Thailand

The Thai government, led by Prime Minister Thaksin Shinawatra, has restored political stability and effectiveness since taking power in 2001. Although there is still further room for political reform, the government welcomes and supports FDI.

Thailand’s principle competitive features are its low labour costs and flexible labour laws, which traditionally have attracted FDI into the manufacturing sector. The most important of these sectors has been automotive parts, and electrical and electronic appliances.

Opportunities exist for investment in infrastructure projects, a priority area highlighted by the government. Laws were amended specifically to permit foreign participation in bringing Thailand’s infrastructure up to world-class standards.

Historically, official encouragement of FDI has taken the form of tax holidays and subsidies but these are being phased out and being replaced by a lower general corporate tax burden. Priority will be given to investments involving the use of local inputs or those that are expected to boost Thai competitiveness. An additional scheme aims to encourage companies to establish their regional operating headquarters in Thailand.

Since 1997, many of the restrictions on foreign ownership in certain sectors (for example, banking, retail and manufacturing) and foreign ownership on land and leases have been removed.

Source: Economist Intelligence Unit World Investment Prospects 2003