Over the past two years—particularly since Thailand announced incentives for EVs, including tax exemptions and reductions—there has been a clear trend of manufacturers relocating their facilities to Thailand. This shift is reshaping the country’s industrial landscape and creating significant opportunities in the real estate sector for companies looking to establish or expand EV manufacturing operations in Southeast Asia.
Incentive-Driven Market Transformation
The government’s tax exemptions and reductions have proven effective in attracting foreign investment, with Chinese manufacturers currently dominating the market. Most EV parts and car manufacturers operating in Thailand are from China, reflecting the prominence of Chinese EV brands that have already established a presence in the country. The sector encompasses manufacturers of electrical equipment as well as companies seeking to establish facilities for producing electric vehicle components, parts, and accessories.
The surge in activity is evident across Thailand’s EV manufacturing sector, with legal practices handling these transactions experiencing unprecedented demand.
Industrial Real Estate Framework and Market Dynamics
Thailand’s industrial real estate framework provides compelling advantages for foreign manufacturers, who typically face restrictions on foreign land ownership under the Land Code. However, foreign investors can benefit from exemptions to these restrictions if the land is located within industrial real estate zones designated by the Industrial Estate Authority of Thailand (IEAT) or they obtain investment promotion from the Board of Investment (BOI) if the land is located outside an industrial estate area governed by the IEAT. Both the IEAT and BOI provide special tax and nontax incentives, including foreign land ownership, with even greater incentives available for land situated within the country’s Eastern Economic Corridor (EEC).
This regulatory advantage has sparked a parallel trend in land development. Industrial real estate developers in the EEC are actively consolidating land into large plots to develop new industrial estate projects, recognizing that EV manufacturing facilities require significant space. These developers then sell the consolidated land to manufacturers, creating a streamlined pathway for large-scale investments.
The legal process for foreign manufacturers’ land acquisition involves multiple coordinated steps: conducting land due diligence, reviewing transaction documents, and managing the conveyancing process. Once the land is confirmed as suitable for industrial use, companies must incorporate a local entity or subsidiary to obtain additional tax and nontax privileges from the IEAT (for the land located within an IEAT-governed industrial estate area) or the BOI, including the crucial privilege allowing foreign-majority-owned companies to own the land.
Regulatory Requirements
For industrial land acquisition by foreign investors, permission to own land from either the BOI or the IEAT is the key consideration. When land is located within an industrial estate area governed by the IEAT, manufacturers must also secure several permits from the IEAT to use and own the land for industrial purposes, while BOI permission to own land is required to acquire land located outside IEAT-governed areas. This regulatory framework is particularly important for foreign investors and companies, given the general restrictions on foreign land ownership under the Land Code.
The complexity of these requirements has created significant demand for integrated legal services that combine real estate expertise with regulatory guidance, supporting clients through the entire process from initial land identification through final facility operation.
Looking Ahead
With developers actively consolidating land and manufacturers continuing to relocate, Thailand’s EV industrial real estate market shows no signs of slowing. The combination of government incentives, established legal frameworks for foreign ownership in industrial zones, and the active assembly of large-scale industrial sites creates a compelling case for Thailand as a manufacturing base. For companies in the EV supply chain planning new facilities in Southeast Asia, Thailand’s evolving industrial real estate landscape presents significant opportunities for long-term investment in this fast-growing sector.
