What Products & Services Is Thailand Buying From Russia?
Какие товары и услуги Тайланд покупает в России?
Thailand is a popular light manufacturing, and tourism hub for foreign investors in Asia and the ASEAN region, which also includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore & Vietnam.
These countries enjoy free trade between each other, meaning subject to rules of origin regulations, production in one country can be exported, duty free, to the other. ASEAN also has Free Trade Agreements with China and India. This means, given the right circumstances, a Russian-owned manufacturing entity could export, duty free to these additional markets from the Thailand. This is especially true of Thailand to Malaysia, which is situated to the south.
Thailand is also of specific interest to Russian investors as it has also expressed willingness to negotiate a Free Trade Agreement with the Eurasian Economic Union. Research on the potential for Russian exporters and manufacturers to assess the Thai market should be underway for Russian businesses looking to expand into Asia.
Thailand is a good choice as a developing trade and services partner for Russia, it has a growing medium-high per capita income level of US$7,800, and a population base of 69 million. It is therefore a significant consumer market, with the additional benefit of being an ASEAN manufacturing centre. Statistics from DBS Bank on this can be found here and Mintel here.
Current Russian trade trends with Thailand are also on an upwards path, as we can see in these statistics courtesy of Trading Economics (figures in millions of US dollars) and grew steadily during the course of 2019.
It is worth noting that Russia also has a Double Tax Treaty with Thailand, which if used correctly can reduce profits taxes for Russian entities based in the country. Professional advise should be sought.
In terms of exports to Thailand, Russia currently sells a variety of products, ranging from oil and gas to fertilizers and automotive parts. A breakdown can be seen here.
It should be noted that there are Quality Control standards differences between Russia and ASEAN nations, and Russian exporters should be aware of these. We covered this in the article Quality Control Challenges For Russian Exporters To ASEAN.
Our practice, Dezan Shira & Associates, has offices in Thailand and are familiar with the protocols concerning import/export and can advise on local market conditions. Please contact Maria Kotova at russia@dezshira.com for assistance both with local market intelligence and business plan development in addition to corporate establishment, tax advisory and on-going corporate compliance in the country.
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About Us
During these uncertain times and with sanctions in place, our firm helps Russian companies relocate to Asia. We also provide financial and sanctions compliance services to foreign companies operating in Russia. Additionally, we offer market research and advisory services to foreign exporters interested in doing business in Russia as the economy looks to replace Western-sourced products. For assistance please email russia@dezshira.com or visit www.dezshira.com
