One-stop investment in Thailand

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Suttipong Damrongsakul, Managing Director, GemopolisThe huge free zone of Gemopolis just adjacent to Bangkok’s main Suvarnabhumi airport is a bureaucracy-free facility for foreign investors who want to set up businesses in the jewelry industry or various other sectors or even take part in the expansion of the estate.

 

Interviewee:  Suttipong Damrongsakul, Managing Director, Gemopolis, Secretary General Thai Gem and Jewelry Traders Association

Gemopolis is Bangkok’s only economic free zone and was established in 1990 to accommodate manufacturers and traders of diamonds, gems and jewelry. Today, it hosts 130 companies employing over 20,000 staff and has also opened to a wide range of products including fashion goods, medical equipment, watches, eye glasses, spectacles, telecommunication accessories, IT, computers, electric and electronic accessories, sport equipment, and any high value adding production. Investing in Gemopolis is a straightforward process for foreign companies, says the free zone’s Managing Director Suttipong Damrongsakul.

Q: What is Gemopolis and what are the general benefits and advantages for foreign investors to set up a business in a free zone as opposed to go the normal way by establishing a partnership with a Thai company?

A: We are a unique industrial estate that started in 1990, designed for diamonds, gems and jewelry trading and manufacturing. Later, we added more sectors to this, but all of them have to be non-polluting industries. At present, there are 130 companies from 26 countries here, with a small amount of Thai companies as well. Around 20,000 people are now working in Gemopolis, and it has become something like an international community. The benefits for foreign companies as compared to a non-free zone are certainly that we are a one-stop investment facility, this means a foreign investor can come here into my office and we handle the whole process, from licensing to work permits and the like. It does not take more than 40 to 60 days until the foreign company can start tax-exempt operations. We serve customers from the beginning. This is one major advantage versus setting up a company outside with a Thai partner. Furthermore, the foreign company can purchase and own land, which it cannot do outside. And regarding manpower, we have our own training schools in the compound. Another benefit is our location: We are just four kilometers away from Suvarnabhumi International Airport, but are not directly under the flying path so that there is no noise pollution. And it takes only half an hour to reach Bangkok’s city center. After all, the government provides strong support with eight authorities involved, among them the Board of Investment, the Departments of Export and Industrial Promotion, and others.

Q: What are the requirements foreign investors have to meet to open a business in Gemopolis?

A: The company should have at least a minimum registered capital of one million baht and should be active in one of the sectors we offer.

Q: Do you have special financing or corporate loan schemes in place to help foreign companies set up a business in Gemopolis?

A: We have a bank here in Gemopolis to serve the daily business routine of our clients. Regarding loans, before it was easy to get them, but things have changed a little after the global financial crisis. Commercial banks have tightened their policies, and if a company now does not have relations to a Thai guarantor, it can be hard to get loans. This does not apply to loans for working capital, though, this is not the problem. But finance schemes for buying property or land or equipment really depend on the background of the foreign investor.

Q: How many foreign businesses have already set up a base in Gemopolis? Where are they from?

A: Our investors come from 26 different countries, many of them from India and Italy, others from England, Germany, Belgium, France, Denmark, Austria, Switzerland, but also from Canada, Australia, China, Hong Kong, Iran, Malaysia, Japan, Morocco, Pakistan, Russia, Philippines, US, Taiwan. There is also one UAE company here, Splendore, under Samra International. We have a full supply chain, from rough stones, stone cutting, manufacturing, support, and logistics. The biggest investor group from Europe comes from Italy and India is the largest Asian investor.

Q: Are you actively promoting Gemopolis in the Middle East? Do you have any partners there, or businesses from there that are interested to visit Gemopolis?

A: We don’t have so many contacts there at the moment, but I think Gemopolis and our future expansion project are very interesting for overseas investors, especially from the Middle East. We want to approach them, and we want to do promotions in the region.

Q: What exactly does the second phase of the Gemopolis master plan comprise? What are the opportunities for investors?

A: Gemopolis Phase II is also called the Gemopolis City project. It is designed as a residential complex with 5, housing and condominium projects over an area of one million square meters, together with a trading platform, exhibition and conference halls, a medical center and a campus, a department store and a shopping complex. We plan to have it finished in about ten years, and we are open for any local or overseas investors. Especially investors from the Middle East might be attracted by hotel and mall developments, a sector where they certainly have expertise.

Q: Why is the focus of Gemopolis so much on jewelry? There are already over 1,500 jewelry manufacturers and exporters in Thailand, is there still room for more?

A: I am convinced that there is still room for new players. The global jewelry business has come down a little bit after the financial crisis, but it is coming back, this is only a matter of time. In Gemopolis, we still have 10 per cent more capacity. The minimum size for a factory or warehouse is only 100 square meters to get a license. And regarding the competition, I think the location of Thailand for jewelry manufacturers is unique, as we have the craftsmanship and the skilled workforce at relatively low costs. Countries with cheaper labor costs like Vietnam, Cambodia or Laos don’t have the skilled workers, and the big competitor China already has higher labor costs than we have, which causes jewelry factories from China to move to Gemopolis instead of going the other way. And after all, the gems and jewelry sector is not an industry that can easily be moved around, as compared to garments or textile manufacturing, for example.

Q: Production and design of jewelry relies on skilled workforce and craftsmanship. What is the current situation on the labor market in terms of education and training? What will the minimum wage change?

A: There is no problem in the supply of skilled workforce. If a company in Gemopolis is hiring, you can see long queues of people lining up to apply for the jobs. As I said, we have our own training facilities here for workers with less experience. Regarding the new minimum wage, about 90 per cent of our workers are already earning more than 300 baht per day due to their high skills. I personally think that the minimum wage rise is a good thing, you know. 300 baht are hardly $10, and it is difficult to live in Bangkok, where everything has become so expensive, on below 10,000 baht per month.

Q: Apart from the investment incentives, why would you recommend Thailand for foreign investors?

A: Thailand is a country with a beautiful culture, and life for long-term investors in Thailand is not as complicated as in China, for example. We have the skills and we have the people. And in 2015, the Asean Economic Community will be a big unity, which is very good for overseas investors. With its modern infrastructures already in place, Thailand is in a good position to be used as a gateway to reach this large market.

 

Special Investment Opportunity

Gemopolis offers:

A one stop shop industrial park for jewelry manufacturers/exporters in Thailand

1 million square meters of land to be developed just next to the airport

Gemopolis is looking for:

Jewelry manufacturers willing to relocate/open a branch in Thailand and benefit for Thailand’s skilled  workforce

Investors willing to develop a plot of land partially or fully

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Reading Time: 5 minutes

The huge free zone of Gemopolis just adjacent to Bangkok’s main Suvarnabhumi airport is a bureaucracy-free facility for foreign investors who want to set up businesses in the jewelry industry or various other sectors or even take part in the expansion of the estate.

Reading Time: 5 minutes

Suttipong Damrongsakul, Managing Director, GemopolisThe huge free zone of Gemopolis just adjacent to Bangkok’s main Suvarnabhumi airport is a bureaucracy-free facility for foreign investors who want to set up businesses in the jewelry industry or various other sectors or even take part in the expansion of the estate.

 

Interviewee:  Suttipong Damrongsakul, Managing Director, Gemopolis, Secretary General Thai Gem and Jewelry Traders Association

Gemopolis is Bangkok’s only economic free zone and was established in 1990 to accommodate manufacturers and traders of diamonds, gems and jewelry. Today, it hosts 130 companies employing over 20,000 staff and has also opened to a wide range of products including fashion goods, medical equipment, watches, eye glasses, spectacles, telecommunication accessories, IT, computers, electric and electronic accessories, sport equipment, and any high value adding production. Investing in Gemopolis is a straightforward process for foreign companies, says the free zone’s Managing Director Suttipong Damrongsakul.

Q: What is Gemopolis and what are the general benefits and advantages for foreign investors to set up a business in a free zone as opposed to go the normal way by establishing a partnership with a Thai company?

A: We are a unique industrial estate that started in 1990, designed for diamonds, gems and jewelry trading and manufacturing. Later, we added more sectors to this, but all of them have to be non-polluting industries. At present, there are 130 companies from 26 countries here, with a small amount of Thai companies as well. Around 20,000 people are now working in Gemopolis, and it has become something like an international community. The benefits for foreign companies as compared to a non-free zone are certainly that we are a one-stop investment facility, this means a foreign investor can come here into my office and we handle the whole process, from licensing to work permits and the like. It does not take more than 40 to 60 days until the foreign company can start tax-exempt operations. We serve customers from the beginning. This is one major advantage versus setting up a company outside with a Thai partner. Furthermore, the foreign company can purchase and own land, which it cannot do outside. And regarding manpower, we have our own training schools in the compound. Another benefit is our location: We are just four kilometers away from Suvarnabhumi International Airport, but are not directly under the flying path so that there is no noise pollution. And it takes only half an hour to reach Bangkok’s city center. After all, the government provides strong support with eight authorities involved, among them the Board of Investment, the Departments of Export and Industrial Promotion, and others.

Q: What are the requirements foreign investors have to meet to open a business in Gemopolis?

A: The company should have at least a minimum registered capital of one million baht and should be active in one of the sectors we offer.

Q: Do you have special financing or corporate loan schemes in place to help foreign companies set up a business in Gemopolis?

A: We have a bank here in Gemopolis to serve the daily business routine of our clients. Regarding loans, before it was easy to get them, but things have changed a little after the global financial crisis. Commercial banks have tightened their policies, and if a company now does not have relations to a Thai guarantor, it can be hard to get loans. This does not apply to loans for working capital, though, this is not the problem. But finance schemes for buying property or land or equipment really depend on the background of the foreign investor.

Q: How many foreign businesses have already set up a base in Gemopolis? Where are they from?

A: Our investors come from 26 different countries, many of them from India and Italy, others from England, Germany, Belgium, France, Denmark, Austria, Switzerland, but also from Canada, Australia, China, Hong Kong, Iran, Malaysia, Japan, Morocco, Pakistan, Russia, Philippines, US, Taiwan. There is also one UAE company here, Splendore, under Samra International. We have a full supply chain, from rough stones, stone cutting, manufacturing, support, and logistics. The biggest investor group from Europe comes from Italy and India is the largest Asian investor.

Q: Are you actively promoting Gemopolis in the Middle East? Do you have any partners there, or businesses from there that are interested to visit Gemopolis?

A: We don’t have so many contacts there at the moment, but I think Gemopolis and our future expansion project are very interesting for overseas investors, especially from the Middle East. We want to approach them, and we want to do promotions in the region.

Q: What exactly does the second phase of the Gemopolis master plan comprise? What are the opportunities for investors?

A: Gemopolis Phase II is also called the Gemopolis City project. It is designed as a residential complex with 5, housing and condominium projects over an area of one million square meters, together with a trading platform, exhibition and conference halls, a medical center and a campus, a department store and a shopping complex. We plan to have it finished in about ten years, and we are open for any local or overseas investors. Especially investors from the Middle East might be attracted by hotel and mall developments, a sector where they certainly have expertise.

Q: Why is the focus of Gemopolis so much on jewelry? There are already over 1,500 jewelry manufacturers and exporters in Thailand, is there still room for more?

A: I am convinced that there is still room for new players. The global jewelry business has come down a little bit after the financial crisis, but it is coming back, this is only a matter of time. In Gemopolis, we still have 10 per cent more capacity. The minimum size for a factory or warehouse is only 100 square meters to get a license. And regarding the competition, I think the location of Thailand for jewelry manufacturers is unique, as we have the craftsmanship and the skilled workforce at relatively low costs. Countries with cheaper labor costs like Vietnam, Cambodia or Laos don’t have the skilled workers, and the big competitor China already has higher labor costs than we have, which causes jewelry factories from China to move to Gemopolis instead of going the other way. And after all, the gems and jewelry sector is not an industry that can easily be moved around, as compared to garments or textile manufacturing, for example.

Q: Production and design of jewelry relies on skilled workforce and craftsmanship. What is the current situation on the labor market in terms of education and training? What will the minimum wage change?

A: There is no problem in the supply of skilled workforce. If a company in Gemopolis is hiring, you can see long queues of people lining up to apply for the jobs. As I said, we have our own training facilities here for workers with less experience. Regarding the new minimum wage, about 90 per cent of our workers are already earning more than 300 baht per day due to their high skills. I personally think that the minimum wage rise is a good thing, you know. 300 baht are hardly $10, and it is difficult to live in Bangkok, where everything has become so expensive, on below 10,000 baht per month.

Q: Apart from the investment incentives, why would you recommend Thailand for foreign investors?

A: Thailand is a country with a beautiful culture, and life for long-term investors in Thailand is not as complicated as in China, for example. We have the skills and we have the people. And in 2015, the Asean Economic Community will be a big unity, which is very good for overseas investors. With its modern infrastructures already in place, Thailand is in a good position to be used as a gateway to reach this large market.

 

Special Investment Opportunity

Gemopolis offers:

A one stop shop industrial park for jewelry manufacturers/exporters in Thailand

1 million square meters of land to be developed just next to the airport

Gemopolis is looking for:

Jewelry manufacturers willing to relocate/open a branch in Thailand and benefit for Thailand’s skilled  workforce

Investors willing to develop a plot of land partially or fully

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