Clearer, simpler rules could help attract FDI
To restore and expand foreign direct investment, the government should distribute new investment guides worldwide and also simplify immigration procedures, says the property consultancy Colliers International Thailand.
Problems with investment in certain regions include lack of infrastructure, distance from port facilities, poor agricultural land, low level of industrial development and limited natural tourism advantages, said managing director Patima Jeerapaet.
Most of the skilled worker population is concentrated in Bangkok while education levels are lower elsewhere.
“The only obstacle for our country obtaining more FDI is unstable politics, while infrastructure and human resources are an opportunity,” he said.
However, it would also help if procedures for expatriates coming to work in Thailand could be improved.
To open up investment in the hospitality business, Mr Patima suggested the minimum number of hotel rooms qualifying for investment privileges in Board of Investment Zone 3 should be reduced to 20 from 100.
As well, he said, foreign ownership in all hospitality sectors should be allowed in Zone 3, which covers 60 of the country’s less-developed provinces, and there should be tax incentives for the sector.
Better infrastructure in border areas would bolster trade, especially with China, he said.
The BoI has four investment zones. Zone 1 is Greater Bangkok including Samut Prakan, Samut Sakhon, Pathum Thani, Nonthaburi and Nakhon Pathom.
Zone 2 includes Samut Songkhram, Ratchaburi, Kanchanaburi, Suphan Buri, Ang Thong, Ayutthaya, Saraburi, Nakhon Nayok, Chachoengsao, Chon Buri, Rayong and Phuket. Zones 3A and 3B cover the remaining provinces.
Total investment with BoI certificates issued from 2008 to April 2010 was around 1 trillion baht. The largest investment value was in Zone 2 with 716.5 billion baht, accounting for 71%.
It was followed by Zone 3A with 166 billion baht, or 17%, Zone A with 104.4 billion or 10% and Zone 3B with 15.4 billion baht or 2%, according to Colliers and BoI statistics.
Leasehold periods for commercial and industrial purposes should also be extended to 99 years to make Thailand more competitive, Mr Patima noted.
He said all businesses preferred longer leaseholds. For residential property, an extension from 30 years to 50-70 years should be a renewal option, and the Joint Foreign Chambers of Commerce proposed an automatic leasehold extension to 60 years, said Mr Patima.