What is BOI Thailand?
BOI Thailand or Thailand Board of Investment was established in 1997 to provide investment incentives for both foreign and local entrepreneurs who are interested in investing in the agency's promoted activities. The Office of the Board of Investment is a government agency under the Office of the Prime Minister. Its core roles and responsibilities are to promote valuable investment, both investment into Thailand and Thai overseas investment.
To do this, investment promotion policies were adjusted in order to attract more businessmen; decentralize Thailand's industrial base, and respond to future economic situations. The BOI’s investment policies are geared to:
- 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 reduce social and economic disparity.
- 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 to 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 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
Thailand Board of Investment has formulated criteria for projects applying for incentives and privileges. These depend on the location of the promoted activities and whether these are priorities or not. To be eligible for a BOI Thailand promotion, your business has to fall within either of these categories:
- Section 1: Agriculture and Agricultural Products;
- Section 2: Mining, Ceramics and Basic Metals;
- Section 3: Light Industry;
- Section 4: Metal Products, Machinery, and Transport Equipment;
- Section 5: Electronic Industry and Electric Appliances;
- Section 6: Chemicals, Paper, and Plastics;
- Section 7: Services and Public Utilities; and
- Section 8: Technology and Innovation Development.
Recently, the Thailand Board of Investment has provided additional investment policies and promotional measures to better promote investments in Thailand. Some of these measures are:
- Measure for improvement of production efficiency
BOI Announcement No.1/2557, regarding promoting and upgrading technology and machinery for energy conservation, alternative energy utilization, or reduction of environmental impacts, as well as to encourage research and development and advanced engineering design involvement to improve production efficiency.
This measure is used with:
- Existing projects, whether BOI or non-BOI promoted. In the case of non-BOI promoted projects, the activity must be eligible for investment promotion by the Board of Investment.
- BOI promoted projects can also apply for this measure when the corporate income tax exemption or reduction period expires, or in case the respective project(s) does not receive a corporate income tax exemption.
- Investment promotion policy for industrial development in border provinces in Southern Thailand
To boost investment in the southern border provinces and to establish model cities under the slogan "Stable, Affluent and Sustainable Triangle", the BOI promotes the private sector’s investment in the designated provinces, in order to help locals generate income which will lead to economic expansion in the future.
- Investment promotion policy for investment in Special Economic Zones
In order to create economic connectivity with neighboring countries and support the integration of the ASEAN Economic Community, the Board has issued Announcement of the Board of Investment No.4/2557, Investment Promotion in Special Economic Zones especially border areas both in and around industrial estates which will be granted incentives.
- The minimum capital investment must not be less than 1 million Baht (excluding the cost of land and working capital).
- The application must be submitted by December 30, 2020, and the project must complete implementation within three years from the date the promotion certificate is issued.
To gain project approval, the investment must meet the following criteria:
- In order to develop competitiveness in the agricultural, industrial, and service sectors, the project submitted for BOI promotion must have the following qualifications:
- 1.1 The value-added of the project must not be less than 20% of revenues
- 1.2 Modern production processes must be used.
- 1.3 New machinery must be used.
- Environmental protection; and
- Minimum capital investment and project feasibility.
Board of Investment Privileges and Incentives
Two of the most significant privileges offered by the BOI for promoted projects are:
- Tax Incentives and Privileges
- Exemption/reduction of import duties on machinery
- Reduction of import duties for raw or essential materials
- Exemption of import duties for R&D purposes
- Exemption of corporate income tax on the net profit and dividends derived from the promoted activity
- A 50% reduction of the corporate income tax
- Double deduction of the costs of transportation, electricity and water supply
- Additional 25% deduction of the cost of installation or construction of facilities
- Use of Corporate Income Tax Incentives
Non-Tax Incentives and Privileges
- Permit for foreign nationals to enter the Kingdom for the purpose of studying investment opportunities
- Permit to bring into the Kingdom skilled workers and experts to work in investment promoted activities
- Permit to own land
- Permit to take out or remit money abroad in foreign currency
To ensure that the incentives are granted effectively and exercised correctly in accordance with promotion conditions and to ensure the clear cost-and-benefit evaluation of investment promotion, promoted persons must report operating results for their projects to the Office of the Board of Investment for review prior to being granted corporate income tax incentives for that year. The reporting criteria and method shall be as prescribed by the Office of the Board of Investment.
BOI Thailand Application Process
- Preparation of the BOI Application
Before getting into the application process for Thailand BOI, it is important to have a feasibility study and research of your project. This initial stage involves pre-assessment of your BOI business plan and project plan and presenting it to the relevant government offices. This will provide some relevant insights on the preparation, and whether or not it will be a successful BOI application. Therefore, by doing this, you will be able to identify any changes that need to be made with the BOI business plan and strategy before the submission of the application.
- Submission of the BOI Application
This process involves the submission completed application and required documents through the BOI Thailand e-service portal. Within 10 business days after the submission of the application, the applicant may contact the BOI office to schedule an appointment for the project presentation and interview before the BOI committee.
- BOI Presentation and Project Evaluation
This is your opportunity to present and promote your business idea before the Board. After the interview and evaluation by the BOI Officers, you will receive the Board's resolution or approval depending on the investment:
- Investment value of less than 200 Million THB
Consideration for BOI promotion is within 40 working days – after acceptance of complete application
- Investment value of more than 200 Million THB
Consideration by subcommittee for BOI approval is within 60 working days – after submission of complete application
- Investment value of more than 2 Billion THB
Consideration by subcommittee and then BOI board approval is within 90 working days – after submission of complete application
- BOI Approval
Within 7 days after the approval of the BOI application, the BOI office will inform the applicant through a written communication detailing the conditions, BOI privileges and benefits which have been granted to the applicant. The application form for the BOI certificate will also be included.
Upon receipt of official approval, the BOI applicant must reply by completing the details of promotion acceptance and returning it to the Office of the Board of Investment (OBOI) within 30 days. If the applicant is unable to reply within 30 days, a letter of clarification should be sent to the OBOI, which may consider an extension of the timeline in 30 day intervals and no more than 3 times.
- BOI Company Registration
In order to receive the BOI investment promotion certificate, the applicant must establish a Thai company within six months of acceptance approval. The following documents must be submitted:
- Application form for BOI promotion certificate
- Memorandum of association
- Certificate of company registration
- Certificate stating the registered capital, authorized directors indicating signing authority and the registered address
- Shareholder list
- Evidence of the transfer of funds from overseas, or an investment certificate issued by the Bank of Thailand
- A joint venture contract, licensing or franchise agreement, technical assistance contract and/or technology transfer contract
- Form outlining human resource requirements
- Issuance of BOI Certificate
The Office of the Board of Investment will issue the investment promotion certificate after receipt of all specified documents and completing its registration in Thailand. The newly promoted company must follow the conditions laid out in the Certificate.
- Visa and Work Permit
This process involves securing the non-immigrant B visas and BOI work permits for the foreign director and employees. As prerequisite to hiring foreign staff, the newly established BOI company must complete its registration into the e-expert system. This will allow the company to make subsequent requests for the consideration and approval of foreign workers. After a position has been submitted, opened and approved through the e-expert system the applicant is cleared to make their application for both visa and work permit through the BOI One Stop Service Centre (OSOS).
- BOI Progress Report and Compliance
The newly formed and/or BOI-promoted company will need to notify the officials about your progress on a regular basis:
- Within 30 months, the machinery and equipment of the company must be imported to benefit from the reduction of taxes and duties
- Within 36 months, construction must be completed, the machinery and equipment installed, and the factory ready to commence operations
- The company must ask for permission from the Office of the Board of Investment if the operation has to be halted for a duration longer than two months
- The Office of the Board of Investment must give written permission before a promoted company may mortgage, sell, lease, or transfer machinery which was imported either exempt from, or at a lower rate of tax. Permission must also be obtained to use machinery for non-approved purposes.
Where is BOI Thailand located?
The Thailand Board of Investment (BOI) Head Office is located at:
555 Vibhavadi-Rangsit Road,
Chatuchak, Bangkok 10900, Thailand
Tel: (+66) 2553 8111
Fax: (+66) 2553 8315
Siam Legal BOI Thailand Services
The application for BOI Thailand promotion and certification is best done through a Thai law firm as it is a very complex procedure. For more detailed information about doing business in Thailand, please contact us through our phone numbers and contact form. Our corporate lawyers will provide you with detailed information on your BOI Thailand application.