The U.S. Department of State Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses. The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption. The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
Executive Summary
Thailand is an upper middle-income country with a half-trillion-dollar economy, generally pro-investment policies, and well-developed infrastructure. Despite some political uncertainty, Thailand continues to encourage foreign direct investment as a means of promoting economic development, employment, and technology transfer. In recent decades, Thailand has been a major destination for foreign direct investment, and hundreds of U.S. companies have invested in Thailand successfully.
The Foreign Business Act (FBA) of 1999 governs most investment activity by non-Thai nationals. Many U.S. businesses also enjoy investment benefits through the U.S.-Thai Treaty of Amity and Economic Relations, signed in 1833 and updated in 1966. The Treaty allows U.S. citizens and U.S. majority-owned businesses incorporated in the United States or Thailand to maintain a majority shareholding or to wholly own a company or branch office located in Thailand and engage in business on the same basis as Thai companies (national treatment). The Treaty exempts such U.S.-owned businesses from most FBA restrictions on foreign investment, although the Treaty excludes some types of businesses outlined below. Notwithstanding their Treaty rights, many U.S. investors choose to form joint ventures with Thai partners who hold a majority stake in the company, leveraging their partner’s knowledge of the Thai economy and local regulations.
The Board of Investment (BOI) is Thailand’s principal investment promotion authority. It offers businesses assistance in navigating Thai regulations and provides investment incentives to qualified domestic and foreign investors.
Additional incentives are also available for investment in the Eastern Economic Corridor (EEC), an investment zone spanning Thailand’s three eastern seaboard provinces – Chachoengsao, Chonburi, and Rayong. The EEC seeks to leverage cutting-edge infrastructure, tax breaks, and regulatory concessions to promote the development of high-tech and other advanced industries. Sectors targeted include: next-generation automotives; intelligent electronics; advanced agriculture and biotechnology; food processing; tourism; advanced robotics and automation; digital technology; integrated aviation; medical hub and total healthcare services; biofuels/biochemical; defense manufacturing; and human resource development.
The Thai government is also actively pursuing foreign investment related to clean energy, electric vehicles, and related industries. Thailand is currently developing a new National Energy Plan that will set a 20 percent target for renewable energy by 2037. Revised plans are expected to increase clean energy targets in line with the Prime Minister’s November 2021 announcement during COP26 that Thailand will increase its climate change targets, as well as domestic policies focused on sustainability, including the “Bio-Circular Green Economy” model.
To access the full text of the 2023 ICS, visit the U.S. Department of State Investment Climate Statements website.