Economy and Investment

Investment opportunities for Thai SMEs towards AEC

by Duangkamol Buranasomphop


 

            Despite more challenges from both international and domestic factors, in particular the increase of minimum wage to 300 baht, Thai SMEs should not only prepare to handle the challenges, but they also need to take advantage of AEC liberalizations to expand trade and investment in nearby countries having an abundance of resources and lower manufacturing costs, which will help increase competitiveness.

            The best trade and investment opportunities for Thai SMEs are Indonesia and the CLMV countries. However, to determine which markets should target for investment, SMEs need to determine which advantages their business would like to build upon.

            Indonesia and Vietnam both benefit from having large markets thanks to their large populations. It is easier and faster to start business operations there compared to other CLMV countries. However, for labor-intensive industries, the best destinations to invest should be Cambodia and Myanmar.

            Due to labor shortages, Vietnam has had to increase its minimum wage around 25-30% in 2012, making wages 1.5 times higher in Vietnam than in Myanmar and Cambodia. Besides the attractive factors mentioned above, SMEs should also consider other factors such as the market needs, tax system, and investment regulations that restrict certain kinds of businesses. For example, Indonesia has rules against SME ownership in some sectors, such as a ban on foreign ownership of small retail businesses.

 

Content: thailand-business-news.com
Picture: thailand-business-news.com

Duangkamol Buranasomphop

ข้อมูลทั่วไปเกี่ยวกับ AEC