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New 5-year investment strategy from the BOI
09/01/2023
Thailand’s Board of Investment (BOI) has begun its new investment promotion strategy for the next five years (2023–2027). This new scheme will replace the BOI’s current eight-year plan (2015–2022).
The BOI announced its new strategy in Announcement No. 8/2565 on December 8th, 2022. The contents of this announcement are now in full effect and will be available to all new BOI applications.
Key points
- Thailand’s Board of Investment (BOI) has announced its new investment promotion strategy for 2023 to 2027.
- This new scheme will replace the BOI’s current eight-year plan (2015–2022).
- Applications for investment promotion submitted to the BOI are now eligible for the new content.
What is the BOI?
Thailand’s Board of Investment is a special government agency that focuses on promoting foreign investment within Thailand. A BOI promotion removes many barriers to doing business in Thailand, such as the restrictions of the Foreign Business Act.
More detailed information relating to the Foreign Business Act can be found here.
Furthermore, the BOI also provides the following incentives for qualifying projects:
- Tax benefits such as income tax exemptions for a fixed period.
- 100% foreign ownership of a company.
- Reduced requirements for supporting work permits, i.e., no quotas for hiring foreigners
- The ability to own land.
What is the new investment strategy from the BOI?
As part of the new scheme, the BOI will begin to focus more on the following three core concepts:
(1) technology, innovation, and creativity;
(2) competitiveness and adaptability; and
(3) inclusiveness (especially in relation to environmental and social sustainability).
These three areas of focus will be complemented by a new set of investment promotion policies that aims to assist with the following (but not limited to) areas:
- supply chain reinforcement,
- conversion to a smart and sustainable industry,
- promotion of Thai SMEs with global connections.
Has the application criteria for a BOI promotion changed?
This new strategy does not introduce or make any significant changes to the criteria for applying for a new investment promotion. Therefore, the following will still apply to applicants:
- a 20% annual revenue growth projection,
- The requirement to use new machinery (with limited exemptions for used machinery),
- A minimum THB 1 million investment,
- and 3:1 debt-to-equity ratio threshold.
Businesses should be aware that the list of business activities eligible for investment promotion will be recategorized. Still, the existing categories (including the criteria and conditions for applying) will be maintained.
Have the BOI incentives remained the same?
The incentives on offer from the BOI will remain divided into groups A and B.
Group A will provide successful applicants with a corporate income tax (CIT) exemption for a period ranging from 3 to 13 years.
Group B will focus on non-CIT incentives, such as import duty exemption, 100% foreign ownership, relaxed requirements for hiring foreign staff, and land ownership for foreigner-owned businesses.
How can Belaws help?
To learn more about the BOI in Thailand, why not talk directly to one of our experts?
If you would like to learn more about how our experts can help with your BOI and company incorporation needs needs, please check out our full list of services.
Please note that this article is for information purposes only and does not constitute legal advice.
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Frequently asked questions
What is BOI company in Thailand?
Thailand’s Board of Investment is a special government agency who focuses on promoting foreign investment within Thailand.
A BOI promotion removes many of the barriers to doing business in Thailand, such as the restrictions of the Foreign Business Act.
The BOI also provides qualifying projects with a series of impressive incentives such as:
- – Tax benefits such as income tax exemptions for a fixed period.
- – 100% foreign ownership of a company.
- – Reduced requirements for supporting work permits i.e. no quotas for hiring foreigners
- – The ability to own land.
What is BOI Visa in Thailand ?
Foreigners who wish to either work, conduct business or undertake investment activities in Thailand are required to apply for the relevant visa and work permit. BOI promoted companies can support visa and work permits for foreign staff and are subject to less requirements than traditional Thai companies.
What are the benefits of a BOI Licence?
Aside from specific tax incentives, the most benefits of a BOI promotion is the possibility for foreigners to hold up to 100% of the company’s shares, buy land and facilitation for visas and work permit:
| TAX INCENTIVES
Tax privileges granted by the BOI varies depending on the category and the location of the project |
|
| OTHER INCENTIVES
Other incentives are granted to all BOI project |
|
BOI Company vs. Thai Limited Company
A BOI Company gets to enjoy a number of attractive benefits over a traditional Thai Limited Company but this comes with additional scrutiny from official authorities. The key differences are highlighted below:
| BOI COMPANY | THAI LIMITED COMPANY | |
| Foreign ownership | Up to 100% | Limited to less than 50% in most activities |
| Thai to foreign employee ratio | No ratio for foreign skilled employees | 4:1 |
| Corporate income tax rate | Up to 9 years exemption depending on the nature and location of the project | 20% |
| Import of machinery | No tax. | No specific restriction if more than 50% of the capital is held by Thais shareholders |
| Reporting and audits | Regular updates and audit from the BOI Annual accounting audit | Annual accounting audit |
What business activities are promoted by the BOI?
- 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
- Technology and Innovation Development
For more information about the Promoted activities, please visit here
What is the BOI looking for when approving Licence applications?
- 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
- Promote activities that are environment-friendly, save energy or use alternative energy to drive balanced and sustainable growth
- Promote clusters to create investment concentration in accordance with regional potential and strengthen value chains
- Promote investment in border provinces in Southern Thailand to help develop the local economy, which will support efforts to enhance security in the area
- 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)
- Promote Thai overseas investment to enhance the competitiveness of Thai businesses and Thailand’s role in the global economy
How can I get BOI in Thailand?
In order to be able to get a BOI promotion for your company in Thailand, you will need to complete the following process:
- Business feasibility study
- BOI application and interview
- Approval from the BOI and acceptance of proposed terms
- Registration of BOI company in Thailand
- Issue Work Permits and Visa
- Undertake the required reporting and compliance
- Complete the BOI accounting procedures.
Do I need a lawyer to obtain a BOI promotion?
There is no legal requirement to appoint a lawyer to obtain a BOI promotion but it is highly recommended to ensure a smooth process and increase your chances to obtain a BOI promotion. At Belaws, our expert lawyers take a pragmatic approach and will intervene only when it is strictly necessary for savvy clients. This is notably the case with young entrepreneurs applying for eCommerce or software promotion where the fees can start from THB 50,000 for limited assistance.
What is a BOI letter?
Once an application has been submitted to the BOI, they will inform the company in writing whether or not the application has been accepted. This letter is usually issued after seven working days. The approval letter will also include details about the benefits the company will be entitled to.
Can I work remotely from Thailand?
As mentioned above, anyone who wishes to work in Thailand is required to obtain the relevant visa and work permit. At the time of writing there is no visa that supports Remote Work from Thailand, it is also not possible to obtain a work permit for this purpose either.
Can a foreigner open a company in Thailand?
Yes it is possible for a foreigner to open a company in Thailand. There are also options available which allow 100% foreign owned companies as well.
Is it good to start a business in Thailand?
Thailand is an attractive option for those wishing to start a business. Thailand has a great infrastructure in place and scheme such as the BOI provide great incentives for companies to take advantage of.
How can a foreigner start a small business in Thailand?
Yes, foreigners can start a business in Thailand. However, certain business activities are restricted by the Foreign Business Act and in order for businesses to undertake them they must obtain a Foreign Business Licence/Certificate which can be time consuming and complicated.
Can I own a company in Thailand?
Yes, foreigners can start a business in Thailand. However, certain business activities are restricted by the Foreign Business Act and in order for businesses to undertake them they must obtain a Foreign Business Licence/Certificate which can be time consuming and complicated.
What is BOI visa?
BOI companies are able to hire foreigners without the restrictions faced by normal Thai Limited Companies. Therefore, BOI companies can provide visas and work permits for employees.
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