DOING BUSINESS IN THAILAND.   Term Paper ID:28784 Click to get this paper

Essay Subject: Examines feasibility. Financial, economic, cultural, political aspects. Regulations.... More...

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Paper Abstract: Examines feasibility. Financial, economic, cultural, political aspects. Regulations. Paper Introduction: DOING BUSINESS IN THAILAND Objective of the Study For most of the 20th Century, Thailand (Siam) was a natural economic leader in the ASEAN region. Because of the openness of the Kings who ruled Thailand, and their willingness to learn all they could of the Western ways, the nation was able to build an industrial base that includes textiles, cement, electronics, petroleum, refining, transportation equipment, tourism, food processing. Because of this openness, Thailand was the only nation in Southeast Asia to escape colonial rule. With some reservations, Thailand became an excellent place for Western businessmen to do business. In 1997, however, the economy did a dramatic turnaround, and launched what is now known as the “Asian financial crisis.” The objective of this paper is to determine the feasibility toda Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Limsamarnphun (1997) pointed out that the 1997 crisis was due to theabsence of a 'powerful brake' on the free-wheeling economy of the pastdecade, "without which a lot of foreign money was used for speculativepurposes, especially for real estate and stocks. |12. Asense of humor, laughter and a smiling attitude are highly regarded byThais. Today the Kingdom is known for its textile products, computers andrelated parts, rubber and plastic products, footwear, processed seafood andplastic products. Public displays of anger result in loss of face, and publiccriticism is taboo. -8.5 |3. Gesturetaboos abound. |8.25-8.75 | | | | || Deposits:* | | | | | | | || Demand deposits | - | - | - | | | | || Savings deposits |5. |3.75 | | | | || 6 Months to 12 months |(-) |(-) |(-) | | | | || 12 Months to 2 years |1 . Shoes are removed on entering a home or Buddhist temple(avoid stepping on the temple doorsill when entering). Private limited companies require a minimumof seven promoters and must file a memorandum of association, convene astatutory meeting, register the company, and obtain a company income taxidentity card. |n.a. | | | || Interbank lending rates |21.73 |2.63 |1.23 | | | | || (daily average of overnight rates) | | | | | | | || Prime rates: | | | | | | | || Minimum overdraft rates |15.75-16. 7).Reports of king's illness rock a shakyThailand: Stocks fall as parties squabble over leadership, InternationalHerald Tribune. Liberalizing the financial services andcapital accounts must also be accompanied by prudent supervision of thebanking and financial system," (Limthammahisorn, 1997, Aug., Online). Na Thalang and others point out the Thai central bank failed toadequately and properly regulate the banking and financial system, "whichset the stage for the bubble economy and the rise in problem loans thatwould become unsustainable when exports or the economy are to slow down,"(Na Thalang, 1997, Sept. The Patent Act protects bothinventions and product designs and pharmaceuticals. In the early 199 s, the Thai government and its banking systemsdecided to "peg the baht" the United States dollar, joining the other worldcurrencies linked to the dollar (Shari, Corben, 1997, July 7, 22). This plan emphasizes education and development of human resources.Historically, the NESDP's economically practical, socially-effective planshave provided long-term public policy planning in a framework clearlyfocused on the Kingdom's overall well-being, balanced with cautious -- andhighly effective -- economic policy. -11.5 |6. (1997, Nov. Doing business in Thailand is a pleasure, because the Thaibusiness community and public servants are sensitive to quality of lifeconcerns for visitors for business and holiday. A primer on the Southeast Asianfinancial crisis. When finished eating, place your eating utensils togetheron your plate. |n.a. With somereservations, Thailand became an excellent place for Western businessmen todo business. Economic Aspects of Doing Business in Thailand Exports, tourism, investment and domestic consumption have expandedrapidly. ||2,247,454 ||24.4 ||2,213,965 ||-1.5 || ||Source: Bank of Thailand || | Selected Interest Rate Movements| End of period --> |1997 |1998 | 1999 | || || Government bonds & |14.9 |7.26 |6.4 | | | ||State enterprise bonds | | | | | | || Average repurchase rates (7 days) |22.36 |3.75 | .94 | | | || Bank rates |12.5 |12.5 |4. || |units | | | || Microwaves | million | 2.58 |n.a. || |tons |** | | || Petroleum | million |42,9 6 |4 ,528 |41,856 ||Products |liters | | | || Cement | ' tons | 37,136 |22,722 |25,349 || White cement | metric |167,883 |68,597 |121,12 || |tons | | | || Galvanized iron | metric | 387, |252,857 |3 2,8385||sheet |tons | | | || Tin plate | metric | n.a. Strategy review takes on urgency.The Nation. The overall policy of the Thaigovernment since the early 196 s has been laid out in series of five-yearplans. Na Thalang added more to this financial picture. Unless you are Thai, the handshake is an acceptable form of greeting.Thai's address each other using the "wai" (a gesture with the palms of thehands pressed together with the fingers extended and held about chest-high,together with a slight bow and the honorary prefix Khun followed by thegreetee's first name.) Political Aspects of doing Business in Thailand The Kingdom of Thailand is a constitutional monarchy with a parliamentconsisting of the Senate, appointed by the House of Representatives,elected by the people for a four-year term. (1997,Sept.2). Both the financial success of Thailand (and the roots of its 1997decline) are found in the same economic philosophy" the desire to exploitits low-wage/low-skilled labor forces, to lure foreign direct investment(FDI) to build plants to build "screwdriver plants" (Ciminero, 1997, Nov.24, Online) that would assemble and ship consumer electronics products andother labor-intensive goods. Financial Aspects of Doing Business in Thailand In 1995 Thailand's economy was singled out by the World Bank as themost consistently expansive and healthy economy world-wide in the precedingdecade from 1985-1994. Suchpolicy adjustments helped stabilize the Thai economy in the early 198 s andlaid the foundations for the unprecedented growth which began in 1986. Capital inflow also places a bigconstraint on the BOT to manage an independent monetary policy(Limsamarnphun,1997, July 31, 4). Suit or dress for business; smart casualsocially. 14(2) Shari, M.; Corben, R. DOING BUSINESS IN THAILAND Objective of the Study For most of the 2 th Century, Thailand (Siam) was a natural economicleader in the ASEAN region. Ciminero points out "In recent years. Competitive Aspects of doing Business in Thailand A 1997 White Paper published by the Bangkok Bank and authored byWatsaya Limthammahisorn traces the free capital movement as beginning in1991 when the Bank of Thailand began a series of measures to free upmovement of capital accounts to attract more foreign funds into the countryand to bolster the capital market. || |tons |** | | || Toilet paper | metric |48,665 |n.a. Women should wear a suit or dressfor business, and never slacks. |3.75 | | | | || |(-) |(-) |(-) | | | | || | - |- | 4.25-5. The Nation. | | | | || |(-) |(-) |(-) | | | | || Borrowing rates:** | | | | | | | || At call |4.25-12.75 |2. 9 |12.81 | | | | || Maximum |5 . They must also follow accounting procedures specified in the Civil andCommercial code, the Revenue Code and the Accounts Act. (1997, July 31). Thai borrowers werespoiled by the belief that the ever-lasting fixed currency regime wouldprotect them from foreign exchange risks. Confidence calls for fullacceptance of IMF plan. | | | | || 6 months |11. A1 Limsamarnphun, N. Ciminero, and other analysts (Crampton, 1997,A2) point out that as long as the baht was pegged to the dollar, Thailandwas viewed as even more attractive for FDI and foreign portfolio investmentin its securities market (Limsamarnphun, 1997, 4). |n.a. (1997, July 28). The Copyright Actprotects literary, artistic works, and performance rights, by making itunlawful to reproduce or publish such works without the owner's permission. 11 Na Thalang, J. They forgotthat eventually the external debts must be repaid by net export earnings(Na Thalang, 1997, 16). || |units | | | || Refrigerators | million | 1.92 ** |n.a. .the trade surplus hasevaporated, as stimulated domestic demand has been pulling in moremerchandise imports than the country exports. Some of the world's leading producers of cement ,ceramic tiles, sanitary ware,bearings, printed circuit board assemblies and computer peripherals, hard-disk drives and varied agro-industrial products, are in Thailand. 24). | .25-4.5 | | | | || 1 month |9.5-15.25 |3.5 -5.5 |1. . Government has consistently promoted industrial decentralization,setting into motion policies bringing employment opportunities throughoutthe country. -15.75 |6. The influx of currency speculators usually has an affect on a nation'scurrency supply since these speculators invest in short-and-long termchanges in the currency markets and make the money supply increase. Major and increasing Government involvement in energy,telecommunications, transportation infrastructure and direct foreigninvestment characterized the Thai economy moving into the mid-to late-199 's. The Alien Occupation Law requires all foreigners workingin Thailand to obtain a Work Permit prior to starting work in the Kingdom,except when they are applying under the Investment Promotion Law, in whichcase they have 3 days to apply. When seated on the floor, men sit cross-legged, and women tuck theirlegs to the side. Due to the magnitude of Thailand's extensive infrastructuralimprovements, the Kingdom saw substantial investment opportunity and co-operation between public and private sectors. In addition, companies are required to withholdincome tax from the salary of all regular employees. With the removal of theexchange rate guarantee by the Bank of Thailand in the wake of the bahtfloat, fewer people will be willing to or have enough courage toinvest,"(Limsamarnphun, 1997, July 28, 21). The Trademark Act governs registration of, and provides protectionfor, trademarks. In some cases, factories do not require licenses, in otherinstances the requirement is simply to notify officials in advance of start-up, and in some cases licenses are required prior to commencing operations.Licenses are valid for five years, and are renewable. The Ministry of Industry administers The Factory Act, which governsfactory construction and operation, as well as safety and pollution-controlrequirements. 24, Online). In 1997, the Thaigovernment decided to float its currency, the baht, against the dollar. One should never criticize the monarchy, even in private. | n.a. Thailand's stable social , political andfinancial landscape has benefited both foreign importers of its productsand investors. |n.a. In 1997, however, the economy did a dramatic turnaround, andlaunched what is now known as the "Asian financial crisis." The objectiveof this paper is to determine the feasibility today of doing business inThailand. "The currency pegsystem opened the floodgates to foreign capital. This has rendered a current .. The Eastern Seaboard, a primary center of industrial growthon the east coast, expanded, while the Board of Investment provided addedtax and related incentives to companies locating in other regions. Never having beencolonized, Thais relate easily to foreigners, welcoming tourists andbusiness visitors.Continuing growth based on proven performance Cultural Aspects of Doing Business in Thailand Thai culture is based on Thervada Buddhism involving the remembranceand recognition of ancestors. Economic regulation is minimal; innovation has burst ontothe scene, with educational institutions increasingly developing graduateswho bring new thinking, design and function to products and services. "As aresult, money supply grew by more than 2 per cent a year, an indicationthat an anti-inflationary policy was doomed to fail," (Limthammahisorn,1997, Aug., Online). Business leaders andcivil servants co-operate to encourage the push for economic evolution:Thai companies have both active export markets and growing local markets.Thailand long ago left the world of rice monoculture and primary products. Thais also respect unselfishness and those who leadvirtuous lives. On line at:http://www.dismal.com/thoughts/asian_crisis.stm Crampton, T. They include touching another person's head or passing anobject over it; pointing the sole of the foot at another person; stampingyour feet or touching a person with your foot; crossing your legs whileseated; and placing your arm over the back of a chair in which anotherperson is seated. | | | | || | | | | | | | || Time deposits: | | | | | | | || Less than 3 months | - | - | - | | | | || 3 Months to 6 months |1 . The most popular form of business organization among foreign investorsis the private limited company. | | | | || 3 months |12.25-15.5 |5.5 -7.5 |2.25-6. Industrial Production - Selected Major Products| |unit |1997 |1998 |1999 || Sugar | ' tons | 6,188 |3,921 |5,63 || Beer | ' | 874,231 |1,976,98|1, 42,22|| |liters | |3 |1 || Soft drinks | million | 1,769 |1,592 |1,384 || |liters | | | || Liquor | 2 , |45,813 |45,757 |67,315 || |liters | | | || Cigarettes | metric | 43,387 |34,585 |31,146 || |tons | | | || Jute Products | metric | 39,168 |25,55 |18,45 || |tons | | | || Synthetic Fiber | metric |551,41 |7 2,352 |693,727 || |tons | | | || Pulp | metric |361, 82 |n.a. |n.a. |3 . 22, 14). (Often, however, the Thai counterpart is late, but thevisiting businessperson must be on time.) All preliminary business meetings must be at the Thai host's officeand formal business attire is required. || |tons | | | || Televisions | million | 7.46 |n.a. -5. |3.75 | | | | || 2 years and over |(-) |(-) |(-) | | | | || |1 . Non-Immigrant visas provide the holder with eligibility to apply for awork permit, and allow the holder to work while the work permit applicationis being considered. |5 . The King and Queen are the most respectedpersons in Thailand. ||Sources: Bank of Thailand, Ministry of Industry, and ||Electronics Industrial Association of Japan | Exports by Product Classification| (million baht) || ||1997 ||1998 ||1999 || || ||Value ||Growth ||(%) ||Value ||Growth ||(%) ||Value ||Growth ||(%) || || Manufactured Products ||1,489,468 ||29.4 ||1,849,753 ||24.2 ||1,865,7 5 || .9 || || Agricultural Products ||183,987 ||1 .1 ||211, 92 ||14.7 || 184,947 || -12.4 || || Fishery Products ||72,234 ||13.7 ||89,268 ||23.6 ||78,851 || -11.7 || || Others || 61,459 || 1 4.2 || 97,341 ||58.4 || 84,462 || -13.2 || || ||Total Exports ||1,8 7,148 || 28. 34 Limsamarnphun, N. The Thai economy's growth rate averaged over eightpercent during this decade, and was expected to move into place as theworld's eighth largest economy by the year 2 2 . 3534: 22(2) Thailand QuikFacts (1995). -5. (1997, Nov. Punctuality and promptness is essential for doing businessin Thailand. - not available; * - million baht; ** - ||Jan.-Sept. -12.75 |8.5 -8.75 | | | | || Minimum loan rates |15.25 |11. |n.a. | | | | || || Note| | figures in parenthesis show ceiling ||s: |( |rates || |) | || * | -| as offered by four big commercial || | |banks || ** | -| averages of borrowing rates quoted by|| | |12 finance companies || *** | -| average of loan rates quoted by 18 || | |finance companies || | | ||Sourc|Bank of Thailand ||e: | | References Ciminero, G.L. -11.5 |6. "It hoped that it would still have anindependent monetary policy. -12. Because of this openness, Thailand wasthe only nation in Southeast Asia to escape colonial rule. The impact that this had on competition was sizable, since it forcedboth Thai and foreign companies to begin competitive price cutting to reactto the pressure of foreign capital from flooding the Thai market toarbitrage for interest rate differentials(Na Thalang, 1997 15). Table 1: Investment expenditure in infrastructure projects (million US dollars)|Item |6th plan |7th plan | 8th plan || |(1986-1991) |(1992-1996) |(1997-2 1) ||Energy |9,352 |14,392 |35,4 ||Communication |2,768 |7,536 |24,48 ||Transportation |7,564 |24,548 |55,88 ||Others |1,176 |5,424 |1 ,48 ||Total |2 ,86 |51,9 |126,24 |Source: National Economic & Social Development Board Legal Aspects of doing business in Thailand As in most countries, there are three kinds of business organizationsin Thailand: Sole proprietorships, partnerships, and limited companies. Thailand recognizes three kinds of intellectual property rights:patents, trademarks, and copyrights. || |tons |** | | || Printing paper | metric |33 ,488 |n.a. -7.5 |2.75-5.75 | | | | || 12 months |11.5 -15.5 |6. In anironic symmetry, linking the baht to the dollar accounted for Thailand'sastounding economic growth, and unlinking it, as it did in July of 1997 ledto the current downturn. A balance sheetmust be prepared once a year and filed with the Department of Revenue andCommercial Registration. Thailand: Meltdown in progress?Business Week International. | | | || Lending rates charged on finance companies | 12.5 |12.5 |4. Instead of using the foreignsavings to finance export-oriented industries, the borrowers recklesslyspent the money to speculate in the property and stock markets. Coupled with a favorable climate, ample arable land and richnatural resources, Thailand is a good place for its people to live -- and agood place to do business. No longer gatekeeper and control agent of private business, Governmentfacilities a growing privatization of state enterprises, as well asmovement toward contracting on a turn-key basis business and industrialorganizations which were previously state monopolies. National Geographic atlas of the worldRevised Sixth Edition. |4.5 |3. Because of the openness of the Kings who ruledThailand, and their willingness to learn all they could of the Westernways, the nation was able to build an industrial base that includestextiles, cement, electronics, petroleum, refining, transportationequipment, tourism, food processing. While Thai men have traditionally been expected to become Buddhistmonks for at least three months of their lives, the practice is no longerstrictly enforced, and wealth is now also seen as a reflection of virtue. |n.a. (1997, July 7). |6. -5.75 | | | | || | | | | | | | || Loan rate: | | | | | | | || Minimum (average)*** |17.33 |17. With a growing number of significant overseas acquisitions, Thaientrepreneurs are becoming more active , visible and successful on theworld stage. The Eighth National Economic and Social Development plan ispresently being implemented, covering the period 1997-2 1. || |units | | | || Integrated | million | 4, 1 |3,929 |5,182 ||circuits |units | | | || Passenger cars | units | |32, 8 |72,716 || | |112, 41 | | || Commercial | units | 248,262 |126,122 |254,517 ||vehicles | | | | || Motorcycles | units | |561, 37 |725,425 || | |1, 55,555| | || | | | | || Tires | metric | 139,7 8 |131,397 |157,897 || |tons | | | ||Note: n.a. -13. Conflicting policies blamed for crisis.The Nation. .(BOP) account deficit of dangerous proportions: 8.3% in 1995, 7.9% lastyear and estimated at 7.5% this year even before the devaluation"(Ciminero,1997, Nov. Thekingdom is now the world's primary producer of rubber, claims the region'slargest fishing fleet, and is the world's largest exporter of canned tuna,canned pineapple and frozen prawns. Independent Economic Advisory Alert. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.