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BOI approves new investment schemes in Thailand
21/06/2022
On June 13th, the Thailand Board of Investment (BOI Thailand ) held a meeting which approved a total of 209.5 billion baht (US 6.2 billion) worth of investment applications in manufacturing and infrastructure projects.
The BOI also approved a new set of incentives and measures which we will explore further in this article.
What is the BOI 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.
More information on the Foreign Business Act can be found here.
Furthermore, 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 incentives were passed during the meeting?
Smart Industrial Estate Incentives
The BOI approved 2 packages relating to Smart Industrial Estates. The first package is for the promotion of investment in smart industrial estates/zones, and the second package relates to projects who are interested in upgrading the existing general industrial estates/zones.
To qualify and apply for either package of incentives, the projects must provide intelligent system services to their customers in five key areas:
- Smart Facilities,
- Smart IT,
- Smart Energy,
- Smart Economy,
- and at least one of the following three intelligent system services; Smart Good Corporate Governance, Smart Living, and Smart Workforce.
Additionally, Investment promotion benefits will now also include any investments made in the development of smart systems for use in industrial estates and zones.
Approved projects who satisfy the above criteria will be granted an 8-year corporate income tax exemption. Furthermore, any qualifying projects who are located in the country’s Eastern Economic Corridor (EEC) area, will enjoy a 50 percent corporate income tax reduction for a further 5 years.
Please note, investments in smart industrial estates and zones require at least 51 percent Thai shareholders in order to qualify for the benefits, however, there are no ownership restrictions for investments in the development of smart systems.
Facilitation of Land Ownership for Foreign Juristic Persons
The BOI also approved a measure allowing BOI promoted foreign juristic persons with registered and paid-up capital of no less than 50 million baht to own land.
Any land owned by such juristic persons must be used to set up the offices and residential quarters for executives and foreign experts.
What investments were made by the BOI in the meeting?
During the meeting, the BOI approved nearly 210 Billion THB worth of investment. Out of this sum, 36.1 Billion THB was awarded to Horizon Plus Co., Ltd., a joint venture between Taiwan’s Foxconn and Thailand’s PTT PCL. This venture received the investment in order to make battery electric vehicles (BEV).
This is in line with Thailand’s plans to become a leading hub in the development of BEVs. For more information relating to the enhanced investment incentives on offer from the BOI for Electric Vehicle production, please check out our article here.
How can Belaws help?
If you want more information about how our experts can assist you with the process for applying for a BOI Promotion, please click here. Alternatively, you can book a consultation with one of our experts to discuss everything you need at your convenience.
Please note that this article is for information purposes only and does not constitute legal advice.
Our consultations last for a period of 1 hour and are conducted by our 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 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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BOI approves new investment schemes in Thailand
21/06/2022
BOI Thailand approves new investment schemes and incentives worth 209.5 billion baht (US 6.2 billion).
BOI Thailand approves new investment schemes and incentives worth 209.5 billion baht (US 6.2 billion).
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