Thailand is already one of the largest importers and exporters in the world, but it still pales in comparison to some of its nearby Asian neighbours. China, Japan, South Korea, Singapore and more all exported more in 2016 than Thailand, while its importing figures still remain below the level of its exporting ones. The country already has a decent importing and exporting setup in place, but there are a few ways in which it could make improvements that may see foreign investment in the country grow.
Adapt the Foreign Business Act
The Foreign Business Act was introduced in 1999 to detail what businesses from abroad can and can’t do. This stipulates that foreign businesses set up in the country must have a Thai majority shareholder for a range of industries, although import/export trading is exempt from this.
While that is favourable for many import and export firms and helped Thailand develop as a popular place for cross-border trading, it can be off-putting for other businesses that would otherwise benefit greatly from import/exporting. For example, a foreign manufacturing business may wish to expand into Thailand and rely on importing certain parts for its production. It may not be classified as an importing business though and require a Thai majority shareholder, which if proving difficult would result in lost business.
Thailand is well placed for exporting to and importing from many other Asian nations especially, bordered by four other countries and the ocean. For the Western world, the logistics of trading with Thailand are a little trickier.
Individual companies such as TNT have begun to do this themselves by appointing a Managing Director responsible for Thailand. Through the company’s ‘Asia Road Network’ this is intended to improve the logistics of both importing and exporting to Thailand. Their services can help anyone from small SMEs to large corporations enhance their delivery processes.
Create New Trade Policies
In order to try and improve importing and exporting between Thailand and certain other countries, setting up trade agreements could be another way to grow importing and exporting. Offering incentives and negotiating on tax and other costs involved with Thailand’s biggest export partners (such as the USA, China and Japan) is a good place to start.
In 2016 Thailand shipped $213.6 billion worth of goods overseas, with around 11% of that going to the USA and China. This figure could increase with even more amicable trading policies put in place between the two countries.
Enjoy the Benefits
Importing will further improve the competitiveness and hopefully quality of products and services in the local market. Along with a greater influx to the economy, this is one of the key benefits importing provides, while a greater number of foreign businesses exporting out of Thailand will do the same. Improving trade with other countries is likelier to attract more business from around the world and significantly strengthen the country’s financial power.
Thailand is already strong when it comes to importing and exporting, but an even more effective approach could boost its economy and trade even more.