Businesses in the European Union are interested in investing in all sectors in Thailand, while urging the government to accelerate regulatory reforms to enhance the investment climate.
Noel Clehane, vice-chair of the EU-Asean Business Council (EU-ABC), highlighted several industries, such as life sciences, biotechnology, low-carbon manufacturing, high-tech manufacturing, financial services, and fast-moving consumer goods.
"Thailand is an ideal location as a central geographic hub in the region with a well-developed industrial ecosystem. The country has a sizeable consumer market and is a hub for the broader Asean market of almost 700 million people," he said.
According to the 11th EU-Asean Business Sentiment Survey published in 2025, about 57% of European firms intend to increase their investment in Thailand.
Despite Thailand's attractiveness, Mr Clehane noted concerns regarding the country's more than 7,600 ministerial regulations, many of which are considered outdated, unnecessary and inconsistent.
He pointed out that the Foreign Business Act 1999 presents several specific barriers that primarily affect services and high-tech industries looking to invest in Thailand.
A key obstacle is ownership restrictions, which limit foreign ownership to 49% in certain sectors, effectively requiring foreign firms to enter into a joint venture with local partners.
"This ownership cap is a major deterrent for companies with sensitive intellectual property [IP] such as those in the artificial intelligence [AI] or specialised service industries. Investors are often unwilling to surrender 51% of their operations because they fear losing control over their knowledge," he noted.
European businesses also said that the licensing and permit processes are complicated. They are looking for a more predictable and transparent regulatory environment in Thailand.
He supported Thailand's proposals to introduce an omnibus law, removing certain sectors from the Foreign Business Act's restrictive lists and broader regulatory reforms to make the country more investor-friendly.
DEMOGRAPHIC CHALLENGE
Thailand is ranked 26th globally among 70 economies in the 2026 IMD World Competitiveness Ranking, trailing Singapore and Malaysia but ahead of Vietnam.
To maintain its competitiveness, Mr Clehane recommended that Thailand address long-term structural issues, including an ageing population and the need for digital upskilling.
"Thailand must invest more in digital upskilling. While the country has highly educated people in industrial manufacturing, it has likely lagged behind some competitors in developing digital skills and the industries of the future, which are knowledge- and idea-based."
Thailand-EU FTA
Mr Clehane said that since talks on the Thailand and EU free trade agreement restarted in 2023, negotiations have progressed well to settle easier issues. Remaining topics are more difficult, including market access for goods particularly for sensitive agricultural and industrial products; sanitary and phytosanitary measures, services and investment; government procurement; digital trade; IP rights; and energy and raw materials.
"For Thailand, the greatest challenge is securing access for its agricultural products in EU markets, while for the EU, the most difficult issue is investing in the service sector in Thailand," he said.
However, he believes that both sides possess the political will to overcome these obstacles and will reach mutually beneficial solutions.
"I do believe that negotiations would be agreed in principle later this year, or in early 2027," he said.
Bilateral trade between the EU and Thailand reached 1.64 trillion baht in 2025, with European companies holding investment stocks worth more than 953 billion baht in Thailand. A modern FTA can create a stronger platform for both trade and investment, Mr Clehane added.
The EU currently has FTAs with Vietnam and Singapore. It finalised FTA negotiations with Indonesia in September 2025 and is negotiating FTAs with Thailand, the Philippines and Malaysia.
The bloc aims to conclude the deal with the Philippines later this year and Malaysia in 2027.
