Investments in Thailand are projected to increase this year, following a 35% rise in investment incentive applications, reaching 1.14 trillion baht (US$32.8 billion) last year. This marks the highest level since 2014, driven by substantial foreign direct investment (FDI) projects in data centres and cloud services, according to the Board of Investment (BoI).
For the first time in 2024, the digital sector led in value, with 150 projects amounting to a total of 243 billion baht (US$7 billion) in committed investment. Significant projects in this sector included proposals to establish large data centres by units of major technology and cloud services firms such as Google (Alphabet) from the US and Australia’s NextDC.
The electronics and electrical appliances sector ranked second, with projects valued at over 231 billion baht (US$6.6 billion), followed by the automotive sector with 102 billion baht (US$2.9 billion), the agriculture and food sector with 87.6 billion baht (US$2.5 billion), and the petrochemicals and chemicals sector with 49.1 billion baht (US$1.4 billion).
Narit Therdsteerasukdi, secretary-general of the BoI, acknowledged the impressive investor response to policies promoting Thailand as a secure and neutral hub for large digital sector and smart electronics projects last year.
He anticipates this trend will strengthen in 2025 with the establishment of Thailand’s Semiconductor Board and the increasing need for companies to manage risks amid the current geopolitical climate.
Narit stated that the board will continue conducting roadshows in key FDI source markets, including China, the US, Japan, and Europe, to promote its policies and engage potential investors.
Thailand investments
From January to December 2024, investment promotion applications grew by 40%, totalling 3,137 projects, compared to 2,235 projects in the same period in 2023.
FDI accounted for 73% of the total application value in 2024, increasing by 25% from the previous year. Singapore led the FDI source rankings with 305 projects, primarily in digital services and electronics manufacturing, amounting to an investment value of 357 billion baht (US$10 billion), or 43% of total FDI applications.
China followed with an investment value exceeding 174 billion baht (US$5 billion), mainly in the printed circuit board and automotive industries, followed by Hong Kong with 82.3 billion baht (US$2.3 billion), Taiwan with 50 billion baht (US$1.44 billion), and Japan with 49.1 billion baht (US$1.4 billion).
The BoI is in discussions with the Finance Ministry regarding the impact of the Top-Up Tax on large multinational enterprises, which should affect fewer than 1,000 companies, according to Narit, reported Bangkok Post.
The Top-Up Tax, enforced since January 1 this year, is a mechanism designed to ensure these large multinational companies pay a minimum level of corporate income tax, typically aligned with the global minimum tax rate of 15%.
The story Thailand sees record investment surge, driven by digital sector boom as seen on Thaiger News.
