|➤ 100% foreign ownership of the company's shares|
|➤ Import duty exemption/reduction on machinery|
|➤ Import duty reduction on raw or essential materials|
|➤ Import duty exemption on materials imported for R&D purposes|
|➤ Exemption from corporate income tax on net profits and dividends of the promoted activity|
|➤ Corporate income tax exemption on net profits and dividends of the promoted activity|
|➤ Corporate income tax exemption on net profits and dividends of the advanced high technology and innovation activity|
|➤ 50% reduction in corporate income tax|
|➤ Double deduction for transportation, electricity and water supply costs|
|➤ 25% deduction for equipment installation or construction costs|
|➤ Import duty exemption on raw or essential materials imported for use in production for export|
|➤ Additional 3 to 13 year corporate income tax (CIT) exemption, not to exceed 13 years in total|
|➤ Additional 50% reduction for five years|
|➤ Double deduction for ten years of transportation, electricity and water supply costs|
|➤ Deduction of 25% of the costs of installation or construction of equipment (apart from the standard deduction of the valuation)|
|➤ Import duty exemption on machinery|
|➤ Import duty exemption on imported raw materials used in production for export|
|➤ Non-tax incentives, i.e. permission to own land and permission to bring in experts to work|
To summarize the advantages of BOI Company, BOI allows up to 100% foreign ownership, up to 18 years of corporate income tax (CIT) exemption, no tax on import of machinery and equipment essential for project development, fast Thailand visa and work permit procedure and renewal, permission to bring in experts and skilled workers with their families. Conditional permission for foreigners to own land and paid-up capital of up to THB 1 million or more depending on the business project.
The Board of Investment has the following Policies for Investment Promotion:
1. Promote investments that contribute to the competitiveness of the Thai market by encouraging research and development, innovation, innovative solutions in agriculture, industry and services, SMEs, fair competition, and reduction of social and economic disparities.
2. Promote activities that protect the environment, save energy or use alternative energy for the benefit of Thailand.
3. Promote business activities to create investment in a specific region of Thailand and balance the development of Thailand’s regions.
4. To promote investments in southern Thailand to develop the local economy.
5. Promote special and designated economic zones, especially in border areas, inside and outside industrial zones, to create economic connectivity with neighboring countries and prepare for entry into the ASEAN Economic Community (AEC).
6. Promote Thai overseas investment to enhance the competitiveness of Thai businesses and Thailand’s role in the global economy.
The BOI has four divisions responsible for promoting investment in Thailand:
|Investment Promotion Division 1:||Agricultural, Bio and Medical Industries|
|Investment Promotion Division 2:||Advanced Manufacturing Industries|
|Investment Promotion Division 3:||Basic and Supporting Industries|
|Investment Promotion Division 4:||Digital, Creative Industries & High Value Services|
|Investment Promotion Division 1-4:||Research and Development, Targeted Core Tech Dvlpt|
To obtain a BOI company in Thailand, it is essential to follow several essential steps:
The BOI covers many economic activities. However, those who are not on the BOI eligibility list will not be able to obtain this license and its benefits. Therefore, we recommend that anyone wishing to register a BOI company determine if their business is eligible. You can contact the BOI abroad to receive information or you can contact our business lawyers to assist you in your application. Indeed, analyzing the eligibility of your company to the BOI with an expert is essential to receive confirmation of the possibility of register a BOI company.
Once the Board of Investments has received all the documents, it evaluates the proposal and approves or rejects it. If the project is approved, the Board of Investments issues a promotion certificate to the investors. The next step is to request the use of the incentive and the start of the operation. The BOI sets the following conditions for approval of individual projects:
Growth in competitiveness in agriculture, industry and services. The added value of the project must not be less than 20% of total income. However, there are exceptions for the agricultural sector and agricultural products, electronic products and parts and winding centers. For these materials, an added value of at least 10% must be achieved.
Modernized manufacturing techniques must be used, as well as new equipment. The following criteria apply to imported used machinery/equipment. If the used equipment is less than five years old between the year of manufacture and import, it can be used in the project. It is counted as capital for the calculation of the corporate tax exemption limit. However, such used equipment is not covered by the import duty exemption. A document on the performance of the machine, issued by a reliable authority, evaluating the efficiency, environmental impact and energy consumption of the machine, as well as its fair price, must be provided.
In the case of used equipment older than five years, but not older than ten years from the year of manufacture to the year of import, the press alone can be used in the project and registered as investment capital for the calculation of the corporate tax exemption limit. But the import duty exemption cannot be granted.
For sea and air transportation, molds and dies used in machines that are more than ten years old between the year of manufacture and the year of import may be allowed to be used in the project as a convenience and may be considered as capital expenditure (investment) for the calculation of the maximum corporate income tax exemption and may be exempted from import duties on machines.
Appropriate and effective procedures and policies shall be in place to ensure that the quality of the situation is maintained and its impact on the environment is minimized. The OIO will pay particular attention to the identification and management of environmental pollution arising from a project-related issue that may impact the environment. Projects or activities that are required to submit an environmental impact report must comply with Thai environmental laws and Cabinet resolutions.
The minimum capital investment required for each project is Baht 1 million (excluding the cost of land and working capital), unless otherwise specified in the list of activities eligible for investment promotion.
The area most supported by the Thai government is the Eastern Economic Corridor (ECC), which includes the provinces of Chachoengsao, Chonburi and Rayong. The Eastern Economic Corridor can be described as an important industrial region with a strong focus on Thai high-tech industries such as automotive, electronics and petrochemicals.
In addition, it is a region with developed infrastructure such as deep sea ports and airport rail systems. Highways and industrial states with a skilled labor pool and a prime location for tourists. Its main objective is to lead Thailand to the new area of Thailand 4.0. To achieve this goal, projects in the EEC are given greater incentives. Thailand 4.0 is an engine to raise the standard of living for all Thais and to strengthen upstream core technologies with downstream targeted industries, startups and SMEs. Existing initiatives include agriculture and food, tourism, automotive, electrical and electronics, and petrochemicals, complemented by automation and robotics, aerospace, digital, bioenergy and biochemicals, and medical and health.
Investors who wish to benefit from the higher EEC incentives must meet the following criteria:
|➤ Project in the target industry|
|➤ Cooperation with institutions / organizations|
|➤ Projects must be located in Chachoengsao, Chonburi or Rayong|
In the context of a BOI company application, several documents must be provided to the officer to obtain authorization. Themis Partner has provided a non-exhaustive list below:
|➤ Company documents such as company affidavit, list of shareholders, financial statement, memorandum of association (in case the company has already been established)|
|➤ Copy of the passport or Thai identity card of the company director (if the company has not yet been confirmed)|
|➤ Financial and investment plan|
|➤ Description of the company's purpose|
|➤ Type and size of the company|
|➤ List of machinery, tools, equipment, computers and software that will be used for this project (including country of origin, quantity and value)|
|➤ Environmental protection plan|
|➤ Employment details (including positions, number of employees and nationality)|
|➤ List of major customers and business relationships|
|➤ Marketing plan|
|➤ Business plan, including details of services, location of operations, estimated revenues|
|➤ Estimated project taxes and expenses for the first three years of operation|
|➤ Program awards (if applicable)|
|➤ Company and subsidiary brochures|