Thailand-Australia Free Trade Agreement
Thailand and Australia made known each side’s intention to negotiate and enter a free trade agreement in 2003. On January 1 of 2005, the Thailand-Australia Free Trade Agreement (TAFTA) came into effect and since then, the said agreement has played an integral part in the increase of movement of investments and trade between the two countries.
Benefits of the TAFTA
Australian goods that were imported to Thailand used to be met with considerably high tariffs. Also, Thailand’s laws on foreign investments are viewed as very limiting to multinational business entities including those from Australia. Further, the process in establishing and conducting business opportunities in the Kingdom by foreign investors were often viewed as highly complex.
With the agreement, the issued mentioned above were greatly addressed upon and this includes the reduction and gradual elimination of tariff imposed by Thailand on Australian goods on specific years, 2015, 2020 and 2025.
Australian companies can now access and establish business interests that are previously off-limits to them such as mining and the hospitality sector (hotel and restaurant) with ownership up from 49% to 100% on some sectors and 60% on others (figures are dependent on the type of industry).
Another benefit for Australian investors and employers in Thailand is that when the need for them to bring in labor from outside of the Kingdom, they may now able to do so easily as the same agreement forwards easy application, access and extension of visa and work permits. This also includes the reduction of number in required documents for visa and work permit application.
The Need for Consultation
Australian investors may still find the process in establishing businesses in Thailand complex and difficult even in the advent of the Thailand-Australian Free Trade Agreement. Nonetheless, consultations with proper resource entities and persons would further reveal the beneficial outcomes of these companies when engaging Thailand as their new base for operations.