Unlocking Thai competitiveness

POLICY FOCUS

- KIRATIPONG NAEWMALEE PHUMJIT SRI-UDOMKAJORN

Regulatory reform is an urgent priority in restoring growth to Thailand’s emerging economy.

Rigid rules and excessive red tape have become significant structural barriers to private sector development. Evidence from several key industries demonstrates that outdated, fragmented legislation continues to constrain competitiveness.

In sectors Thailand is pursuing, such as innovation and high-tech industries, capital and talent matter most. Yet Thailand’s regulations make it hard to attract both. While the manufacturing sector is relatively open to foreign investment, services remain restricted under the Foreign Business Act. Limitations on foreign ownership discourage investors and frequently result in nominee arrangements that are difficult to supervise effectively.

At the same time, Thailand faces a shortage of skilled workers, and regulations governing the entry and employment of foreign nationals remain complex and fragmented. Even highly skilled professionals must navigate overlapping procedures for visa approvals with the Ministry of Foreign Affairs and Immigration Bureau, as well as work permit requirements with the Ministry of Labour.

Previous studies indicate that applicants must submit approximately 25-35 documents. Coordination among agencies remains cumbersome. Although online systems and one-stop service centres have been introduced, limited data integration and insufficient inter-agency coordination continue to undermine their effectiveness. In practice, regulatory burdens remain substantial. In some cases, foreign applicants are compelled to hire legal consultants, at an average cost of approximately 25,000 baht per person.

Even in industries where Thailand has already demonstrated strong performance but seeks to move up the value chain into higher-value segments, regulatory obstacles continue to hinder progress. Such obstacles limit businesses’ ability to upgrade, innovate, and move up the value chain.