EU keen on investment, seeks regulatory reforms

EU Keen on Investment but Calls for Regulatory Reform in Thailand

European businesses are signalling strong interest in investing across Thailand, but are calling on the government to accelerate regulatory reforms before that potential can be fully realised.

Noel Clehane, vice-chair of the EU-ASEAN Business Council, met with Prime Minister Anutin Charnvirakul at Government House and highlighted sectors including life sciences, biotechnology, low-carbon and high-tech manufacturing, financial services, and fast-moving consumer goods as key areas of EU investor interest. He described Thailand as an ideal regional hub, citing its well-developed industrial ecosystem and access to the broader ASEAN market of nearly 700 million people.

According to the 11th EU-ASEAN Business Sentiment Survey published in 2025, approximately 57% of European firms intend to increase their investment in Thailand. However, significant obstacles remain.

Clehane pointed to Thailand's more than 7,600 ministerial regulations, many of which are considered outdated, unnecessary, and inconsistent. He also identified the Foreign Business Act 1999 as a key barrier, particularly for services and high-tech industries. A central concern is the 49% foreign ownership cap in certain sectors, which requires foreign firms to enter joint ventures with local partners. He noted this is a particular deterrent for companies handling sensitive intellectual property, such as those in artificial intelligence or specialised services, as investors are often unwilling to surrender majority control over their operations and knowledge.

European businesses also raised concerns about complicated licensing and permit processes, calling for a more predictable and transparent regulatory environment.

Clehane expressed support for Thailand's proposals to introduce an omnibus law, remove certain sectors from the Foreign Business Act's restrictive lists, and pursue broader regulatory reform.

On competitiveness, Thailand currently ranks 26th out of 70 economies in the 2026 IMD World Competitiveness Ranking, behind Singapore and Malaysia but ahead of Vietnam. Clehane recommended the country address long-term structural challenges including an ageing population and the need for greater digital upskilling to maintain its position.

For foreign investors and business owners in Thailand, these regulatory frameworks directly affect how businesses can be structured and operated here. Understanding the Foreign Business Act and ownership restrictions is essential when planning any investment in the Thai market, and this is an area where proper legal guidance makes a meaningful difference.

SLF Legal advises clients on business structures, Foreign Business Act compliance, and investment planning in Thailand. Reach out to our team in Koh Samui for a consultation.