Philip Hemmings
OECD Economic Surveys: Thailand 2025
Abstract
Thailand’s productivity growth has been relatively low over recent years. Between 2015 and 2023 labour productivity growth averaged 2.1%, compared with 4.8% between 2010 and 2015. Boosting the country’s productivity performance is critical to ensuring further catch-up in economic development. Ensuring product market regulations and policies do not hinder and, where possible, strengthen market competition is a key channel for improving productivity. There is scope to improve policy settings around foreign investment, trade, state-owned enterprise and competition legislation. Campaigns to streamline government red tape and continued efforts to combat corruption would also improve resource allocation and productivity.
Sustained increases in labour productivity are core to raising output per capita and material living standards, given that there are limits as to how far labour-force participation can be raised. Furthermore, in emerging market economies, gauging the capacity for advance on the latter is complicated by extensive informal economic activity. For Thailand, population ageing means the country faces a headwind in advancing participation. Increase in output per employee is therefore the main channel for increase in output per capita over the longer term. However, Thailand has experienced relatively low labour productivity growth in recent times. Between 2015 and 2023, labour productivity growth averaged 2.1%, compared with 3.7% between 1990 and 2010 and 4.8% between 2010 and 2015. Other countries have also seen a drop in productivity growth, yet Thailand’s has been particularly significant (Figure 2.1). Thailand’s performance in total factor productivity has also been weak; between 2015 and 2023 it averaged zero growth (Figure 2.1). Weak total factor productivity growth indicates scope to better tap into new technologies and for greater levels of innovation. These shortfalls in performance underscore the importance of ensuring there are good conditions for advances in productivity, especially that in the business sector.
This chapter focuses on issues relating to product-market regulation. This area of regulation is key for creating a good environment for business-sector productivity growth. However, it is not the only issue and needs to be accompanied by progress on other fronts. For instance, Chapter 4 of this Survey considers how to expedite transition away from low productivity informal employment, including via strengthening education and skills. Past Survey coverage on productivity-related issues has considered green innovation (2023), productivity in agriculture (2020) and trade in services (2023). This chapter first examines Thailand’s standing regarding product-market regulation using the OECD’s Product Market Regulation (PMR) indicator. The chapter then examines selected policy issues: facilitating trade and attracting foreign investment; strengthening competition; paring back regulation red tape; and, improving governance.
Note: Per-hour labour productivity is calculated by dividing total output by total hours worked. Total factor productivity growth is the residual growth once hours worked and changes in capital stock are accounted for. Abstracting from the business cycle using long-run averages, total factor productivity is an indication of output gains from technological change and innovation. In the period 2015-2023 Thailand’s total factor productivity averaged zero growth.
Source: APO Productivity Database 2025.
Quantitative indicators confirm there is considerable scope to make Thailand’s regulation more competition friendly. Thailand has recently been incorporated into the OECD’s product market regulation (PMR) indicator database (Box 2.1). Results indicate that the country’s regulation is among the least conducive to competition (Figure 2.2). Thailand’s aggregate score is 2.4, which ranks 4th most restrictive out of the 47 countries covered by the data (the scores for Türkiye, China and South Africa are slightly higher). This score signals substantial scope for improvement. Like most other emerging market economies covered by the data, Thailand’s score is markedly higher than those of many OECD countries; the OECD average is 1.3. Countries with particularly low scores include Sweden, Ireland, the United Kingdom and the Netherlands.
The PMR indicator is a composite indicator measuring distortions to competition that can be induced by regulatory barriers to entry and expansion faced by firms across the economy, as well as by the involvement of the state in the economy.
The PMR indicator relies on a qualitative dataset of laws and regulations that are in place in the surveyed countries at a specific point in time and assesses them against internationally accepted best practices. This approach ensures that the results reflect the ‘de jure’ policy setting, instead of the subjective assessments by market participants or country authorities. This enhances the comparability of the results, as it eliminates potential discrepancies in the evaluation of similar regulations across different geographic and temporal contexts.
This qualitative information is turned into quantitative values by scoring against internationally accepted best practices. The scores range from 0 for the most competition enhancing regulatory approaches to 6 for the least competition friendly. These scores are aggregated in 15 low-level indicators according to regulatory domains. These indicators are then averaged, following a pyramidal structure, until a single economy-wide value is attained, as shown in Figure 2.3. The PMR data for Thailand the PMR database was developed by OECD in collaboration with the Asian Development Bank.
Source: OECD
Note: Thailand is shaded in red, while other non-OECD member countries are shaded in grey.
A higher score on the OECD Product Market Regulation (PMR) indicator indicates more restrictive regulatory settings as regards market competition. The maximum possible score is 6.
Source: OECD-ADB 2023-2024 Product Market Regulation database.
Examination of the PMR data sub-indicators reveals areas where the shortfalls may be greatest. The data suggest challenges are somewhat greater in barriers to market entry compared with distortions induced by state interference (Figure 2.3). Nevertheless, there are instances of poor scores in the latter, including state involvement in business operations in network sectors and in public procurement. As regards barriers to entry, scope for more competition-friendly regulation is particularly large in the sub-indicator on the communication and simplification of administrative and regulatory burdens. Scope for improvement is also sizable as regards barriers to entry in network sectors. Thailand scores poorly in all three measures relating to barriers to trade and investment.
Key areas with scope for improved structures and regulatory settings highlighted by the PMR data are explored below, including foreign direct investment and trade, state-owned enterprise, competition and regulation and red tape. Selected sub-indicators are used to illustrate and benchmark Thailand’s performance in these areas.
Notes: Scoring:
(++)/ (--): Good /Poor performance: indicator score ranks among top (bottom) 5 OECD performers;
(+)/(-): Above / Below average performance; score at least 15% better (worse) than OECD average;
(=): Around average performance; score is within 15% of the OECD average score.
Abbreviations: SOE, State Owned Enterprise; LLC, Limited Liability Company; POE, Publicly Owned Enterprise; FDI Foreign Direct Investment.
Source: OECD-ADB 2023-2024 Product Market Regulation database.
Thailand has received considerable Foreign Direct Investment (FDI) inflows over recent decades, which testifies to the competitiveness of its manufacturing sector. FDI has been an important channel for productivity gains, including through integration into global supply chains, notably in the automobile and electronic goods sectors. However, as measured by inward foreign investment relative to GDP, Thailand has been less successful in attracting FDI than some peer countries. Between 2015 and 2023, Thailand accumulated FDI worth 11% of annual GDP, considerably less than Malaysia and Viet Nam, which accumulated 25% and 42% respectively (Figure 2.4), The COVID-19 pandemic appears to have affected Thailand more strongly than peers, but FDI inflows in other years have been modest too. Research on Thailand’s performance in attracting FDI variously points to various issues including cost challenges (relatively high minimum wages compared with some peers), domestic market size, skills and workforce growth and FDI regulations (TTB Analytics, 2024[1]; NESDC, 2024[2]; Phicha and Prajongkan, 2024[3]). Investment in manufacturing sectors typically accounts for a large share of FDI inflows, notably contributing to the expansion of the automobile and electronic goods sectors. Thailand’s Board of investment (the main body promoting investment) reported a strong surge in inward FDI in 2024 (Board of Investment, 2025[4]). Interestingly the value of FDI in data centres and cloud services surpassed that of traditional leading sectors, notably the electronics and electronic appliances sector.
Cumulative FDI inflow, 2015 onwards
The measure in year t comprises FDI as a percentage of GDP in year t plus the value in t-1 with a start value in 2015.
Source: UNCTAD.
2.3.1. Active policies to attract investment continue
FDI policy is currently guided by the Thailand Investment Promotion Strategy, 2023-2027 (Board of Investment, 2023[5]). The Strategy focuses on promoting high-technology, innovation, and green industries such as electric vehicles in selected locations. These are the target sectors in four Special Economic Corridors (SECs). Investment promotion policy also includes ten Special Economic Zones (SEZs). Tax incentives managed by the Board of Investment (Box 2.2) are a key policy tool for both channels of support. Among the recent measures, in January 2025 the government approved draft legislation introducing new corporate income tax reductions to attract investment into the SEZs. This measure aims to stimulate economic activity, enhance cross-border trade, and strengthen Thailand’s position as a regional investment hub. Ensuring cooperation among these zones would help maximise the returns to the tax incentives, as underscored in the 2023 Survey (OECD, 2023[6]). As for all such targeted tax incentives, careful design and close evaluation is needed to ensure they represent value for money. Ongoing changes to the international tax architecture, notably the OECD global minimum tax initiative, are relevant in this context (OECD, 2022[7]). Measuring the right policy outcomes also matters for successful policy evaluation. For instance, at present the Board of Investment focuses on the number of investment promotion applications and approvals, while a greater focus on actual investment may also be useful. In addition, more consideration could be given to ensuring that FDI generates local employment and involves the participation of local SMEs in supply chains.
Complementing the support for businesses in zones and corridors, Thailand has created special visa categories to attract high-skilled foreign workers. Among the recent developments, in January 2025, the SMART Visa programme (established in 2018) was streamlined to only provide a visa for start-up entrepreneurs (MPG, 2025[8]). Meanwhile the Long-Term Resident (LTR) Visa programme (established 2022), which includes tax and non-tax benefits, has been expanded to cover more industries and professional categories. In addition, the criteria have been made more favourable: requirement of prior work experience has been removed and the employer-revenue floor for the work-from-Thailand category has been lowered. Also, income requirements have been removed for the wealthy-global-citizen category; the focus is now on the stability of assets and long-term investment in Thailand. Also, dependents’ rights have been expanded.
The Office of the Board of Investment operates under the Office of the Prime Minister. Its core roles are to promote both investment into Thailand and Thai overseas investment.
The Board offers a range of incentives to business. These are granted according to explicit eligibility criteria; scope for discretionary intervention on which businesses receive support is limited. The Board’s tax and non-tax incentives are among the main instruments for government policies targeting certain sectors of the economy.
Tax incentives can comprise (depending on circumstance): exceptions/reductions on corporate income tax, import duties and accelerated tax depreciation on some business costs. The timeframes for the incentives can be quite long; sometimes sufficiently long for an investment project to never be subject to corporate income tax. Such exemptions can bring windfall gains to multinational enterprises.
Non-tax incentives can comprise the granting of entry permits, including for skilled workers and experts, permits for land ownership and permits to remit foreign currency.
The incentives systems include additional support for investment in provinces with low average income, certain industrial areas and in Special Economic Corridors (SECs) and Special Economic Zones (SEZs).
Source: (PWC, 2025[9])
2.3.2. Selective easing of regulation could boost inward investment and trade
Regulations on FDI in Thailand are relatively tight. According to the OECD’s FDI Restrictiveness Index (a component of the Product Market Regulation indicator system) Thailand’s regulations are considerably more restrictive than the OECD average. Within the region, Thailand is on a par with India and Vietnam, but less restrictive compared with Indonesia, Malaysia and the Philippines (
Figure 2.5). As in many countries, restrictions are applied to specific sectors of the economy that limit the extent of foreign ownership at the level of individual companies or sectoral aggregates (Box 2.3). Such restrictions risk blocking the entry of potentially high-performing competitors (OECD, 2024[10]). Thailand’s limitations apply to a wide range of sectors. In the Foreign Business Act (1999) special restrictions apply, for instance, to rice farming and processing, construction, retail, food and drink outlets and hotels (Thailand Law Online, 2025[11]). FDI restrictions on some services sectors partly explain why Thailand also scores poorly in the OECD’s Services Trade Restrictiveness Index, including in comparison with ASEAN peers (Figure 2.6) (OECD, 2025[12]). In May 2025, in a welcome move, the government approved an initiative to reform the Foreign Business Act that aims to modernise the legislation, ensuring its alignment with current economic, social, and technological contexts. A working committee has been established to oversee the legal reform. The planned reforms include lower FDI restrictions for sectors such as digital services, renewable energy, waste management, carbon-reduction technologies and logistics.
The Foreign Business Act (1999) categorises businesses into three lists:
List 1: Foreign business operators that are strictly prohibited from engaging in any of the business activities on list 1, such as media outlets and rice farming.
List 2: Foreign business operators must obtain a foreign business license (FBL) from the Department of Business Development and secure approval from the Thai cabinet. In addition, the company must be at least 40% Thai-owned (this may be reduced to 25% with special approval from the Minister of Commerce and the Cabinet), and at least two-fifths of the board of directors must be Thai nationals. This list covers business activities related to national security, such as arms trading.
List 3: Foreign business operators must obtain a foreign business licence (the approval requirements are lower than for businesses under List 2), with approval from the interagency Foreign Business Committee. List 3 covers business activities in which Thai nationals are deemed not yet ready to compete with foreign businesses.
Source: (Board of Investment, 2025[13])
OECD FDI regulatory restrictiveness index, scaled from 0 (open) to 1 (closed), 2023
Note: The OECD FDI Regulatory Restrictiveness Index covers only statutory measures discriminating against foreign investors (e.g. foreign equity limits, screening and approval procedures, restriction on key foreign personnel, and other operational measures). Other important aspects of an investment climate (e.g. the implementation of regulations and state monopolies, preferential treatment for export-oriented investors and special economic zones regimes among other) are not considered. See Kalinova et al. (2010) for further information on the methodology.
Source: OECD FDI Regulatory Restrictiveness Index database, OECD FDI Regulatory Restrictiveness Index - Regulatory Database (beta).
Services Trade Restrictiveness Index (STRI), 2024, scaled from 0 to 1.
Source: OECD Services Trade Restrictiveness Index, 2024.
2.3.3. Progress is being made on trade agreements
Thailand’s economy is being affected by international developments in trade policies, notably the increased use of tariffs as a policy lever by the United States. Like other economies, and as discussed in Chapter 1, a negative impact on trade is arising from tariffs already implemented and uncertainty around how they may change looking forward. Broadly, sustained tariffs imply less international trade and potentially less investment. This suggests less participation in multi-country supply chains and consequently reduced positive productivity spillovers. The PMR indicates that Thailand itself imposes relatively high tariffs. Based on UNCTAD calculations of average tariff rates, Thailand’s PMR score in this sub-component has a score of 4 out of 6 (where 6 is the most stringent); 39 out of the 47 other countries in the PMR database have a score of 1 or less.
Thailand is covered by trade agreements struck by ASEAN, such as the ASEAN-China agreement and has bilateral trade agreements. Further expansion of preferential trade agreements could generate new export opportunities and stronger trade integration. As reported in the 2023 Survey, in 2022 Thailand ratified the 15-member Regional Comprehensive Economic Partnership (RCEP), providing better market access in the Asia Pacific region. Progress is also being made regarding trade with Europe. In January 2025, Thailand finalised a free trade agreement with the European Free Trade Association (EFTA, the four-country bloc comprising, Iceland, Liechtenstein, Norway and Switzerland). Negotiations on a free-trade agreement with the European Union are ongoing. The importance of advancing on such agreements has increased given recent developments in international trade policy. A positive climate for international trade and investment also depends on robust application of trade legislation including, for instance, legislation on strategic trade control (STC). Ensuring full implementation of STC will bolster Thailand’s reputation as a secure and trusted player in global supply chains.
2.3.4. Fees and charges are a weak spot in trade facilitation
Thailand scores well on many dimensions of the legislation and administration around exporting and importing, but there are weak points. The OECD’s Trade Facilitation Index points to improvements in trade facilitation over time and Thailand scores relatively well compared with peers (Figure 2.7). Thailand’s strengths include the procedures, automation and documentation around trade. However, Thailand scores poorly in ensuring that fees and charges on trade reflect the cost of the service rendered (‘disciplines’ on fees and charges; for instance, large processing fees for imports can in effect act as a tariff). Thailand’s score is appreciably below the Asia-Pacific and Upper-Middle-Income averages. Other countries in which Surveys identity scope to improve trade facilitation include Chile (OECD, 2022[14]), Mexico (OECD, 2024[15]), Switzerland (OECD, 2024[16]) and Türkiye (OECD, 2025[17]).
Source: OECD, Trade Facilitation Indicators.
Thailand’s approach to economic development has hitherto seen government playing a relatively direct role in economic activity and markets through public ownership and control of enterprises and various regulatory tools, such as price controls on goods. These tools may have had some advantages at earlier stages of economic development, but the benefits have likely diminished over time. Indeed, increasingly these approaches may be hindering productivity growth and economic development more broadly.
Stronger competition is also key to greater productivity. Competition helps ensure the most productive and innovative firms grow, including at the expense of less efficient incumbents. This ‘creative destruction’ incentivises investment in products and processes. Weak competition can trap resources in low-productivity firms, and mute investment, innovation and technological upgrade. There is a robust and longstanding body of international evidence confirming the connection between competition and productivity. Regulations hampering competition have been found to limit productivity catch-up (for instance, (Lewis et al., 2022[18])). Competition has been found to motivate the elimination of inefficiencies, encourage the adoption of new technologies and the reallocation of resources towards more productive firms including through the entry and exit of firms and rapid growth of more productive firms (OECD, 2023[19]; Griffith and Reenen, 2021[20]).
Large economic rents from weak competition can create wider political economy challenges. Rents arising from policies that shield parts of the economy from competition may have regressive distribution effects as they transfer resources from a large number of consumers to a small number of individuals that are often affluent and influential. Once established, such vested interests can reduce the pace of reform. Against this background, ensuring an equal playing field and low entry barriers in all sectors is important, both to reduce inequalities in incomes and opportunities and to boost productivity. Strengthening competition is also conducive to stimulating both foreign and domestic investments.
2.4.1. Ensuring good governance and a level playing field for Thailand’s SOEs
State-owned enterprises (SOEs) continue to play a key role in Thailand’s economy. Past privatisation programmes have reduced state ownership, but it remains significant in some sectors. The central government has full or majority ownership in 52 SOEs and stakes in six listed companies. According to a recent OECD review (OECD, 2025[21]) as of 2023, the 52 SOEs employed around 300 000 employees (around 0.75% of employment). SOEs play a particularly large role in the energy sector, and there are SOEs in a range of other sectors including telecommunications, transportation and financial services (Table 2.2). Opportunity for further privatisation among SOEs should be explored. The continuing role of SOEs in the economy is reflected in the PMR sub-indicator on the distortions induced by public ownership (Figure 2.8). Thailand’s score in this indicator is 1.6, which is a good margin above the OECD average and substantially higher than the best performers, but well below the scores of the worst performers.
Thailand’s SOEs have limited exposure to the main competition legislation, the Trade Competition Act B.E. 2560 (2017). According to this legislation, state enterprises are exempt from the application of the Trade Competition Act provided that their actions are necessary for the purposes of maintaining national security, public interest, the common good, or the provision of public utilities and are in accordance with the law or a resolution of the Cabinet. According to recent OECD assessment (OECD, 2025[21]) these provisions create an uneven playing field where incumbent SOEs can maintain a dominant market position, making it difficult for potentially better performing entrants to challenge them.
Related to the above, the governance of SOEs is complicated by multiple legal forms. Around half of SOEs are categorised as autonomous agencies established by specific legislation or statutes (Figure 2.9), implying that they possess a certain degree of administrative independence from the government. The second most common type of SOEs are those established by Decree issued under the Act on the Establishment of Government Organisations (1953). These SOEs are often entrusted with public functions and operate under the supervision of government authorities as separate legal entities. A relatively small number of SOEs are structured as public limited liability companies.
Note: Non-OECD member countries are shaded in grey. A higher score on the OECD Product Market Regulation (PMR) indicator indicates more restrictive regulatory settings as regards market competition. The maximum possible score is 6.
Source: OECD-ADB 2023-2024 Product Market Regulation database.
Legal status of Thailand’s 52 SOEs by legal status, % based on number of entities
Source: OECD calculations based on data provided by SEPO.
Maintaining an overarching SOE policy is important to executing strategy. In this regard, the powers and scope of the main SOE management body, the State Enterprise Policy Office (SEPO) could be strengthened. The Office, operating under the Ministry of Finance, oversees and co-ordinates the management of the SOEs. It collaborates with line ministries in exercising ownership rights, including board nominations, strategic decision-making, and oversight responsibilities. Legislation in 2019 established a committee to oversee SOE development (the State Enterprise Policy Committee, SEPC). It also paved the way for SEPO to issue its Principles and Guidelines on the corporate governance of SOEs. However, SEPO lacks sufficient enforcement powers as compliance with the guidelines is voluntary. Directors of SOEs may either adopt the principles and guidelines or provide justifiable reasons for not doing so. If compliance proves unfeasible, directors are required to provide explanations to the owners and stakeholders (OECD, 2025[21]). SEPO’s role is also limited in that it does not approve capital investments by SOEs; a task currently carried out by the National Economic Social Development Council (NESDC).
In addition, there is room for clearer SOE accounting and greater independence of boards of directors. Unlisted SOEs are subject to internal audits by the Ministry of Finance, but these are not backed by external audits. SEPO’s Principles and Guidelines set standards on financial and non-financial reporting, as well as internal control and risk management. However, the only weak compliance requirements described above may mean these standards are not strongly applied. Regarding boards of directors, the Principles and Guidelines only broadly define the criteria for an independent director, leaving scope wide for interpretation. The composition of the boards of Thailand’s ten largest SOEs reflects a significant presence of civil servants, with varying levels of independence among board members. While 47% of board members are classified as independent directors by the government, their independence may be affected by the fact that most are appointed directly by the state, and the criteria for independence vary across laws and regulations (Figure 2.10). Also, there is scope to further increase the share of women on SOE boards; only around one fifth of board members are female (Figure 2.10).
Board composition in the 10 largest commercial SOEs in Thailand, 2023
Source: (OECD, 2025[21]).
2.4.2. Additional issues in network sectors
Network sectors are a key area where strong government control has been exercised via public ownership. In sectors such as energy and telecommunications, state-led enterprise can help to overcome coordination challenges in early stages of development as the central task is the construction of the “network” component (such as rail lines). Once this is established, a market-based approach with competing providers operating via a regulated network can bring better provision of services and a more efficient allocation of resources. Thailand’s scope for further shift towards market-based approach in network sectors is confirmed by the PMR indicators (see Figure 2.3); where a sub-indicator indicates continued heavy state involvement in network sectors (largely linked to state-ownership).
Issues in Thailand's network industries are not confined to public ownership. The PMR data picks up examples where scope for regulations that can strengthen market competition. For instance, in the electricity sector there are no requirements for clear billing information on customers consumption and the tariffs charged. Across the network sectors there are shortfalls in requirements to publish information about network infrastructure, including civil works.
2.4.3. Strengthening competition law
Weak points in Thailand’s competition law are potentially limiting the strength of market competition across the economy. A recent OECD peer review (2025[22]) identifies widespread room for improvement, including the scope of application of the law, institutional set-up, transparency, assessing and enforcing anti-competitive behaviour and merger control. Features that are unusual when compared with competition policy and law in OECD countries and which are particularly detrimental to competition include:
Shortfalls in transparency arising from a practice of not publishing the names of companies involved in legal proceedings, and the decisions of legal proceedings, even when companies are found guilty.
In enforcement, anti-competitive behaviour as regards cartels and abuse of dominance among businesses operating in the same market can only be prosecuted as a criminal offence; there are no provisions allowing the competition authority to sanction such practices as administrative infringements. Conversely, for cartel operations that involve businesses operating in different markets, only civil penalties can apply. These limited options of prosecution are problematic. In particular, the stringent standards of proof for criminal offence means relatively few legal cases are launched involving cartels of businesses operating in the same market.
The competition authority does not have the powers to intervene in all mergers where competition concerns may arise, even when covered by the Competition Act. Thailand has a complex merger review regime in which mergers, according to certain criteria, must be notified either ex-ante or ex-post. However, the Trade Competition Authority of Thailand can only intervene (i.e. impose remedies or block transactions) in the ex-ante regime, having no enforcement powers in the ex-post system, even when mergers are considered anti-competitive. In addition, the notification criteria specifying whether and when businesses should report mergers are unclear. This creates room for interpretation beneficial to business interests. It is telling that between 2017 and 2023 only 12 mergers sought ex-ante approval, meanwhile 130 mergers were notified ex-post.
Sector-specific competition provisions in some areas of the economy contribute to an uneven application of competition policy. The Trade Competition Act does not apply to businesses regulated by other sectoral laws with jurisdiction over competition matters. However, the Trade Competition Act does not specify which sectors are covered by this exemption and to what extent. In practice, sectors such as broadcasting and telecommunications, energy, banking and insurance seem to be covered by various sector-specific competition provisions, which are not harmonised, leading to a patchwork of different competition regimes, with different sets of competition rules and policies. This scenario results in a gap in enforcement within these regulated sectors, which are particularly concentrated and likely to experience anti-competitive behaviour.
A lack of clarity in extraterritorial provisions also compromises the scope of competition law. This weakens the prospects of addressing domestic competition issues that originate from business practices outside Thailand.
2.5.1. Improving the management of government regulation
Like many countries, Thailand has a system for assessing the impact of proposed new regulation and existing regulations, or regulatory impact assessment (RIA). Such systems help ensure regulation minimises negative impacts on business operations, and aligns with other policy objectives, such as environment goals. However, it can be challenging to ensure such assessments bring positive impact across multiple goals and without undue additional administrative burden. Scope to improve RIAs has, for instance been identified in the OECD Surveys of Brazil (2023[23]), Croatia (2023[24]), Greece (2024[25]) and Portugal (2023[26]). Thailand’s PMR score in the sub-indicator the impact of regulation is 2.8, which is relatively high (Figure 2.11). Among other upper-middle income countries there are cases of low scores, for instance Mexico and Peru, which suggests that good regulatory impact assessment is achievable without the resources of high-income countries.
Note: Non-OECD member countries are shaded in grey. A higher score on the OECD Product Market Regulation (PMR) indicator indicates more restrictive regulatory settings as regards market competition. The maximum possible score is 6.
Source: OECD-ADB 2023-2024 Product Market Regulation database.
Thailand is making progress in improving its RIA. The 2019 Act on Legislative Drafting and Evaluation of Law included requirements towards good regulatory practices. These included provisions that, under certain conditions, ex-post reviews of laws must be conducted every five years (OECD, 2025[27]). Also, the Office of the Council of State (OCS) was given responsibility as the country’s main regulatory oversight body (the Council is the central legal drafting and advisory agency under the Prime Minister's office). Since the 2019 Act, RIA, and more broadly good regulatory practices, have advanced throughout the administration. Among 207 ex post reviews conducted since the 2019 Act, a total of 124 of resulted in a proposal to amend the relevant law or regulation and 19 resulted in a proposal to repeal (OECD, 2025[27]). High levels of awareness of the purpose and procedures of RIA can increase effectiveness. Recent in-depth OECD assessment of Thailand’s RIAs (OECD, 2025[27]) points to other avenues for advancing on good regulatory practices, including:
Increasing the public awareness of RIAs, including through publication of annual reports.
Clarification of the Office of the Council of State’s role in oversight capacity and giving the Council greater powers, including ability to request further study and evidence from ministries. Examination of similar bodies elsewhere, such as Japan’s Regulatory Reform Council, may point to useful ways forward.
Undertaking RIAs earlier in the policy process and introducing more stringent assessment guidelines.
Implementing a forward legislative planning process and a proportionality framework to better allocate scarce resources, including ensuring that high-impact regulatory proposals are thoroughly studied.
Similarly, taking a proportional approach to the five-year, ex post reviews mandated by the 2019 Act to better allocate resources to high impact regulations.
2.5.2. Reducing red tape and simplifying government bureaucracy
Similar to many other countries, Thailand conducts specific campaigns to improve the administrative interface between government and businesses. Improvement can be made by identifying and removing redundant regulation and by making bureaucratic processes smoother for users. For businesses, administrative burdens can be particularly heavy at the start-up phase, for instance due to licensing requirements. Cutting back on red tape can strengthen productivity through various channels. For instance, less red tape can free up managerial and administrative resources, make business operations smoother and strengthen competition by lowering barriers to entry.
There have been welcome recent initiatives to cut back on red tape faced by business and households. For instance, the Digital Government Development Agency has implemented a one-stop service platform to streamline the registration and licensing process for both citizens (“Citizen Postal”) and business operators (“BizPostal”). Other recent initiatives include legislation to expedite business licensing, fast-track initiatives for patents, better business registration systems and improved public procurement systems (Table 2.3. ). Further steps along these lines would be welcome, including further harnessing of artificial intelligence, for instance in form filling and application processing. As discussed above, legislation passed in 2019 has increased momentum in conducting ex-post assessment of legislation with a view to simplification or repeal.
The PMR indicators point in the direction of aspects of red tape that could be improved. Thailand has a poor score in the sub-indicator on communication and simplification of administrative and regulatory burdens. (Figure 2.12). Indeed, Thailand has the second highest score among the countries available for comparison. In detail, contributory factors to Thailand’s score include an absence of requirements to use plain language in draft legislation and regulation, limited requirements for government to publish primary laws being prepared, an absence of inventories of licences and permits required by businesses and an absence of the “silence is consent” principle for issuing permits and licences.
Note: Non-OECD member countries are shaded in grey. A higher score on the OECD Product Market Regulation (PMR) indicator indicates more restrictive regulatory settings as regards market competition. The maximum possible score is 6.
Source: OECD-ADB 2023-2024 Product Market Regulation database.
Weak economic governance and corruption hinder economic and social development by misallocating resources through distorted decision making. Poor decisions linked to corruption can have wider consequences. A cross-country comparison (Cevik and Tovar Jalles, 2023[28]) finds that the higher the level of corruption, the greater the number of fatalities as a share of population due to natural disasters. This likely reflects potential for negative influence of corruption on areas such as the quality of public infrastructure, emergency response, healthcare services and adherence to building codes.
As for most countries in the region, indicators point to a continued need for progress in tackling corruption. Thailand ranked 107 out of 180 countries on the Corruption Perceptions Index in 2024. In regional comparison Thailand is middle ranking. It scores slightly better than India and the Philippines but less well than Vietnam and Malaysia (Figure 2.13). The region’s scores remain in almost all cases substantially below the OECD average and especially top-ranking countries. Thailand’s performance on the World Bank’s Control of Corruption Indicator also remains low.
The Thai authorities, notably the National Anti-Corruption Commission (NACC) and Public Sector Anti-Corruption Commission (PACC), as well as ministries and agencies, continue to work towards eliminating corruption. Broader developments over the past decade (Box 2.4) have included new general legislation and plans to tackle corruption, and efforts to reduce corruption through digital tools. Specific developments include:
Strengthening of no-gift policy. Individual government agencies began strengthening gifting rules and January 2023 saw the introduction of a general government provision on gift policy.
The preparation of legislation on provisions for deferred criminal inquiry, where the deferral is made on the condition that certain conditions are met and provides an alternative route to tackling corruption. The NACC is advocating new laws in other areas, including conflict of interest and the submission of asset and liability declarations by state officials. However, progress on introducing new legislation remains slow.
Continued collaboration with the private sector. The NACC continues to help the private-sector network, Collective Action against Corruption (CAC), to disseminate information to businesses about corruption through outreach programmes.
Note: Panel B shows the point estimate and the margin of error. Panel D shows sector-based subcomponents of the “Control of Corruption” indicator by the Varieties of Democracy Project.
Source: Panel A: Transparency International; Panels B & C: World Bank, Worldwide Governance Indicators; Panel D: Varieties of Democracy Project, V-Dem Dataset v12.
2018: Establishment of the Organic Act on Anti-Corruption, which further strengthened the legal framework for combating corruption and enhanced the powers of the National Anti-Corruption Commission (NACC), while introducing stricter penalties for corruption-related offenses.
2020: Development of a new Anti-Corruption Action Plan focusing on enhancing the efficiency of anti-corruption agencies and promoting public participation in anti-corruption efforts.
2021: The Whistleblower Protection Act encourages reporting of corruption by providing legal protection to whistleblowers. Nevertheless, the whistleblower legislation does not yet align completely with section XXII of the OECD Anti-Bribery Convention.
2023: The implementation of the Digital Government Development Plan aims to reduce corruption through digitalisation and increased transparency in government services.
Some recent policy measures reflect Thailand’s progress towards attaining international standards in fighting foreign bribery. As a prospective OECD member, Thailand is committed to becoming a signature to the OECD’s Anti-Bribery Convention. This process included the publication in 2024 of an OECD review of Thailand’s legal and policy framework for fighting foreign bribery (OECD, 2024[29]). The report includes recommendations regarding frameworks and legislation around foreign bribery offence, the liability of legal persons for foreign bribery, sanctions for bribery, enforcement and international co-operation. The review, which was conducted as part of the OECD-Thailand Country Programme, will help Thailand enhance its legal readiness to comply with key requirements of the OECD’s Anti-Bribery Convention prior to the assessments that will be conducted by the Working Group on Bribery as part of the accession processes to the Convention and the OECD.
Concerns around policy co-ordination raised in the previous Survey remain. The effectiveness of anti-corruption policy is hampered by overlapping and conflicting mandates of anti-corruption agencies. Notably, the referral of low-level cases from the NACC to the PACC or the police is discretionary and lengthy, creating a backlog of unresolved cases. Clearer guidelines and faster processes would help. More generally, stronger co-operation among anti-corruption agencies could be fostered by establishing an integrity network between anti-corruption agencies. Many OECD countries including Canada, Sweden, Austria and Germany have such networks. Some OECD countries have established multi-agency fraud and anti-corruption centres to facilitate investigative work on corruption-related crimes. For instance, Australia’s Fraud and Anti-Corruption Centre is staffed by Federal Police and staff seconded from other federal agencies, including those covering customs, tax, criminal intelligence and anti-money laundering.
Concern around the scope of Thailand’s whistleblower legislation raised in previous Surveys (OECD, 2020[30]; OECD, 2023[6]) still holds (Table 2.5). In contrast with most OECD countries, Thailand does not have dedicated whistleblower legislation that aligns completely with section XXII of the OECD Anti-bribery Recommendation (OECD, 2021[31]). The Witness Protection Act and the Organic Act on Anti-Corruption provides partial protection only. For instance, the NACC can grant protection, such as security arrangements, for whistleblowers but coverage is limited to qualified whistleblowers related to serious criminal cases. Provisions for whistleblowers in other circumstances are limited (OECD, 2016[32]).
Ensuring independence and appropriate resourcing of Thailand’s National Anti-Corruption Commission is key to combatting corruption. An OECD review of Thailand’s foreign bribery framework (OECD, 2024[29]) underscores the importance of ensuring that the legislative safeguards guaranteeing the independence of its law enforcement, anti-corruption agencies, and the judiciary are implemented transparently, and that foreign bribery investigations and prosecutions are free from executive interference. As regards resources, the Commission suffers from manpower shortages, contributing to a backlog of cases. In 2024 the NACC reviewed 11 000 corruption allegations, the greatest number of over the past five years. Nevertheless, the backlog of cases remains substantial. There is particular need for more inquiry lawyers. Compared with other countries, including those in the region, the staffing levels of the Commission are relatively low.
Combatting high-level corruption in Thailand would be helped by a system to encourage good practice in relations between parliamentarians and lobbyists. Many countries, including among OECD Members, require the registration of lobbying activity and have systems of monitoring and sanctions for breaches of reporting or ethical rules. For instance, Canada’s Lobbying Commission requires parliamentarians to log various details on encounters with lobbyists. Sanctions comprise bans on lobbying, fines or prison sentences (HATVP (France), 2023[33]). Thailand has no such dedicated provisions.
Thailand continues to make progress in containing money laundering (Figure 2.14). According to the Asia/Pacific Group on Money Laundering (APG, 2023[34]), Thailand was rated compliant or largely compliant in 32 out of the 40 the Financial Action Task Force (FATF) Recommendations in 2023, up from 31 in 2021 and 25 in 2017. The Anti-Money Laundering Office (AMLO), the key government agency in policy coordination and enforcement, operates according to the 2022-2027 National Strategy on AML/CFT (Anti-Money Laundering and Combating the Financing of Terrorism), which aims to keep pace with international standards amid rapidly evolving financial technology. Illustrating current operational challenges, a joint notification by AMLO and the Bank of Thailand to financial institutions in December 2024 (AMLO and BOT, 2024[35]) announced steps in response to a United Nations report that some financial institutions in Thailand provided financial services related to the procurement of weapons by the Myanmar military government in 2023, which were used to harm civilians and violate human rights.
Note: The figure shows ratings from the FATF peer reviews of each member to assess levels of implementation of the FATF Recommendations. The ratings reflect the extent to which a country's measures are effective against 11 immediate outcomes. "Investigation and prosecution¹" refers to money laundering. "Investigation and prosecution²" refers to terrorist financing.
Source: OECD Financial Action Task Force (FATF), latest year available.
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