Thailand doubles down on attracting foreign investments
Despite global uncertainty, political turmoil, and regional conflict, Thailand aims to capitalize on its core strengths to attract more foreign capital.
Thailand has had three different prime ministers in the past two years, two of which heightened expectations of raising the economic status of the nation. With a new chapter under Prime Minister Anutin Charnvirakul, Thailand’s private sector begins to return to business as usual in the aftermath of a domestic consumption slump, internal political unrest, and geopolitical conflict with Cambodia.
In October 2025, the Cabinet approved the 2026 budget of THB 4.1 trillion (USD 127 billion), comprised of THB 3.78 trillion (USD 117 billion) in new allocations and some THB 320.9 billion (USD 9.9 billion) in carryover funds from the previous fiscal year. The budget includes allotments to attract global investors towards specific areas like Thailand’s digital sector, special economic zones, and low-carbon technologies.
While riddled with challenges both domestically and internationally, Thailand remains to be an attractive destination for foreign investment within ASEAN. The Charnvirakul government is committed to push Thailand towards economic prosperity, however, one might ask how he can maintain the country’s appeal as an investment destination.
Confidence in Thailand’s efforts
When we talk about investor confidence, it is not solely about Thailand’s inherent reputation. It is also about the government’s active support towards the business sector. The political vision of Charnvirakul is clear: to restructure the Thai economy and domestic capital market. He also accepted the proposal of the Stock Exchange of Thailand to implement a regulatory guillotine – this involves rapidly abolishing outdated, redundant, and burdensome regulations in the hopes of increasing investor confidence and participation.
Based on Graph 1, the sentiment of the private sector towards investments displays positive, albeit fluctuating, signals as the index has remained above the 50-point mark since 2024. From the time that former Prime Minister Paetongtarn Shinawatra was removed from office in July to Charnvirakul officially succeeding the position in September, the index scores for the current period and three-month outlook remained generally upbeat. This shows that the Thai economy has stayed resilient, and that businesses will gravitate towards the best opportunities that the domestic market can provide as steered by state policies.
Thailand remains a preferred destination for global capital, ranking 10th among emerging markets according to the 2025 Foreign Direct Investment (FDI) Confidence Index. We see investors choosing Thailand due to its skilled labour pool and abundant natural resources, which may be boosted further with greater ease of doing business. These make Thailand a competitive market especially within ASEAN, and we believe that the country will continue to generate new demand and opportunities to lure in foreign investors.
Momentum of FDI inflows
After the ASEAN Summit in Malaysia and the Asia-Pacific Economic Cooperation (APEC) Forum, Charnvirakul has set his eyes for Thailand to become the economic centre of the region. So far, he has reached out to Singapore and Brunei to collaborate further on economic integration. In Singapore, Charnvirakul has promoted Thailand’s fiscal stimulus programs and stock market reforms to woo investors; meanwhile, in Brunei, the prime minister sought out trade and investment deals targeting healthcare and food security.
According to the Thailand Board of Investment, September 2025 saw record-breaking investment applications totalling THB 1.37 trillion (USD 42.5 billion), nearly doubling last year’s figure and reflecting strong foreign investor confidence in Thailand’s economic conditions. Moreover, the Eastern Economic Corridor will be established as a premier hub for a diverse range of sectors to attract Chinese investments.
Graph 2 shows that the value of FDI inflows during the first half of the year amounted to USD 42.99 billion, which is a strong showing considering the heightened volatility in global financial markets due to the US’ tariff war. By end-2025, we anticipate that FDI inflows would match or exceed the previous year’s total, supported by the government’s policies and active efforts to be more investor-friendly. With the general election scheduled in March 2026, Charnvirakul’s economic plan must succeed in reviving Thailand’s economic prospects before the parliament dissolves.
Destination of choice
To attract high-value expatriates such as professionals, investors, and retirees to take base in Thailand for a longer period of time, the government recently offered a 10-year Long-Term Resident (LTR) Visa. This visa comes with tax exemptions on overseas incomes and a simplified 17 per cent personal income tax rate for professional workers. By eliminating tax barriers for skilled professionals, this could have a positive economic impact in attracting high-value talent. The Thai community could benefit from knowledge transfers and technological innovation as more job opportunities arise, and investors gain profit from these economic opportunities – a win-win situation for all.
Another game-changing tax incentive for international investors looking to build their portfolio within the ASEAN region was introduced early this year. Many firms were affected by the Thai government’s adoption of the Global Minimum Tax which introduced a 15 per cent minimum tax rate. To reduce the tax burden, the government offered the Qualified Refundable Tax Credit which can be used to deduct various tax payments; any remaining balance can be refunded in cash within four years.
With the interventions laid out by the new government, Thailand appears ready to turn the tables as ASEAN opens up to more opportunities for investors – that is, as long as Charnvirakul keeps the momentum going. Despite some growth slowdown, Thai assets remain attractive as we consider them undervalued and with sufficient room to rise.
