Business Opportunities for Norwegian Companies in Thailand
Norway’s relationship with Thailand
Norway has had diplomatic relations with Thailand since 1905. One of the most significant happenings in the bilateral relation was H.M. King Chulalongkorn (Rama V)’s visit to Norway on his second tour of Europe in 1907. Among many objectives, he visited Norsk Hydro to study the production of nitrogen-based fertiliser at Porsgrunn. He also crossed the mountains studying Norway’s engineering feats and travelled by ship from Trondheim all the way to Vadsø stopping at Nordkapp on the way, a very exotic trip at the time.
Currently the political relations with Thailand are cordial. However, Norway has chosen to abstain from official contact with Thailand on ministerial level due to the fact that the military seized power from a democratically elected government through a coup d’état in 2014. The abstention is in line with other European countries, but with elections on the horizon for early 2019, relations on government levels are starting to warm up. Despite the fact that the country is under a military regime, Norway continues to invest heavily in Thailand through the Government Pension Fund Global (Statens Pensjonsfond Utland). Total investments in 2017 reached NOK 30 billion up from NOK 27 billion in 2016. Shares account for NOK 23 billion, an increase of 44%, divided among 134 companies and institutions.
Roughly 60 Norwegian companies are established in Thailand, the largest being Aibel, Jotun, Telenor/Dtac, Wallenius Wilhelmsen and Yara.
Strategically located at the heart of Asia, Thailand serves investors as a dynamic gateway to a fast growing economic market. Thailand’s growing economy, world-class infrastructure, competitive human capital and strong government support, are responsible for Thailand’s key position as one of the most attractive investment destinations for foreign investors.
Many companies chose Thailand as location for their regional offices due to the fact that all corners of Asia can easily be reached nonstop from Bangkok. Bangkok’s Suvarnabhumi international airport serves 56 million passengers, while the city’s secondary airport, Don Mueang primarily catering to low cost carriers serves 33 million passengers. Both Norwegian Air Shuttle and Thai Airways International serve Bangkok with several nonstop flights a week to Oslo.
Thailand, with its close to 70 million inhabitants is the second largest economy in Southeast Asia after Indonesia. The ASEAN Economic Community (AEC) with close to 4 billion inhabitants and market size of 24 trillion USD is easily reachable from Bangkok. Thailand also offers the second lowest corporate tax in the region at 20%. Thailand has negotiated free trade agreements with most countries in the Asia-Pacific region, facilitating easy access to components for production and export (see chart above).
Roads and other infrastructure are highly developed. The mobile telephone penetration rate is 120% and Thailand has world’s the highest Facebook penetration rate. Finally, Thailand has close to 70 well functioning industrial estates where a multitude of manufacturing facilities are available. It is not without reason that Japanese auto manufacturers have chosen Thailand as their centre for R&D in the region.
Thailand offers superior quality of life and value for money in terms of expatriate life. Bangkok has repeatedly been voted the best expatriate destination. Expatriate accommodation is affordable and Bangkok has several international schools of the highest standard. Both American and British curriculums are available. Thailand’s hospitals are world class and patients from all over the world come to Thailand for medical procedures. Bangkok also offers the most affordable Grade A office space in the Asia-Pacific region. In terms of dining, Bangkok has one of the highest concentrations of restaurants from all kitchens of the world.
There are a great number of recreation and leisure options for families to engage in at the end of the work week, or during vacations, such as sailing, yachting, kayaking and rafting along Thailand’s many rivers. Thailand has become one of the top golf destinations in Asia with more than 200 world-class golf courses. Shopping in Thailand is another enjoyable activity spanning the entire range from high-end fashion stores to colourful flea markets.
In Thailand we work closely with Thailand’s Board of Investment as well as major industrial estates and reputable solicitors to facilitate investments into the country.