Drawing upon the 2017 White Book for Business and Investment in Thailand, the present study reviews recent changes in Thailand’s business environment and investment climate in general, and explores the prospects for Taiwan-Thailand bilateral cooperation in the context of the US-China trade war and the post-pandemic era. In an effort to provide updates from the previous edition, interviews with Taiwanese investors in Thailand were also conducted to develop policy recommendations for Thai authorities of trade and investment, and shed light on the actual needs of Taiwanese businesses in Thailand amidst recent shifts in international economy and trade.

When it comes to business environment in general, the economy boasts medium to long-term recovery prospects, a strategic geographic location, well-developed transportation networks, and proximity to the CLMV countries (Cambodia, Laos, Myanmar and Vietnam) and China, with its investment climate exhibiting continuous improvement. Additionally, Thailand has been in active negotiations for trade agreements with other countries, and is an important investment destination for foreign businesses in the Asia-Pacific region, all highlighting its regional significance.

Regarding bilateral trade between Taiwan and Thailand, the import and export trade between the two has remained stable, possibly a result of the implementation and complementarity of bilateral policies between Taiwan and Thailand. Thailand’s exports to Taiwan have been around $3.9 billion since 2017, while imports from Taiwan have remained above $8 billion. In addition, compared to 2016, Thailand’s imports from Taiwan have become more concentrated in the category of electronic and electrical equipment, while a high share of Taiwan’s imports from Thailand is also concentrated in electronic and electrical equipment, as well as machinery. In terms of investment, top targets for Taiwanese investment in Thailand over the past decade include electronic component manufacturing (optoelectronic material manufacturing, printed circuit board manufacturing, totaling $928 million, 41.04%), finance and insurance (financial holdings, totaling $585 million, 25.87%), and power equipment and machinery manufacturing (batteries, power transmission and distribution machinery, totaling $154 million, 6.81%). Taiwanese investments in Thailand have aligned with Thailand’s policy goals and could contribute to local industrial development.

The contributions of Taiwanese investment in Thailand primarily include: 1) boosting economic growth and enabling industrial transformation and upskilling of human capital; 2) facilitating the formation of local supply chains, promoting manufacturing exports, and creating considerable job opportunities; 3) introducing advanced Taiwanese technology to the local startup industry in support of Thailand’s digital innovation agenda; 4) promoting vocational education and cultivating talent through industry-academia partnerships to enhance the quality of local human resources.

Lastly, the study identifies six major issues faced by Taiwanese businesses in Thailand, including: regulatory framework and procedures; trade; investment; labor and human resources; taxation, and infrastructure. For each issue, recommendations to the relevant Thai authorities are summarized as below (see the analysis results of this study for details).

Issues related to regulatory framework and procedures:

l  Enforce regulatory reforms and reduce ambiguity in laws or regulations

l  Enhance transparency in the consultation process for regulatory reforms

l  Simplify the certification process for importing industrial products

l  Improve access to official English versions of regulatory documents

Trade issues:

l  Reduce bilateral tariff barriers to enhance bilateral trade and investment

l  Improve the transparency of tariff-related regulations and procedures to reduce customs clearance costs and uncertainty

l  Announce clear and transparent technical guidelines for customs to minimize unintentional or technical errors of importers/exporters

l  Relax restrictions on government procurement for foreign businesses

Investment issues:

l  Accelerate the relaxation of industry and ownership restrictions on foreign investments

l  Relax time restrictions on leasing land and buildings for foreign investments to increase long-term investment willingness

l  Update the bilateral investment agreement to better safeguard Taiwanese investors’ rights and interests

l  Expand the scope of investment incentive measures

l  Remove financing barriers for SMEs

Labor and human resources issues:

l  Promote specialist training and talent exchange between Taiwan and Thailand to meet Thailand’s talent demand

l  Extend the scope of smart visa services to attract a wider range of talent to Thailand

l  Simplify the work permit application process

l  Clarify the definition of work and remove the requirement for work permits for business travelers

l  Relax the 4:1 principle for hiring Taiwanese interns by companies

l  Relax the requirement of a Thai company with a full capital of 2 million Thai baht for funding guarantees for SME work permits

Taxation issues:

l  Lower tax rates, simplify procedures, and expand the scope of investment incentives

l  Provide clear advance tax ruling reports and interpretations consistent with the law

l  Extend benefits for startups and establish clear incentive measures

Infrastructure issues:

l  Strengthen existing infrastructure through public-private partnerships and effective leveraging resources from local Taiwanese businesses

l  Improve network infrastructure quality and enhance internet accessibility

Chinese：https://web.wtocenter.org.tw/Page/91/388806