THAILAND Looking Back: 2023 and Gazing Into: 2024 Looking Back: 2023
Thailand's new government officially took office on 5 September 2023, with Srettha Thavisin, who belongs to the Pheu Thai Party, named Prime Minister by Parliament, after a period of uncertainty following the 14 May 2023 election in which the Move Forward Party ("MFP") won the election on a progressive platform but was unable to form a government. The Pheu Thai Party, which placed second in the election, then formed a broader coalition with a couple of major parties and the MFP became the opposition. The Government is focusing heavily on foreign and economic policies, and issues such as energy costs.
There have been significant developments on various fronts in order to achieve these goals. For instance, to faciliate and encourage business and foreign investments, there have been amendments to the Civil and Commercial Code, changes to the private placement rules, etc.. Thailand has also expedited its entry into AEO Mutual Recognition Arrangements which provide benefits to Authorised Economic Operators.
There is also progress on the Sustainability and Environment front with a new draft Climate Change Bill. The Government is further considering restructuring carbon taxes on vehicles based on carbon emissions, where lower carbon emissions correspond to lower tax rates. In addition, there are incentives to faciliate sustainability financing.
On the Technology, Media & Telecomunications front, there is new regulation for digital platform service providers and a new law regulating technological crime.
Gazing Into: 2024
Thailand's economic and foreign policy has seen much recent development. Taking an overview of these trends, we can get an indication of the expected outlook for 2024.
Thailand remains committed to its aspiration to graduate from an upper middle-income to a high-income country by 2037 as outlined in the 20-year national strategy (2018-2037). A key component of this strategy is "Thailand 4.0", which encapsulates Thailand's vision to become a value-based and innovation-driven green economy and move away from producing commodities to promoting technology, creativity and innovation in focused industries and, increasingly, in services. Thailand is also working on the Bio-Circular-Green (BCG) economy model, which involves a strategy and reform agenda on how to achieve the Thailand 4.0 vision and long-term objectives related to the Sustainable Development Goals (SDGs). One of the key instruments to Thailand's progress towards a "New Economy" is the Investment promotion and facilitation policy under the Board of Investment ("BOI"). The policy provides both tax-based (e.g. corporate income tax exemptions and import duty exemptions) and non-tax privileges (e.g. waiver of foreign ownership restrictions) for promoted projects.
In its press release, BOI reported that between January-September 2023, it received a total of 1,555 project applications, totaling THB516.8 billion in value, reflecting a 22% year-on-year increment. The key sectors which have received investment incentives are the electrical appliances and electronics (E&E) industry, the agro-industry and food processing sector, the automotive and parts industry.
According to the Ministry of Commerce’s Trade Report, in 2023, China was Thailand's largest trading partner, followed by the United States ("US"), Japan, Malaysia, and Taiwan.
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Exports. Thailand's five major trading partners for exports were (in descending order): the US, China, Japan, Australia and Malaysia. The principal products were: (i) motor cars, parts and accessories, (ii) automatic data processing machines and parts, (iii) precious stones and jewellery, (iv) rubber products, and (v) refined fuels. Fresh, frozen and dried fruit were 10th on the list of principal export products.
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Imports. Thailand's five major trading partners for imports were (in descending order): China, Japan, the US, United Arab Emirates and Taiwan. The principal products were: (i) crude oil, (ii) machinery and parts, (iii) electrical machinery and parts, (iv) electronic integrated circuits, and (v) chemicals.
Full Report
Click on the link below for the full report which provides summaries of the key legal developments related to the above areas.
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Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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