Thai FDI soaring in nearby lands
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Thai FDI soaring in nearby lands

A man loads goods from Thailand onto a boat bound for Laos. Cross-border trade between the two countries is a major driver of both economies. PATTARAPONG CHATPATTARASILL
A man loads goods from Thailand onto a boat bound for Laos. Cross-border trade between the two countries is a major driver of both economies. PATTARAPONG CHATPATTARASILL

Thailand's outward foreign direct investment (FDI) is flourishing as investors large and small rev up international expansion in line with the government's commitment to supporting such investment and helping companies secure cheaper raw materials.

Adul Chotinisakorn, deputy director-general of the Foreign Trade Department, said Thai outward FDI amounted to 6.82 billion baht in the first nine months of 2015, a year-on-year surge of 143%.

The FDI came mostly in the form of business acquisitions and industrial factory set-ups.

Investment destinations included Cambodia, Laos, Myanmar, Vietnam and Indonesia, all of which are rich in raw materials and have cheaper labour.

Higher FDI is one of the factors in shrinking export revenue, Mr Adul said.

In response, the Commerce Ministry's strategy this year will focus more on encouraging Thai businesses to become traders and boosting foreign investment.

The ministry is also committed to stimulating border and cross-border trade.

The Foreign Trade Department yesterday said Thailand's border and cross-border trade, mainly with Singapore, southern China and Vietnam, amounted to 1.4 trillion baht last year, up 3.48% from 2014.

But the performance fell short of the government's target of 1.5 trillion baht due largely to the global economic slowdown and the relocation of electronics production to neighbouring countries.

The proportion of border trade, however, rose last year to 7% of total exports from 5% in 2014.

Mr Adul said this year's target for border trade would be set later this month at a meeting of the Border Trade Development Committee chaired by Commerce Minister Apiradi Tantraporn.

In a bid to stimulate border trade, the Commerce Ministry, in its capacity as the state agency handling public relations and marketing for the development of special economic zones (SEZs), will host an "Open House to Special Economic Zones" at Siam Paragon in Bangkok on Feb 29.

The event will showcase the preparedness of Thailand as it seeks to become an Asean investment hub.

Topics discussed will include connectivity to world markets and the generous investment privileges on offer from the Thai government.

Investors in SEZs are entitled to generous Board of Investment privileges such as an exemption from corporate income tax for eight years, a 50% tax reduction on net profit from investment over five years, double tax deductions for the cost of transport, electricity and water for 10 years and an additional 25% tax deduction for the cost of installation or construction of facilities.

Other privileges include exemptions from import duties on machinery, a five-year exemption for raw or essential materials for use in the production of exports and a permit for the employment of unskilled foreign workers at promoted projects.

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