Eastern Economic Corridor and SEZ: The new Investment Opportunity in Thailand
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1 Eastern Economic Corridor and SEZ: The new Investment Opportunity in Thailand
2 1. THE VOICE OF EUROPEAN BUSINESS IN THAILAND Who we are The EABC is the European Chamber of Commerce in Thailand. As Europe is not a nation but a confederation of states, it must be called an Association according to Thai laws. The EABC was founded six years ago by the Chambers of Commerce of the European Nations that are represented in Thailand, with support and mandate of. The members of the EABC are European companies active or wishing to operate in Thailand and Thai companies representing European companies. The EABC has 11 Working Groups with hundreds of top managers making suggestion to the Government for a more competitive Thai economy
3 1. CONT THE VOICE OF EUROPEAN BUSINESS IN THAILAND What we do We have a close relationship with the Royal Thai Government, its Ministers and State Organizations and pursue matters with the government. Through our Working Groups EABC members may submit their concerns and suggestions directly to Ministers and Senior Officials
4 1. CONT THE VOICE OF EUROPEAN BUSINESS IN THAILAND EABC Position in ASEAN EABC can help businesses resolve issues on ASEAN level. The EABC is a founding member of EU-ASEAN Business Council which is the primary voice for European Business within the ASEAN region. EABC members are granted access to the EU-ASEAN Chamber. The work of the bilateral chambers of commerce is meaningfully supplemented. Every Year EABC issues a Position Paper, with recommendations by the shared interests of European business community to the Royal Thai government. Policymakers today acknowledge the neutral approach and benefits of useful information presented in this Paper, rather than different individual trade strategies. Austrian-, Belgium/Luxembourg-, British-, Danish-, Finnish-, Franco-, German-, Irish- Italian-, Netherlands-, Norwegian- Swedish-, and Swiss-Thai Chamber of Commerce --4--
5 1. THE EU S POSITION IN GLOBAL MARKETS EU is the world largest single market by GDP, with a GDP per head of for its 500 million consumers. Together, 's 28 members account for 16% of world imports and exports. The EU ranks first in both inbound and outbound international investments --5--
6 1. EU - ASEAN TRADE & INVESTMENT EU is the largest source of FDI for ASEAN, between , USD 69.6 bn or 22% of total FDI inflow to ASEAN FDI Flows into ASEAN And ASEAN s Second largest Trading Partner. ASEAN TOP 10 Trading Partner 2015 Significant investors in ASEAN Thailand s major trade partners --6--
7 1. EU - THAILAND TRADE & INVESTMENT Thailand ranked 4 th in EU-ASEAN Trade, or 16% share in EU-ASEAN trade Thailand remains a region of good growth, sound macro economic trends and a lot of opportunity. ASEAN Member States s Share of EU-ASEAN Trade in Goods
8 1. EASTERN ECONOMIC CORRIDOR PRIVILEGES Existing EEC Privileges EEC Package consists of 3 types of promotion on top of BOI: 1. Extended TAX incentives, 2. Long LAND lease, 3. VISA for management of company and some experts Thailand requires urgently. Other Important Aspects to Consider for Investments There are other important factors for investment such as: ease of doing business, access to innovation and required workforce, competitive taxation, size of internal market, availability of mass transport via trains and buses, infrastructure to connect airports and city centres to consider, suppliers --8--
9 2. OUR VIEW ON GOVERNMENT POLICIES FOR EEC, SEZ, AND LOGISTICS IN THAILAND Thailand can become ASEAN HUB Geographical Advantage for ASEAN Hub Transport / Logistics Trade R&D Automotive (Assemblers + Auto-part makers) Solar Digital Park Tourism Need strong support through government policies and long-term commitment of years Consider Thailand as a part of global supply chain. Need policy to support innovation. Ex: reduce patent backlog, enforcement of IP law --9--
10 3. THAILAND S OBSTACLES FOR FOREIGN INVESTMENT Foreign Equity Limit should be at least the level of AEC (70%) or more liberalized for foreign investment. E.g., logistics companies, Telecommunication service providers, retails and wholesales Competition from State Enterprise pharmaceuticals sector Access to Human Capital lack of engineers in emerging industries, e.g. rail, skilled workers, and insufficient vocational education and English proficiency workforce IP Protection need to increase ability to register patents and require strong IP enforcement Ease of Doing business VISA, Work Permit, 90-day reporting Minimum Capital Requirement for Service Businesses services bring GDP Access to Finance grants for investment or labor costs International Compliance of Customs Procedures e.g. valuation, rewards
11 4. EABC RECOMMENDATIONS FOR FUTURE PROMOTION / TRADE FACILITATION 1. Strengthen Transport / Logistics Hub For Customs purposes, cargo should be free to move between customs points / free zones as long as it has not passed customs formality 2. National Trucks to be allowed between ASEAN countries. 3. Lat Krabang containers terminal must be totally revamped and operator changed
12 4. CONT..EABC RECOMMENDATIONS FOR FUTURE PROMOTION / TRADE FACILITATION 4. Ease of Customs procedures as well as coordinating efforts between ASEAN countries and introduction of customs document in English 5. Creating an innovative climate especially for SMEs, lower capital requirement and improve VISA/Work Permit schemes 6. Equal opportunity for private sectors and state owned enterprises. SOE should not be the regulators and operators the same time 7. Continue to have close consultation on changes to laws and regulations with EABC and foreign business community 8. Adopting of universal standards for transport and logistics to overcome disadvantages of high costs and time constraint 9. EV automotive manufacturing the government should install sufficient supporting infrastructure and consider personal income tax incentives 10. Use more solar energy to prepare for the increased power demand in EEC
13 5. THAILAND LOGISTIC EFFICIENCY THAILAND AS A PROMINENT ASEAN LOGISTICS HUB 1. International System for Railway European Rail Standard to ensure interconnectivity with ASEAN and reduce logistics costs 2. Trading Nation Adopting TIR System for logistics, which is international standard and part of UNECE, being used by 70+ nations including China and India Abolish AFFA (Asean Federation of Freight Forwaders Association) since its not working properly 3. Establish rail authority to supervise tenders and up-to-date rail standards 4. Establish rail assembly opportunity
14 Thank you for your attention! The EABC is in prime position when it comes to government policy recommendations. The EABC has achieved a strong position by acting together with ONE European voice, rather than with 28 separate trade strategies. EABC OFFERS SUPPORT TO ESTABLISH SUCCESSFUL EEC PROMOTION TO EUROPEAN COMPANIES WWW. EABC-THAILAND.EU
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