Investing in Thailand: East Asian interest gathers pace

In recent years, the East Asian powerhouses — South Korea, Greater China, and Japan — have significantly increased their investment footprint in Thailand, heralding a new era of economic synergy.

The Land of Smiles witnessed a staggering 43 per cent increase in investment applications in 2023, totalling 848.3 billion baht (US$23 billion), a clear testament to the nation's growing global appeal.

The convergence of Thailand 4.0 and the Eastern Economic Corridor (EEC) marks a crucial juncture for East Asian firms to boost their investments into the region.

Thailand 4.0 and EEC: Synergy for success

Thailand 4.0, a government-led initiative, signifies a transformative shift from traditional industries to a dynamic, innovation-driven economy. Focused on digitalisation, innovation, and the green economy, this initiative aims to elevate Thailand's economic standing.

Figure 1: EEC map showcasing ongoing infrastructure projects aimed at boosting regional connectivity.

The EEC, spanning over 13,000 square kilometres in Chonburi, Rayong, and Chachoengsao provinces, serves as a hotbed for high-tech industries.

Through attracting FDI and fostering technological advancements, the EEC offers a golden opportunity to invest in a region strategically positioned for success.

By targeting high-value industries such as electric vehicles, aerospace, and medical equipment, these initiatives provide fertile ground for international investors to align their expertise with Thailand's vision for sustainable economic growth.

Figure 2: Total investment secured for key industry sectors.

The Thai Government's commitment to facilitating foreign investments, through favourable tax regimes and streamlined processes, further sweetens the deal.

Diverse investments driving economic growth

Thailand's investment climate scaled to new heights in 2023. Foreign investors submitted 1,394 applications for investment promotion with a combined investment value of US$18.9 billion dollars – an increase of 72 per cent over last year, mainly due to more large projects.

This growth underscores the geopolitical push for companies to diversify their operational bases and Thailand's allure as an investment destination.

Figure 3: Top 5 countries providing investment inflows.

Leading the charge, China is the top investor in Thailand, with investments in the electronics and automotive industry, including electric vehicles (EVs).

Singapore has significant investments in solar cells and electronics – both high-value sectors. This is complemented by Japan's focused investment in innovation-driven sectors like aerospace and medical equipment.

Electric vehicles supercharge growth

Leveraging its strategic location and robust supply chain, Thailand is becoming a key player in the EV industry.

Thailand aims to transform a third of its annual 2.5 million EV vehicles production by 2030. To achieve this, it is rolling out incentives such as corporate tax holidays to boost investments along the EV manufacturing supply chain.

Figure 4: According to the Department of Land Transport (DLT), the number of EVs registered in Thailand reached 512,343 units as of November 30, 2023.

Korean automotive leaders like Kia and Hyundai are also taking a more active role in market expansion by taking over distribution, sales, marketing, and aftersales services from previously outsourced operations.

For example, the opening of Hyundai’s IONIQ Lab in Bangkok late last year reflected the brand’s global leadership and expertise in vehicle electrification, as well as a belief in Thailand’s strategic importance to Hyundai’s ASEAN strategy.

Japan, a leader in battery technology and automotive manufacturing, plans to invest 150 billion baht in Thailand over five years.

Meanwhile, Chinese EV makers are stepping up their efforts, increasingly outpacing Japanese investments. BYD and Great Wall Motor recently pledged $1.44 billion towards new manufacturing facilities in Thailand.

Strengthening ASEAN connectivity for mutual growth

A key development in this collaborative journey is the Memorandum of Understanding (MOU) between UOB and Thailand’s Board of Investment (BOI) signed earlier this year. This agreement facilitates not only foreign direct investment into Thailand and across ASEAN, but also supports Thai companies looking to expand overseas.

UOB and BOI have been working closely with key investors such as China's Great Wall Motor and BYD to facilitate the success of their large-scale flagship investment projects in Thailand.

With the MOU in place, UOB's extensive network and expertise in the region make us an ideal partner for businesses aiming to navigate the Thai and ASEAN markets.

BYD and Rever – Synergy in new energy

Leveraging UOB’s green financing solutions to scale EV adoption

The Foreign Direct Investment (FDI) Advisory unit has helped more than 370 companies expand into Thailand. It has also enabled more than US$1.6 billion of projected foreign direct investments and more than 18,000 job opportunities into Thailand since 2019. For outbound FDI, the Bank has helped more than 210 Thai companies expand across ASEAN with Singapore, Malaysia, and Vietnam as the top destinations for investment.

Such strategic cross-border partnerships mark a significant step towards a unified and prosperous region.

Important notice and disclaimers

This article shall not be copied or relied upon by any person for whatever purpose. This article is given on a general basis without obligation and is strictly for information only. The information contained in this article is based on certain assumptions, information and conditions available as at the date of the article and may be subject to change at any time without notice. You should consult your own professional advisers about the issues discussed in this article. Nothing in this article constitutes accounting, legal, regulatory, tax or other advice. This article is not intended as an offer, recommendation, solicitation, or advice to purchase or sell any investment product, securities or instruments. Although reasonable care has been taken to ensure the accuracy and objectivity of the information contained in this article, UOB and its employees make no representation or warranty, whether express or implied, as to its accuracy, completeness and objectivity and accept no responsibility or liability for any error, inaccuracy, omission or any consequence or any loss or damage howsoever suffered by any person arising from any reliance on the views expressed and the information in this article.

About the author

Jimmy Koh

UOB

Jimmy Koh currently heads the network partnerships and strategic marketing outfit at UOB’s FDI Advisory. As a managing director, one of his key roles is to identify and establish partnerships with local and overseas ecosystem partners, while providing direction and editorial guidance that can help profile FDI initiatives in Southeast Asia.

Jimmy has more than 20 years in banking and global markets research and business experience, having previously led UOB’s external and internal communications teams, as well as the Group’s CSR and Art Programme initiatives.