentially turn Thailand into one of the leading innovation hubs in Southeast Asia.
What is Thailand 4.0
Thailand 4.0 is the vision to transform Thailand economy into an innovation-driven one. But before this stage, it has undergone 1.0, 2.0 and 3.0 stages first. Thailand 1.0 which focuses on agriculture. Thailand 2.0 emphasised light industries such as clothes, bags, and beverages. Presently, the country’s current economy is described as Thailand 3.0; which focuses on processing and exporting steel, natural gas, and car parts.
Thailand 4.0 has 4 main project goals. These are the following:
Promote Economic Prosperity
The current economic strategy centres on innovation to drive investment opportunities and create a value-based economy.
Improve Social Well-Being
One of the country’s primary aim is to reduce the social disparity amongst its citizens by creating a labour force which offers high-value services.
Raise the Educational Standard
Improving the overall educational standard will produce a young workforce equipped to handle globally in-demand tasks.
Creating a Sustainable Environment
Building and maintaining an economic system which can adjust to climate change. The core goal is to develop liveable Thai cities within the next 10 years.
Realizing Thailand 4.0 with EEC
Eastern Economic Corridor, or also known as EEC, is an initiative that is heavily supported by Thailand’s leaders. EEC lies at the heart of “Thailand 4.0” vision to transform the country’s competitiveness. Promoting multiple investment opportunities in selected regions in the country. This area spans approximately 13,285 square kilometres across the provinces of Chachoengsao, Chonburi, and Rayong.
Chachoengsao will be developed into a smart city due to its proximity to Bangkok. Chonburi will focus more on digital innovation. And, Rayong will be a tourism hub [ASEAN Briefing].
Several opportunities await corporations that focus on target industries within the zone. The table below [AECNews Today] shows the different business sectors being promoted.
*image sourced from AEC News Today
Reuter’s reported that Thailand’s government had already approved the $45 billion budget in support of this project [Reuters]. This will fund the infrastructure projects within the zone such as the construction of a high-speed railway, office buildings for digital industries, and factories for large-scale processing businesses [Bangkok Post].
These include targeted technological development funding, foreign legal entity land ownership for business operations within the special zone, and promoting the use of foreign currencies in the Eastern Economic Corridor [EECO].
Accessing Banking Services in Thailand
If you are an interested foreign investor that looks to expand your company operations and leveraging on the special economic zone, you are required to open a corporate bank account.
Here are the general steps in opening a bank account in the country:
Step 1 – Identify the Company Structure
Thailand’s corporate governing body recognises four company structures. This includes sole proprietorship, partnerships, private or public limited companies, and joint ventures.
Entrepreneurs should identify the company’s purpose and function before opening a bank account.
Step 2 – Choose the Right Banking Establishment
Different banking institutions have varying offers for SMEs and large business. The most notable establishments are the Bangkok Bank, Siam Commercial Bank, Krungthai Bank, and Kasikorn Bank.
Find the right banking establishment for the size of the enterprise.
Step 3 – Prepare for an Interview and Present the Requirements
Several banking establishments in Thailand requires applicants to fill up an account form and be interviewed by the bank manager. Although the requirement depends on the bank, in general, the applicant must also present the following documents:
* The latest Copy of the Company Registration Certificate
* Notarized minutes of a Board of Directors meeting which outlines the purpose of a company bank account, and who will be authorised to use the account.
* Valid passport of the company representative
After complying with these requirements, the foreign investor or entrepreneur can now proceed to operate in the country under a legal entity.
Why Thailand Should be Considered
As Thailand’s economy move towards an innovative one, Foreign investors are still very essential this development. In exchange for the state of the art expertise and technology, they provide substantial incentives and benefits to aid foreign investors.
Here are some of the incentives and benefits that foreign investors can benefit from:
Incentives to Foreign Investors
The Eastern Economic Corridor Act B.E. 2561 of Thailand provides incentives to foreign businesses that received a BOI promotion. Some of the incentives include:
- Exemption to import duties on machinery, raw materials used for exports production and research & development.
- Foreign legal entities entitled to land ownership for business operations in the promotional zone.
- Business operators are exempted from the Law on Foreign Currency Exchange Control and are allowed to use foreign currencies in the Promotional Zone
*Source: Thailand Board of Investment
Increased Regional Connections
Thailand is situated at the centre of the Indochinese peninsula. Through the EEC project, transportation and logistics systems will be expanded and developed. The improved transportation networks will turn the area into a comprehensive business centre for trade, investment, and logistics as well as a tourist attraction in Asia.
*Source Thailand Board of Investment
Improved Business Policies
As such, Thailand in 2017 sees its ranking in Ease of Doing Business to up to rank 26. Some of the changes like the abolished requirement to obtain a company seal. The government also eliminated the need for approval from the Labour Department of company work regulations. [World Bank].
This further demonstrates the government’s intent to fine-tune its policies to attract more foreign direct investments.
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Thailand’s Eastern Economic Corridor (EEC): The hard sell begins, aecnewstoday.com
Thailand’s Eastern Economic Corridor – What You Need to Know, aseanbriefing.com
What is Thailand 4.0?, thaiembdc.org