Foreign direct investment (FDI) to Thailand - statistics & facts
Foreign direct investment (FDI) is one of the mechanisms that contribute to the development of Thailand’s industries and economy. As the second-largest economy in Southeast Asia, Thailand attract investors from around the globe with its well-developed infrastructure. Nevertheless, Thailand's inbound FDI experienced significant fluctuations over the past decade, reaching a low point of 17 billion U.S. dollars in 2023. The recent decline raises questions about the country's ability to attract and retain international capital in an increasingly competitive global market.
Thailand’s economic context and outlook
The decline in FDI occurs against a backdrop of modest economic growth in Thailand. The recent challenges in attracting foreign investment stemmed from political volatility which impacted policymaking and investor confidence. However, there are signs of continued interest from foreign investors, as evidenced by the record-high number of FDI applicants for the Board of Investment promotion with a total project value of around 547 billion Thai baht as of September 2024. This accounted for more than 80 percent of the country’s total FDI inflows. While this figure is lower than in 2014, it indicates ongoing interest of foreign investors to contribute to Thailand's economic development.
Among the industries supported by the BOI, the machinery and vehicles sector attracted the highest number of FDI projects in 2023. The electronic and electrical appliance industry received approval for approximately 200 FDI projects, with a total investment value reaching around 267.4 billion Thai baht. The agriculture sector also attracted foreign interest, with 87 approved FDI projects valued at over 30 billion Thai baht. This highlights the diverse range of sectors benefiting from foreign investment in Thailand.
Despite fluctuations in FDI, Thailand remains attractive to investors, with strong net inflows in real estate and machinery. This signals potential for continued economic growth.
The decline in FDI occurs against a backdrop of modest economic growth in Thailand. The recent challenges in attracting foreign investment stemmed from political volatility which impacted policymaking and investor confidence. However, there are signs of continued interest from foreign investors, as evidenced by the record-high number of FDI applicants for the Board of Investment promotion with a total project value of around 547 billion Thai baht as of September 2024. This accounted for more than 80 percent of the country’s total FDI inflows. While this figure is lower than in 2014, it indicates ongoing interest of foreign investors to contribute to Thailand's economic development.
Who is the leading source of Foreign Direct Investment (FDI) in Thailand?
In 2023, China emerged as the top contributor to Thailand's FDI net inflows, injecting over 1.8 billion U.S. dollars into the Thai economy. Seeing that China remains Thailand’s biggest trading partner, the Thai government has been inviting Chinese investors to invest in target industries such as the electric vehicle industry and e-commerce. Through free trade agreements between the two countries, including the ASEAN-China Free Trade Agreement and the Regional Comprehensive Economic Partnership (RCEP), China enjoys reduced import tariffs on electric vehicles exported to Thailand and no tariffs on certain fruits and vegetables. Other significant sources of FDI to Thailand are Japan and Taiwan, highlighting the importance of East Asian countries to Thailand’s economy.Sectoral distribution of FDI in Thailand
Certain industries in Thailand continue to bring in significant foreign investment. In 2023, the real estate sector was the primary beneficiary, drawing in nearly 2.25 billion U.S. dollars in net FDI inflows. Conversely, the construction industry faced challenges, recording a deficit of approximately 38.2 million U.S. dollars in net FDI inflows during the same period.Among the industries supported by the BOI, the machinery and vehicles sector attracted the highest number of FDI projects in 2023. The electronic and electrical appliance industry received approval for approximately 200 FDI projects, with a total investment value reaching around 267.4 billion Thai baht. The agriculture sector also attracted foreign interest, with 87 approved FDI projects valued at over 30 billion Thai baht. This highlights the diverse range of sectors benefiting from foreign investment in Thailand.
Despite fluctuations in FDI, Thailand remains attractive to investors, with strong net inflows in real estate and machinery. This signals potential for continued economic growth.
