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Mekong Memo Thailand Weekly, October 20, 2023: Business, politics, finance, trade & legal news.
We monitor and filter the very best and most insightful stories from Southeast Asia directly to your inbox every weekday.
By reviewing a wide variety of media including legal, financial and other relevant industries along with government and NGO sources, we are able to sift through the noise and bring you only what we believe to be relevant to an informed observer of Thailand business news.
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Here is your Mekong Memo Thailand for the week of October 20, 2023:
Foreign Investors to Gain Clarity on Economic Policies
In a move to address uncertainties, the Federation of Thai Industries (FTI) is hosting a forum on November 1 in Bangkok. This event will provide up to 300 foreign investors from prominent firms an opportunity to directly engage with government representatives. The focus will be on the economic policies of the Srettha Thavisin government, investment promotion, and challenges posed by the Thai economy. This initiative comes after foreign investors expressed a need for clearer insights into the government's investment strategies and the coalition's stance.
Read more: Bangkok Post
Offshore Income Tax Loophole Tightens Up
Thailand's Revenue Departmental Order No. Por. 161/2566, effective from January 1, 2024, will subject offshore-sourced income of Thai tax residents to personal income tax when brought into the country. This move aims to standardize tax collection and counter tax avoidance tactics. Previously, offshore income was exempt from personal income tax if brought into Thailand after the year it was earned. While this new order seeks to close the loophole, the actual efficiency of tax collection remains to be observed. Some exceptions, like income retained abroad, still apply.
Read more: Tilleke & Gibbins
Landbridge Project Attracts China's CHEC
China Harbour Engineering Co (CHEC) has expressed interest in Thailand's ambitious 1-trillion-baht landbridge project, aiming to connect the Gulf of Thailand to the Andaman Sea. This interest was expressed during a meeting between CHEC's chairman, Wang Tongzhou, and Thai Prime Minister Srettha Thavisin. The project, set for completion in 2039, envisions deep-sea ports, motorways, oil pipelines, and railways. The Thai government plans to promote the project to potential investors in the coming months, with construction anticipated to commence in September 2025.
Read more: Bangkok Post
Nightlife's Extended Hours Make a Comeback
Bangkok's Governor, Chadchart Sittipunt, has expressed support for an initiative to extend the operating hours of entertainment venues in the city until 4 am. This proposal, endorsed by Prime Minister Srettha Thavisin, is strategically aimed at revitalizing the tourism sector, a significant contributor to the local economy. The current regulations mandate a 2 am closure. The extended hours, expected to begin as a pilot in December, target key tourist zones including Bangkok, Pattaya, Phuket, and Ko Samui. Emphasis is placed on stringent regulations to address potential challenges such as noise disturbances, drug-related issues, and underage access, ensuring a balance between economic growth and public safety.
Thailand's Visa Push to Boost Tourism
Thailand is proactively enhancing its tourism strategy through several visa initiatives. The Prime Minister has proposed making visa-free entry for Chinese tourists a permanent feature, a move that could significantly boost visitor numbers. Additionally, the Tourism Authority of Thailand is advocating for visa waivers for travelers from India and Taiwan. Starting from November, Russian tourists can enjoy an extended visa-free stay of up to 90 days, a significant increase from the previous 30-day limit, valid until April 2024. These initiatives highlight Thailand's commitment to enhancing its tourism appeal and fostering international relations.
Challenges Ahead for Digital Wallet Initiative
Thailand's ambitious $15 billion digital wallet initiative, intended to stimulate the economy, has been postponed from its initial February 1st launch date. The delay is attributed to the need for a more secure system development. While the government remains optimistic about the scheme's potential to boost economic growth, it has faced criticism from economists and political opposition. Concerns revolve around the scheme's economic viability, potential violation of financial regulations, and the risk of increasing public debt. Despite the challenges, the government is continues to proclaim that it is determined to launch the program by Q1 2024.
Bangkok Penthouse Breaks Records Amidst Condo Market Glut
A penthouse in 34-story Bangkok tower Scope Langsuan has set a record as Thailand's most expensive condo sale, trading hands at 436 million Thai baht (almost US$12 million). This sale contrasts with the broader condo market in areas like Nonthaburi and Samut Prakan, which has seen a decline in the price index for four consecutive quarters. The dip is attributed to an oversupply of unsold units in older projects. Due to the challenges facing the market, including rising interest rates and high household debt, developers are offering attractive campaigns and discounts to stimulate sales.
EEC Draws Australian Investment Interest
Australia has expressed keen interest in investing in infrastructure projects, especially in water resources, within Thailand's Eastern Economic Corridor (EEC). As Thailand's 8th largest trading partner, Australia's bilateral trade with Thailand stood at approximately US$18.38 billion last year. This figure is expected to rise, aligning with Australia's Southeast Asia economic strategy. Notably, both nations have inked three significant trade agreements, with the Thailand-Australia free trade agreement (TAFTA) set to expire in two years. Efforts are underway to further promote trade and capitalize on these agreements.
Read more: Thai PBS World
Overview of 2023 Banking Landscape
Navigating the banking landscape in Thailand as an expatriate can be challenging. The Thaiger has provided an overview of some of the top choices recommended for foreigners at the moment. Kasikorn Bank, known for its innovative banking solutions, offers a no-minimum deposit policy and a Foreign Currency Deposit Account tailored for foreign residents. Bangkok Bank, the largest in Thailand, boasts an extensive global presence and is renowned for its expat-friendly services. Siam Commercial Bank, the country's oldest, is recognized for its investment banking prowess. United Overseas Bank and CIMB also offer unique advantages, allowing them to round out the top options.
Read more: Thaiger
Turbulence Ahead for SE Asia's Budget Carriers
Emerging low-cost carriers in Southeast Asia are bracing for challenges as established airlines may employ price dumping to safeguard their market dominance. Patee Sarasin, CEO of Really Cool Airlines, highlighted the risks, citing the recent suspension of Malaysian budget airline MYAirline due to financial constraints. Despite post-pandemic airfares rising, the budget segment remains price-sensitive. Larger airlines, capable of frequently reducing prices, could have the upper hand. Sarasin anticipates a full aviation recovery, in terms of seat capacity, to take a decade, given various industry challenges.
Read more: Bangkok Post
State Embraces EVs on PM's Command
Prime Minister Srettha Thavisin has mandated state agencies to prioritize electric vehicle (EV) purchases, establish more charging stations, and ensure affordable EV insurance. This move aligns with Thailand's ambition to boost green transportation, minimize carbon emissions, and position itself as a leading producer of EVs and components. Plans also encompass electrifying all public transport and introducing incentives to encourage the public to switch from traditional vehicles to EVs. With ongoing incentives, EV sales in Thailand are projected to constitute 8.7% of total vehicle sales in 2023.
Read more: Bangkok Post
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