Thailand is situated in the heart of South East Asia and bordered to the west by Myanmar and the Andaman Sea, to the east by Cambodia and the Gulf of Thailand, to the north by Laos, and to the south by Malaysia. It covers a land area of approximately 514,000 square kilometres (200,000 square miles).
Thailand lies in the tropical zone and has three distinct seasons: summer, from March to May, with an average temperature of 30°C (86°F); the rainy season, from June to October, with an average temperature of 28°C (82°F) and high humidity; and the cool season, from November to February, with an average temperature of 20 to 25°C (68°F to 77°F), but as low as 3 to 5°C (37°F to 41°F) in the northern and north eastern regions.
Population and language
Thailand has a population of approximately 65 million people, of which approximately 25% are under the age of 15. Most of the population is Thai; minority groups include Chinese, Indians and Malays.
Approximately 95% of the population is Buddhist, the rest mainly Muslims, Christians and Hindus. Freedom of religious belief is highly emphasised in Thailand, with the king's royal patronage extended to all religions.
Bangkok, the nation's capital, is home to about 15% of the total population. It is situated in the central region.
Thai is the national language. Some 15 percent of the population are of Chinese ethnic origin. Their principal dialect is Teo Chiew. In commercial and business circles English is widely spoken.
Currency
The unit of currency is baht and satang. One baht is equal to 100 satang.
Business hours
Business offices are usually open from 8.30 am to 12 noon and 1.00 pm to 5.00 pm, Monday to Friday. Government offices are open from 8.30 am to 12 noon and 1.00 pm to 4.30 pm, Monday to Friday. Banking hours can vary but are typically 9.30 am to 3.30 pm, Monday to Friday.
Government and legal system
Thailand is governed by a constitutional monarchy with a democratically elected government. Thailand is currently ruled by King Bhumibol Adulyadej, the ninth reigning sovereign of the Chakri dynasty. The Thai monarchy is revered by Thai people and regarded as the central, unifying element of the nation.
The parliament consists of a Senate and a House of Representatives. The government is headed by the Prime Minister who is an elected member of the House of Representatives. The judicial arm is headed by the Supreme Court.
The country is divided into 76 provinces, each administered by a governor. The 76 provinces are divided into four regions: central, northern, north-eastern and southern. The provinces are sub-divided into districts, sub-districts, tambons (groups of villages), and villages.
Thailand has a codified system of law. The major codes are the Civil and Commercial Code, Penal Code, Civil Procedure Code, Criminal Code, Revenue Code and Land Code. The current constitution of Thailand was promulgated on October 11, 1997. The interest of Thais and foreigners alike are protected by the law.
Economy
Thailand’s strong manufacturing base is reflected in its top exports. Hi tech industries producing computers and components is the number 1 export. Cars and auto parts come in at number 2, and highlights the focus on efforts to develop the eastern seaboard of Thailand as the Detroit of the East.
Thailand is focused on increasing the competitiveness of its economy and free trade agreements is a step towards achieving this goal.
Thailand has comprehensive free trade agreements with Australia and New Zealand and is currently negotiating free trade agreement with Japan and the US..
Thailand is 1 of 5 net exporters of food in the world. It is the number one exporter of several products including rubber and canned and frozen seafood.
Foreign investment
To attract foreign investment into Thailand, many incentives are offered that not only meet investors need but also are in line with national development objectives.
Many of these incentives are contained in Thailand’s Investment Promotion Act, which protects and provides guarantees to foreigners investing in Thailand.
The Board of Investment, BOI for short, chaired by the Prime Minister, is responsible for the Investment Promotion Act, highlighting the important placed by Thailand on protecting and supporting foreign investment.
The BOI is probably the most flexible and pro-active government agency in Thailand, and is constantly reviewing and fine tuning Thailand’s investment policies to adapt to the ever-changing global investment climate.
Thailand likes to promote itself as a regional hub for many activities in Asia. Quite frequently you hear of a plan to make Thailand a regional hub for something, ranging from spas to software development.
Thailand now offers incentives to foreign companies to establish their regional headquarters in Thailand. Thailand in this case is competing with traditional regional hubs like Singapore and Hong Kong.
Like most countries, Thailand has a law that prohibits foreign participation in certain business activities for e.g. for national security reasons, to protect traditional customs and requires certificates or licenses to be obtained before engaging in others.
100% foreign equity is allowed in most manufacturing businesses – there are no license or joint venture requirements, as might be the case in other countries like China.
Some businesses, mainly service businesses will require a license – many foreigners instead structure their companies so the foreign business law will not apply to it. Nominee structures are however illegal and advice should be sought on this area of the law. The foreign business laws are currently under review and draft amendments were approved by cabinet in January 2007.
To be a fair trading partner one must honour the intellectual property rights of foreign parties. Thailand has laws base on international standards to protect IP rights, such as patent, copyright and trademark laws.
Exchange policy and controls
Thailand adopts a managed-float exchange rate regime, of which the value of the baht is determined by market forces, namely demand and supply in both on-shore and off-shore foreign exchange market, to let the currency moves in line with economic fundamentals.
An important question often asked by foreign investors is the controls placed on foreign currency movements. Generally speaking, there are no restrictions on non-residents remitting foreign currency into Thailand or converting funds into foreign currencies for remittance abroad. New capital controls came into effect in December 2006 that require a 30% reserve to be set aside in certain circumstances should be considered when remitting foreign currency into Thailand of USD 20,000 (or its equivalent) or more for conversion into Thai baht.
Documentation such an invoice or contract to prove the obligations to make a payment offshore is normally required by residents. No special tax clearance is required before making payments.
