The main tax benefits that the BOI license allows for projects belonging to category 5.10 are the following:
|➤ Exemption from corporate income tax for up to 8 years: the annual cost of Thai IT staff, the cost of Thai IT staff in the IT field and the cost of obtaining ISO standard will be used for the calculation of the tax exemption|
|➤ 50% reduction in corporate income tax for up to 5 years|
|➤ Exemption from import duties on raw materials used in production or those used in research and development|
Only revenues from the direct sale of the software service or the developed platform or digital content are eligible for tax exemption. Today, the smartphone has become a tool that people carry everywhere, so it is necessary if you want to develop in the gaming industry to create your mobile application. The BOI is increasingly looking to support the mobile application industry, and is offering even more benefits to foreign investors wishing to create a mobile application for online games.
The BOI license brings many benefits but the application requires certain conditions that can be seen as restrictive for the foreign investor:
|➤ The minimum cost of Thai IT staff must be THB 1.5 million per year|
|➤ The development of the software or platform must be done in Thailand|
|➤ Retail and wholesale business are excluded from BO application|
|➤ The company must have at least 3 registered shareholders|
In addition, the process can be quite lengthy as the BOI will inform the company of the outcome of the process within 40-90 days of receiving the application. The length of time to respond is generally determined by the amount of the investment value:
|➤ If the investment value is less than THB 200M the license received within 40 working days|
|➤ If the investment value is THB 200M-2B, the license is considered by the sub-committee within 60 working days|
|➤ If the investment value of more than THB 2B, the license is considered by the sub-committee and approved by the BOI board within 90 working days after the application is submitted|
This list of documents is not exhaustive as the BOI officer may request any additional documents or exhibits if necessary. The documents required for the BOI application are as follows:
|➤ Two sets of the complete BOI investment application form|
|➤ Company documents: affidavit, list of shareholders, memorandum of association, accounting (if the company has already been established)|
|➤ A copy of the passport or Thai identity card of the director of the unincorporated company (if the company has not yet been registered)|
|➤ Financing and investment plan|
|➤ Information about the proposed business|
|➤ Business sector and size of the company|
|➤ List of machines, tools, equipment, computers and software used, mentioning the country of origin, quantity and value|
|➤ Environmental protection plan|
|➤ Information on employees with their function, number and nationality|
|➤ List of major customers and business relationships|
|➤ Marketing plan|
|➤ Operating plan with construction/operating site and estimated profits|
|➤ For the first 3 years of operation, estimated revenues and expenses for the project|
|➤ Benefits of the project (if applicable)|
|➤ Company and subsidiary brochures|
There are essential steps that you must follow to successfully apply for a BOI promotion in the gaming industry:
1) The company must submit application forms obtained in person from BOI headquarters in Bangkok or via BOI’s electronic investment platform along with all other documents.
2) The project is presented to a BOI officer in an interview with the owners of the online gaming company.
3) The application is evaluated. The OIO officer makes a decision within 40-90 days on the outcome of the application.
4) If the application is approved, the company must establish a Thai company within six months after the application is approved. Certain documents must be submitted to the Office of the Board of Investment.
5) The BOI will issue the investment promotion certificate within 10 working days after the company has completed its registration in Thailand. The promotion certificate also includes the rules that the BOI company must follow.
If you decide to start an online business in the gaming industry, there are a few data protection rules that you need to follow. All of these issues are regulated in Thailand, by the Personal Data Protection Act (PDPA). This law regulates all processing of personal data in commercial transactions, including eCommerce. There are a number of rules you must follow:
– Consent: You must not use an individual’s personal data without their consent, whether implied or explicit. The usual way to obtain consent in the eCommerce world is to allow the customer to check the box “I hereby agree to the use of my personal data…”.
– The purpose: You may collect, use and disclose personal data only after you have informed the data subject of the purpose of such data collection activities. You may not collect personal information simply because you have access to it.
– Reasonableness: You should only retain user data if there is a business reason to do so. There must be an explicit business purpose for such collection. This purpose must be considered appropriate by a reasonable person.
– If the data used is to be disclosed to another organization, or to make a decision about the data subject, companies must ensure that all such personal data is accurate and complete.
– Personal data should not be transferred outside Thailand if the jurisdiction to which the data is transferred does not provide legal protections comparable to the PDPA for the data subject.
eCommerce is protected in Thailand under the Electronics Transaction Act, which facilitates the use of electronic technology and controls the operations of companies providing online services and conducting electronic transactions.
A company in Thailand operating one or more websites in the gaming industry for the sale of its products or services must apply for an eCommerce license within 30 days once the company has started its business. The license application must be submitted to the Department of Business Development once the website is operational as the owner of the website will have to provide the following information:
|➤ Name of the site|
|➤ Nature of goods or services sold on the site|
|➤ The date the website starts/started operating (application must be made within 30 days of the start date)|
|➤ Method of payment for the purchase|
|➤ Document of domain name registration or certification document of the service provider|
In conclusion, Thailand is a very interesting country to set up in the field of online gaming eCommerce. The best option as a foreigner wishing to invest in the online gaming business is to apply for a BOI since you will be entitled to many advantages that you cannot get when setting up a simple company. In addition, the gaming industry is part of category 5.10, one of the sectors that will easily receive the BOI license.
We also recommend that you make sure that the rules for the protection of the data collected by your company are respected, which are essential and whose violation is severely punished.
Finally, there are certain procedures that you should not omit such as the application for an eCommerce license, in order to guarantee more protection to the users of your platform.