Thailand’s Ladkrabang Freezone Warehouse– What You Need to Know
EAS operates a freezone warehouse in Ladkrabang Thailand. Free Zones or special economic zones are often misunderstood by businesses and the general public as well. For many, the mention of a free trade zone, or FTZ brings to mind an industrial estate, surrounded by a fence or barrier, that hosts a wide variety of Multinational companies looking for tax breaks, a low wage labor supply and loosely monitored import/export regulations.
In contrast to the above, the Ladkrabang Free Trade Zone has emerged as an attractive, and well run concept that has brought employment, foreign capital, and a platform for a wide range of logistics and trade related activity.
Concept of FTZ and Goals
The concept of a FTZ or other types of special economic zones is not a new idea. The first officially recognized special economic zone was in Ireland in 1959 while less formalized zones in cities like Hamburg and Singapore go back centuries. The Ladkrabang FTZ can trace its origins back to 1977. It was created with 3 main goals:
- To attract foreign investment. Positioned to alleviate the costs and administrative headaches typically associated with setting up an operation in a foreign country, the Ladkrabang FTZ enabled foreign companies, looking to expand in Thailand, a means to manufacture in a low cost environment while avoiding duties, tariffs and customs regulations.
- To minimize the danger of large scale unemployment. The simple fact that the companies utilizing the Ladkrabang FTZ were not part of the local economic environment meant that unemployment would not be drastically impacted as a result of the ups and downs of the local economy.
- Economic Strategy. As part of the Thai government’s overall economic development strategy that would allow Thailand to develop additional exports while still being able to keep strategic economic barriers in place that were protecting fledgling industries in greater Thailand.
In short, FTZs are designed to have a positive impact on the host countries economy by increasing employment, attracting direct foreign investment and benefiting from increases in foreign exchange.
Conversely, FTZ’s such as the Ladkrabang Free Trade Zone offer participating companies the benefits of plentiful and relatively low cost labor while being able to import raw materials and export finished goods without the additional costs of duties, corporate taxes and value added taxes.
Today, the Ladkrabang Freezone warehouse has emerged as a convenient and efficient option for many MNC’s (Multinational corporations) and Eagles Air and Sea has become a leader in helping interested parties set up their operations within the Ladkrabang setting. Situated close by both the Suvarnabhumi International Airport as well as the Ladkrabang Inland Container Depot (ICD), Eagles can offer its clients access to warehousing and other operational facilities within the Ladkrabang FTZ complex. If you are evaluating the attractiveness of a ASEAN based manufacturing or distribution strategy, the professionals at Eagles Air & Sea can help guide you through the process of developing a business plan in conjunction with governmental agencies.
Frequent Asked Questions
What is the main advantage of operating in the Ladkrabang freezone compared to other locations?
Ladkrabang is located on the outskirts of Bangkok nearby both the Suvarnabhumi airport and the Ladkrabang Inland Container Depot (ICD), making transport of goods much easier than if you are located up country.
How would goods move from the Ladkrabang Freezone to the Leam Chabang port?`
Rail service runs directly from the Ladkrabang ICD to the port in Leam Chabang. In addition to rail services, trucking is also available as well.
When would it not make sense to use the freezone concept?
Since the freezone concept is designed to avoid many of the issues and complexities of importing products into a country (like Thailand) you might not enjoy the benefits of a freezone if you are actually distributing and selling your product(s) in Thailand, rather than shipping goods back out of the country after they are processed in the freezone.