Applications to invest in Thailand up 70%

The Thailand Board of Investment (BOI) has reported a significant increase in investment applications in the first half of 2023. The total value of investment promotion applications rose by 70% compared to the previous year, reaching 364.4 billion baht (US$10.3 billion). The surge was primarily driven by foreign direct investments (FDI), which saw a remarkable 141% increase. Global companies continue to view Thailand as an attractive manufacturing base, particularly in sectors like electronics, food processing, and automotive, with a focus on the electric vehicle (EV) supply chain.

During the January-June period, the number of project applications also rose, with 891 projects submitted, representing an 18% increase from the same period in 2022. Out of these, 464 projects were concentrated in targeted industries, accounting for 79% of all applications and a combined value of 286.9 billion baht.

FDI applications saw a 33% growth, with 507 projects submitted in the first half of the year. The total investment value for FDI projects soared to 304 billion baht, marking a substantial 141% increase compared to the previous year. China led the way as the largest source of FDI applications, pledging 61.5 billion baht for 132 projects, primarily in electronics parts manufacturing. Singapore ranked second with 73 projects and investments worth 59.11 billion baht, followed by Japan with 98 projects amounting to 35.33 billion baht. The value of Japanese applications more than doubled compared to the same period in 2022, mainly due to significant projects in electronic components and automotive parts.

Narit Therdsteerasukdi, Secretary General of the BOI, highlighted the positive trend in investment applications, particularly the rapid growth in foreign investment within the electronics and EV sectors. He attributed this confidence to Thailand’s strong fundamentals, well-developed infrastructure, and robust supply chain.

Thailand’s solid economic fundamentals have also been recognised by international organisations. The International Institute for Management Development (IMD) recently ranked Thailand 30th out of 64 economies worldwide in terms of competitiveness for 2023, reflecting a three-position improvement from the previous year.

Among the sectors attracting investments, the electrical appliances and electronics (E&E) industry secured the highest amount of funding, with 106 projects and a total investment value of 160 billion baht. The sector experienced a significant increase compared to the same period last year, driven by the relocation trend of electronic component manufacturers seeking to mitigate risks from trade wars and geopolitical tensions.

The agro-industry and food processing sector ranked second, with 139 projects worth 51.3 billion baht. Notable brands such as Pringles and Lotus Biscoff were among the companies filing investment applications in this sector.

The automotive and parts industry also saw 80 investment applications, amounting to 19.6 billion baht. Many of these projects focused on the production of parts for electric vehicles, such as tires, axles, hybrid transmission systems, and electric charging stations.

Thailand’s commitment to becoming a regional hub for EV manufacturing is attracting major players in the industry. To date, 14 battery electric vehicle (BEV) manufacturers have received investment promotion benefits, with a combined investment value of 33.9 billion baht. This represents an annual production capacity of 276,640 units. Leading manufacturers, including BYD Auto, Great Wall Motor, and Mercedes Benz, have already initiated projects, and others like Changan Automobile and GAC AION New Energy Automobile are expected to submit applications in the second half of the year.

Apart from the targeted industries, the power generation sector, particularly renewable energy projects, received a large number of applications. Out of the total 195 projects in the sector, 186 were related to renewable energy, with a combined investment value of 8.33 billion baht.

Geographically, the Eastern Economic Corridor (EEC) area accounted for 47% of the total investment value, with 306 projects and 171.47 billion baht in investments. The EEC projects primarily focused on the E&E, petrochemical, and automotive sectors. The central region of Thailand followed with 362 projects worth 75.19 billion baht in investments.

The Thailand BOI also provided an update on the Long-Term Resident Visa (LTR Visa) program, which has received over 4,200 applications from citizens of Europe, the United States, and China. The program aims to attract high-potential investors and experts to Thailand. The BOI has appointed four certified agents to facilitate visa applications and plans to upgrade the application system to accommodate increasing demand.

The robust growth in investment applications highlights Thailand’s attractiveness as a preferred investment destination, driven by strong fundamentals, favourable government policies, and the country’s position as a regional manufacturing hub.