Marine to Thailand

Trends and opportunities

The market

Thailand’s Leisure Marine sector continues to grow as the popularity of Thailand as a major international tourism destination increases. More than 23 million foreign tourists visited Thailand, generated Baht 1.6 trillion (approximately A$ 65 billion) incomes in 2016 (Source: Ministry of Tourism and Sports, Thailand). The Ministry of Tourism and Sports targets revenue from tourism industry will reach Baht 1.81 trillion (A$ 73.5 billion) in 2017 (Source: Tourism Authority of Thailand Newsroom Tourism Authority of Thailand Newsroom).

Geographical position, beautiful natural assets and extensive yachting infrastructure have made Thailand become a major marine tourism destination in Asia. Phuket, yachting destination on the west coast of Thailand receives around 1,300 foreign yachts each year, while Pattaya on the east coast welcomes less than 10 per cent of that (Source: Bangkok Post Property). The yachting industry generated over Baht 5.8 billion (A$ 236 million) in annual revenue for Thailand (Source: Kasikorn Research Center).

Thailand’s Ministry of Tourism and Sports plans to increase the number of high-end tourists to the country by promoting leisure marine tourism, particularly by encouraging the superyacht sector. However, changes to regulations enabling foreign flagged superyachts over thirty metres length to charter in Thai waters are not yet in place.

The Thai Government, led by the Ministry of Transport (MOT), has announced a plan to promote Thailand as the ‘marina hub’ of Asia, with the aim to develop the local yachting industry and its supply chains and to further promote high-end tourism. The MOT is conducting a feasibility study to identify suitable locations for developing new yacht marinas and cruise ship terminals.

Thailand currently has seven international standard yacht marinas as well as some smaller marinas, with a capacity of nearly 1,500 wet berths. Six marinas are located in Phuket and Krabi, off the Andaman Sea, while the other is located in Pattaya, off the Gulf of Thailand.

Thailand’s boat building and repair industry has the capability to handle the maintenance and repair of luxury yachts, as well as limited superyacht conversion from commercial or other types of vessels. Key factors that may hinder the growth of the yacht market in Thailand include the lack of availability of yard hire and financing, government regulations and restrictions on immigration of yachts and crews, taxation on yacht sales and yacht chartering, and limited depth of the nautical channel.

Opportunities

Opportunity areas in Thailand’s leisure marine industry include:

boat equipment and yacht supplies
marine infrastructure and marina equipment
yacht and superyacht maintenance and repair services
fast ferries including second hand vessels
pleasure craft
aluminium boat kits
education and training for yacht repairs, superyacht crew, marina operation and other marine-related skills.

Australian marine design features are regarded as equal or superior to other imported products in Thailand and boat builders should explore the demand for both basic and sophisticated vessels.

Good opportunities exist for charter boats, chartering services, yacht management services, pleasure craft and marina facilities in the major seaboard tourist and island resort areas, particularly in the south of Thailand. Australian companies interested in providing yacht chartering and management services should consider setting up a business in Thailand as charter licenses of yachts with length less than 30 metres are currently limited to Thai registered yachts only.

Thailand’s important leisure marine destinations are located on the west coast of the peninsula including Phuket, Phang-Nga and Krabi, the east coast including Samui, Pha-ngan, Ang-thong, Pattaya, Koh Chang and several nearby offshore islands.

Competitive environment

Marine products and services from Australia are competitive compared to the United States and Europe, due to proximity to the market and the Thailand - Australia Free Trade Agreement (TAFTA) which has resulted in tariff abolishment of most marine products with sufficient Australian content.

Tariffs, Regulations and Customs

The Thai Government has endorsed zero import taxes on boats. Since February 2004, the following categories of boats imported into Thailand don’t have to pay import and excise taxes:

inflatable boats
sailboats (with or without auxiliary motor)
motorboats (other than those with outboard motors)

Value Added Tax (VAT) of 7 per cent still applies to imports. The abolishment of import and excise duties on boats has helped to increase demand of boats and boating products in Thailand.

Australia has signed a bilateral trade agreement with Thailand, the Thailand-Australia Free Trade Agreement (TAFTA), which has resulted in duty free import on most products with sufficient Australian content. To qualify for TAFTA import duty rates, Australian suppliers are required to:

establish Australian content
register as a TAFTA exporter
obtain a Certificate of Origin (CO) for the shipment

There is no quota on the type or number of vessels imported to Thailand and an import license for importing vessels is not required.

Industry Standards

Thailand’s Marine Department at the Ministry of Transport is responsible for granting licenses to own and operate various vessel types. All boats cruising in Thai waters are required to hold a license for the appropriate size of vessel. Foreign boats are allowed to stay in Thailand for six months with the option to renew for a further six months. (Source: Phuket Customs)

Foreign yachts are not allowed to be chartered in Thai waters.

Boats that intend to stay in Thailand for less than six months need a foreign sailing license. A Thai boating license is required to operate a Thai registered vessel.

The Marine Department also checks and controls the conditions of the vessels used in the country for the safety of passengers. There are six classification societies who are authorised by the Marine Department to check the standards of the vessels.

They are:

American Bureau of Shipping
Bureau Veritas
Det Norske Veritas
Germanischer Lloyd
Lloyd Register of Shipping
Nippon Kaiji Kyokai

Marketing your products and services

Market entry

It is recommended that the Australian leisure marine and shipbuilding industry considers the following approaches to the Thai market:

Australian-built new vessels (naval and commercial vessels) - Shipbuilders need to offer more basic vessels - not too sophisticated, fast, luxurious and or expensive for Thailand. The Royal Thai Navy is required to build new patrol vessels locally
Yacht repair and refit - Partner with yacht marinas in Thailand or set up a locally-owned yacht repair facility at yachting destination such as Phuket, Pattaya, Krabi or Samui
Second-hand vessels - Some Thai operators are interested in importing second-hand vessels and several are already in service
Boat design and marine architecture - Thai boat builders and shipyards have capability to build luxury yachts, fast ferries and sophisticated vessels, however design and architecture of vessels still relies on foreign designers/ architects
Joint venture with Thai shipbuilders - Opportunities exist to enter into a licensing or joint venture arrangements to supply expertise to build better vessels in local Thai yards at competitive prices. Thai shipbuilders already build ferries and cruise vessels for local operators. These are usually basic steel and fibreglass vessels although some have been built with aluminium superstructures. Low wage costs in Thailand mean it is difficult for Australian yards to compete on price with locally built vessels
Set up boat building facility in Thailand - Australian boat builders may consider setting up a shipyard in Thailand to reduce production and labour costs while maintaining quality. Setting-up costs can be minimised by renting premises instead of investing in green-field land and facilities. Incentives may be offered by the Thai Board of Investment in this
Boat equipment and supplies - Appoint a local agent or a distributor to distribute your products in the market. Australian exporters should become familiar with the Thailand – Australia Free Trade Agreement (TAFTA) in order to claim tariff reduction or zero per cent import duty benefits.

Most marine equipment is shipped by sea freight. Shipping time to Thailand takes approximately two weeks and shipping frequencies are twice weekly from major ports.

It is recommended exporters use customs agents or freight forwarders to clear goods from customs. Your local agent or distributor usually handles import procedures and documentation (it is required goods are imported by a Thai registered company). Australian exporters need to provide an Australian certificate or origin (CO) for products to be eligible for TAFTA’s benefit.

Links and industry contacts

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

Contact details

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Export markets - Thailand