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Unleashing Growth: BOI Incentives for Business Expansion and Relocation
06/06/2023
As part of its latest 5-year strategy, Thailand’s Board of Investment (BOI) has recently introduced a comprehensive incentive package to stimulate and drive the Thai economy. These incentives, known as the BOI Thailand Incentives for the Expansion and Relocation of Businesses, have garnered significant attention and are attracting foreign investors to explore the promotional opportunities offered by the Board.
In this blog post, we will explore the diverse BOI incentives and benefits on offer to businesses considering expansion within or relocation in Thailand.
Key points
- The BOI now offers tax incentives to established companies actively conducting business to expand their activities in Thailand.
- Established companies must have previously received a BOI promotion for at least three investment projects over the past 15 years and have applied for new investment projects before the end of 2023.
- A new incentive package has been introduced in Thailand, offering a relocation scheme to encourage businesses to move their operations to the country.
- Relocation incentives include corporate income tax (CIT) exemptions for relocating their regional corporate offices, research and development (R&D) facilities, and production plants.
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:
- 100% foreign ownership of a company.
- Reduced requirements for supporting work permits, i.e., no quotas for hiring foreigners.
- The ability to own land.
- Tax benefits such as income tax exemptions for a fixed period. Please note that tax incentives depend on specific promotions and are unavailable to all.
What are the new incentives from the BOI?
As mentioned above, Thailand’s Board of Investment (BOI) has recently introduced a comprehensive incentive package as part of its new 5-year strategy. This 5-year strategy has introduced a series of new incentives called the BOI Thailand Incentives for the Expansion and Relocation of Businesses.
These new incentives include a range of special privileges specifically designed to support long-standing investors who plan to expand their businesses in Thailand.
The BOI has also announced a set of incentives for companies that will relocate their existing business from another country to Thailand. These incentives are aimed at companies relocating their headquarters and research/manufacturing facilities to Thailand.
Additionally, it provides an initial package for investments in sustainable activities, such as hydrogen vehicle production and the development of biofuels.
As of May 2023, these incentives are available and have benefited numerous investors who have taken advantage of the opportunities presented.
What is the BOI Thailand Investor Retention and Expansion Program?
The BOI now offers tax breaks to reward established companies in Thailand actively conducting business and looking to expand their operations. This program encourages existing BOI-promoted companies to expand their operations in Thailand by providing various incentives and benefits. This marks a significant departure from the Thai government’s previous approach of not offering this investment incentive.
To qualify for the program, companies must meet several criteria, including having received BOI promotion for at least three investment projects valued at a minimum of 10,000 million baht (excluding land costs and working capital) over the past 15 years (2008-2023), and having applied for new investment projects worth 500 million baht or more (excluding land costs and working capital). Additionally, companies must apply for the new program by the end of 2023. Upon approval, projects will receive a range of sector-specific benefits and other additional incentives.
The specific incentives granted will vary depending on the nature of the company’s operations. They can range from a complete exemption from corporate income tax (CIT) for up to three years to a substantial 50% reduction in CIT for up to five years.
Further benefits include:
- Corporate income tax (CIT) exemptions for A+ category businesses are available for up to 13 years, with an extra 3 years of exemption possible after the original 10–13 years.
- The program offers 8 years of CIT exemption for A1 and A2 business categories, followed by a 50% reduction for the next 5 years.
- Businesses in the A3, A4, and B categories might be qualified for up to 5 years of CIT exemption, with an additional 3 years of exemption possibly available.
The length of the CIT exemption depends on the business category and can range from 0 to 13 years for authorized projects, depending on their classification.
BOI Incentives for the Relocation of Businesses to Thailand
A new incentive package has been introduced in Thailand, offering a relocation scheme to encourage businesses to move their operations to Thailand. As part of this package, businesses can benefit from corporate income tax (CIT) exemptions for relocating their regional corporate offices, research and development (R&D) facilities, and production plants.
Businesses that relocate all three facilities (regional corporate offices, R&D facilities, and production plants) to Thailand will be eligible for a five-year CIT exemption. Furthermore, a three-year CIT exemption will be granted for the transfer of regional headquarters and manufacturing facilities.
For businesses that opt to relocate just their manufacturing and R&D facilities, the duration of the CIT exemption will vary depending on the industry. Companies can receive a CIT exemption from one to five years in these cases.
It is important to note that the CIT exemption applies to earnings generated from the relocated manufacturing operations only.
It is also important to note that there are also 2 sub-programs for this promotion which are as follows:
- New applications for investment promotion in production projects,
- Investment projects in ongoing productions already get A-category advantages.
To be eligible for the sub-programs, the following criteria must be met:
1.New investment applications in production projects:
- Companies must have applied for a production project and an International Business Center (IBC).
- Companies must apply for the benefits by the end of 2023.
2. Investment applications in existing production projects:
- Companies must have applied for an International Business Center (IBC).
- Companies must apply for the benefits by the end of 2023.
- Projects receiving approval will be eligible for various non-tax benefits.
For projects involving production and an International Business Center (IBC), the benefits include:
- The standard benefits are under the production component.
- An additional 3 years of corporate income tax (CIT) exemption.
- Non-tax benefits.
For projects that comprise manufacturing, an IBC, and an R&D center, the incentives are as follows:
- Comparable incentives to the production component.
- An additional 5 years of CIT exemption (total exemption period not exceeding 8 years).
- Other non-tax benefits.
How can Belaws help?
For more information about BOI promotions in Thailand, why not talk to one of our experts now?
Please note that this article is for information purposes only and does not constitute legal advice.
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Frequently asked questions
What are the BOI work permit requirements?
The requirements for a BOI work permit in Thailand are not subject to the same mandatory capital and minimum Thai staff requirements as other company structures. BOI-promoted companies have more flexibility in hiring foreign employees.
What is a BOI work permit?
A BOI work permit is a work permit issued to foreign employees working in a company promoted by Thailand’s Board of Investment (BOI). It allows foreign workers to legally work in Thailand.
hat is a BOI letter in Thailand?
A BOI letter refers to an invitation letter issued by the BOI after approving a new position for a foreign employee in a BOI-promoted company. This letter is submitted to the Thai Embassy as part of the visa application process.
How can I obtain a work permit in Thailand?
To obtain a work permit in Thailand, including a BOI work permit, you need to follow a specific process. First, your employer, in this case, a BOI-promoted company, must open a new position on the online BOI platform. Then, you will go through a qualification approval process, which includes submitting your qualifications and work experience. Once approved, you can proceed to apply for a visa and work permit at the One Stop Service Center.
How to obtain a work permit and visa in Thailand?
A: To obtain a work permit and visa in Thailand, including a BOI work permit and visa, you need to follow these steps:
- Have a job offer from a Thai employer, preferably a BOI-promoted company.
- Your employer opens a new position for you on the online BOI platform.
- Obtain an invitation letter from the BOI and apply for a Non-Immigrant B visa at the Thai Embassy or Consulate.
- Create a profile on the BOI’s Single Window system for the newly opened position and get your qualifications approved.
- Once approved, schedule an appointment at the One Stop Service Center to receive your visa and work permit.
- Remember to do the 90-day report and follow the renewal process when necessary.
Can I work in Thailand without a work permit?
No, it is illegal to work in Thailand without a work permit. Foreigners must obtain a valid work permit to engage in employment activities in Thailand. Failure to do so can lead to legal consequences for both the foreigner and the company they work for.
What are the BOI incentives in Thailand?
BOI incentives in Thailand include 100% foreign ownership of a company, reduced requirements for supporting work permits, the ability to own land, and tax benefits such as income tax exemptions for a fixed period. However, it’s important to note that specific incentives may vary depending on the BOI promotion and industry.
What is a BOI company in Thailand?
A BOI company in Thailand refers to a company that has been promoted by the Board of Investment (BOI). These companies receive certain benefits and incentives from the Thai government to encourage foreign investment and business activities in Thailand.
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