Although Vietnam and Cambodia have opened their doors to all foreign investors ahead of Asean Economic Community (AEC) integration, Thai businesses, especially SMEs, face several obstacles to penetrate the market, a consulting firm says.
KPMG Vietnam and Cambodia chairman and chief executive Warrick Cleine said Thai SMEs should get local partners to pave the way for doing business in the neighbouring countries.
"There are risks about costs to get licences for business and how to cope with currency exchange as most Thai companies still lack resources to handle those problems," he said.
He said many Asean entrepreneurs had invested in retail business and restaurants in Vietnam.
"Thailand still has a competitive advantage and what has happened in Vietnam is like what happened in Thailand 20 to 30 years ago," Mr Cleine said.
"Under current Asean and other trade agreements, the Vietnamese market is more open. Thai companies need to capitalise now because it will be too late if they wait until the AEC is fully implemented."
Charoen Phosamritlert, KPMG (Thailand) head of audit, said Thai SMEs should learn more about Vietnamese style and culture to have a better understanding of its consumer needs. Thai products have a good reputation in Vietnam but firms need an appropriate way to access the market.
Vietnam opened its doors to foreign investments at the end of the Vietnam War in 1995 when trade restrictions were lifted. However, investment grew at a lacklustre rate as most Asean countries suffered the 1997 financial crisis, Mr Charoen said.
Mr Charoen blamed Vietnamese bureaucracy, complicated investment laws and a delay in implementing business promotion measures for slow Thai business expansion in Vietnam. Inconsistencies between policymakers and local authorities also hindered investment.
For Cambodian prospects, Mr Cleine said Phnom Phen had a fast-growing economy offering privileges to attract investors. But most business in Cambodia is likely to be dominated by Chinese investors, so it would be harder for Thai businessmen to compete.