Concern that increasing investment from Singapore might be from China

NESDC warns that some Chinese companies are re-registering in the island nation to avoid Trump’s increasing tariff walls

The exponential increase in foreign direct investment (FDI) from Singaporean companies applying for promotional privileges from the Board of Investment (BOI) over the past five years has led to concerns that these companies may actually be Chinese firms registering in Singapore to avoid tariff walls from the United States.

The National Economic and Social Development Council (NESDC) reported that Singaporean companies applied for BOI privileges for investment worth 16.36 billion baht in 2020, with the amounts increasing to 29.66 billion baht in 2021, 44.28 billion baht in 2022, 159.38 billion baht in 2023, and 357.54 billion baht in 2024.

Danucha Pitchayanan, NESDC secretary-general, noted that Chinese companies have been moving their production out of China to avoid trade restrictions and tariff barriers from the US.

Some of these companies register in Singapore to change their nationality before investing in Thailand, he said.

“If the US conducts an investigation, it will be able to determine whether these are Chinese companies. Not only might this raise the possibility of being subject to tax measures but it could also lead to increased scrutiny of Thailand's exports,” he warned.

Danucha advised a mechanism to ensure that Thai companies hold a majority stake in foreign companies applying for BOI promotion. This can be done by forming a business partnership with Thai companies or registering as a joint venture, so that the company legally becomes a Thai business.

Additionally, extra incentives could be provided for foreign companies with technology in target industries that Thailand aims to develop, on the condition that they register as a Thai company so that Thailand benefits from technology transfer.

“This would signify that the investment is for actual production and technology development in Thailand, rather than being a strategy to avoid US tariffs,” he said.

Thailand received a total of 832.11 billion baht worth of FDI in 2024 across 2,050 projects, an increase of 25% year on year.

Singaporean companies were the biggest contributor at 357.54 billion baht, followed by those from China (174.63 billion baht), Hong Kong (82.26 billion baht), Taiwan (49.96 billion baht), and Japan (49.14 billion baht).

The top five enterprises in which Singaporean companies invested the most last year were the digital industry, electrical and electronic components, automotive and parts, tourism, and petrochemical and chemicals, respectively.

(2025/03/04-00:00)