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BOI Thailand

Frequently Asked Questions

I am looking at starting my company in Thailand. My business activity is developing an online platform which provides P2P payment services between sellers and buyers. Would this activity be eligible for BOI Thailand promotion?

Online platform is eligible for investment promotion under the activity 5.9 Digital Services which are software platform, managed service, digital architecture design service, and digital services such as FinTech, DigiTech, MedTech, AgriTech, among others.

Conditions:

  • Projects must hire digital specialists and have capital investment (excluding cost of land and working capital) not less than 1,000,000 baht.
  • Projects must include digital service processes as approved by the Board.
  • Projects with an investment of 10 million baht or more (excluding cost of land and working capital) must be certified with ISO 20000 or other quality standard certificate as approved by the Ministry of Information and Communication Technology within 2 years from the full operation start-up date, otherwise the corporate income tax exemption shall be reduced by 1 year.
  • Revenue derived from sales or the provision of services that are directly related to a promoted digital service business shall be regarded as revenue of such promoted businesses.
  • Projects must gain approval from the Ministry of Digital Economy and Society before applying for investment promotion.

Upon successful application for Board of Investment (BOI) promotion, what benefits can my company derive?

Once the company is BOI promoted, the following incentives may be granted:

  1. Basic Incentives
    • Exemption of corporate income tax
    • Exemption of import duties on machinery
    • Exemption of import duties on raw materials used in R&D
    • Exemption of import duties on raw materials used in production for export
    • Non-tax incentives
  2. Merit-based incentives (additional incentives)
    • Merit for Competitiveness Enhancement
    • Merit on Decentralization – for projects located in 20 provinces with lowest per capita income shall receive additional incentives such as additional corporate income tax exemption or reduction
    • Merit on Industrial Area Development – projects located within industrial estates or promoted industrial zones shall be granted one additional year of corporate income tax exemption.

What is the criteria for foreign shareholding in projects that apply for investment promotion?

The BOI Thailand stipulates the following criteria for foreign shareholding in projects that apply for investment promotion:

  1. For projects in activities under List One annexed to the Foreign Business Act, B.E. 2542, Thai nationals must hold shares totaling not less than 51% of the registered capital.
  2. For projects in activities under List Two and List Three annexed to the Foreign Business Act, B.E. 2542, there are no equity restrictions for foreign investors except as otherwise specified in other laws.
  3. The Board may set foreign shareholding limits for certain activities eligible for investment promotion as deemed appropriate.

My company is engaged in the agricultural business. We are considering applying our business activity for BOI Thailand promotion. What are the criteria for investment promotion application?

In order to develop competitiveness in the agricultural, industrial and service sectors, projects submitted for BOI Thailand promotion must have the following qualifications:

  1. The value-added of the project must not be less than 20% of revenues, except for projects in agriculture and agricultural products, electronic products and parts, and coil centers, all of which must have value-added of at least 10% of revenues.
  2. Modern production processes must be used.
  3. New machinery must be used.
  4. Projects that have investment capital of 10 million baht or more (excluding cost of land and working capital) must obtain ISO 9000 or ISO 14000 certification or similar international standard certification within 2 years from the full operation start-up date, otherwise the corporate income tax exemption shall be reduced by one year.
  5. For a concession project and the privatization of a state enterprise project, the Board’s criteria shall be based on the Cabinet’s decisions dated May 25, 1998, and November 30, 2004:
    1. An investment project of state enterprise according to the 1999 State Enterprise Corporatization Act shall not be entitled to investment promotion.
    2. For Build-Transfer-Operate or Build-Operate-Transfer projects, the state agency that owns the project must submit its project to the Board for consideration prior to any invitation to bid, and bidders shall be informed of any promotional privilege entitled to them, prior to the bidding. In principle, the Board will not promote a project where the private sector pays the state for a concession, unless such payment is deemed reasonable in comparison with what the state has invested in the project;
    3. For Build-Own-Operate projects, including those leased to or managed by the private sector, which in return pays rent to the state, the Board shall use normal criteria for investment promotion.
    4. For the privatization of state enterprises according to the 1999 State Enterprise Corporatization Act, in case of expansion after the privatization, only the expansion investment shall be eligible for promotion. Incentives shall be granted according to normal criteria for investment promotion.
  6. Environmental protection
    1. Adequate and efficient guidelines and measures to protect environmental quality and to reduce environmental impact must be installed. The Board will give special consideration to the location and pollution treatment of a project with potential environmental impact.
    2. Projects or activities with type and size that are required to submit environmental impact assessment reports must comply with related environmental laws and regulations or Cabinet resolutions.
    3. Projects located in Rayong must comply with the Announcement of the Office of the Board of Investment No. Por 1/2554 dated May 2, 2011, on Industrial Promotion Policy in Rayong Province.
  7. Minimum capital investment and project feasibility
    1. The minimum capital investment requirement of each project is 1 million baht (excluding cost of land and working capital) unless specified otherwise on the list of activities eligible for investment promotion that is attached to this announcement.

      As for knowledge-based services, the minimum capital investment requirement is based on the minimum annual salaries expense specified in the list of activities eligible for investment promotion.
    2. For newly established projects, the debt-to-equity ratio must not exceed 3 to 1. Expansion projects shall be considered on a case-by-case basis.
    3. For projects with an investment value over 750 million baht (excluding cost of land and working capital) the project’s feasibility study must be submitted with details as specified by the Board.
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