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1. Introduction and Background information
The kingdom of Thailand lies in the heart of Southeast Asia, making it a natural gateway toIndochina, Myanmar and southern China. Its shape and geography divide into four natural areas: the mountains and forests of the north; the vast rice fields of the central plains; the semi-arid farmlands of the northeast plateau; and the tropical islands and long coastline of the southern peninsula. The country comprises 771 provinces that are further divided into districts, sub-districts and villages. The country covers an area of 513,120 square kilometers and, when looking on a map, it resembles the shape of an axe (Tourism Authority of Thailand, 2018). Thailand encompasses diverse ecosystems, including the hilly forested areas of the northern frontier, the fertile rice fields of the central plains, the broad plateau of the northeast, and the rugged coasts along the narrow southern peninsula (E. Jane Keyes, 2018). (refer to Appendix 9.1)  Thailand is a tropical nation. From mid-May to September it is mostly rainy, warm, cloudy southwest monsoon and from November to mid-March is dry, cool northeast monsoon. However for southern isthmus it is always hot and humid (Central Intelligence Agency, 2018). 64% of the population are engaged in agriculture. Therefore, Thailand is suitable for agriculture. For soybean typical farming systems, it is mostly located in the north, northeast and central plain of Thailand (Food and Agriculture Organization , 2018). Bangkok is the capital city of Thailand, and the currencies used is Thai Baht (?). The major language spoken is in Thai. In 2018, the estimated population in Thailand is approximately 69,18 million with a growth rate of 0.21%, and is ranked 20th in worldwide. The Life expectancy for men is 71 years and 79 years for women. The land area of Thailand is 513,120 per square kilometer, while the population density is 134.83 people per square kilometers. Bangkok is currently the most populated city with a figure of 5,104,476, followed by Samut Prakan and Mueang Nonthaburi with a number of 388,920 and 291,555 respectively (World Population Review, 2018). Thailand’s population forecast in the following years can be seen in Appendix 9.2. Like many emerging economies in the Southeast Asia region, Thailand has undergone rapid urbanization. According to the United Nations, the share of Thailand’s urban population increased to 50.4% in 2015 – up from 38.8% in 2006 – with most of the growth centered around the Bangkok area (HKTDC Research, 2017).

2. Economic Analysis & Social/Cultural Environment Analysis
2.1 Economic Analysis
2.1.1 Gross Domestic Product
According to the International Monetary Funds (IMF), Thailand had a Gross Domestic Product (GDP) of 15.450 trillion baht (US$455 billion), the 8th largest economy of Asia in 2017 and continues to be the second-largest economy in the Association of Southeast Asian Nations (ASEAN). In 2018, its GDP is forecast to expand by 3.6-4.6%, according to the National Economic and Social Development Board. Annual real GDP growth surged from 3.3% in 2016 to 3.9% in 2017, which was driven by a recovery in exports and solid growth in private final consumption (ONO, 2018). In the following years, annual real GDP is still expected to increase but at a slower rate. (Refer to Appendix 9.3) The GDP per capita in Thailand was last recorded at 6125.66 US dollars in 2017, which is equivalent to 49 percent of the world’s average (TRADING ECONOMICS, 2018), and is expected to increase over the years. (Refer to Appendix 9.4) Thus, Thailand’s forecasted GDP growth, annual real GDP and GDP per capita of Thailand implies an increase in pay, availability of jobs and higher standard of living of the people.

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2.1.2 Income and Expenditure
The World Bank classifies Thailand as an upper-middle-income economy, the disposable personal income in Thailand increased to 8202027.36 THB Million in 2017 from 7931560 THB Million in 2016, reflecting an increase of consumer purchasing power in Thailand. The country’s household monthly income and expenditure per capita averaged US$276.9 (CEIC: Global Economic Data, Indicators, Charts ; Forecasts, 2017) and US$224.8 (CEIC: Global Economic Data, Indicators, Charts ; Forecasts, 2017), respectively in 2017. In the capital of Thailand, Bangkok, the respective figures were US$443 and US$359.7, which are 60% higher than the national average (HKTDC Research, 2017).  Although it is relatively low compared to other countries like Singapore, it shows an overall improvement on the standard of living of Thailand’s household. Also, it shows Bangkok is more developed as compared to other regions in Thailand by accounting for the largest proportion of total consumer spending in the country.

According to Euromonitor International, consumer expenditure in Thailand is expected to expand modestly by 5.2% each year from 2016-2021, with stronger growth expected in education (7.4%), communications (5.9%), health goods and medical services (5.6%), and food and non-alcoholic beverages (5.5%). Indeed, as income improves, Thai consumers increasingly crave quality, convenience and high levels of service. The sectors that best match the needs and lifestyles of this middle-income class are likely to offer the greatest potential. Particularly, Thai consumer expenditures on food and beverage (F&B) totaled $59 billions in 2015, equaling approximately 26% of all household expenditure (Oxford Business Group , 2018). The revenue in F&B amounts to US$79m in 2018 and it is expected to show an annual growth rate (CAGR 2018-2022) of 14.3% resulting in a market volume of US$136m in 2022. (Refer to Appendix 9.5) Thailand’s F;B industry represents one of the most attractive retail opportunities in the country. The user penetration for F;B is at 16.3% in 2018 and is expected to hit 22.1% in 2022 (Statista, 2018). Thus, these growing trends indicate a huge market potential to allow Super Bean to venture into Thailand’s F&B industry.

2.1.3 Employment
In terms of the employment and labor cost, Thailand’s employment rate fell below 75.0% over 2012-2017. In 2016, Thailand’s formal labor force was 38.3 million, more than 56 percent of the population. Unemployment among youth (aged 15 to 24) is around 3.5 percent, while it is only 0.5 percent for adults over 25 years old. Over half the labor force (55.6 percent) earns income in the informal sector, including through self-employment and family labor. However, the proportion of workers in the informal sector has gradually declined, from 62 percent as of 2013, as Thailand experienced a structural transformation from a low productivity agricultural economy to a higher productivity manufacturing and service oriented economy. Skills shortages affect the labor market in Thailand, particularly its manufacturing and IT sectors. Although Thailand’s higher educational attainment rate was higher than the Asia Pacific average in 2017, it is low compared to more advanced-economy peers, owing to its relatively large rural population with limited access to higher education institutions and inefficient use of funds intended for the sector. Trade sources report that around half of employers have difficulties filling vacancies, which an ageing population will exacerbate going forward. Thailand’s fertility rates are low, with population growth projected to become negative by 2025. This demographic shift, combined with inadequate social welfare programs for elder care, is exacerbating labor shortages in many sectors, especially among low-skilled working aged women (U.S. Department of State , 2017). Nevertheless, its employment rate was still in the top third in Asia Pacific in 2017. (Refer to Appendix 9.6) The Labor Cost Per Unit decreases from 2015 to 2017 and it reached 98.2 index points in the end of 2017. In the long-term, the Thailand Unit Labour Cost is projected to trend around 104.00 Index Points in 2020 (TRADING ECONOMICS, 2018). (Refer to Appendix 9.7) Although the labor cost may increase in the future due to the ongoing shift from agricultural sector to the service sector, Thailand’s labor cost is still considered as low with a minimum daily wage of US$10 in Bangkok as compared with US$25 in Singapore (Bangkok Post, 2018). Hence, Super Bean is still able to leverage on Thailand’s low labor cost and reduce their overall operating expenses.
2.1.4 Infrastructure development
Thailand has relatively well-developed infrastructure development, but varies greatly across the country. Cities are typically well-developed in terms of transportation, but rural towns or more remote regions would be less so. In order to maintain economic momentum, the Thai government is planning on spending significantly to upgrade the country’s infrastructure (Euromonitor International, 2018). The Thailand infrastructure action plan for 2017 is worth US$25.2 billion and includes 36 projects, covering railway, roads, air transport and ports around the country (Reuters, 2016). Bangkok has quite a facelift compared to other cities in Thailand as it is a major trade hub and port. By setting up Super Bean business in Bangkok, it facilitates the smooth transportation of raw materials as beans imported can be collected from port of Bangkok and delivered to central kitchen in a short period of time, supported with well-developed roads, ensuring the quality of beans.
In terms of communication infrastructure, Thailand has taken systemic measures to improve broadcasting and telecommunications. The information and communications technology (ICT) sector in Thailand is developing rapidly, spearheaded by the application of a 4G network leading to greater consumer use. Capital investment in telecommunications increased markedly by 68.1% in real terms over 2012-2017.  In Bangkok, the country’s largest urban area, more than 70% of the overall population uses smartphones, according to the National Statistical Office. By contrast, the country’s less developed Northeastern region has a usage rate of just 39.3% (Kressmann, 2017). This shows consumers in Bangkok has higher access rate to internet. With more internet users in Bangkok, it allows Super Bean to promote its products and raise brand awareness more easily through online advertising when they first venture into Thailand market. It also facilitates the exchange of information within the stores and central kitchen in order to maintain consistency in services.
2.1.5 Foreign Direct Investment (FDI)
Foreign direct investment (FDI) inflows into Thailand plunged over 2014-2016, owing to sluggish cross-border merger and acquisition sales, along with large divestments by multinational companies (Euromonitor International, 2018). According to the estimations of Bank of Thailand UNCTAD World Investment Report, Thailand’s FDI amounts USD 8 billion in 2017 (UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT, 2017). As shown in Appendix 9.8, Singapore is rank second in contributing to Thailand’s FDI inflow of 20.9% (Santander Tradeportal, 2018). This shows that Thailand’s infrastructure and access to raw materials, communication and transport links, skills and wage costs of labor are attractive to Singapore’s companies and they are confident in Thailand’s economy. Likewise, Super Bean can leverage on the attractiveness as well to further develop their business in Thailand.

2.2  Social/Cultural Environment Analysis
Thai consumers, particularly young, middle-class family members living and working in urban areas are more aware of nutrition’s and benefits of healthy diet nowadays. With a higher level of education and the rise of the internet and social media, consumers are increasingly more conscious about the food they buy and prepare. More consumers are moving away from high sugar or fat packaged food and beverages and are opting for sugar or fat free options instead. Thus, health and wellness is expected to continue witnessing positive retail value growth in the future (Euromonitor International, 2018). With increasingly hectic and stressful lifestyles, Thai consumers are looking for convenient ways for consumption of food. This is evident from Appendix 9.9, which shows a higher percentage of 10.4 in fast casual food as compared to 7.2% of non-fast casual food. Super Bean’s product line falls into fast food category, offering a variety of healthy and refreshing food and beverage products which contains various nutrients that are beneficial. In addition, with Super Bean’s grab and go services, it provides convenience to target consumers while satisfying their desire for health living.
In addition, Thais tend to enjoy snacking. Thais are famous for their love of snacks. There are food stalls near every public place due to the Thai habit of snacking all day. Though Super Bean may face a strong competition with the local food stalls, but it would be a great business opportunity for Super Bean to venture into this market as pancakes can be consumed throughout the day. Besides snacking habits, soya bean milk in Thailand is known as Nam Tao Hoo, which is a quintessential breakfast for Thais, and has cashes in on the worldwide health-food bandwagon. According to research conducted by Tetra Pak, a leading beverage packaging company, Thailand is second in the world in the consumption of soy milk per head. People consume soy milk at the rate of 12 liters per year per head, which is a little ahead of Singaporeans (KONGRUT, 2014).
To further support Thais’ behavioral consumption on soybean products, our team has conducted an interview with Aom, whom is a Thai citizen residing in Bangkok currently.  (refer to Appendix 9.10) The appeals to Thai consumption behaviors will therefore allow Super Bean to penetrate into Thailand’s F;B industry more easily.

3. Political ; Legal Environment Analysis
3.1 Political System ; Risks
The political ideology of Thailand is pluralism, a constitutional monarchy. Thailand’s military has a history of intervening in politics and has seized power 12 times since the end of the absolute monarchy in 1932. In June 2014, Late King Bhumibol gives his assent to an interim constitution enacted by the junta and give military sweeping powers (BBC, 2018). The junta promised to restore democracy since the coup but have been vague about the exact timeline (Holmes, 2017). Thus, the ruling of junta has been causing conflicts and violence in Thailand by pro-democracy demonstrators. They have been organizing protests to express resentment and lead to political unrest(BBC, 2018). Besides that, Thailand has been suffering from acts of terrorism on a daily basis since 2004, particularly in its southern areas. Tourist areas are not immune to terrorist incidents and but were targeted in 2016. This results in a poor terrorism index score as it is a composite score that ranks countries according to the impact of terrorism from 0 (no impact) to 10 (highest impact). Thailand score 6.61 in 2017 which is considered as relatively high, showing a threat of terrorism (TRADING ECONOMICS, 2018). Thus, the ongoing conflicts and terrorism may implies the fact that Thailand may not be a safe business environment for Super Bean to operate in, and may reduce their ability in obtaining materials and equipment from other areas during the tension. In addition, Corruption is common in Thailand, but it has been improving over the years, owing to state energies to tackle graft that is an impediment to business operations. Nevertheless, the ranking is still unfavorable, which may lead to a diminished business climate, resulting in inefficient use of Super Bean’s resources and weaken business further development.

In 2018, Thailand has attained a Global Peace Index of 2.259, ranked 113 worldwide. Therefore, Thailand’s overall political environment is still problematic especially for government instability and corruption, which may affects the business risk of Super Bean’s operation in Thailand.
3.2 Legal System
Thailand legal system is a statutory law system, meaning its based mostly on written law passed by the legislature. Thailand has a civil law and dual court system. Primary sources of law include the Constitution, which is the supreme law, legislation such as Codes and Acts, decrees and custom (The University of Melbourne, 2018). The fundamental laws that form the backbone of Thai law have been codified into four codes: the Civil and Commercial Code, the Penal Code, the Civil Procedure Code and the Criminal Procedure Code (Thailaws, No date).
In Thailand, the general law governing food quality and integrity is the Food Act B.E. 2522 (A.D. 1979) (“Food Act”). The Food Act provides that factories for the manufacturing of food for sale must obtain licenses from the Food and Drug Administration (FDA) prior to operating their businesses. This is to ensure that the foods are manufactured in a clean and safe condition. Therefore, Super Bean’s central kitchen must meet the food manufacturing quality and safety standard in order to obtain a license. Under FDA, soybean related food products are classified under standardized food and product owners are directly responsible for ensuring their products are in accordance with FDA regulations. Good manufacturing practice (GMP) must be met as it is the basic level of food safety for standardized food. Labelling requirement is not applicable to Super Bean as it is sold to serve in food shops. Fail to compliance with these rule may result in imprisonment and fine (McKenzie, 2015).

Under the law of trademarks, it is important to apply a trademark for Super Bean before market entry as Thailand operates a strict ‘first-to-file’ system and there are still widespread issues of ‘bad faith’ registrations and ‘trademark squatting’.  With trademark registered, Super Bean will have full legal protection against product fraud as well as providing with public visibility which consumers can identify (Thai Law Online, 2018).

The registration process for trademarks in Thailand typically takes between 12 and 18 months. Once registered, trade mark protection lasts for 10 years from the filing date, or the priority date where this has been claimed. Trade marks can be extended indefinitely for consecutive 10 year periods, subject to the timely application for renewals. Any individual or corporation can file a trade mark registration in Thailand, either through a local qualified trade mark agency or by themselves where their domicile/head office is in Thailand, or they have real business operations/dealings in Thailand. All application forms and required documents must be submitted in Thai, or accompanied by a Thai translation (Helpdesk, 2016).

3.3 Tariffs and Quotas
Soybeans are one of Super Bean’s main ingredients used, and currently, they are importing from North America to their retail outlets in countries like Singapore. In Thailand, it only have a production of just 60,000 tonnes a year, making up only 2% of total demand nearing 3 million tonnes (THEPARAT, 2016). Due to low domestic production of soybeans, Thailand has been relying on imports especially from the United States (U.S) and Thailand government has posted special tariff on soybeans. Currently, Thailand imports 80,000-90,000 metric tons (MT) of food grade soybeans, and Thai regulates that all soybean imports for food use should be “biotech-free” (International Trade Administration, 2017). Thailand’s World Trade Organization (WTO) commitments permit a soybean tariff rate quota (TRQ) to non-WTO member countries of 10,922 MT, with an in-quota tariff of 20 percent and an out-of-quota tariff of 80 percent. In January 2017, the Ministry of Commerce announced the implementation of a new three year soybean import policy from 2017 to 2019. In principle, this policy allows unlimited soybean imports at a zero percent tariff for WTO member countries, such as the U.S. However, under the new policy, only six trade associations and 16 food processing companies are eligible for these unlimited import quotas. In order to import through the trade associations’ quotas, importers must belong to one of the six permitted trade associations. In addition, the exported price of soybean is U.S.$414/MT (Refer to appendix 9.11) while all importers are subject to purchasing domestic soybeans at prices not lower than 19.75 baht/kg (U.S. $564/MT) for human food processing (i.e. soy milk) (Preechajarn, 2018). Also, the government also pledged to promote farmers in the North and Northeast consolidating their farmland to grow soybeans using soft loans with special interest rates of as low as 0.01% offered by the state-run Bank for Agriculture and Agricultural Cooperatives (THEPARAT, 2016). The higher prices and government’s assistance are meant to entice Thai farmers to grow more soybeans, so as to meet the increasingly domestic demand.
Since Thai food industry prefers domestic soybeans over imported soybeans due to their freshness and “biotech-free” status (Preechajarn, 2018), the implementation of such legal policies will means Super Bean will need to and can consider the alternative to source soybeans supply from Thailand.
3.4 Taxation
In general, a large number of reforms have taken place in Thailand which are likely to benefit the business environment. In Thailand, the corporate income tax rate for a small company’s tax rate is 0%, if net profit not exceeding 0.3 million baht. If net profit is no more than 3 million baht, the taxable rate is 15%. However, if net profit exceed 3 million baht, the tax rate be will  20%. In this case, a small company refers to any company with paid-up capital less than 5 million baht at the end of each accounting period (UHY, 2018). When Super Bean first enter into the market with a low brand recognition, it is more likely to not be accountable for any tax rate. Only after Super Bean has achieved a stable market share and become more profitable, their tax rate will increase to 15% or 20%. Despite the taxation rate, Super Bean will not be overly burden as Thailand’s total tax and contribution rate was lower than the regional average such as Philippines and Malaysia, according to Doing Business 2018 (Euromonitor International, 2018).  (Refer to Appendix 9.12)
3.5 Ease of Doing Businesses
In the Index of Economic Freedom, Thailand’s ranking was in the top third in Asia Pacific in 2018 with a score of 67.1, and has improved owing to greater freedoms for businesses and the investment landscape (Global Property Guide, 2018). It ranks countries based on how politics impacts business decisions there. The lower the index, the greater the level of government interference in the economy. As shown in Appendix 9.13, Thailand’s Economic Freedom Index is higher than the world average from 2012 to 2018. Therefore, this shows Super Bean will have greater freedom to setup new outlets, and develop new products and services as compared to other countries, which may results in earning better profits without much government intervention.
Under Thailand’s Foreign Business Act, Super Bean falls into the category of sale of food and beverage which is under List Three business. List Three designation of act restrict and prohibit foreigner from operating in “businesses in respect of which Thai nationals are not ready to compete with foreigners”, and sale of food and beverage is one of the 21 businesses (The Business Times, 2018). Recently, the Thai government are trying to improvise the act by opening some businesses in the food service industry to increase foreign participation (The Business Times, 2018). This shows a greater business opportunity for Super Bean with Thailand government’s support in promotion of F&B industry to foreign investment. However, foreign companies like Super Bean must apply for and obtain a foreign business license in order to participate in these businesses (The Business Times, 2018). License is issued by the Director General of the Foreign Business Committee. Businesses in List Three are not required to have Thai shareholders, meaning that the company can be 100 percent foreign owned. For the capital requirements for doing business in Thailand, generally, the minimum registered capital required to start a business is no less than five million baht within four years of start-up (UHY, 2018). This can be reduced if the industry in question is being promoted by the Thai Board of Investment at the time of entry (Shira, 2017).

The Thai government is working tirelessly to promote and realize its ‘Thailand 4.0’ model through which it hopes Thailand will become a high income and extensively connected ‘smart economy’ (BHUNIA, 2017). This plan covers five key industries, including Food and Agriculture and Biotechnology, and aims to integrate related businesses in the food production supply chain, from upstream agricultural activities, processing, packaging, storage and marketing, to logistics and distribution. The World Bank’s 2016 Ease of Doing Business Report ranks Thailand 18 of 190 countries globally for the ease of Registering a Business. The process takes about 25 days and includes five separate procedures, helping Super Bean to enter the market easier and quicker (Euromonitor International, 2018).
4. Financial Environment Analysis
4.1 Inflation and Interest Rate
Inflation in Thailand are expected to rise due to higher wages, economic growth, and a rise in energy prices (Oil) in 2018-2023. Moreover, structural changes, such as an expansion of e-commerce and rising price competition, still warranted monitoring as they might contribute to more persistent inflation than in the past (TRADING ECONOMICS, 2018). (Refer to Appendix 9.14)
The Bank of Thailand has maintained its benchmark interest rate at 1.5% since 2015, as it has sought to boost economic progression. (Refer to Appendix 9.15) Although inflation has increased, the central bank is likely to keep its interest rate at current levels for the foreseeable future, maintaining a low cost of borrowing for businesses and investors. It provides currency stability which aid the growth in trade and lessen the risk for businesses like Super Bean.
4.2 Money Supply
Thailand’s money supply can be classified as M0, M1, M2 and M3. M0 and M1, also called narrow money, normally include coins and notes in circulation and other money equivalents that are easily convertible into cash. M2 includes M1 plus short-term time deposits in banks and 24-hour money market funds. M3 includes M2 plus longer-term time deposits and money market funds with more than 24-hour maturity. The exact definitions of the three measures depend on the country (The Financial Times, 2018). In May 2018, Thailand money supply M0 was reported at 1380578.00 THB Million (IECONOMICS , 2018). It ranks as the world’s 13th highest recorded money supply M0. In the long-term, money supply M0 is projected to trend around 1550000.00 THB Million in 2020 (TRADING ECONOMICS, 2018). As for money supply M1, Thailand stands at 2008.20 THB Billion and is the 8th lowest amongst other countries. In the long-term, it is projected to trend around 2300.00 THB Billion in 2020 (TRADING ECONOMICS, 2018). By increasing money supply in Thailand, more money is available circulating in the market, the interest rate will decrease accordingly, which in turn generates more investment and thereby increase consumer spending. Businesses like Super Bean will benefit more in the projected future as consumers have more money to spend.

4.3 Capital Market and Investment Portfolio
The Thai government maintains a regulatory framework that broadly encourages and facilitates portfolio investment and largely avoids market-distorting support for specific sectors. The Stock Exchange of Thailand (SET) is the country’s national stock market, which was set up under the Securities Exchange of Thailand Act B.E. 2535 (1992). There is sufficient liquidity in the markets to allow investors to enter and exit sizeable positions. In Doing Business 2018, Thailand achieved the fourth best ‘Getting Credit’ ranking in Asia Pacific, with its ranking improving significantly since 2012. This is due to reforms including provision of credit scores to financial companies and greater leniency in the range of assets that can be used as collateral. The Bank of Thailand, country’s central bank, has respected International Monetary Fund (IMF) Article VIII by refraining from restrictions on payments and transfers for current international transactions. Credit is generally allocated on market terms rather than by “direct lending.” Foreign investors are not restricted from borrowing on the local market. In theory, the private sector has access to a wide variety of credit instruments, ranging from fixed term lending to overdraft protection to bills of exchange and bonds. However, the private debt market is not well developed, and most corporate financing, whether for short-term working capital needs, trade financing, or project financing, requires borrowing from commercial banks or other financial institutions (International Trade Administration, 2017).

4.4 Banking
Thailand’s banking sector, with 15 domestic commercial banks, is healthy with low rates of non-performing loans (around 3 percent in December 2016) and a high ratio of capital funds/risk assets (capital adequacy) of 17.4 percent in December 2016. Thailand’s largest commercial bank is Bangkok Bank, with assets totaling USD $80.4 billion as of December 2016. The combined assets of the five largest commercial banks totaled USD $350.9 billion, or 76.6 percent of the total assets of the Thai banking system (International Trade Administration, 2017).
Under Bangkok Bank’s business banking for corporations, there is Society for Worldwide Interbank Financial Telecommunication (SWIFT) system as it allows corporations to have access to financial services with all their financial institutions through one-single, highly secure, standardized communication platform. SWIFT is a global member-owned cooperative and the world’s leading provider of secure financial messaging services.  By using SWIFT, it allows Super Bean to receive end of the day report directly from their related banks so as to increases funds visibility and ability to invest. It also lowers the cost of financial transactions, there will be staff productivity gains from the increased of straight through processing. SWIFT improves security to prevent break down and reliability of payment (Bangkok Bank, 2001).

Non-residents may open Thai baht accounts with authorized commercial banks in Thailand. Non-resident Baht Account for Securities (NRBS) may be debited or credited for the purpose of investment in securities and other financial instruments such as equity instruments, debt instruments, unit trusts, derivatives transactions traded on the Thailand Futures Exchange and the Agricultural Futures Exchange of Thailand. Non-resident Baht Account (NRBA) may be debited or credited for general purposes (i.e. other than investment in securities) such as trade, services, foreign direct investment, investment in immovable assets, and loans. The total daily outstanding balances for each type of account shall not exceed THB 300 million per non-resident. Transfers between different types of accounts are not allowed (Grant Thornton Thailand, 2016). Allowing foreigners to open local bank account will facilitate Super Bean in the ease of transaction. Non-residents can open and maintain foreign currency accounts without deposit and withdrawal ceilings. The accounts can be freely credited with funds originating from abroad. Other repayments from Thai residents or borrowed from authorized banks can be deposited subject to supporting documents. Balances on such accounts may be freely withdrawn.
4.5 Exchange Rate/ Value of Baht USD
Thailand follows a managed-float exchange rate regime since July 2, 1997. Despite the firming of the US dollar, due to tightening monetary policy in the USA, the Thai baht strengthened against the former currency by 3.8% annually in 2017, outpacing the performance of most Asian currencies, due to higher economic growth, rising investor confidence, and tourist receipts. The currency is expected to slightly depreciate over 2018-2023 (Euromonitor International, 2018). At present, only a few major currencies, e.g. USD EUR and JPY, are normally used for international trade and service settlement. However, trading share between Thai and the core markets who own those currencies have now declined in their importance, while new trading partners in the region i.e. China and ASEAN subsequently take on growing shares. Amidst global financial market uncertainty, the use of local currencies for trade settlement would be useful, especially as alternative currencies for Thai exporters and importers to reduce exchange rate risks arising from volatility in major currencies. The fluctuation in exchange rates is evident in Appendix 9.16. Thus, the fluctuation may results in translation risk, as the parent company of Super Bean is in Singapore, and subsidiary company is in Thailand in this case. As mentioned earlier on, Thai Baht is expected to be depreciated over the years, and Super Bean’s investment amount may results in transaction loss as they venture into Thailand.
5. Government regulations and initiatives
In recent years, there are several initiatives imposed by Thai government in order to achieve its global competitiveness and meet its sustainable development goals.

In 2016, regulations were loosened on banking, specifically on commercial banking and representative offices of foreign banks (Shira, 2017). There are no restrictions on capital investment and foreign loans. Remittances of investment funds and foreign loans into Thailand are unlimited and freely permitted provided they are conducted through the commercial banks and surrendered to a commercial bank or deposited in a foreign currency account opened with a commercial bank in Thailand within 360 days (The Mayer Brown Practices, 2015). This facilitates the opening of 30 retail outlets in Thailand as it requires large amount of capital investment. With this government encouragement regulation on banking, funds can be remitted from Singapore to Thailand freely, which supports the expansion of Super Bean’s businesses.
In addition, Thailand is expecting to experience another property market boom, and the Thai government is eager to increase levels of foreign investment to help fuel the explosion in property prices. The laws regarding property ownership in Thailand currently allow non-residents to own property, but not land. The Financial Institutions Business Act, passed at the end of 2007, unified the legal framework and strengthened the Bank of Thailand’s supervision and enforcement powers. The Act gave power to the Bank of Thailand to raise foreign ownership limits for existing local banks from 25 percent to 49 percent on a case-by-case basis. The Act also allows the Minister of Finance to authorize foreign ownership above 49 percent if recommended by the central bank (EVERETT, 2017). As Super Bean plans to set up a central kitchen, ownership of the central kitchen would be a concern. With this policy, Super Bean is able to increase its percentage of ownership. In the meanwhile, partnership with local is needed as 50% of the ownership still belongs to local partners.
Thailand Board of Investment (BOI) is a government agency in which it promote valuable investment, both investment into Thailand and Thai overseas investment. However, as the trade promotion is only applicable for industry in technology and innovation, Super Bean will not be eligible for this financial assistance (BOI Thailand, 2017).

On the other hand, Super Bean can leverage the assistance provided by Singapore’s Special Government Agency; Enterprise Singapore in terms of grants, loans and insurance, and tax incentives. Firstly, Super Bean can obtain the Global Company Partnership (GCP) Grant. The GCP Grant is able to help Super Bean in defraying eligible costs of their overseas expansion projects in capability building, market access and manpower development. Since Super Bean is considered a non-small and medium enterprise (SME), they can obtain up to 50% eligible costs incurred in engaging a third-party professional to build up relevant firm level capabilities (Enterprise Singapore, 2018).
Secondly, Super Bean is able to undertake International Finance scheme (IFS) and Political risks insurance scheme (PRIS). IFS is a programme designed to assist aspiring Singapore-based companies who wishes to venture abroad and are in need of financing facility. With IFS, Super Bean can access financing facilities in asset-based to purchase fixed assets for use in Thailand, structured loans to finance their working expenses, and lastly, banker’s guarantee for issuance of guarantee facilities in the form of advance payment guarantee, performance guarantee or tender bond guarantee (Enterprise Singapore, 2018).
On the other hand, PRIS can be used to safeguard Super Bean’s projects in Thailand against political uncertainties. A typical PRI policy covers risks such as, expropriation, currency inconvertibility and transfer restrictions, political violence, breach of contract by host government and non-honoring of sovereign financial obligations. Thus, Enterprise Singapore will support 50% of the premium support for up to the first three years of each PRI policy, and subject to a maximum amount of S$500,000 (Enterprise Singapore, 2018).
Thirdly, Super Bean can benefit from the Double Tax Deduction Scheme for Internationalization (DTDi), with a 200% tax deduction on eligible expenses for international market expansion and investment development activities. DTDi is able to support Super Bean’s activities in various key stages of its overseas growth journey (Enterprise Singapore, 2018). (refer to Appendix 9.17)
Hence, with the financial support and reassurance from Enterprise Singapore, Super Bean will be more inclined to venture into Thailand.
6. Risk Analysis and Conclusion

(BERI, 2018)

(BERI, 2018)
To conclude the above evaluated risk factors of the report, Business Environment Risk Intelligence (BERI) has provided an overview of the risk assessment by taking consideration into political risk index, operations risk index, and remittance and repatriation factor. Political risk index comprise of elements on External Cause: Dependence on/Importance to a Hostile Major Power, External Cause: Negative Influences of Regional Political Forces, Internal Cause: Fractionalization of the Political Spectrum, Internal Cause: Fractionalization by Ethnic Lang., & Religious Groups, Internal Cause: Restrictive Measures to Retain Power, Internal Cause: Mentality; Xenophobia, Nepotism, Nationalism, Corruption, Internal Cause: Social Conditions; Wealth Distribution, Population, Internal Cause: Organization/Power of Radical Group, Symptom: Societal Conflict; Strikes, Violence, Demonstrations, Symptom: Non-Constitutional Changes, Assassinations, Guerrillas (BERI, 2018). Operation risk index comprise of elements on Policy Continuity, Attitude Foreign Investors and Profits, Degree of Nationalization, Monetary Inflation, Balance of Payment, Bureaucracy, Economic Growth, Currency Convertibility, Enforcement of Contract, Labor Cost/ Productivity, Professional Service & Contract, Communication & Transportation, Local Management & Partners, Short-term Credit and lastly, Long-term Loans & Venture Capital (BERI, 2018). Remittance and repatriation factor is based on Legal Framework Subindex Foreign Exchange Generation Subindex Accumulated International Reserves Subindex Foreign Debt Assessment Subindex (BERI, 2018). As shown above, from 2011 to 2018, Thailand has achieved an average combined score of 40.375, while Singapore has attained the average combined score of 74.5. As stated in “A Guide to Global Investment Strategy”, the higher the score, the lesser the risk of doing business in the country. The BERI splits result into four different risks from prohibitive risk which is from 0 to 39 points, high risk is from 40 to 54 points, moderate risk is from 55 to 69 points, up to low risk is from 70 onwards to 100 points (Michel Henry Bouchet, 2003). Thus, as compared with Singapore, it is more risky for businesses like Super Bean to venture into Thailand. However, Thailand’s business operating environment is forecasted to improve over the years, which could be due to Thai government’s policies and initiatives in resulting a more stabilized political system, easiness and attractiveness of doing business. This will in turn boost foreign investors’ confidence in setting up businesses in Thailand.
6.1 Strength
The strength of Thailand is that they have a favorable tax regime for corporation as the tax rate is lower compared to some other countries, mentioned in section 3.4. Large number of reforms has also taken place that will likely to benefit the Super Bean.
6.2 Weakness
However, the weakness is adverse political risk as there is a large threat of terrorism as mentioned in section 3.1, which could affect the business operations. Besides that, there is a skills shortage in the labor force due to limited access to education and insufficient funds.
6.3 Opportunity
Infrastructure in Bangkok are well-developed compared with other regions and this is a great opportunity for Super Bean to leverage on for a more efficient transportation. Another opportunity is that there are different incentives that can entice companies to increase their Research ; Development (R;D) sectors. Besides that, Thai government has taken steps to encourage domestic soybean plantation such as imposing a price floor on domestic soy beans with at least U.S. $564/MT. With this, we suggest to Super Bean by switching to domestic beans in order to support government policy. By doing so, it reduces the logistic cost of international transportation as well as encourages domestic growth of agriculture. Even though the domestic price is slightly high compared US imported beans, we believe that the price will decrease if domestic production increases. Therefore, this could be a business opportunity for Super Bean.

6.4 Threat
There is an increase in ageing population, which affects the labor force as well mentioned in section 2.1.3 which is a threat.  In addition, there is a threat in corruption, mention in section 3.1 it is a major issue and thus affecting the business landscape.
7. Recommendation
Based on the overall macroeconomic analysis of Thailand, it is recommended for Super Bean to venture into Bangkok, Thailand in 2023 by setting up 30 retail outlets and central kitchen. Out of 76 provinces, Bangkok would be the most ideal city for foreign business investment. Being the capital of Thailand, Bangkok tends to have a higher level of security to protect society from potential terror attack. The people residing in Bangkok are more inclined to purchase healthier food due to their increasing purchasing power, high education level and exposure to social media. Beside that, because of their hectic lifestyles, people in Bangkok would prefer food that is more convenient. Lastly, the accessibility of road, rail and air infrastructure in Bangkok will allow the transportation of raw ingredients or materials needed more easily, and ensure on time delivery. Therefore, Super Bean should set up their business in Bangkok, Thailand, as they are likely to benefit from Thailand’s potential growth in terms of economy and financial environment in the long run.

8. Conclusion
Overall, this report has successfully analyzed the macro-environmental of Thailand, and Super Bean should expand their business into Bangkok, Thailand in the future.