Thailand

Like so many countries situated in the Asia area, Thailand is steeped in history and tradition, which has only recently been opened up to the western world. The country covers an area of some 500,000 square kilometres offering one of the most diverse of climates and landscapes. Thailand offers an array of high mountainous regions in the north, with hundreds of smaller islands in the south, and vast areas of beautiful beaches, active nightlife, and laid back atmosphere in between.

Thailand was known as Siam until 1939, and seemed to come to life as a major economy in the later part of the 20th century. While economic growth has continued, the country has managed to retain that mystical feel with beautiful architecture, and reminders of the great tradition at every turn. Steeped in history, yet showing an appreciation of western values, the country covers both ends of the spectrum, which is a major plus point for tourists. A can do rather than cannot do attitude has seen the respect for the Thai workforce increase throughout Europe, with many Western companies investing in the region.

Contrary to popular belief Thailand is one of the safest countries in the world, although the image of the Asia region tends to be dominated by some of the more volatile countries. The people are renowned for their friendly nature and good mannered approach to visitors from a far. As the popularity of the country grows, everyone seems to have realised the massive potential of the growing tourist market, which can be central to many of the more rural economies.

Property Market

While many countries would have faltered after facing one of the worst Tsunamis of modern times, the Thai authorities have used this as a positive, rebuilding the devastated areas in double quick time, and using the “fresh start” to restructure the landscape and facilities. This has resulted in a massive influx of overseas investment which has seen the price of Thailand property recover, with particular interest from Europe and powerful neighbour, China. The recovery is still ongoing, however the country now has one of the fastest growing economies in the world.

The price of property in Thailand is benefiting from this new found interest from foreign investors, which is opening vast areas of the country which until recently were relatively undiscovered by western visitors. The major increase in the economy of recent years has been fuelled predominately by the massive increase in tourist activity, with Thailand now on the radar of all major travel companies. This untapped region is commonly known as the “Spain of Asia” by observers of the international tourist market.

The increase in tourist numbers has opened up a new buy to let market which in turn has opened many eyes to the potential for long term property price appreciation in this ever expanding, ever popular area of Asia. Current property value appreciation of between 10% and 15% per annum is less than some of the more volatile “tiger” economies, however the Thai economy is no where near as volatile, and offers a greater degree of transparency in property transactions than most countries in the area. Even the Tsunami did not dent the property market, and deals were still being closed the day after the disaster, although obviously areas effected by the Tsunami had to start again.

Areas of specific interest in the Thai property market take in cities such as Phuket, Bangkok, Koh Samui, Chiang Mai, Pattaya, Krabbi and Pang Nang. Overseas employers have been showing particular interest in Thailand properties, as they look to house there growing workforces.

While there are restrictions on foreign land ownership (although not over onerous) the creation of a simple Thailand Trading Company will simplify the situation, and open up the possibility of local partnerships for a closer “feel” of the local property market characteristics.

Why Invest in Thailand

Thailand has always been seen by many in the west as one of the hubs of the Asian economic scene, showing a great ability to adapt and reinvest in order to attract quality overseas investment. The liberal tax laws and lack of capital gains tax payments are a great incentive for overseas investment. Indeed the recent event of the tragic Tsunami demonstrated amply, the ability of the authorities to act in a swift, well thought out manner, which was the main reason for the country remaining so economically strong.

Thailand is also awash with areas of great natural beauty, with the mountainous areas contrasting against the western style beach resorts which are proving ever more popular. An ability and willingness to continually invest in the nations infrastructure has again paid great dividends, and opened up many of the more rural areas to potential economic improvement. Against this western attitude to business and investment, the authorities still hold a great appreciation of the origins of the country, the culture and the people.

For the older generation looking for an overseas retirement opportunity, visas are available to people over 50 year of age with very few questions asked. As the quality properties for sale in Thailand are quickly snapped up, this band of investors could be a major influence in the future.

Two Japanese automakers namely Honda and Nissan, Japan’s second and third largest carmakers respectively were reported to be seeking for a license to set up plants in Thailand. These two automakers will use the plants in Thailand to build their fuel-efficient cars in support of Thailand’s aim to become an eco-car production center.

Thailand is scheduled to release license on February of next year to an unspecified number of carmakers according to Satit Chanjanakul, Secretary-General of the Board of Investment. He also added that the Thailand government will offer tax breaks and lower tariffs on machinery imports to the companies.

At present there is an increasing demand for vehicles that are fuel efficient and utilizes the hybrid technology attributed to the ever increasing gasoline prices as well as the increasing awareness to preserve the environment.

Two of the world’s largest automakers namely Toyota and General Motors producer of quality Saab 900 parts have their manufacturing plants in Thailand already. They use these manufacturing plants for the production of pickup trucks. Toyota and General Motors are planning of expanding their car production to add to lat year’s 241 billion baht worth of vehicle exports.

Mr, Satit said, “The government wants fuel-efficient cars to be the country’s future main export product after our successes in promoting shipments of pick-up trucks.”

Last year Thailand’s auto exports has increase by 22 percent from a year earlier to 539,206 units wherein more than 60 percent were pick-up trucks that is according to Thailand Automotive Institute. Likewise, the values of the vehicle exports which are mostly headed to Australia, the Middle East, and Europe have also increase by 19 percent.

In order to be granted a license, auto companies must build vehicles with engines of no more than 1.3 liters that are able to run more than 20 kilometers on a liter of petrol. Aside from that, the plant should at least build 100,000 vehicles annually by the fifth year of operation.

Honda spokeswoman Yasuko Matsuura in Tokyo said, “We’re considering various options, but nothing has been decided.”

Thailand is not the only Asian country that is hoping to become a vehicle production center as a matter of fact India’s government last year has cut taxes on hatchbacks in its desire to become a global base for small cars.

There are already Japanese automakers that have started building factories in India for exporting small cars namely Suzuki Motor Corp, Nissan, and Hyundai Motor Co.

According to John Bonnel, a director at the Bangkok unit of J.D. Power & Associates the Thai government’s plan of making the country a center for pick-up trucks is not going to be easy. But he also said that the country has a substantial demand for pickup trucks and its much easier converting the country to an export-oriented hub. Mr. Bonnel explained during a phone interview that the car project is “starting from scratch in terms of the market demand in Thailand. The demand is not there and has to be created.”