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Thailand Market Profile

Why Thailand?

Thailand is the United States' 22nd largest trading partner. Two-way trade in 2010 was about $33 billion, with $23.6 billion in Thai exports to the U.S. and $9 billion in U.S. exports to Thailand. The figures represent an increase of 24 percent in the value of trade between the two countries. U.S. exports to Thailand increased by 28 percent, while US imports from Thailand increased by about 22 percent for the same period in 2009. In Asia, Thailand ranks as the United States’ 8th largest trading partner after China, Japan, South Korea, Taiwan, India, Singapore and Malaysia.

The Thai economy is export-dependent with exports accounting for about 61 percent of its Gross Domestic Product (GDP). Since recovering from the Asian financial crisis in the late 1990s, GDP performance has averaged 5-6 percent. The 2010 GDP grew close to 8 percent, as a result of an increase in exports and the Thai Government’s increased spending on its “Thai Khem Khaeng” economic stimulus program. This stimulus package was estimated to have contributed an increase to the Thai GDP of 2.3 percent. The Thai GDP per capita is approximately $8,100 (2009 est.).

The U.S. and Thailand have enjoyed a special commercial relationship for 177 years under the Treaty of Amity and Commerce. Under the treaty, with the exception of a few sectors, U.S. companies operating in Thailand are afforded national treatment, or an “equal playing field,” with Thai companies.

Trade Agreements

Thailand is a member of the Association of Southeast Asian Nations (ASEAN). In 1992, leaders of ASEAN governments approved a Thai proposal to establish the ASEAN Free Trade Area (AFTA), which aimed to reduce tariffs on most processed agricultural and industrial products traded among ASEAN countries. The scheduled tariff reductions have continued to be pushed forward; currently, most reductions will be in place by 2015. ASEAN is examining the possibility of expanding this special trade relationship with Australia, New Zealand, China, South Korea, India and Japan.

Thailand has signed a limited bilateral free trade agreement with China and has a partial agreement with India. Thailand implemented an FTA with Australia on January 1, 2005. Thailand has completed FTA negotiations with Japan and the agreement was signed in 2007.

Market Opportunity

Thailand’s economic growth has created opportunities for U.S. companies in a number of infrastructure sectors, including electrical power, telecommunications, and renewable energy. Thai consumers are creating opportunities for new sales of U.S. medical products, cosmetics, security equipment, food supplements and educational services. Thailand also continues to look for U.S. suppliers of automotive accessories, defense equipment, broadcast equipment, food processing and packaging equipment, and environmental technology.

Best Prospects

Robust economic growth in Thailand has created numerous opportunities for U.S. companies in varying industry sectors, including the following:

  • Automotive Parts and Services/Equipment
  • Broadcast Equipment
  • Defense Equipment
  • Education Services
  • Electronic Components
  • Electrical Power Systems
  • Food Processing and Packaging Equipment
  • Medical Devices
  • Printing/Graphic Arts Equipment
  • Security and Safety Equipment
  • Telecommunications Equipment
  • Water Pollution Control Equipment

Government Regulations Regarding Foreigners Doing Business in Thailand

Prior to conducting business in Thailand, Americans should be familiar with the restrictions on foreign businesses in Thailand, especially the Alien Business Law (ABL). Because of the Treaty of Amity and Economic Relations, American companies are exempt from many of the restrictions on foreign investment imposed by ABL; however, being familiar with ABL and other restrictions is important. Also known as the National Executive Announcement No. 281 of 1972, ABL restricts business activity of aliens, or non-Thai residents. "Alien" and "alien business" is defined as a natural person or juristic person without Thai nationality. This includes a business with at least one-half of the registered capital held by aliens. The three categories of restrictions are as follows:

  • Category A is completely closed to foreigners (with a few exceptions) doing business in certain sectors, most notably accounting, law and architecture.
  • Category B is closed to foreigners unless promoted by the Board of Investment. Category B sectors include fishing, printing, tour agencies and other businesses.
  • Category C requires an Alien Business License for retail, wholesale and other businesses. A complete list of restricted industries can be obtained upon request.

While exempt from many of these regulations, American businesses are restricted from doing the following:

  • Owning land
  • Engaging in the business of inland communication
  • Engaging in inland transportation and communication industries
  • Engaging in fiduciary functions
  • Engaging in banking involving depository functions
  • Engaging in domestic trade in indigenous agricultural products
  • Exploiting land or other natural resources

For more information about Thailand government regulations, please click here

FCPA

The U.S. Foreign Corrupt Practices Act (FCPA) is an important anti-corruption tool designed to discourage corrupt business practices in favor of free and fair markets. The FCPA prohibits promising, offering, giving or authorizing giving anything of value to a foreign government official where the purpose is to obtain or retain business. These prohibitions apply to U.S. persons, both individuals and companies, and companies that are listed on U.S. exchanges. The statute also requires companies publicly traded in the U.S. to keep accurate books and records and implement appropriate internal controls.

More information on the FCPA can be found here.

A party to a transaction seeking to know whether a proposed course of conduct would violate the FCPA can take advantage of the opinion procedure established by the statue. Within 30 days of receiving a description of a proposed course of conduct in writing, the Attorney General will provide the party with a written opinion on whether the proposed conduct would violate the FCPA. Not only do opinions provide the requesting party with a rebuttable presumption that the conduct does not violate the FCPA, but DOJ publishes past opinions which can provide guidance for other companies facing similar situations.

More information on the DOJ opinion procedure can be found here.
FCPA Guidance in pdf. Format can be downloaded at http://www.justice.gov/criminal/fraud/fcpa/guide.pdf

The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission released a Resource Guide to the U.S. Foreign Corrupt Practices Act. The Guide is an excellent resource on the FCPA for U.S. companies with questions about the statute and its enforcement. The Guide explains the statute in detail and contains hypothetical, examples of actual enforcement actions, and summaries of FCPA case law and DOJ opinion releases. For this and other useful resources visit the DOJ webpage: http://www.justice.gov/criminal/fraud/fcpa/guidance/

Thailand at a Glance

  • Location: Southeastern Asia, bordering the Andaman Sea and the Gulf of Thailand, southeast of Burma
  • Land Boundaries: Burma, Cambodia, Laos and Malaysia
  • Area Total: 514,000 sq km (slightly more than twice the size of Wyoming), Land: 511,770 sq km, Water: 2,230 sq km.
  • Climate: Tropical; rainy, warm, cloudy southwest monsoon (mid-May to September); dry, cool northeast monsoon (November to mid-March); southern isthmus always hot and humid
  • Population: 67.3 million (2010)
  • Languages: Thai, English (secondary language of the elite), ethnic and regional dialects
  • GDP Real Growth Rate: -2.33 percent (2009 est)
  • GDP – per capita: $8,100 (2009 est.)
  • GDP by Sector: Agriculture: 12.3 percent; industry: 44 percent; services: 43.7 percent (2009 est.)
  • Labor Force: 38.6 million (2010)
  • Government type: Constitutional monarchy

Country Commercial Guide

For more details on Doing Business in Thailand, read the Thailand Country Commercial Guide, select the link below

Upcoming Events

For events information, visit http://export.gov/thailand/tradeevent/index.asp

Contact Us

Dean Matlack
Commercial Attaché
U.S. Commercial Service,
U.S. Embassy, Bangkok
GPF Witthayu Tower A, Suite 302,
93/1 Wireless Road Bangkok 10330
Tel: [662]-205-5263
Fax: [662]-255-2915
E-mail: dean.matlack@trade.gov
Website: www.export.gov/thailand/

For more information on Intellectual Property Rights Protection in Thailand, contact:

Peter N. Fowler
Regional IP Attaché
U.S. Patent and Trademark Office
U.S. Embassy, Bangkok
GPF Witthayu Tower A, Suite 302,
93/1 Wireless Road Bangkok 10330
Tel: [662]-205-5913
Fax: [662]-255-2915
Email: peter.fowler@trade.gov

For more information on how U.S. Commercial Services Thailand can help you enter the Thai market, visit http://export.gov/thailand/index.asp

For complete U.S. Commercial Services Thailand contact information, visit http://export.gov/thailand/contactus/index.asp

Useful Links


Market Overview
Country Commercial Guide
Thailand Map_2