Global Business Environment CA2

Country Analysis Report: Thailand

Class : DIB/FT/2A/02
Team Members (Student ID):
Lee Yan Cheng (P1528561)
Lee Zhen Wei (P1528529)
Xavier Koo (P1500709)
Winson Baek (P1542064)

In partial fulfilment of the requirements for the Module

BA0176: Global Business Environment
CA2 Country Analysis Report
Lecturer: Ms Sim Hui Ping

Submission Date: 18 July 2016

Word Count: 11380
 ACKNOWLEDGEMENTS

The team would like to express our gratitude to Ms Sim Hui Ping, Lecturer, Singapore Polytechnic, for
her guidance and support throughout the preparation of this report.

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 Contents

Executive Summary 4

1. Introduction

1.1 Purpose

1.2 Background Information 5

2. Economic & Social/Culture Environment Analysis

2.1 Economic Environment Analysis

2.1.1 Economic Indicators

6
2.1.2 Trade Analysis

2.1.3 Wages
7
2.1.4 Fiscal Policy

2.1.5 Rental
8
2.1.6 Competitor Analysis

2.2 Social/Cultural Environment Analysis

2.2.1 Population 9
2.2.2 Dining Culture

2.2.3 Education/Languages

3. Political & Legal Environment Analysis

10
3.1 Political Environment Analysis

3.1.1 Political Ideology

3.1.2 Political Risks 12

3.1.3 Political Stability 13

2
3.1.4 Corruption 13

3.1.5 Labour/Trade Union

3.1.6 Ease of Doing Business 14

3.2 Legal Environment

4. Financial Environment Analysis

15
4.1 Financial System

4.2 Interest Rates 18

4.3 Inflation Rates

19
4.4 Foreign direct investments

5. Government regulations and initiatives

5.1 Government Regulations

20
5.1.1 Work Permit

5.1.2 Labour Regulations

5.1.3 Intellectual Property 21

5.1.4 Food Control

22
5.2 Government Initiatives

6. Risk Analysis and Conclusion 23

References 26

Appendix 30

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Executive Summary

This report is intended as a feasibility project to examine the possibility of Mr Bean investing and
setting up a central kitchen and 30 retail stores in Thailand by 2020. This report also has
recommendations as to whether Mr Bean should invest in Thailand. Thailand is currently a newly
industrialized country, boasting greater national production and exports from industrial operations.
With a Human Development Index of 0.726 (High), a well-developed infrastructure, a free-enterprise
economy, and generally pro-investment policies, Thailand could be a great place to do business.

Firstly, Thailands economy has been growing in the recent years. After the Thai economy collapse in
2014, Thailand has been experiencing a GDP growth trend. The forecast for Thailands economy also
has a positive outlook, with GDP projected to rise in the following years. In this report, Thailands
economy will be studied with the following factors of economic indicators, trade analysis, wages,
fiscal policies, rental and competitor analysis of Thailand.

Secondly, Thailands political situation has changed since the 2014 coup which turned the
government effectively right wing totalitarian. Along with this, Thailand has faced political risks such
as the South Thailand Insurgency, civil unrest and terrorism. The country has also always been
politically unstable with many coup de tats and political demonstrations over decades and this trend is
expected to continue. Corruption is also rampant. Trade unions are largely ineffective in taking care of
the welfare of workers.

Thirdly, the financial system of Thailand includes the commercial banks, stock and foreign exchange
markets, types of payment systems. Interest rates are forecasted to decrease while inflation rates are
held steadily. Foreign direct investments are on the decline, indicating losing faith by investors. The
analysis of these financial statistics and trends are essential in helping in determining if Thailand is
financially suitable for Mr Bean to venture into.

Lastly, it is necessary to also study some of Thailands government regulations and initiatives to
ensure Mr Bean do not suffer from any harm resulting from business operations overseas, such as
failure to comply with several business laws, labour laws and food control regulations. Besides,
several initiatives have been carried out by the government in Thailand or even in Singapore, that will
benefit Mr Bean such as from tax reliefs. Furthermore, the larger the government grows, more of such
regulations and initiatives will be implemented by the government. Hence, it is extensive to keep up to
date with such informations in order to avoid being involved with the government for wrongdoings,
especially.

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1. Introduction
1.1 Purpose
This report is intended as a feasibility project to examine the possibility of Mr Bean investing and
setting up a central kitchen and 30 retail stores in Thailand by 2020. This report also has
recommendations as to whether Mr Bean should invest in Thailand
1.2 Background Information
The country of Thailand is one of the worlds most beautiful countries and known worldwide as the
'Land of Smiles. The country has diverse natural landscapes; a rich history and Buddhist culture;
both ancient and modern inspiring buildings; world famous cuisine; warm and hospitable people
make Thailand one of the worlds most popular destinations. (EmbraceChiangMai, 2016)
Thailand is currently a newly industrialized country, boasting greater national production and exports
from industrial operations. With a Human Development Index of 0.726 (High), a well-developed
infrastructure, a free-enterprise economy, and generally pro-investment policies, Thailand could be a
great place to do business. (CIA, 2016)
Demographics: Thailand has a population of 67,976,405 with a population density of 133.055 per
km2. The ethnic groups include Thai 95.9%, Burmese 2% and others 1.3%. Religions include
Buddhism (official) 93.6%, Muslim 4.9%, Christian 1.2%, other 0.2% and none 0.1%. (CIA, 2016)
Geographics: Thailand has a total land area of 510,890 km2. It is located in Southeastern Asia,
bordering the Andaman Sea and the Gulf of Thailand, southeast of Burma. Bordering countries
include Burma (2,416 km), Cambodia (817 km), Laos (1,845 km), Malaysia (595 km). The terrain
consists mostly of a central plain, the Khorat Plateau in the east and mountains elsewhere.
Thailand has a tropical weather with a southwest monsoon (mid-May to September) a dry, cool
northeast monsoon (November to mid-March) and the southern isthmus is always hot and humid. (CIA,
2016)

2. Economic & Social/Culture Environment Analysis

2.1 Economic Environment Analysis
Thailands economic environment will be analysed by looking at the economic indicators, trade
analysis, wages, fiscal policies, rental and competitor analysis.

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2.1.1 Economic Indicators (Refer to Fig. 1, 2, 3 and Table 1)
Thailand is a newly industrialized country. In 2015, Thailands nominal GDP is at 395 billion USD
while its nominal GDP per capita is at 5,700 USD. The GDP growth rate has fluctuated in the past 5
years, at 2.8% in 2015. The GDP per capita purchasing power parity (PPP) in 2015 was 15,400 USD.
Thailand has the second-largest economy in Southeast Asia, after Indonesia and fourth-largest per
capita GDP after Singapore, Brunei and Malaysia. (tradingeconomics.com, 2016)
Compared to Singapore, Thailand has a higher GDP but a significantly lower GDP per capita and
GDP per capita PPP. However, this does not mean that Thailand is not a suitable country for Mr Bean
to venture into. The country has an upward trend in per capita growth as seen from the graphs, this
implies a fast growth market, this also means a higher purchasing power which means more
consumers will be able to purchase Mr Bean products. This is coupled with a positive GDP growth in
the past year which has a slight increasing trend, Thailand currently has a healthy and growing
economy. Investors prefer and economy with lower per capita GDP that is growing rapidly than an
economy with a high GDP but stagnant growth which is the case for Thailand. This means that if Mr
Bean were to set up shop in Thailand, the business will unlikely be hindered by unstable economic
conditions such as currency dilution.
2.1.2 Trade Analysis
Thailands total exports, though fluctuating has been on a downward trend since 2012. Currently, total
exports is just under 18,000 million USD. (Refer to Fig. 4) Meanwhile Thailands total imports are also
seeing a decreasing trend since 2012 with a current value around 16,000 million USD. (Refer to Fig. 5)
This has thus allowed Thailand to run a trade surplus of around 1,800 million USD which is currently
in decline.(Refer to Fig. 6) Though it is running a trade surplus, the downward trend is a cause of concern
for Mr Bean since the balance of trade is linked directly to the countrys economy and if it is
decreasing, GDP growth may decrease too.
Total volume of soybean imports by Thailand has been increasing rapidly since the 1990s from (in
1,000 MT) 250 to 3,300 currently. (Refer to Fig. 7)

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2.1.3 Wages
When exploring whether it is viable for businesses to venture into Thailand, one must first look at the
wage condition in Thailand. For a better profit margin, Mr Bean will likely offer lower wages for its
workers. However, a low wage is not always the best option. Disadvantages that may come about
with a low wage include low commitment to the brand. This might result in a high employee turnover
rate which may also result in Mr Bean needing to continually retrain their staff. These factors would
result in a lot of valuable time and resources wasted. For this section, we are looking at the suitable
wage for staff that Mr Bean will hire in Thailand which can strike the balance between a healthy staff
relationship for the brand and its employees as well as a good profit margin for Mr Bean.
First, we must examine the minimum wage in Thailand. Since most employees that Mr Bean employ
are going to be front-line staff which requires little to no expertise, Mr Bean can afford to give them a
lower wage. The daily minimum wage in Thailand as of 2015 is 300 baht or around 8.52 USD. The
average monthly wage of a salesperson is typically 6,118 baht (173.92 USD). To make the job more
attractive in order to retain good employees while keeping in mind a good profit margin, we have
decided that if Mr Bean were to set up shop in Thailand, the monthly salary should be around 6,500
baht (185.11 USD) subjected to change. (tradingeconomics.com, 2016)
2.1.4 Fiscal Policy
Next, we take a look at the fiscal policy in place in both countries which affects Mr Beans profitability.
Both countries have fiscal policies, namely taxation, which affects Mr Beans profitability margin. A
higher tax rate would be undesirable for Mr Bean as this would mean a lower income.
Corporate Income Tax
In Thailand, the corporate income tax rate has been held at 20% since 2013, which Mr Bean will be
subjecte(home.kpmg.com, 2015) In Singapore, the corporate income tax is held at a flat rate of 17%.
(iras.gov.sg, 2016) This is not inclusive of the partial tax exemption for all companies which gives a 75%
tax exemption on the first $10,000 of normal chargeable income and a further 50% tax exemption on
the next $290,000 of normal chargeable income. This will mean that Mr Bean will be taxed less in
Singapore as compared to Thailand allowing Mr Bean to have a higher profitability margin in
Singapore. Based on the taxation policies, corporate income tax in Thailand may not be that
favorable for Mr Bean.

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VAT/Sales Tax
The VAT rate of 7% is charged to consumers based on the purchase price of certain goods and
services. In 2012, the rate was scheduled to increase to 10% but the current government has
extended the 7% VAT rate until 30 September 2015. (Thomson Reuters, 2014)

2.1.5 Rental
Rental is an important component to the cost of setting up the business and also maintaining it. In
Thailand, the rental costs for F&B outlets is between 20,000 baht to 70,000 baht each month. (571.94
USD to 2,000.72 USD) (shophousesbangkok.com, 2016) In Singapore, the rental costs for F&B outlets can go
anywhere between 2,000 SGD to 30,000 SGD each month. (1488.26 USD to 22323.92 USD)
(commercialguru.com, 2016) This shows that setting up and maintaining a retail outlet will be cheaper in
Thailand as compared to Singapore.
2.1.6 Competitor Analysis
In Thailand, soya bean pancakes have not been introduced as a product since it is unique to the Mr
Bean product line. However, soya milk, youtiao and soya beancurd or taohuai ( ) as it is known
in Thailand, are typical breakfast foods. These foods are sold by street side stores as well as
convenience stores and supermarkets.
The street side stores main competitive edge against Mr Bean would be the cheaper prices that they
will be able to offer their customers. However, since we do not know the price that Mr Bean will set
their products at, we cannot precisely say how much that amount would be. However, there will be no
doubt that these street stores will be vying for the same customers that Mr Bean seeks to serve. One
advantage Mr Bean could have would be the higher quality of its products and hygienic process of
making its products.
The next competitor which Mr Bean faces are already established soya milk brands such as VitaMilk.
Also sold in Singapore, VitaMilk is a Thai-Owned brand with a wide variety of soya milk products. As
they are selling the same product as Mr Bean, the demand of Mr Beans product will not be as high
as it can be since it faces competition from an existing brand. Also, VitaMilk being around for a longer
period of time in Thailand also strikes a level of customer loyalty within consumers of their product
and it might be hard to switch their preferences to Mr Beans products. This will result in a lower

8
demand for Mr Beans products in Thailand which will not be desireable for Mr Beans venture into
Thailand. This is because a lower demand will result in a lower revenue which in turn leads to lower
profitability for the company. (greenspotco.com, 2016)
2.2 Social/Cultural Environment Analysis
Thailands culture is mainly from the ethnic Thai people. The fundamental culture of Thailand can be
made out from their religion which has been the core part arts and literature, social system, habits
and customs. It is only recent that globalization has led to certain changes to the Thai culture due to
certain western influences. 93.6% of Thais are Buddhist, which makes it the largest Buddhist
population in the world.
2.2.1 Population
As stated above, the larger population size of Thailand as compared to Singapore indicates a larger
potential market size for Mr Bean. However, this alone is not a good enough indicator of market
potential or economic strength. Next, the population density of Singapore is much higher than
Thailand. This implies that Mr Bean will have higher costs and harder distribution and communication
in Thailand. The percentage of people living in urban areas is 50% in 2015 and 100% in 2015 for
Singapore. Having a lower urban population concentration, this would mean that the marketing
process in Thailand will be more tedious than in Singapore. (worldbank.org, 2016)
2.2.2 Dining Culture
With many different influences from the countries surrounding it, Thailand offers a wide variety of
different breakfast foods. Products that Mr Bean sells such as soya milk, soya beancurd and youtiao
can also be found in Thailand. In Thailand, taohuai is normally served cold with milk and fruit salad.
Youtiao, called pathongko in Thailand, is also a widely sold food by street vendors in Thailand.
As Mr Bean products are already familiar to the general Thai crowd, it will not be hard for Mr Bean to
settle into the culture of Thai cuisine. This shows that Mr Bean products could potentially sell well with
the Thai crowd. Mr Bean does not need to spend advertising to educate the Thai people as to what
their products are made of and as such can concentrate on other ways to improve the business.
(lolo-eatablethai.blogspot.sg, 2011)

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2.2.3 Education/Languages
This section explores how education in Thailand affects Mr Beans decision in hiring staff and
designing prints such as menus and advertisements. For Mr Bean, higher level positions such as
managerial positions will require a higher level of education. In Thailand, as with the rest of the world,
a higher education will warrant a higher salary. The average wage for higher educated workers in
Thailand is 25,000 baht or 713.12 USD each month. (livingthai.org, 2016) In Singapore, the average wage
for managerial positions is at 4275.10 USD each month. (payscale.com, 2016) This means that those with
a higher education will get paid much lesser in Thailand as compared to in Singapore even if they are
in the same position. This will be beneficial for Mr Bean as lower wages paid out will mean a higher
profit margin for Mr Bean.
Next, Mr Bean must keep in mind that the official language and national language of Thailand is Thai.
Over eighty percent of the Thai population reads and speaks Thai. (studycountry.com, 2016) Therefore,
when designing prints such as their menu and advertisements in Thailand, Mr Bean should use the
Thai language. This means that the products must be translated to the Thai language from the
English language.
3. Political & Legal Environment Analysis
3.1 Political Environment Analysis
3.1.1 Political Ideology

Until 22 May 2014 the political framework of Thailand was that of a constitutional monarchy. This
would mean that Thailands political ideology was Pluralism where both private and public groups
need to balance each others power. However, on 22 May 2014, after the coup d'tat by the Royal
Thai Armed Forces the 2007 Constitution was revoked, and Thailand was ruled by a military
organization called National Council for Peace and Order(NCPO), which took control of the national
administration. The Chief of the NCPO abolished the National Assembly and assumed all
responsibility of the legislative branch. Martial law and curfew was declared nationwide, political
gatherings were banned, politicians and anti-coup activists were arrested and detained, internet
censorship was imposed and the media was taken over. (Green Left, 2014) The NCPO established a
military dominated national legislature which later unanimously elected General Prayut as the new

10
prime minister of the country. Prime Minister Prayuth Chan-ocha, has ruled under Article 44 of an
interim constitution, this gives him absolute power to issue any orders. (The Nation, 2014)

The most probable political scenario for now and the near future is that the NCPO, under Prayuth
Chan-ocha governs with more authority extending more powers in restoring internal order to the
countrys military. Drafting the new constitution had delayed elections and the proposed constitution
divides the country further as the opposition labels the draft as an attempt to give more power to the
army in the political arena. A referendum over the constitution took place in July 2015 but was
rejected, which resulted in another delay of the poll even though the junta had emphasized that
elections would be held in 2017. More demonstrations took place resulting in stricter measures and
increasing arrests. Relations with Western countries deteriorated as they felt the Thai government
was curtailing freedom of expression and media.(BERI, 2016)

Thailands political ideology is thus right-wing totalitarianism, where the military has imposed its
authority and the people of Thailand lack any constitutional guarantees. Such a government however
endorses private ownership of property and a market-based economy but grants few political
freedoms. With such a political system, it is attractive for international companies such as Mr Bean to
use Thailand as a location for investment since it creates stability through suppression of free political
expression. (University of Honolulu, 2011)

However, doing business in Thailand can still be a risky proposition. Many parts of business law are
regarding contractual disputes. In countries such as the United States, resolution of such disputes are
quite specific according to the law. In totalitarian nations such as Thailand however, the law can
largely be vague or nonexistent, and those in powerful government positions can interpret the laws as
they please. For example in China, what the law states may not matter as much as it does how
individual government officials interpret the law. The sometimes arbitrary nature of totalitarian
governments makes it hard for companies to know how laws will be interpreted and applied to their
particular business dealings. (University of Honolulu, 2011) Thus formal Mr Bean, such uncertainties may not
make Thailand a safe investment because if the company were to run into any disputes and the rule
of law is not impartial, it could cause problems if the ruling is against Mr Bean, causing the company
losses.

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3.1.2 Political Risks

Thailand currently faces mainly macro political risks, examples of such risks are the South Thailand
Insurgency, civil unrest and terrorism. Political ratings for Thailand by Beri have remained weak with
2015 being the worst since 2009. (Refer to Fig. 8)

The South Thailand insurgency is an ongoing conflict centred in southern Thailand. (Refer to Fig. 9) It
started in 1948 as an ethnic and religious separatist insurgency in the historical Malay Patani Region,
and has become more complex and increasingly violent since 2001. Over 6,500 people died and
almost 12,000 were injured between 2004 and 2015. (UCA, 2015) This may compromise the safety of
employees and the companys assets if there were stores or factories in the region. There would be
difficulty in obtaining materials and equipment too as well as manufacturing and distributing the
products as the companys factories or distribution channels may be attacked by insurgents. Thus Mr
Bean should avoid the whole affected region if the company were to invest in Thailand since the
insurgency still continues with no end in sight.

Thailand for the past decade has also faced many political demonstrations, many turning violent.
Examples include colourful mass rallies, marches and occupations - including of the Government
House and the main airports in Bangkok. However, political protests have been outlawed ever since
Thailands generals seized power in the May 2014 coup. The military government cracks down on
any demonstrations. (Channel News Asia, 2015) For Mr Bean this would mean a safer place to do business
as many of the past protests had caused disruptions to businesses due to the escalation of many of
these protests which had caused looting, injuries and deaths.

Terrorism is also another major risk for Thailand. Most of the incidents of terrorism are related to the
South Thailand Insurgency, but there are also sporadic incidents that are not related such as the
2015 Bangkok bombings. In the year 2015, Thailand was ranked 10th on the Global Terrorism Index
and is the only Southeast Asian country in the Top 10. From a scale of 1 to 10, Thailand scored 7.28 (
Refer to Fig.10) This shows that Thailand is regularly targeted by terrorists and could disrupt businesses.
Such acts of terrorism could cause lost of lives, destruction of property owned by businesses and
disrupt business operations. Thus, Mr Bean could face such risks as terrorism in Thailand is still very
prevalent.

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3.1.3 Political Stability

Thailand has for many years been politically unstable. Many governments in Thailands History
cannot maintain itself in power. Since 1932, when the absolute monarchy was abolished, Thailand
has had 25 general elections and 19 coups d'tat, 12 of them successful. (CBC News, 2014) This shows
how politically unstable Thailand is. According to The World Bank, on the political stability index (-2.5
weak; 2.5 strong) Thailand since 2003 has registered a negative number on the index, with the lowest
at 2010 at -1.43. (Refer to Fig.11) Political forecasts into the future are not good as mentioned above,
Thailand currently has a military government after the 2014 coup. Such instability is expected to
continue in the future.

With such political instability, it may cause problems for Mr Beans business as political instability
causes many uncertainties. It may make it difficult to work with the government in acquiring licenses
etc. Such instability also causes policy changes as each government has different agendas, policies
that may be harmful for doing business. Regular strikes, demonstrations, acts of violence and even
coups may cause stoppage of work, looting and destruction of assets thus causing Mr Bean losses.

3.1.4 Corruption

Thailand is regularly plagued with corruption, without proper checks in place to prevent it. A
perception of corruption study done by the Political & Economic Risk Consultancy Ltd. where grades
are scaled from zero to 10, with zero being the best grade possible and 10 the worst. Thailand scored
a 7.67. There were great hopes that new military government would be effective in reducing
corruption, but they have disappointed. The junta in Thailand is given some credit for reducing
corruption compared with the elected government it replaced. It certainly got off to a strong start by
making some high-profile arrests. However, over the past year the anti-corruption campaign seems to
have weakened and the government is developing a reputation for being intolerant of criticism,
including accusations that its own leaders have acted corruptly. (PERC, 2016)

Corruption can adversely affect businesses as it reduces business credibility and profits when political
officials misuse their positions for personal gain. This can cause inefficiency of the business when
resources are tampered with and used improperly, customers also lose respect and trust in the

13
business resulting in a fall in sales. (Chron, 2016) Mr Bean may come across corrupt officials who
complicate issues unless payment is made when trying to expand into Thailand.

3.1.5 Labour/Trade Union

In Thailand, the Labour Relations Act grants the right to organise into formal trade unions, labour
federations or labour congresses only to workers with employers or those in the formal sector. From a
total of 8.89 million workers who can exercise their right to organise in accordance with the Labour
Relations Act, only 330,000 workers, or roughly 3.7% are members of trade unions. (Friedrich Ebert

Stiftung, 2010) Thus, this may be good for business as it increases productivity, this is because trade
unions may organise strikes or work unproductively, leading to lost sales and output. It also reduces
wage inflation since if trade unions become too powerful, they may bargain for wage increases above
the inflation rate.

3.1.6 Ease of Doing Business

According to The Economist Intelligence Units latest Business Environment Rankings (BER),
Singapore appears to remain the worlds most investor-friendly location in 2014-18, retaining its
number-one spot from the 2009-13 period. Thailand on the other hand is not too far behind with its
ranking of 38 from 2009-13 set to increase to 34 in 2014-18 period. This suggests an increase in
business friendly policies by the government as well as a generally more business friendly
environment which would be good for Mr Bean intending to expand into Thailand. (EIU, 2014)

3.2 Legal Environment

The laws of Thailand are based on the civil law. It is based upon a set of written rules and statutes,
and there is no need to interpret laws. Business contracts need only be concerned with the explicit
wording of the legal code, and all obligations, responsibilities and privileges follow the code. This is
advantageous as less time and money is spent on legal advice by businesses such as Mr Bean since
the law is clear. However, it may cause problems as it ignores the unique circumstances of each case
and thus if Mr Bean were to be involved in legal issues, it may be disadvantageous if the law is not
flexible.

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4. Financial Environment Analysis
4.1 Financial System
A financial system plays an imperative part as an intermediary for capital preparation and allocation of
monetary assets and as a provider of payment and settlement services. A well developed, productive
and stable financial system is thus the key to bolster sustainable economic development. In general,
a financial system includes three key components, to be specific, financial institutions, financial
markets and payment systems.
1. Financial Institutions
There are 2 types of financial institution in Thailand, including: 1) Depositary Corporations such as
commercial banks. 2) Non-depository corporations such as mutual funds and insurance companies.
As of year end 2014, total assets of financial institutions amounted to 36 trillion baht or 2.7 folds of the
countrys GDP. Depository corporations played the most important role with the share of 69.6
percent. (Bank Of Thailand, 2014)
Commercial Banks
The most important depository corporations were commercial banks with the share of 47.9 percent.
Such domination was attributed to their extensive branch networks which allow them to service
businesses and consumers more widely than other types of financial institutions. (Bank Of Thailand, 2015)
Banks are generally the best ways for a business to obtain the capital it needs to grow and expand.
This is because of the convenience and accessibility of a bank loan, as well as lower interest rates
than most other financial institutions. They also get to experience tax benefits as a percentage of
profits used to repay the loan is not subjected to taxation (Businessblogshub.com, 2016).
Thailands banking assets add up to a total of 319 billion USD (Www2.bot.or.th, 2016). Although this is pale
in comparison to Singapores massive banking assets of 749 billion USD (Secure.mas.gov.sg, 2016),

Thailand has a relatively strong banking economy that has sufficient amounts of assets to loan out or
invest. Therefore, capital to finance the growth and expansion of Mr Bean in Thailand can be easily
obtained.
To further justify the accessibility of the commercial banks in Thailand, the statistic on the number of
commercial bank branches per 100,000 adults can be used. This statistic reflects the number of
people served by each outlet, thus a higher value would imply fewer customers per branch and

15
ultimately, easier accessibility. Thailand has 12.7 bank outlets per 100,000 adults, the highest value
amongst all ASEAN states, even surpassing the 9.4 outlets per 100,00 adults that Singapore(Refer to
Fig. 13 and 14). This high financial access has many advantages to the economy of Thailand, but for Mr
Bean, it simply means growth via the provision of credit.
2. Financial Markets
Financial markets comprise the money market; the capital market, which offer medium-term and
long-term capital mobilization through bond and stock markets; the foreign
exchange market; and the derivatives market. In the case of Mr Bean, the foreign exchange market
and the stock market will be analysed.
Stock Market
Stock Markets have the ability to sway consumer spendings as well as a chance to earn returns on
capital. During periods where prices in the stock market are expected to go up, consumers see their
portfolios rise in value and thus, are more willing to spend more money, potentially on Mr Bean
products. Conversely, during periods where prices in the stock market are expected to go down,
consumers will dread seeing their portfolios drop in value and thus, cut down on their spendings.
Therefore, for a business, it is best to have an increasing and stable stock market. However, in the
case of Mr Beans products, which is classified as an elastic good due to the availability of
substitutes, fluctuations in the stock market will have more of an effect on sales.
Businesses also grow by investing in their own companies. To invest in itself, a business would need
capital. One of the most effective ways to raise capital is to issue stock on the stock exchange. Doing
so generates more capital when the stock market is up. Potential investors increases, as more people
put their money in stocks during bull markets. Prices also increase during a bull market, so a
company can sell each share for more money. (Investopedia, 2016)
The Thailand Stock Market is valued at 916 points while the Singapore Stock Market is valued at
2750 points (Tradingeconomics.com, 2016). However, when looking at the forecast, both Stock Markets are
projected to decrease in price. This would mean that investing in Thailand during this period of time
would result in decreased sales as well as a decrease in potential investors. But, Thailands stock
market price has a lower variation and is decreasing at a slower rate (Refer to 21). This means that

16
Thailands stock market is relatively more stable (Refer to 22). Thus, even though investor spending in
Thailand is less than Singapore, it is more predictable and stable.
Foreign Exchange Markets
Now, we will be discussing on how exchange rate fluctuations must be taken into account in order to
determine the successfulness and profitability of opening a business in Thailand. It is very important
to consider exchange rate fluctuations as it affects the real cost of imports or exports, which is directly
related to Mr Beans profit margins. Since Mr Bean is partnering with one of the most reputable North
America soya bean farms, that is where most of Mr Beans raw materials will be imported from.
Therefore, in the case of venturing into Thailand, we must consider the exchange rate between the
Thai Baht and the US Dollar as this could cause an overnight change in the cost of production which
can ultimately determine a net loss or profit.
The exchange rate between Thai Baht to US Dollars has been relatively stable compared to the
exchange rate between Singapore Dollars to US Dollars. During the past 10 years, the low, high and
mean for Thai Baht to US Dollars are 26.6, 38.1 and 32.8 per USD respectively (Refer to Fig. 19). This
translates to a Standard Deviation of 2.2 and a fluctuation of 6.7% per year. However, the low, high
and mean for Singapore Dollars to US Dollars are 1.2, 1.79 and 1.36 per USD respectively(Refer to Fig.
20). This means a Standard Deviation of 0.1 and a fluctuation of 7.2% per year. Therefore, in terms of
exchange rate, the Thai Baht is more stable than the Singapore Dollar. This means that prices are
also more predictable and stable in Thailand, therefore making it easier and safer to coordinate either
the import of raw materials or export of goods.
The forecast of exchange rate is not looking very good for the Thai Baht. The current exchange rate
is 35.17 Thai Baht per USD. Though the Thai Baht is appreciating currently, the trend for the Thai
Baht is that it is expected to depreciate (Refer to Fig. 19). This would mean that imports of soya bean
imports from the US would be more expensive more Mr Bean due to the fact that more Thai Baht is
needed to exchange for US dollars to pay for soya bean imports. This would increase the cost of
production for Mr Bean, decreasing profit margins. Furthermore, when dealing with foreign exchange,
there are three types of financial risks Mr Bean may face. They are Transaction, Translation and
Economic risks. Transaction risk is when exchange rate movements that occur after the firm is legally
obligated to complete the transaction, affecting the financial benefits and costs of an international

17
transaction. This can be minimised through hedging, such as a forward contract. Next is Translation
risk which is the impact on the firms financial statements of fluctuations in exchange rates that
change the value of foreign subsidiaries as measured in the parent companys currency which in this
case is SGD. Lastly, economic risks is the impact on the value of a firms operations of unanticipated
exchange rate changes. This can be reduced by analyzing the likely changes in the exchange rate of
the Thai Baht. (SP, 2016)
3. Payment Systems
Accomplishment of smooth and stable economic transactions depends greatly on having set up
appropriate payment systems infrastructure to bolster payment and settlement transactions amongst
business and organizations. The payment systems comprise of(Bank Of Thailand, 2016):
BAHTNET (Bank of Thailand Automated High-value Transfer Network) is a financial infrastructure
serving for Real-Time Gross Settlement (RTGS) of large value funds transfer between financial
institutions and other organization maintaining deposit account at the BOT.
Cheque Clearing System consists of Electronic Cheque Clearing System (ECS), Provincial Cheque
Clearing and Bill for Collection (B/C)(Bank Of Thailand, 2016)
Bulk Payment System is the convenient means of payment for a customer in making inter-bank
preauthorized transactions that are large in volume and have a regular recurring payment period.(Bank
Of Thailand, 2016)

Funds transfer via ATM In enhancing efficiency of payment system and performance of
commercial banks, the BOT has implemented a policy to promote the use of ATM in conducting an
interbank Retail Fund Transfer. (Bank Of Thailand, 2016)
A smooth and efficient payment system infrastructure would result in lesser manpower needed, lesser
time and resources wasted for business such as Mr Bean.
4.2 Interest Rates
We must also consider how interest rate movements, affects Mr Beans ability to obtain capital to fund
their business. In the month of April 2016, the Bank of Thailand dropped their interest rates from 2%
to 1.5% (Refer to Fig. 15). As of 22 June 2016, the Bank of Thailand has still left their interest at 1.5% and
is forecasted to decrease in the coming years (Tradingeconomics.com, 2016)(Refer to Fig. 15). This was done in
an attempt to recover and speed up the growth of the economy, after Thai exports fell for a second
straight year in 2014 for the first time in at least two decades, by making it cheaper for companies to

18
obtain loans (Bloomberg.com, 2016). However, this is higher than Singapore which has a benchmark
interest rate of 0.44% in July 2016 (tradingeconomics, 2016). Therefore, when compared to Singapore, it is
more expensive to obtain loans from Thailand to finance Mr Beans growth. However, in the long run,
the Singapore interest rate is forecasted to increase while the Thailand interest rate is forecasted to
decrease (Refer to Fig.16).
4.3 Inflation Rates
Generally, inflation is seen as a good thing as it encourages growth of the economy and allows
businesses to stay profitable enough to withstand the growing work force. The inflation rate in
Thailand has been relatively high prior to 2015, at an average of 4.34%. In 2015, Thailand was hit by
a deflation of 1%. However, the inflation rate in Thailand has been growing steadily as of 1 Jan 2016
and is currently at a healthy and stable rate of 0.38%. The inflation is forecasted to remain low around
0.2% and even drop in the years to come (Tradingeconomics.com, 2016)(Refer to Fig. 17).
Thailands inflation of 0.38% is a healthier number when compared to Singapores deflation of 1.6%.
(Refer to Fig. 18) This is because a deflation would not be ideal as debts would take up a larger amount
of spending power than it did initially. On the other hand, high inflation, or cost-push inflation, would
result in an increase in cost of production, compressing the profit margins in order to keep prices low
and consumer demand up. Therefore, this low inflation number serves as a testament to the stability
of the Thai economy. We would be operating in a state of certainty whereby investments by Mr Bean
or banks can be made confidently. This also negates the need to spend time and resources on ways
to defend ourselves against high inflation, thus allowing us to fully utilize all resources in facilitating
operations.
4.4 Foreign direct investments
Analysing the trends in Foreign Direct Investments flow gives us an insight of how open the Thailand
government is to the presence of a foreign business in the economy of Thailand. This should provide
us an insight on how smooth Mr Beans venture into Thailand will be. Furthermore, it also provides By
looking at the trends of Foreign Direct Investments (Refer to 23 and 24), we can see that Thailand has a
higher volume of FDI flows as compared to Singapore. However, it has a larger fluctuation and slight
downward sloping trend. Currently in 2016, Thailand is seeing a huge drop in foreign investments.

19
Therefore, the Thailand government policy is not as favourable to foreign investments within Thailand
than in Singapore.
5. Government regulations and initiatives
5.1 Government Regulations
The most important thing when it comes to starting business overseas is knowing the law. When Mr
Bean intends to start a business in Thailand, the approval requirement under the Foreign Business
Act B.E. 2542 must be complied with (BOI, 2016), and they will be granted licence from the Director
General of the Commercial Registration Department of the Ministry of Commerce (Director General)
and approval from the Foreign Business Committee for the sale of food and beverages in Thailand
(nortonrosefulbright.com, 2016).

Any foreigner that engages in business in Thailand in violation of the restrictions imposed by the FBA
may be subject to imprisonment for a term of up to three years and/or a fine of between 100,000 and
1,000,000 Baht and a daily fine of between Baht 10,000 to 50,000 for the period of the violation. In
addition, the courts may order cessation of the business or termination of the shareholding or
partnership which is in violation of the FBA (nortonrosefulbright.com, 2016).
5.1.1 Work Permit
Foreigners who intend to work in Thailand are subject to the Foreign Employment Law. Under the
provisions of this Act, a foreigner cannot perform any work or service unless a work permit has been
issued by the Foreign Employment Division of the Labour Department and Social Welfare Ministry,
unless the individual or the work performed falls within an exception to the Act. For instance,
volunteer work or movie extras, which is not Mr Beans type of service (Samuiforsale.com, 2016).
If Mr Bean were to send a Singaporean over, a work permit would be needed.
5.1.2 Labour Regulations
It is required to make sure the employees welfare such as given at least the minimum wage and
taking note of the different minimum wages in different states of Thailand and the rates are subject to
change. Failure to do so would result in the employer being punished. (MOL, 2016).
Furthermore, there are also rules on the working hours for the employees. In most cases, working
hours should not go beyond above 8 hours per day or 48 hours per week. In case of such work that is
considered by law as hazardous or harmful to health of an employee, working hours is limited to 7

20
hours a day or 42 hours per week. However, it should be fine for Mr Beans employees to work 48
hours per week, with a maximum 36 hours of overtime per week. Moreover, all employees are
entitled 1 hour of resting time after every 5 consecutive hours of work in Thailand. These working
hours and resting hours can be arranged with flexibility through agreement of both the employees and
employers, however, the number of hours must still be strictly followed. All employees are also
entitled to holidays such as weekly holiday, annual leaves, traditional holidays or any other public
holiday in the calendar of Thailand. They must still be paid accordingly (Panwagroup.net, 2016).

Singapores maximum working hours is lower at 44 hours a week (Ref to Table 3), therefore Thailands
employees will be able to work longer thus maximising production.
5.1.3 Intellectual Property
One critical issue when starting a business overseas is to make sure that no intellectual property laws
are being infringed on, also to make sure to protect Mr Beans intellectual property . This is where the
trademark act and the patent act comes into place.
Trademark is used to protect words, names, symbols, sounds, or colors that distinguish goods and
services by the trademark owner from those sold by others. Since trademark is territorial, Mr Bean will
have to register the trademark in Thailand. Trademarks can be renewed forever as long as they are
being actively used in commerce. If a trademark is registered, the proprietor has the exclusive right to
its use with goods for which registration was granted. Trademark shall be registrable only if proprietor
or his representative has office or any place of business in Thailand which the registrar can contact.
We suggest Mr Bean to register its company before other businesses start to replicate any idea of Mr
Beans. Furthermore, the process of making Mr Beans products can be patented. Patent in Thailand
is important mainly because it provides exclusive right to its use for a certain period of time without
competition from other traders, thus providing owners monopoly. Patent brings commercial benefit
and profit in terms of income earnings from royalties through others use with upon owners
permission. It also adds value to the mark or name of a business, thus gaining goodwill and
reputation for the business. When a is product has been patented, it is associated with quality goods
and services (Thailandcourt.com, 2016). Therefore, with these intellectual property rights, Mr Bean will be
able to protect its product and avoid any possible replicas before being distributed to the market.
5.1.4 Food Control

21
In Thailand, there are several food control activities to take note of as they are undertaken by several
organisations. There is the Food Act to be followed and there will be authorised competent officers,
promulgate regulations are appointed to carry out the provisions of this act. On top of that, other
activities are set to carry out the same objective. The Food and Drug Administration of the Ministry of
Public Health and the Provincial Offices of Public Health are responsible for legal food control
operations with the support of food analytical services of the Department of Medical Sciences. The
Thai Food and Drug Administration of the Ministry of Public Health is an agency whose primary duty
by virtue of Food Act B.E.2522 (1979) (FDA, 2016). Its main roles are implementation and enforcement
of this law, and is to guarantee the quality and safety of food, there are several requirements to follow
(Ref. to Table 2).

Regular food surveillance is done to assure food quality and safety distributed in the market place.
The food surveillance is conducted by authorities as they are the main role in this activity. It is done
so by taking food out of the market to analyse to ensure the conformity to the standards.

Meanwhile, in Singapore, where it has one of the lowest occurrence of foodborne disease outbreaks
compared with the rest of the world. This is despite of the fact that Singapore import 90% of all food
consumed in the country (AVA, 2016). This implies that Singapore has a stricter food regulation and thus
it is easier to venture into Thailands market. However, this may not be definitely true as it is subject
to change due to the different type of regulations in both countries.

5.2 Government Initiatives

Incentives (Refer to Table 4)
Several tax and nontax incentives are granted to foreign business owners in Thailand through the
Board of Investment. These include certain tax exemptions or reductions as well as granted different
types of permit depending on the type of business (BOI, 2016). Hence, with this opportunities, Mr Bean
will be able to enjoy several benefits such as fewer taxes and permit to send skilled workers to
Thailand, therefore increasing the profit and productivity.
Double Taxation Relief
In order to attract more foreign investments, through strong bilateral ties between countries,
Singapore and Thailand had came up with agreements to eliminate or reduce double taxes in
contracting countries. Such agreements include, the foreign tax credit, tax treaties and reduction in

22
withholdings taxations. Thailand grants a foreign tax credit for tax paid on foreign income, which is set
off against income tax, up to the amount of tax payable, meanwhile, Thailand has several tax treaties
including with Singapore and US which may be significant to Mr Beans business (ASEAN Briefing, 2016).
Recently, Singapore and Thailand has revised its Double Taxations Agreement and had further
reduced some of the withholdings taxations (Refer to Fig. 25). Therefore, such relations and agreements
will benefit Mr Bean by maximising it profitability for its business incorporated in Thailand.
6. Risk Analysis and Conclusion
Opportunities
Economic/Cultural: The positive trend of GDP per capita growth of Thailand shows potential in the
market. As compared to Singapore, Thailands GDP growth rate and PPP growth rate is higher which
shows that Thailands potential for growth in the economy is better than that of Singapores. Next,
Thailand has a lower average wage than Singapore. This shows that Mr Bean can offer to pay their
workers less in Thailand. This means the profit margin will be greater if Mr Bean were to set up shop
in Thailand. The same goes for rental costs in Thailand which is much lower than that of Singapore.
This means that Mr Bean can get a greater profit margin in Thailand as compared to Singapore.
Political: The lack of trade/labour union participation among the working population would mean that
trade unions would not interfere in how Mr Bean runs its business in terms of wages etc. Mr Bean,
thus would have increased productivity and lower wages in Thailand as compared to Singapore
where trade unions have many members and participate actively in workers rights. Next, a civil law
system is also beneficial as the rule of law is clear. Time and money is not wasted on legal advice.
is unlike Singapore which follows the common law system where precedents are used and thus the
rule of law is not as clear.
Financial: Thailand has a low and stable inflation rate as compared to Singapores current deflation
and projected high inflation. The low and constant inflation rate of Thailand gives us a more stable
and predictable financial environment as compared to Singapore. Currency is also another factor that
is in Thailands favour. Thailand has a more stable currency that Singapore, thus making it safer to
manage imports and exports. The banking system in Thailand is also more business-friendly as it
allows for easier acquisition of capital than in Singapore. Although Thailands interest rate is still
higher than Singapores as of now, it is forecasted to continue decreasing. Meanwhile, Singapores

23
interest rate is forecasted to increase. This means that in time to come, it would be cheaper to make
loans to finance Mr Beans operations in Thailand than in Singapore. Commercial banks in Thailand
are also more accessible than in Singapore as it has more bank outlets per 100,000 people than
Singapore. Therefore, this means that Mr Bean will experience a more efficient and targeted banking
system in Thailand to fund their expansion.
Government: For foreigners, there are incentives, be it taxed related or non-taxed related such as the
protection of rights like intellectual property. On top of that, since Singapore and Thailand has a good
bilateral relationship, there will be more benefits in terms of treaties signed for tax relief. Furthermore,
with the higher number of working hours in Thailand, Mr Bean will be able to increase production rate,
provided that the efficiency of its manpower is equivalent.
Threats
Economic/Cultural: In Thailand, soy based products such as soya milk and soya beancurd are widely
sold by street vendors and supermarkets. This is also reflected by the growing imports of soybeans
since the 1990s. This means that there is a existing demand for soybean products in Thailand
already. Established brands such as VitaMilk will serve as a strong competitor to Mr Bean as Mr Bean
has not established themselves as a brand in Thailand. As such, consumers might stick to the
conventional and already established soybean product brands in Thailand. This might result in a
lower demand for Mr Bean products.
Political: The political ideology of Thailand is currently one of right wing totalitarian. This can be a
problem for businesses due to the arbitrary nature of such governments resulting in uncertainties that
discourage investments. In contrast, Singapores government is one of pluralism where policies are
clear and defined with the will of the people being considered. Thailand also faces many political risks
such as the South Thailand Insurgency, civil unrest and terrorism, this is unlike Singapore where such
occurrences are very rare. The stability of Thailands government has also be called into question due
to the numerous changes in government in just a few years, unlike Singapore where the ruling party
has been in charge since independence. Such instabilities would only bring about more uncertainties
that negatively impact business. Lastly, the rampant corruption in Thailand has also affected business
adversely, reducing business credibility and profits. Singapore on the other hand ranks first in anti
corruption.

24
Financial: There are three types of risks that must be considered in this venture: Transaction,
Translation and Economic risks. Transaction risk is when exchange rate movements that occur after
the firm is legally obligated to complete the transaction, affecting the financial benefits and costs of an
international transaction. Next is Translation risk which is the impact on the firms financial statements
of fluctuations in exchange rates that change the value of foreign subsidiaries as measured in the
parent companys currency which in this case is SGD. Lastly, economic risks is the impact on the
value of a firms operations due to unanticipated exchange rate changes. Thailands government has
a more unstable approach to foreign investments within the country than Singapores government.
Therefore, this makes it hard to predict the kinds of regulations or policies that will be imposed onto
Mr Bean by the government.
Conclusion
No, we do not recommend Mr Bean to enter into Thailand. There are opportunities which point Mr
Bean towards entering into the Thailand market, such as the growing economy and favourable
financial indicators, and numerous government regulations and initiatives. The political ratings in
Thailand have been consistently low and many other risks also indicate that Mr Bean should not enter
the Thailand market. The current prime minister of Thailand, Prayuth Chan-ocha has also continually
adopted policies showing the unlikelihood of democratic elections being held anytime soon. This has
caused civilian unrest to increase as elections are continuously postponed.
Prominent international published reports, such as BERI, have recommended not to make any new
investments in 2016 as political conditions are getting worse. As a result of these political risks, we
believe that Mr Bean should not enter into Thailand and should wait for the political scene in Thailand
to settle down before making the decision again in the future.
However, the unstable political conditions in Thailand outweigh the opportunities.

25
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Tradingeconomics.com. (2016). Thailand Inflation Rate | 1977-2016 | Data | Chart | Calendar | Forecast. [online] Available
at: http://www.tradingeconomics.com/thailand/inflation-cpi [Accessed 2 Jul. 2016].

Tradingeconomics.com. (2016). Thailand Interest Rate | 2000-2016 | Data | Chart | Calendar | Forecast. [online] Available
at: http://www.tradingeconomics.com/thailand/interest-rate [Accessed 2 Jul. 2016].

Tradingeconomics.com. (2016). Thailand Minimum Daily Wage | 1973-2016 | Data | Chart | Calendar. [online] Available
at: http://www.tradingeconomics.com/thailand/minimum-wages [Accessed 15 Jul. 2016].

Tradingeconomics.com. (2016).Singapore Average Overnight Interest Rate | 1988-2016 | Data | Chart. [online] Available
at: http://www.tradingeconomics.com/singapore/interest-rate [Accessed 15 Jul. 2016].

Uca.edu. (2016). 26. Thailand/Malay Muslims (1948-present). [online] Available at:

http://uca.edu/politicalscience/dadm-project/asiapacific-region/thailandmalay-muslims-1948-present/ [Accessed 15 Jul.
2016].

WENR. (2014). Education in Thailand - WENR. [online] Available at: http://wenr.wes.org/2014/03/education-in-thailand/

[Accessed 16 Jul. 2016].

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Www2.bot.or.th. (2016). Bank of Thailand (Statistical Data). [online] Available at:
http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=424&language=ENG [Accessed 1 Jul. 2016].

Www2.deloitte.com. (2016). [online] Available at:

http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-thailandguide-2015.pdf [Accessed 16 Jul.
2016].

vietnamnews.vn. (2016). Banking assets reach $291 billion. [online] Available at:
http://vietnamnews.vn/economy/263870/banking-assets-reach-291-billion.html [Accessed 1 Jul. 2016].

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Appendix

Economic Indicators Value

Gross Domestic Product (GDP) 395 Billion USD

GDP/Capita (Nominal) 5,700USD

GDP/Capita (PPP) 15,400 USD

GDP growth rate 2.8%

Table 1: Economic Indicators (Trading economics, 2015)

Fig. 1: Thailand GDP per capita (Trading Economics, 2016)

31
Fig. 2: Thailand GDP per capita (PPP) (Trading Economics, 2016)

Fig. 3: Thailand GDP annual growth rate (Trading Economics, 2016)

32
Fig. 4: Thailand Exports (Trading Economics, 2016)

Fig. 5: Thailand Imports (Trading Economics, 2016)

33
Fig. 6: Thailand Balance of Trade (Trading Economics, 2016)

Fig. 7: Thailands Soybean Imports (Indexmundi, 2016)

34
 Fig. 8: Thailands Political Risk Rating (BERI, 2016)

Fig. 9: Map of South Thailand Insurgency (Adam Carr, 2006)

35
Fig. 10: Global terrorism index (Statista, 2015)

Fig. 11: Political Stability Index (The Global Economy, 2014)

36
Fig. 12: Thailand Corruption Perceptions Index (PERC,, 2016)

37
Fig. 13: Bank branches per 100,000 people for Thailand (Tradingeconomics.com, 2016)

Fig. 14: Bank branches per 100,000 people for Singapore (Tradingeconomics.com, 2016)

38
Fig. 15: Thailand Interest Rates and Forecast (Tradingeconomics.com, 2016)

Fig. 16: Singapore Interest Rate and Forecast (Tradingeconomics.com, 2016)

39
Fig. 17: Thailand Inflation Rate and Forecast (Tradingeconomics.com, 2016)

Fig. 18: Singapore Inflation Rate and Forecast (Tradingeconomics.com, 2016)

40
Fig. 19: Thailand Exchange Rate and Forecast (Tradingeconomics.com, 2016)

Fig. 20 : Singapore Exchange Rate Forecast (Tradingeconomics.com, 2016)

41
Fig. 21: Thailand Stock Market Price and Forecast (Tradingeconomics.com, 2016)

Fig. 22: Singapore Stock Market Price and Forecast (Tradingeconomics, 2016)

42
Fig. 23: Thailand Foreign Direct Investments and Forecast (Tradingeconomics, 2016)

Fig. 24: Singapore Foreign Direct Investments and Forecast (Tradingeconomics, 2016)

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Fig. 25: Singapore - Thai DTA Withholdings Taxation (ASEAN Briefing, 2016)

Food Regulation Requirements

1. Setting up food standard and specification as well as hygienic and labelling requirements.

2. Controlling of the production and importation of food products.

3. Approval for registration of specific-controlled food.

4. Approval for advertisement.

5. Approval of packaging materials.

6. Inspection of food manufacturing premises and salers.

7. Sampling and quality assessment of food products.

8. Taking legal action eg. Seizure, product recalls, prosecution.

44
 9. Conduction epidemiological study.

10. Promotion of consumer awareness and voluntary compliance of food manufacturers.

11. Controlling of food plants to meet national standard by using GMP.

12. Collaboration with government agencies, private sectors as well as international organizations in the
manners of technical cooperation.

13. To assemble, disseminate and exchange information related to food.

14. Issuing of certification

Certification of Free-sale
Sanitary Certification
GMP Certification
HACCP Certification

(FDA, 2016)
Table 2 : Food Control Requirement

If you work Your contractual hours are

5 days or less a week Up to 9 hours per day or 44 hours a week

5 days or more a week Up to 8 hours per day or 44 hours a week

(MOM, 2016)
Table 3: Normal hours of work in Singapore

Tax incentives Non-tax incentives

Exemption/reduction of import duties on Permit for foreign nationals to enter the Kingdom
machinery for the purpose of studying investment
opportunities

Reduction of import duties for raw or essential Permit to bring into the Kingdom skilled workers

45
 materials and experts to work in investment promoted
activities

Exemption of corporate income tax and juristic Permit to own land

person income tax

Double deduction from the costs of Permit to take out or remit money abroad
transportation, electricity and water supply

Additional 25 percent deduction of the cost of

installation or construction of facilities

(Board of investment, 2015)

Table 4: Tax Incentives for Thailand

46