Taiwan and Thailand sign investment agreement, marking major milestone in bilateral economic and trade relations
Press Release / Taipei Economic and Cultural Office in Thailand
June 28th, 2024
On June 27, the Agreement for the Promotion and Protection of Investments between Taiwan and Thailand was officially signed by Mr. Chang Chun-Fu, Taiwan’s representative to Thailand, and Mr. Narong Boonsatheanwong, Executive Director of the Thailand Trade and Economic Office in Taipei. Thailand has now become the fifth trading partner to sign an investment agreement with Taiwan since 2016, following earlier agreements with the Philippines, India, Vietnam and Canada, marking a significant milestone in the development of economic and trade relations between the two sides.
Prior to these negotiations, Taiwan and Thailand had signed an earlier investment agreement in 1996 – nearly 28 years ago. As our businesses have evolved and investment between our two economies has diversified, however, the 1996 agreement no longer met the needs of overseas investors, and a new agreement was negotiated to provide more comprehensive protections and increase investor confidence.
Representing a meaningful upgrade to the earlier version, this Agreement primarily includes the following features:
- Investment promotion and regulatory transparency: The Agreement will ensure that investment application procedures remain clear and transparent. If any new investment-related regulations or measures are enacted or amended, they will be announced immediately.
- A designated window for investment-related matters: The Agreement will require the two sides to establish a designated window to answer investment-related questions, allowing investors to understand changes to the investment environment as soon as possible.
- Joint resolution of investment disputes: The Agreement will require the establishment of a joint investment committee to facilitate consultations, negotiations and settlements of investment disputes, thereby avoiding lengthy dispute settlement procedures and improving the efficiency of dispute resolution.
- Protection of indirect investment: In addition to protecting traditional forms of investment, the Agreement will also cover indirect investments by enterprises on both sides that have been made through third countries or economies.
- Necessary measures for the public interest: Finally, the Agreement will allow the government to reserve regulatory policy space for the realization of public health, environmental protection, labor rights, consumer protection, financial stability, and other areas of public interest.
According to trade and investment statistics, since the implementation of the New Southbound Policy in 2016, bilateral trade volume between Taiwan and Thailand has increased 74.6% from US$9.3 billion to US$16.24 billion. At the same time, bilateral investment has also risen by 119.8% from US$3.18 billion to US$6.99 billion, reflecting Thailand’s status as one of Taiwan’s main trading and investment partners in the ASEAN region.
With the restructuring of the global supply chain, Southeast Asia has become a popular target of Taiwanese investment, with Thailand becoming a preferred destination for Taiwan’s electronics and electrical components industry, among others. Signing this Agreement now not only provides comprehensive protections for Taiwanese businesses seeking to invest in Thailand, but also reflects Taiwan’s broader strategy to help enterprises diversify their investment risks and remove investment barriers. By signing investment agreements with the Philippines, India, Vietnam, Canada, and now Thailand, Taiwan has demonstrated that it is committed to strengthening the resilience of its businesses’ overseas investments.
