Regional Round-Up: Thailand Q4 2025 (Year in Review Edition)

The Bank of Thailand projects gross domestic product (GDP) growth to slow to 1.6% in 2026 from around 2.2% in 2025, reflecting subdued global demand and continuing headwinds from the impact of US trade policy and a strong baht. The International Monetary Fund has issued an identical 1.6% forecast, while the World Bank anticipates approximately 1.7% growth. SCB Economic Intelligence Center (EIC) projects Thailand’s economy to expand by only 1.5% in 2026, down from 2% in 2025, marking the lowest growth in three decades outside crisis periods.

Private investment is projected to see moderate growth in 2026, driven primarily by foreign capital entering emerging industries that benefit from BOI incentives. The primary sectors comprise electrical appliances and electronics, data centres, as well as the automotive industry.

Thailand has announced a national strategy to develop its semiconductor industry, focusing on power semiconductors, sensors, photonics, discrete components, and analogue chips. Aimed at establishing complete value chains, the plan was outlined at the 7 January 2026 meeting of the National Semiconductor and Advanced Electronics Policy Committee meeting.

The commitment to enhancing the nation’s digital infrastructure and positioning Thailand as a premier Digital Innovation Hub in the Association of Southeast Asian Nations (ASEAN) was evident at the first 2026 board meeting of BOI on 6 January 2026, with the official approval of seven significant data centre and data hosting projects.

With the Cabinet’s approval of the main principles of the draft Climate Change Act in December 2025, the next phase involves drafting secondary legislation and coordinating with relevant agencies and industries. Pending details include carbon tax rates, Emissions Trading System (ETS) allocation rules, Carbon Adjustment Mechanism (CBAM) implementation, and Climate Fund mechanisms. High-emission industries should prepare for the increasing financial liabilities tied to environmental costs under the polluter-pays principle.

It is likely that 2026 will see heightened examination of shareholding arrangements suspected of violating the nominee provisions under the Foreign Business Act. With effect from 1 January 2026, newly incorporated companies where a foreigner is an authorised director in a wholly Thai-owned company, or where foreign shareholding is less than 50%, are required to submit a three-month bank statement for all Thai shareholders evidencing the withdrawal or transfer of funds consistent with the investment amount and the date of payment for shares.

In 2026, PDPC is expected to continue the ramp-up of its personal data protection enforcement activities, and organisations should anticipate deeper scrutiny as the PDPC increases proactive monitoring, and moves closer to achieving its stated goal of higher accountability and stronger nationwide compliance standards.

It is expected that the Trade Competition Commission of Thailand will advance both its enforcement of Draft Guidelines on unfair trade practices for multi-sided digital platforms and amendment of the Trade Competition Act, signalling a firmer and more structured enforcement environment for online marketplaces as regulators work toward clearer rules, broader investigative powers, and heightened scrutiny of platform practices.

With the cancellation of the de minimis exemption waiving import duties on goods valued at THB1,500 or less, with effect from 1 January 2026, further efforts will be made to address the impact of cross-border e-commerce in low-cost and tax-free goods on small to medium sized enterprises in Thailand.

It is also possible that 2026 will see efforts to soften the 2024 rule that taxed all foreign-sourced income when remitted into Thailand, regardless of when earned, in an effort to encourage Thai tax residents to bring back foreign funds to stimulate the local economy.