01 February DFDL Thailand: Business Forecast for 2019
2018 saw Thailand’s renewed efforts toward a modern, business-friendly economy truly begin to bear fruit. The passing of the EEC (Eastern Economic Corridor) Act brought forward a new set of incentives to businesses operating in special economic zones, beyond the BOI’s existing programs. The BOI itself streamlined its licensing processes to allow for fast and convenient online registration. The Ministry of Commerce similarly improved the procedure for establishing a company in Thailand, allowing much of the process to be conducted online as well.
Last year also saw flagship PPP projects move to the bidding stage, setting the stage for a new generation of advanced infrastructure in key economic areas. These and other advancements were reflected in Thailand’s Ease of Doing Business ranking, as determined by the World Bank. Thailand now holds the 27th spot on this overall scale, up from 46th as recently as 2016.
This year, several projects that were previously set in motion will continue to develop in new ways. The high-speed railway and U-Tapao Airport upgrade projects will undergo a selection process to determine the winning bids. How the involved parties will negotiate issues such as funding and bankability remains to be seen, and will likely influence the direction of future projects.
Continuing another theme from the previous year, the government is expected to launch a wider platform for online business licensing, which will remove certain bottlenecks if the implementation is sound.
Balancing out this push for speed and efficiency is an equally important effort to continue developing the Thai legal system to increasingly sophisticated business and investment. New rules surrounding private asset management are anticipated, for the benefit of Thai investors. A revised approach toward merger control is also on the way, in an effort to ensure greater transparency in a competitive business environment.
Thailand’s push for an advanced online ecosystem is also accompanied by a sensitivity to accompanying issues and challenges. New regulations for the digital economy are likely to come into effect in the coming months, as the government is set to pass rules for data protection that are highly influenced by the European GDPR.
In addition to these expected developments are two great unknowns, one domestic and the other international. Thailand’s upcoming elections are nearing, after a series of delays that have left many people around the country restless. The outcome of these elections could affect the business climate, both in terms of the winning party as well as the separate issues of how orderly the election process turns out to be, and how widely the results are respected.
The international backdrop to Thailand’s development on the world’s economic stage is the US-China trade war, whose direction is uncertain as 2019 begins. In some ways, Thailand has the ability to benefit from trade disruption between the two economic superpowers, as the Southeast Asian nation gains a comparative advantage when its rivals are subject to increased tariffs. But Thailand’s delicate political position, as ally and business partner for both US and Chinese interests, effectively prevents it from playing either side off against the other.
However these larger issues are settled, the course toward a fully functional Thailand 4.0 economic model has already been set. The speed of its progress will be determined as events unfold, but its destination as Southeast Asia’s new manufacturing and economic hub is all but assured. Businesses seeking long-term growth opportunities in a modern economy will find that Thailand is now an easier place than ever to invest, with plenty of opportunities for stable and profitable investment.
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