Regional Round-Up: Thailand Q4 2024 (Year in Review Edition)

On 16 August 2024, the House of Representatives elected Paetongtarn Shinawatra, the youngest daughter of Thaksin Shinawatra (Prime Minister 2001-2006) and niece of Yingluck Shinawatra (Prime Minister 2011-14) as the 31st Prime Minister of Thailand. The appointment saw the return of the Shinawatra family to a prominent place in Thai politics, following the Constitutional Court’s order dissolving the Move Forward party and banning ten of its members, as well as the order that Pheu Thai party Prime Minister Srettha Thavisin be removed from office on the grounds that he had committed an ethical violation by appointing a minister with a criminal conviction.

According to the Ministry of Commerce’s Trade Report, in 2024, Thailand’s five major trading partners for exports (in order starting from the largest) were the United States (“US“), China, Japan, Malaysia and Australia, with the principal products being: (i) motor cars, parts and accessories; (ii) automatic data processing machines and parts; (iii) precious stones and jewellery; (iv) rubber products; and (v) refined fuels. 

Thailand’s five major trading partners for imports were (in order starting from the largest) China, Japan, Taiwan, the US and United Arab Emirates, with the principal products being: (i) crude oil; (ii) electronic integrated circuits; (iii) machinery and parts; (iv) electrical machinery and parts; and (v) jewellery including silver bars and gold.

Thailand continued its move to becoming a value-based and innovation-driven economy by promoting technology, creativity and innovation in focused industries and, increasingly, in services.  One of the key instruments of Thailand’s investment promotion and facilitation policy is the Board of Investment (“BOI”), which provides both tax-based and non-tax privileges for promoted projects. In 2024, BOI’s key focus areas included the promotion of investment in the electric vehicle (“EV”) and printed circuit board (“PCB”) supply chains, as well as data centres.

Continuing a post-COVID trend and in response to the ongoing trade tensions between the US and China, Thailand has sought to position itself as a key player in global supply chains, competing with other ASEAN nations to host businesses seeking to relocate business units from China or restructure their global supply chain generally. This process has also necessitated a re-examination of whether new investment structures comply with the foreign ownership restrictions under the Foreign Business Act (“FBA”) or whether Thai nominee shareholders are being used in breach of the law.  August 2024 also saw the first anti-circumvention decision handed down by Thai authorities, targeting steel operators who sought to avoid the imposition of anti-dumping tariffs on certain imported steel products.

New laws and implementing regulations were enacted or came into effect which provided: (i) a framework for virtual bank licensing; (ii) the issuance of sustainability-related tokens and the offering of sustainability-themed bonds by SMEs and Start-ups; (iii) the closure of  a loophole on the taxing of foreign sourced income brought into Thailand; (iv) the application of value-added tax (“VAT”) to low-value imports below the de minimis threshold; and (v) the introduction of consumer protection measures which seek to protect consumers in e-commerce transactions.

The year saw a large number of draft laws move towards enactment in key areas such as the environment, platform economy, artificial intelligence (“AI”), the introduction of a global minimum corporate tax on multinational entities (“MNEs”), and entertainment complexes, the latter of which would represent a significant shift away from Thailand’s long-standing opposition to the legalisation of gambling.

In a momentous development in 2024, Thailand became the first country in Southeast Asia to recognise same-sex marriage when it enacted the Marriage Equality Act.