The Benefits of Opening a BOI Company in Thailand

Written by Umpire Legal on . Posted in BLOG.

For entrepreneurs looking to start a business in Thailand, there is the option to become part of the BOI program. Though this membership is competitive, should you qualify, your business will get to enjoy several lucrative benefits that are more than worth the investment and effort put into the application.

The Thailand Board of Investment is a government agency designated the work of encouraging more foreign investment in the kingdom. It has set about accomplishing this by offering an attractive package of tax and non-tax incentives to eligible companies whose activities fall under specified categories that include:

  • Agriculture and agricultural products
  • Chemical, paper and plastics, electronic industry and electric appliances
  • Light industry
  • Metal products, machinery and transport equipment
  • Mining, ceramics, and basic metals
  • Services and public utilities
  • Technology and innovation development

For any business that falls under these categories and successfully applies to be recognised as a BOI company Thailand, there is a range of benefits to be enjoyed. 

Tax Incentives

Corporate Income Tax Exemptions

Depending on what business activity is being undertaken by the business, it may qualify for an exemption without a cap or reduction of corporate income tax. The applicable period may also vary up to a maximum of eight years for some businesses. There are several groupings for the level of these exemptions. 

Eight-year corporate income tax exemptions will apply to sectors including:

  • Knowledge-based projects focused on research and development in technology and innovation
  • Infrastructure projects for Thailand’s development
  • Businesses that use advanced technology for the provision of value-adding services

Five-year corporate income tax exemptions will apply to:

  • Businesses that use high technology essential in the progress of the kingdom

Three-year corporate income tax exemptions will apply to:

  • Businesses using lower technology than previously mentioned above, but are still value-adding to local supply chains and resources.

Some BOI companies enjoy reduced corporate income tax based on operating their business in in specified promotion provinces. They can do this for a specific period after the initial corporate tax exemption period expires.

Exemptions may also be granted to a juristic person’s income tax and dividends.

Import Duties

Depending on the type of activity, BOI companies may also qualify for an exemption on import duties applicable to machinery and raw materials for manufacturing or producing export products. Such exemptions are valid for a certain period but may be extended depending on the decision of the Board of Investment. 

 Depending on the activity the business carries out, the level of exemption may vary.

Transport and Utility Costs

BOI companies based in specified promotion provinces shall also receive the additional financial incentive of double deductions on transport, water, and electricity costs. This is for a period of up to 10 years from when the first revenue from the promoted activity is granted. 

Infrastructure Installation and Construction Costs

BOI companies in specified promotion provinces shall also receive a deduction from their net profit of 25% of the project’s infrastructure installation and/or construction costs. This is in addition to normal depreciation for a specified number of years. 

Non-Tax Incentives

Foreign Ownership

Unlike limited companies, BOI companies are allowed up to 100% foreign shareholding. However, this does not apply to projects that fall under the Foreign Business Act’s List One or other laws that provide for specific exceptions. Company registration will however require a minimum of at least three shareholders. 

Foreign Workers

BOI companies may be granted permission to bring in foreign skilled workers and other experts for purposes of researching on investment opportunities in Thailand. They may also bring in foreign technicians and experts to work on the projects.

The processing of visas and work permits for this personnel can be undertaken in just one day by the BOI One-Stop Service Centre for Visas and Work Permits. Spouses and children are also covered by this provision. This is different from the normal process of attaining visas and work permits which requires considerable back and forth between the immigration offices and the Ministry of Labour.

Land Ownership

BOI companies may receive permission to possess the right of land ownership, depending on the project. The lands may, however, only be used for building business-related construction such as offices, factories, and residential apartments for staff. Should the business close, the land should be sold within a year of closure. 

Nationalisation

BOI companies will be protected from the risk of nationalisation.

Money Remittance

BOI companies shall have permission to remit money abroad in foreign currency.