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https://www.nationthailand.com/thailand/economy/40022647

Govt moving fast to streamline registration process for multinationals to open regional HQs

THURSDAY, DECEMBER 01, 2022

Four state agencies will meet in the middle of this month to discuss setting up a new one-stop service to make it more convenient for multinational corporations to open a regional headquarters in Thailand.

The move follows an instruction from Prime Minister Prayut Chan-o-cha that the four agencies collaborate to encourage more multinational firms to open their regional headquarters here, deputy government spokeswoman Traisuree Taisaranakul said on Thursday.
She said officials from the Board of Investment, the Revenue Department, the Department of Business Development, and the Bank of Thailand will meet in the middle of this month to fast-track one-stop service.
The meeting will be chaired by Deputy Premier and Energy Minister Supattanapong Punmeechaow, Traisuree said. The minister chairs a government subcommittee focused on reducing obstacles to investment.

Traisuree said the one-stop service would allow multinationals to register a regional headquarters in Thailand at a single office, releasing them from the requirement to seek permission from four different agencies at four separate locations.
She also said the prime minister is confident that Thailand’s economic outlook is bright, explaining that his assessment is based on an increased interest in investment expressed directly to him by American and European business people he met recently.
The US and European executives also expressed support for the government’s efforts to transform Thailand into a hub for international businesses, Traisuree said.
The government offers a number of tax benefits and incentives for multinational corporations to open regional offices in Thailand. Many already have, including Agoda, Exxon Mobil and Alstom-Bombardier.

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https://www.nationthailand.com/thailand/economy/40022643

Budget Bureau, development council support financial transaction tax

THURSDAY, DECEMBER 01, 2022

The Budget Bureau and the Office of the National Economic and Social Development Council told the Cabinet they support its decision to start levying a tax on stock trading, which has been exempt from taxation for 30 years, according to reports from the two agencies released Thursday.

The public release of the reports supporting the financial transaction tax followed renewed criticism from the private sector that the tax was poorly timed.

A tussle between the private and public sectors erupted after the Cabinet on Tuesday gave the green light for the Finance Ministry to start collecting a financial transaction tax on trades on the Stock Exchange of Thailand (SET). Trading on the SET has been tax exempt for 30 years.

The Cabinet’s decision, which stipulates that SET investors must pay a tax equivalent to 0.1% of share sales, will take effect 90 days after the draft royal decree issued under the revenue code is announced – likely sometime in the second quarter of next year. However, during the first year, the tax will be only 0.055% of share sales.

After the Cabinet approved the tax, the Federation of Thai Capital Market Organisations reiterated its criticism of the tax, saying it was poorly timed and could undermine the market.

The government responded on Thursday by publicly releasing reports from the Budget Bureau and development council that showed both agencies support for the tax.

In a report to the Cabinet, the development council said the financial transaction tax proposed by the Finance Ministry should be approved and that it would not undermine the SET. It also said the tax would promote fairness and increase the efficiency of the Finance Ministry’s tax collections.

The development council, however, disagreed with the Finance Ministry’s plan to exempt the tax on shares sold by stock-trading funds controlled by the Social Security Office, pension and provident funds.

Such funds should not be encouraged to invest in stock markets because share prices are volatile and, as a result, the beneficiaries of the funds could be damaged.

The Budget Bureau told the Cabinet the financial transaction tax would make tax collection fairer and reduce income inequality.

The Budget Bureau also said the financial transaction tax would have no impact on the development of new products on the SET, dismissing claims from the Federation of Thai Capital Market Organisations that it would.

Related stories:

Government gives the go-ahead for tax on share sales in stock exchange

Financial transaction tax is poorly timed, industry group warns

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https://www.nationthailand.com/thailand/economy/40022640

Commerce Minister moving swiftly on high-speed access to China’s market

THURSDAY, DECEMBER 01, 2022

Exports of Thai fruit and vegetables to southern China will increase after the Mohan railway checkpoint opens on December 1, Commerce Minister Jurin Laksanawisit said on Thursday.

The high-speed railway running through Laos to southern China will make transport swifter and less expensive, Jurin said, adding that China’s General Administration of Customs had finished its inspection of the checkpoint and given the green light for fruit and vegetables to be imported through it on Wednesday.

The checkpoint will start operating on December 3, the first anniversary of the high-speed railway’s launch.

Jurin said approval to import fruit and vegetables through the new checkpoint opened a new opportunity for exporters and importers, explaining that rail transportation is a cheaper and faster way to ship to southern China. Fruit and vegetables are less likely to rot during transport by high speed rail, the minister added.

Once they arrive in Yunnan province, the fruit and vegetables can be distributed to other regions of China, Jurin said.

He urged Thai exporters to start planning now, saying: “To make the most of the Laos-China high speed rail, Thai exporters must plan early with logistics companies, and clarify their understanding of laws and regulations on imports in China.”

Jurin said the opening of the new checkpoint for imports in China will enhance the value of the high-speed railway for trade, making exporting and importing between China and Thailand more convenient.

He also said it would increase Thai exports to China.

Yunnan province has great potential as a market for Thai food and services as it is the closest Chinese province to Thailand and is integrated with mainland Southeast Asia by highways and the high-speed railway.

Jurin announced that he has appointed ambassadors to accelerate the creation of a Thai-Chinese logistics network to increase the number of companies offering logistics services between the two countries and reduce their costs.

Related stories

• Frozen food business heats up with surge of new entrants
• Trip by Hong Kong importers lands Thailand 81,200 tonnes rice export orders
• Poor-quality durians on Shanghai roadside not from Thailand, ministry clarifies

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https://www.nationthailand.com/thailand/economy/40022635

Baht strengthens to 5-month high against the dollar

THURSDAY, DECEMBER 01, 2022

The baht opened at 35.05 to the US dollar on Thursday, strengthening from Wednesday’s close of 35.26 to a five-month high after the central bank raised its key interest rate by a quarter point.

The currency will likely move between 34.95 and 35.20 against the greenback during the day, Krungthai market strategist Poon Panichpibool said.

Poon said conditions supporting the baht strengthening included a risk-on market, falling dollar, and gold sales after the price rebounded. Foreign inflows to the Thai stock market are adding to the upward pressure, he said.

The baht could test its support level at 35 to the dollar and even strengthen to 34.80 if these supporting market conditions persist, he added.

He forecast its short-term resistance level at 35.30-35.40, explaining that exporters may wait for the baht to weaken before selling the dollar.

Poon advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.

Related stories

• Bank of Thailand raises policy rate by 25 points to fight inflation
• Baht rebounds on expectations that China will ease Covid controls
• Baht plunges as China Covid protests rock investor sentiment

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https://www.nationthailand.com/thailand/economy/40022625

Bank of Thailand raises policy rate by 25 points to fight inflation

WEDNESDAY, NOVEMBER 30, 2022

The Bank of Thailand’s Monetary Policy Committee (MPC) on Wednesday voted unanimously to raise the policy interest rate by 25 basis points to 1.25% to control inflation.

MPC secretary Piti Disyatat said the rate hike took immediate effect.

Piti said the rate rise was based on economic recovery driven by tourism and private sector consumption amid higher-than-projected inflation because of high energy prices.

After going unchanged for more than two years during the Covid-19 pandemic, the policy rate was raised by 25 basis points to 0.75% in August and to 1% the following month.

The MPC projects Thailand’s economy will grow 3.2% this year, 3.7% in 2023 and 3.9% in 2024, Piti told a press conference on Wednesday.

It noted an increasing number of foreign arrivals along with rising consumption driven by an upward trend in employment, wages and salaries. The MPC also saw better income distribution across the country, Piti said.

The MPC believes tourism and consumption will continue to be main economic drivers for Thailand in 2023 and 2024, offsetting a slowdown in exports, he added.

MPC forecasts headline inflation of 6.3% this year, 3.0% in 2023, and 2.1% in 2024

Headline inflation had passed its high point in the third quarter, Piti said, after breaching expectations mainly because of rising power bills. It was now expected to fall toward the target span by year-end, he added.

The MPC forecast core inflation would not exceed previous targets of 2.6% this year, 2.5% in 2023 and 2.0% in 2024.

Piti said the MPC saw Thailand’s financial status as still stable since commercial banks had strong levels of funds and reserves while household and business debt repayment is improving in line with the reviving economy.

But the MPC also realized that SMEs and households were still vulnerable to rising living costs and debt given income levels have not fully recovered.

Hence, the MPC believes debt restructuring measures should be maintained while the government should enact specific measures to help vulnerable groups.

Although the cost of private sector borrowing is rising in line with the policy rate, Thailand’s overall financial situation is easing as fund raising by firms and borrowing and bond issuing continue to expand, Piti said

The MPC said it was keeping a close watch on financial markets and baht exchange rate fluctuations as it implemented financial policy with the goal of maintaining price stability, sustainable economic growth and stability of the financial system.

Related story:

MPC may up Thailand’s policy rate by 25 points to fight inflation

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https://www.nationthailand.com/thailand/economy/40022609

Frozen food business heats up with surge of new entrants

WEDNESDAY, NOVEMBER 30, 2022

The number of new companies entering the frozen food business in Thailand is surging, Deputy Commerce Minister Sinit Lertkrai said on Wednesday, adding that the segment was unscathed by the pandemic.

Sinit said that 92 new frozen food companies registered with his ministry during the first nine months of this year – an 84% surge over the same period last year when 50 new frozen food companies registered with the ministry.

The new companies are also getting bigger. The combined registered capital of the 92 frozen food firms that registered this year was 299.3 million baht, compared to 78 million baht for the 50 companies that registered in the same period last year, Sinit said.

The frozen food business attracted high levels of domestic and foreign investment even during the pandemic, the deputy minister added, noting that annual revenues in the segment rose from about 7 billion baht in 2019 to more than 10.5 billion baht last year.

The market capitalisation of the frozen food segment has hovered near 300 billion baht over the past three years, according to official data.

Thai investors dominate the segment, accounting for 86.20%. The major foreign investors are Japanese (6.51%), Chinese (1.86%) and Singaporean (1.46%). Investors from other countries own a combined 3.97% of the segment, according to official data.

Sinit said exports of eight frozen food products in the first nine months of this year were valued at 87.896 billion baht. These included fish and poultry to vegetable and fruit products.

There were 833 frozen food companies in Thailand as of the end of October, Sinit said, adding that most of them (89.5%) are small companies. A handful (6.3%) are mid-sized companies, while 4.2% are large, he added.

Although the companies’ combined revenues fell slightly last year, profits rose significantly, Sinit said. He explained that businesses in the segment have been adept at managing costs as demand for their products rises at home and abroad.

Related stories

• Trip by Hong Kong importers lands Thailand 81,200 tonnes rice export orders
• Poor-quality durians on Shanghai roadside not from Thailand, ministry clarifies
• Big jump in capital of foreign businesses registering in first 10 months of 2022

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https://www.nationthailand.com/thailand/economy/40022608

DES Ministry in major push for digital economy as driving force for growth

WEDNESDAY, NOVEMBER 30, 2022

A digital economy will be Thailand’s main driving force for growth in the next couple of decades, the top official of the Digital Economy and Society (DES) Ministry said on Monday.

Wisit Wisitsora-at, permanent secretary at the ministry, said businesses and industries such as fintech firms, health tech companies, and those using education technologies will benefit the most from the digital economy.

Wisit was speaking at the opening ceremony of “Thailand 4.0 – the Future and Beyond” seminar and exhibition held at the Centara Grand at Centra Plaza Ladprao Hotel on Monday.

He told the seminar that the ministry has policies to promote the development and usage of digital technologies to push Thailand beyond the middle-income trap.

The ministry has enacted an act on digital development for economy and society this year.

He said the act would promote investments in digital industries and innovations that can be applied for development of the economy and society as part of steering the country to Thailand 4.0.

Speaking at the same seminar, Puchong Nodethaisong, secretary-general of the Office of the National Digital Economy and Society Commission, said the seminar also aimed to encourage members of the society to catch up with digital technologies.

He said the promotion of digital technologies would not only benefit the economy but it would also benefit society by changing the behaviour of the people and increase utilisation of digital technologies.

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https://www.nationthailand.com/thailand/economy/40022606

Trip by Hong Kong importers lands Thailand 81,200 tonnes rice export orders

WEDNESDAY, NOVEMBER 30, 2022

Thailand has secured orders for 81,200 tonnes of jasmine rice from Hong Kong during a special trip to Thailand last week by importers from China’s Special Administrative Region, the Commerce Ministry said.

Kirati Ratchano, permanent secretary at the Commerce Ministry, said the ministry had organised a trip for 34 major rice importers from Hong Kong from November 21 to 24.

The trip was a proactive strategy of the ministry as instructed by Commerce Minister Jurin Laksanawisit to expand rice exports to Hong Kong, Kirati said.

He said the trip secured initial orders of 81,200 tonnes of jasmine rice worth 2.7 billion baht and also provided good opportunities for Thai rice exporters to meet the Hong Kong importers for further trade negotiations.

“As a result, sales of Thai rice to Hong Kong should improve next year,” Kirati said.

He said Hong Kong has reopened to foreign tourists after the Covid-19 pandemic, so the consumption of Thai rice was expected to increase to the pre-Covid level soon.

According to the Commerce Ministry, Hong Kong is Thailand’s fifth largest rice export market. Last year, Thailand exported 174,932 tonnes of rice to Hong Kong worth US$158.04 million.

The ministry said Hong Kong people like to eat new-crop rice, which constitutes 80 per cent of rice imported from Thailand. The ministry said each Hong Kong resident consumes about 44 kilograms of rice per year and Thailand was behind the United States for rice exports to Hong Kong in term of quantity.

Apart from organising the trip, Kirati said the Commerce Ministry has also been using soft power to promote the image of Thai rice by seeking help from Hong Kong entertainers and influencers. The campaign is aimed at promoting the recognition of Thai Hom Mali Rice Certification Mark for Hong Kong people to recognise that packages with the mark are premium quality rice.

Chananpas Pisalapipong, the director of the foreign trade promotion office in Hong Kong, said the trip by Hong Kong rice importers and the visit by an official Hong Kong delegation during the Apec Summit on November 18-19 provided good opportunities for Thai exporters to try to secure export deals to Hong Kong.

Meanwhile, Siribut Ungphakorn, director of rice trade management division of the Foreign Trade Department, said Hong Kong rice importers have also expressed interest in a healthier strain of jasmine rice, especially the RD (Rice Department) 43 strain. She said the RD43 hom mali rice is soft and is much lower on the glycemic index.

She said Hong Kong importers had also expressed interest in the Riceberry strain, which is good for consumers who have health concerns.

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https://www.nationthailand.com/thailand/economy/40022597

Baht rebounds on expectations that China will ease Covid controls

WEDNESDAY, NOVEMBER 30, 2022

The baht opened at 35.40 to the US dollar on Wednesday, strengthening slightly from Tuesday’s close of 35.42.

The currency will likely move between 35.30 and 35.60 against the greenback during the day, Krungthai market strategist Poon Panichpibool said.

Poon said that the baht surged past its first support level at 35.50 during Tuesday trading on investors’ confidence that China would ease Covid-19 controls sooner than expected, offsetting downward pressure from the strengthening dollar and falling gold price.

He said the baht may strengthen further and test the support level at 35.20-35.30 if the Chinese government eases prevention measures as expected.

However, he warned volatility would pressure the baht if China maintains its current Covid policy.

The baht could also fluctuate and weaken if US Federal Reserve chairman Jerome Powell, in his address today (Wednesday, US), signals more interest rate hikes and a rate ceiling of 5.00%-5.25% to control inflation, Poon said.

However, the baht is unlikely to weaken much past its resistance level of 35.90-36 because foreign investors are still buying Thai stocks and bonds, he added.

Poon advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.

Related stories

• Baht plunges as China Covid protests rock investor sentiment
• MPC may up Thailand’s policy rate by 25 points to fight inflation
• Baht opens unchanged on Friday at 35.75/dollar

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https://www.nationthailand.com/thailand/economy/40022576

Poor-quality durians on Shanghai roadside not from Thailand, ministry clarifies

TUESDAY, NOVEMBER 29, 2022

Low-quality durians from other countries are being disguised as premium-grade fruit from Thailand to deceive shoppers in Shanghai, the Agriculture Ministry warned on Tuesday.

Alongkorn Ponlaboot, an adviser to Agriculture Minister Chalermchai Sri-on, said the minister on Monday had told agricultural attachés in China to conduct an urgent investigation after a video clip went viral in China on why Thai durians sold on a roadside in Shanghai were not delicious and appeared to be of poor quality.

The clip was posted on YouTube by a Thai woman living in Shanghai on Saturday. The woman was seen in the clip asking the vendors whether the durians came from Thailand and the vendor confirmed it.

The clip caught the attention of Chalermchai on Monday when some Thai media played it up.

“Once he learned of the clip, the minister instructed the agricultural attachés in Beijing, Shanghai and Guangzhou to investigate the matter,” Alongkorn said.

Chalermchai was informed immediately that the agricultural officer of the Thai consulate in Shanghai had rushed to the roadside as seen in the clip to check, but did not find durians being sold there.

The officer then investigated and found that the buyer had bought durians from a vendor who sold the fruit from the back of his truck, not from a regular shop that has quality control.

The mobile vendors drive their trucks around to sell durians on the roadside over weekends and they sold poor-grade durians from Thailand’s neighbouring countries, Alongkorn added.

He said such mobile vendors normally sold low-quality durians on the outskirts of Chinese cities to avoid being checked by the officials and they mostly sold durians that failed to meet quality standards.

The Thai officials checked with wholesale markets and found that the mobile vendors normally bought poor-grade durians in high quantities to sell on the roadside at cheaper prices than quality fruits sold in permanent shops, Alongkorn said.

He said the Thai official also checked with five large durian shops in Shanghai and found that Thai durians are sold at higher prices than durians form Vietnam.

The shops told the agriculture attaché that Thai durians are more delicious and more popular and buyers mostly choose to buy the Thai variety.

The adviser said most consumers could not tell from the appearance which durians came from which countries so they must check certified stickers put on the fruits.

Alongkorn added that the Thai agricultural attachés in China have reminded Thai exporters to make sure their durians are of premium quality in line with the policy of the agriculture minister.

Alongkorn said Chalermchai, who heads the committee in charge of development of Thai fruit quality, has also instructed the three agricultural offices in China to work with other Thai officials there to monitor fake news on Chinese social media that might affect Thailand’s image, especially about the quality of Thai fruit.

Chalermchai also instructed the Agriculture Extension Department, the Agriculture Department, and the Cooperative Promotion Department to coordinate with the provincial governors and other government agencies to make sure that no unripe, no Covid-contaminated, and poor-quality durians would be exported to China.

The departments were asked to work with provincial administrations so that durian farmers and exporters in major durian-growing provinces, such as Chanthaburi, Trat, Rayong, Si Sa Ket, Chumphon and Surat Thani, would develop their brands for traceability.

Alongkorn said traceability is crucial for quality control because Thailand has exported over 700,000 tonnes of durians, or about 210 million durians, to China from February 1 to the middle of this month.