Most of Thailand has a tropical monsoon climate. Its main natural hazards are regular periods of floods, which should be taken into consideration for companies to build factories and take prevent and recovery measures to deal with its negative effects.
The economic growth of Thailand impacts the environment adversely. Current environmental problems include air pollution, water pollution, deforestation, soil erosion, and threatened biodiversity. Thailand enacted some environmental laws to protect its environment, requiring international companies conducting business in Thailand to operate in accordance with these laws.
Thailand is under a constitutional monarchy with a hereditary monarch being the head of state and the Prime Minister being the head of government. A multi-party system is adopted and executive, legislative and judiciary branches are independent.
The political risk in Thailand is high due to its history of instability, which can be reflected by periodic coups—twelve successful and seven attempted military coups in the past. Especially in May 2014, the military staged a coup and took over this polarized country. The political instability leads to disrupted production, increased operating costs, lower productivity and loss of profits. Therefore, international companies must continually monitor the government and its stability to determine the potential for political change.
Although the Government effectiveness and regulatory quality are relatively high, corruption has existing in Thailand society for a long time.