Investments expected to grow

Investments expected to grow

Japanese investments in Thailand are expected to grow in the first half of 2015, in line with improved business sentiment among Japanese companies.

But Indonesia, Myanmar and Vietnam are now more attractive countries for Japanese investors, a Japanese Chamber of Commerce, Bangkok (JCCB) official said yesterday.

The chamber surveyed 393 of its 1,583 members from Nov 24 to Dec 18.

"Investment by Thai private companies has improved, particularly in terms of the automotive sector," said Masayasu Hosumi, chairman of the JCCB's economic research committee.

"The Board of Investment has also accelerated its ability to approve more incentives for several projects, which has helped to reassure Japanese investors about the economy."

Despite lengthy street protests leading to the May 22 coup, 54% of respondents said the political turbulence did not affect their investment plans in Thailand.

"Most investments are planned for the long term, and political stability was one of several issues that were factored in," Mr Hosumi said.

According to the survey, 35% of Japanese manufacturing companies expect to increase their investment in Thailand, while 29% plan to keep their plans unchanged.

Asked about their greatest concerns, 74% of Japanese firms said a major problem was political stability.

Other concerns are complicated customs-related issues and infrastructure development, especially logistics facilities.

About 45% of Japanese companies in the service sector want to see a relaxation of the Foreign Business Act, especially regarding the foreign capital requirement.

Government plans to promote Thailand as a regional operating headquarters (ROH) received a lacklustre response.

The survey said 74% of Japanese companies had no plans to relocate their ROH to Thailand, while 13% of those that had already set up their ROH here said they would reconsider the location.

"The survey found that the ROH rules were too complicated to understand and comply with, while ROH tax incentives are not very attractive," Mr Hosumi said.

He said the ROH strategy of enticing investors to move their operations to Thailand and expand into neighbouring countries had failed to woo the Japanese, with 5% reporting no plans to expand.

"The reasons that prevent us from expanding are increased labour costs and risks such as political conflict and floods," Mr Hosumi said.

he said Indonesia now ranked as the most attractive country in the region for Japanese investors.

Other interesting countries for Japanese firms are Myanmar and Vietnam.

"Those countries are more attractive than Thailand due largely to attractive growing markets and inexpensive labour costs," Mr Hosumi added.

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