BANGKOK- Thailand expects to secure at least 1 trillion baht ($28.8 billion) worth of investment applications this year, the government said on Monday, as it seeks to attract more investors to help boost Southeast Asia’s second-largest economy.
In 2024, investment applications rose 35 percent annually to 1.14 trillion baht ($32.8 billion), a 10-year high, led by foreign investment in data centers and cloud services, the Thailand Board of Investment said.
Investors still see Thailand as a safe and suitable place for long-term investment, BOI Secretary General NaritTherdsteerasukdi told a press conference.
“Investment still has a good direction this year… There will be more investment relocation this year,” he said.
Investment pledges are expected to exceed 5 trillion baht in a five-year plan starting in 2023, beating an original target of 3 trillion, Narit said.
Companies have been moving factories from China to Southeast Asia, anticipating President-elect Donald Trump would slap high tariffs on Beijing.
In 2024, foreign investment pledges increased 25 percent year-on-year to 832 billion baht, the BOI said.
Singapore was the top FDI source with 305 projects, mostly in digital services and electronics manufacturing, with an investment value of 357.5 billion baht, or 43 percent of total FDI applications, the BOI said.
China was the second largest source of FDI applications with 810 projects worth 174.6 billion baht, led by printed circuit boards, automotive, and metal products manufacturing businesses.
Narit said the government would introduce qualified refundable tax credit measures to ease the impact of a global minimum corporate tax of 15 percent on multinational enterprises, which took effect on Jan. 1.
The global tax could affect about 1,000 companies but not all would have to pay additional tax, he said.
“We need to look at the details to see how much they are paying,” he added.
Thailand’s corporate tax is currently set at 20 percent, but companies receiving BOI incentives can get an exemption of up to 13 years.
Thailand’s economy beat forecasts with its fastest growth in two years in the July-September quarter due to stronger investment, tourism and exports, but officials and analysts saw increased challenges to maintaining the momentum next year.
Gross domestic product grew 3.0 percent in the third quarter from a year earlier, National Economic and Social Development Council (NESDC) data showed, accelerating from revised annual growth of 2.2 percent in the second quarter, and beating the median forecast of 2.6 percent growth in a Reuters poll.
The growth in Southeast Asia’s second-largest economy was driven by a rise in the service sector while the industrial sector decelerated and agricultural production dropped, the state planning agency NESDC said in a statement.
On a quarterly basis, GDP expanded a seasonally adjusted 1.2 percent in the third quarter, the fastest pace in 18 months, and above both a poll forecast and previous quarter growth of 0.8 percent.