BOI Promotion in Thailand

BOI Promotion in Thailand | Umpire Legal | Photo credit

If you are aware that your business is eligible for BOI promotion in Thailand, Umpire Legal encourages you to apply for investment promotion due to the several benefits that you will be entitled to. Let us review your business activities and advise on the BOI promoted category under which you may be eligible to receive promotion, and we can professionally assist you with the complete application process.

In 1997, the Thai government established the The Office of the Board of Investment (BOI) with the intention to provide investment incentives for both foreign and local entrepreneurs who are interested in investing in the agency’s promoted activities. Apart from offering incentives to attract more investments, the BOI also sought to decentralise Thailand’s industrial base and help build foundations for nurturing local skill development in attractive industries. A company promoted by this government body is referred to as a “BOI company”.

Benefits of BOI Promotion in Thailand

Contrary to the general regulations and taxation schemes which apply to limited companies in Thailand, companies promoted by the Thai Board of Investment are eligible to several tax and non-tax incentives, such as complete or majority foreign ownership and, at the same time, permission for the foreign company to own land!

Tax Incentives

Tax privileges granted under the BOI promotion in Thailand include but are not limited to:

  • Corporate income tax exemption for a certain number of years
  • Exemption or reduction of import duties on machinery, raw materials and/or essential materials
  • Exemption or reduction of taxes on dividends payable to shareholders
  • Deductions from the costs of transportation, electricity and water supply, and on the cost of installation or construction of facilities

Non-Tax Incentives

Non-tax privileges granted under the BOI promotion in Thailand include but are not limited to:

  • 100% foreign ownership
  • Permission to bring in foreign skilled workers and experts where their visas and work permits can be processed within a day at the BOI One Stop Service Centre for Visas and Work Permits
  • Permission to own land
  • Permission to remit money abroad in foreign currency
  • Protection against nationalization of the business

BOI Company vs. Thai Limited Company

As previously mentioned, a BOI company gets to enjoy a number of attractive benefits over its Thai limited company counterpart. Basic differences in several key areas are highlighted below:

Thai Limited Company BOI Promoted Company
Thai to foreign employee ratio 4 : 1 Relaxed, can be negotiated
Corporate income tax rate 20% As little as 0%
Foreign ownership Limited to no more than 49% As much as 100%
Import of machinery VAT tax No tax
Ongoing requirements On-site inspections from Immigration BOI update form submissions
Registration duration One week or less Six weeks and longer

To see a more in-depth comparison between the two entities and also an overview of the most popular business structures in Thailand, you can view an infographic here.

BOI Promoted Activities

In order to be eligible for investment promotion by the Thai Board of Investment, your business activity will have to fall under one of the following categories:

  • Agriculture and agricultural products
  • Mining, ceramics and basic metals
  • Light industry
  • Metal products, machinery and transport equipment
  • Electronic industry and electric appliances
  • Chemicals, paper and plastics
  • Services and public utilities

The above list is further broken down into several smaller business activities, mainly involving manufacturing, design, development and technology transfer to Thailand, and can be found here.

In addition to the promoted business categories, another useful resource for self-assessment of one’s eligibility for promotion is consulting the BOI’s investment promotion policies (a list of policies set in place to ensure achievement of the BOI’s vision of Thailand’s economical, social and environmental development):

  1. Promote investment that helps enhance national competitiveness by encouraging R&D, innovation, value creation in the agricultural, industrial and services sectors, SMEs, fair competition and inclusive growth
  2. Promote activities that are environment-friendly, save energy or use alternative energy to drive balanced and sustainable growth
  3. Promote clusters to create investment concentration in accordance with regional potential and strengthen value chains
  4. Promote investment in border provinces in Southern Thailand to help develop the local economy, which will support efforts to enhance security in the area
  5. Promote special economic development zones, especially in border areas, both inside and outside industrial estates, to create economic connectivity with neighboring countries and to 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

BOI Promotion Application Process

The BOI promotion application process generally consists of three stages, each taking place at a different department (The Board of Investment, Department of Business Development and One Start One Stop Investment Centre for Visas and Work Permits). In cases where companies seeking BOI promotion have not been registered yet, the process may look as follows:

The Board of Investment

  • Preparation of the application for investment promotion
  • Interview with officials, presenting the business plan
  • Project evaluation by the responsible authorities
  • Receiving BOI certificate once the company is formed

Department of Business Development

  • Name reservation
  • Incorporation of the company
  • Receiving BOI promoted status and certificate

One Start One Stop Investment Centre

  • Visa and Work Permit

Investment promotion from the Thai BOI is extremely attractive to foreign companies wishing to expand their businesses in Thailand. Although the process of obtaining approval for BOI investment promotion is more complex and time consuming than setting up a regular business through a simple Thai limited company structure, Umpire Legal can guide you through the entire process and assist you in preparing the application, drawing up necessary business plans for submission based on your envisaged activities, accompanying you at the interview with the BOI officials after the application has been submitted, and support you until the last step of collecting the BOI investment promotional certificate from the BOI office in Thailand.

Only businesses under certain sectors can benefit from the investment scheme of the BOI promotion in Thailand. Please contact Umpire Legal for assistance in reviewing whether or not your business will allow you to receive the privileges of being a BOI promoted company.