Essential Preparations for Investing in Thailand

Sanet has already accompanied a wide range of European firms, including SGF from Germany, Noventa AG of Switzerland, TANATEX from the Netherlands, and Styromatic in Denmark—throughout their market entry journey. From strategy design and company setup to BOI promotion, recruitment, and construction oversight, the group provides holistic support.

Starting an overseas investment is exciting yet also full of pitfalls if preparation is rushed. Drawing on decades of experience advising international enterprises, Dr. Gunter Denk, founder of the Sanet Group and author of Asia for SMEs and Asia for Pros, shares pragmatic guidance for companies aiming to establish themselves in Thailand.

Why Thailand Has Become a Hub for European Investors

In recent years, European firms have turned to Thailand to counter rising costs and regulatory burdens at home. The country offers a rare combination: a central ASEAN location, reliable infrastructure, and an advanced industrial base. This makes Thailand not just an attractive alternative but a true regional launch pad.

Key Strengths Include:

• Infrastructure: four international deep-sea ports, seven international airports, and 68 modern industrial estates.

• Incentives: substantial investment privileges, such as multi-year tax holidays and duty exemptions.

Industry Base:

• Automotive: 30 global OEMs and 1,600 suppliers, producing over two million vehicles annually, more than half for export.

• Electronics: over 1,000 companies active in EMS and PCB production, generating billions in revenue.

• Food processing: the most extensive cluster in ASEAN, from inputs to packaging.

• Chemicals: fully integrated operations with direct access to specialized terminals.

• Construction: a workforce of 55,000, with revenues exceeding USD 12 billion annually.

Preparing Your Investment: Five Golden Rules

1. Make Preparation a Top Management Issue

Start with a C-suite workshop involving both executives and specialists to define:

• The motive for investing

• Tangible goals and milestones

• Exit strategies

• Timeframes

• Project leadership

Pro Tip: Involve a local advisor right away—you will quickly see whether they add real value.

2. Project Leadership - Let the Next Line Shine

Rather than having the CEO take on the day-to-day, appoint a project manager who can commit at least 50% of their time and report directly to top management.

Build a cross-functional “Asia Team” drawing from sales, quality, R&D, production, and controlling.

Pro Tip: Give high-potential “second-line” managers responsibility. Copy-pasting the home organization into Asia rarely works.

3. Clarify Budget and Governance from the Start

• Set clear guidelines: regular meetings, clear milestones, and a small supervisory board.

• Define travel and expense policies before launch to avoid later friction.

• Link funding releases to knowledge gained; progress should unlock resources.

4. Use External Advisors Strategically

Consultants should not replace internal leadership, but they are indispensable when local presence or niche expertise is lacking.

They typically cover feasibility validation, site selection, dealings with authorities, contractor vetting, and executive search.

Pro Tip: Expect consulting costs of around 5% of the overall investment, spread across 18–24 months. This is essentially your insurance against costly errors.

5. Communicate Transparently

Keep employees, shareholders, banks, customers, and suppliers informed. Silence fuels speculation and conflict, openness builds trust.

Quick-Reference Playbook

1. Goals and motives documented.

2. Named project leader plus energized team.

3. External expertise complements, not replaces, internal leadership.

4. Risk management: milestones and exit points

5. Staggered funding aligned with growing insight.

6. Feasibility analysis covering multiple locations before commitment.

7. Time and cost discipline enforced jointly.

Conclusion

International expansion succeeds when leadership, structure, and communication come together. By approaching investment in Thailand with discipline and foresight, companies can mitigate risks, accelerate execution, and secure a long-term foothold in one of Asia’s most dynamic markets.

Stay tuned for Parts 2 and 3, where we explore feasibility studies and location selection—the crucial next steps toward building a sustainable presence in Southeast Asia.