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BOI offers incentives to companies promoting sustainability
05/07/2022
Climate change has become a serious threat and governments around the world have made tackling it a top priority. Thailand is no different and has demonstrated its commitment to addressing climate change by becoming signatories to the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol and the Paris Agreement.
Thailand’s Board of Investment (BOI) are now offering promotions to companies who promote sustainability through their activities. A good example of this can be seen through the BOIs recent significant investments in the Battery Electric Vehicle (BEV) sector, as well as other areas such as natural gas separation plants, and cold storage using natural refrigerants.
Key points
- Tax incentives are available for companies who promote sustainability.
- Eligible companies must be engaged in business activities supported by the BOI and have not received CIT benefits as part of their promotion (or who’s CIT benefits have expired).
- Application deadline is December 2022
What is the BOI?
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.
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 are Thailand’s sustainability targets?
Thailand has set the following sustainability targets to help make the country become a low carbon emitter:
- Achieve carbon neutrality by 2050
- Net zero GHG emissions by 2065
- Raise NDC to 40% (if financial and technological support is available)
What areas of sustainability qualify for BOI incentives?
The BOI is focusing on the following four main measures of sustainability in Thailand:
- Measures to promote Thailand as the regional EV hub.
- Measures to promote sustainability-related activities.
- Measures to improve production efficiency.
- Measures to promote a grassroots economy.
In order to realise these measures and provide qualifying companies with a form of motivation, the BOI offers a series of incentives.
What incentives are available?
The BOI currently grants investment promotions which include both tax and non-tax privileges for businesses who invest in business activities which implement or promote sustainable strategies in Thailand. Incentives on offer include:
- Tax privileges, including an exemption of corporate income tax for three years. This CIT exemption has a ceiling which is equivalent to 50% of relevant investment.
- An exemption of import duty on machinery and exemption of import duties on raw materials used in production for export.
These benefits are available in addition to the following non-tax incentives which all BOI companies are eligible for, including:
- No quotas for employing skilled foreign workers and experts
- Permission to own land for the promoted business,
- Permission to remit money outside Thailand in foreign currency.
Who is eligible for the incentives for promoting sustainability?
The BOI incentives to support sustainability in Thailand are available for the following companies:
- Companies who are engaged in business activities supported by the BOI.
- BOI projects who did not receive CIT benefits as part of their promotion (or who’s CIT benefits have expired).
Please note, all interested parties must submit their applications by December 2022.
How can our team of experts help?
Should your company be eligible for any of the BOI incentives on offer for promoting sustainability in Thailand, our experts can provide support for your application. Belaws has a team of expert lawyers and accountants who specialize in working with BOI companies and are familiar with all the requirements and obligations.
For more information about how our experts can help you with your BOI application, please click here.
In order to learn more about BOI promotions in Thailand, please feel free to book a consultation with our experts.
Please note that this article is for information purposes only and does not constitute legal advice.
Our consultations last for a period of up to 1 hour and are conducted by expert Lawyers who are fluent in English, French and Thai.
Consultations can be hosted via WhatsApp or Video Conferencing software for your convenience. A consultation with one of our legal experts is undoubtedly the best way to get all the information you need and answer any questions you may have about your new business or project.
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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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