HSBC signs deal with BOI to promote Thailand as investment hub

CEO Giorgio Gamba’s remarks came on Wednesday shortly after he signed a memorandum of understanding (MoU) with Thailand’s Board of Investment (BOI) to promote the kingdom as Southeast Asia's investment hub and assist in capturing foreign direct investment (FDI) opportunities.

The partnership aims to provide a one-stop advisory for investing in Thailand by leveraging HSBC's international networks in 62 countries and territories, international experience, and innovative digital banking platforms to assist foreign investors in finding greater opportunities to grow their businesses in Thailand. 

Gamba’s confidence in Thailand's growth potential appears to contradict the latest outlook from several leading financial institutions, including the World Bank that recently reduced the country's GDP growth forecast from 3.2% at the start of the year to 2.4%.

Citing the bank’s performance last year, its best years in terms of profit before tax, and given that a significant part of its business is inbound investment into the country, the result best reflected what companies and investors thought of Thailand.

"The news is very positive. A number of multinational corporations are looking to come to Thailand to make investments, to set up plants and offices in the next two years," he said.

According to the HSBC Global Connections survey, 18% of multinational firms without current operations in Thailand intend to enter the Thai market in the next two years. It is evident that Thailand’s attractiveness as the region’s investment hub among global investors remains strong.

"Through this unique partnership and with HSBC’s market-leading cross-border banking solutions, we aim to achieve the goal of unlocking the investment opportunities to facilitate further inflow of FDI to Thailand,” he said.

When asked if he was worried about Thailand's current economic slowdown, he said HSBC operated a niche business here.

"We do not do retail banking. We don't do small and medium-sized business banking. We don't provide real estate financing. So, from the perspective of inbound FDI and multinational interest in establishing businesses in Thailand, that growth trajectory is very strong, and from our perspective, everything is looking good," he said. 

Gamba clarified that HSBC's role cannot have the same impact as the BOI's incentives, but it was still the bank's responsibility to ensure that investors and multinational corporations are aware of Thailand's excellent human resources, robust regulatory framework, and many other benefits of conducting business there, in addition to the highly stable and dependable ecosystem that HSBC has established here.

According to an HSBC survey, 37% of the companies surveyed had already established a presence in the Kingdom. Thailand's skilled workforce is regarded as the most appealing feature, followed by the country's expanding digital economy and middle-class population. Thailand has long been a major regional manufacturing hub, and it continues to play an important role in many global supply chains, he added.

Meanwhile, Thailand is already ASEAN's largest automaker, accounting for half of total production across all countries in the region, making it an appealing location for large-scale investments from major economies in the region and beyond, particularly in electric vehicles.

"We look forward to supporting the BOI on investment roadshows and in developing new trade and investment corridors, particularly in smart electronics and digital economy,” Gamba said. 

BOI secretary-general Narit Therdsteerasukdi expressed delight at the latest collaboration with HSBC.

He pointed out that strategic partnerships with the world's largest banking and financial service institutions, such as HSBC, are a critical catalyst for the mission to increase FDI inflows into Thailand.

According to the BOI, foreign investors' applications for investment promotion in the kingdom have already increased by 38% in 2023, with a 72% increase in total investment value. 

"With the readiness to be a regional production hub and regional headquarters, Thailand can capitalise on the opportunities offered by global companies' plans to relocate to a resilient long-term base for their investment, particularly in innovative and sustainable industries," he said.  

In addition, he expected the MoU to assist Thailand in gaining access to HSBC's extensive client network of leading corporate corporations worldwide, as well as data-driven insights into Thailand's investment landscape.

The move will improve Thailand's competitiveness and business environment by providing specialised support for international business expansion, he noted.

HSBC will also promote Thailand as ASEAN's investment hub through international roadshows in key markets including China, Hong Kong, India, Saudi Arabia, ASEAN, Europe, and the United Kingdom.

"We are confident that HSBC's international connectivity can bridge Thailand with international corporates, many of which operate within our strategic sectors, including the EV supply chain, semiconductor and upstream electronics, digital, new energy, and international headquarters," Narit said. 

While no numerical targets have been set as a result of signing this MoU, Gamba pointed out that the bank's goal is simply to be as supportive of Thailand's national plan as possible.

"It is clear that Thailand wants to achieve many goals in terms of FDI and strategic sectors. All of these sectors are extremely important to HSBC. So, while we haven't set a specific goal, the reality is that Thailand's success can also be ours. The more FDI in Thailand, the better it is for both international banks like HSBC and domestic banks," he said. 

The MoU event was also attended by 20 officials from various embassies and chambers of commerce, including the British, Vietnamese, Australian and French embassies, the China Council for the Promotion of International Trade, the Hong Kong Economic and Trade Office, the American Chamber of Commerce, the Korean-Thai Chamber of Commerce, and the British Chamber of Commerce. 

HSBC's parent company, HSBC Holdings plc, is headquartered in London. The company has offices in 62 countries and territories. With assets of $3.001 trillion as of March 31, it is one of the world's largest banking and financial services organisations.