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Thailand’s New Economy Game-Changer - Riding A Surge In Investment Pledges

Updated: Mar 31, 2023

Riding a surge in investment pledges, the kingdom woos the smart industries of tomorrow!

When Akio Toyoda, head of the world’s largest carmaker, Toyota Motor Corp., flew into Bangkok to mark the 60th anniversary of the company’s Thai unit, he described Thailand as his second home.

The same could equally be said for the auto empire Toyoda’s family built. Thailand, a nation where, in 1962, a handful of workers assembled the first Thai-made Toyota using parts imported from Japan, is today home to the company’s Asia headquarters, overseeing engineering and manufacturing in 20 countries and serving as a research and development hub.

Such is Thailand’s importance to Toyota that Toyoda chose the December 2022 celebration to unveil the first battery electric (BEV) version of its best-selling Hilux truck and announce a partnership with Bangkok-based CP Group to turn agricultural biomass into fuel for hydrogen-powered vehicles. “The future of Toyota and Thailand is very bright, and it's only going to get brighter,” Toyoda declared.

The bond between Toyota and Thailand is just one example of how Southeast Asia’s second largest economy has not only successfully lured some of the world’s biggest and most technologically advanced companies to invest billions of dollars there, but also make it their regional headquarters and R&D hubs.

In 2022, those investors included companies as diverse as Amazon Web Services, the cloud computing division of U.S. tech giant Inc, which has pledged to invest $5 billion; BYD Co., China’s largest electric car maker which has committed to spending $660 million; and Taiwan’s Foxconn Technology, best known as the world’s largest assembler of iPhones but now branching into EVs via a more than $1 billion joint venture with Thai energy giant PTT.

In total, Thailand’s Board of Investment (BOI) received some $20 billion worth of new investment applications in 2022 – a 39 percent increase on the previous year. And as 2023 dawned, the BOI doubled down by launching an even more ambitious five-year investment promotion strategy aimed at catapulting Thailand into the new economy by offering much-improved incentives attractive both to existing investors and newcomers able to bring in upstream industries and advanced technologies.

Under the strategy, premium incentives, including up to 13 years corporate income tax exemption without a cap, will be granted to investments in upstream industries and advanced technology, such as wafer fabrication, biotech, nanotech, and advanced materials, entailing innovation, and technology transfer through research cooperation with Thai entities.

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