American Company Applying for BOI Incentives
Companies incorporated in the U.S. or majority-owned by Americans are often eligible for incentives from Thailand’s Board of Investment (BOI). For example, BOI promoted businesses are automatically granted a business licence.
Investment Promotion Criteria
Regulations set requirements for each industry and sub-industry eligible for the promotion. The Board considers the business plan, the viability of the project, and the project’s compliance with the relevant regulatory criteria. Each project is considered on a case by case basis, and exceptions can be made for projects of particular importance. Several general requirements must be met for all projects.
- Value added should be at least 20% for most industries (except agricultural processing and electronics manufacturing).
- Liabilities should not exceed three times the registered capital.
- Modern production equipment and processes should be used.
- A minimum investment of 1 million THB exclusive of working capital and land acquisition costs must be made. The threshold is higher for certain industries.
- All necessary environmental protection measures must be in place.
- A feasibility study is required for projects with an investment of 80 million THB or more (exclusive of land acquisition costs and working capital).
Research Project Eligibility
Before a business applies for promotion, they should research the project eligibility requirements by consulting BOI experts or BOI officials. The BOI maintains a website and has offices both internationally and within Thailand.
Within 10 days of submission, schedule an interview with the BOI. The interview gives you a chance to pitch your project and address any concerns the BOI may have.
After the interview, the BOI will evaluate the project. Projects with an investment of 80 million THB or less will be considered within 40 days. Projects with an investment between 80 million THB and 750 million THB must be submitted to a BOI subcommittee and will be evaluated within 60 days. Projects with an investment of over 750 million THB must be sent to the full BOI board and will be evaluated within 90 days. Once a decision has been made, a notice will be sent out within 7 days.
Accept BOI Promotion
Projects that are approved have 30 days to accept BOI promotion. Once the acceptance is received, the BOI will provide a promotion certificate.
Register Promoted Company
Businesses have 6 months from the time of acceptance to submit company establishment documents to the Department of Business Development.
Non-tax incentives include work visa eligibility for skilled foreign workers, special permission to own land (foreign land ownership is generally prohibited), and permission to remit money internationally.
The size of a tax incentive usually depends on the project’s location. Projects in developed areas receive smaller tax incentives than projects in less developed areas. Projects developed in specially designated industrial estates or investment promotion zones may also receive greater tax incentives.
The BOI uses two tax incentives. Most promoted businesses receive an import duty exemption when they import industrial equipment and necessary machinery. In addition, many industries qualify for a period of corporate income tax exemption. Generally, the total corporate income tax exemption is capped at the amount of capital invested in the project.
Some activities classified as “priority activities” receive high tax incentives no matter where they are developed. The special tax incentives include a complete import duty exemption for machinery and an 8-year corporate income tax holiday. Priority activities designated as activities “of special importance and benefit to Thailand” are not subject to the corporate income tax exemption cap.
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Siam Legal is an international law firm with experienced lawyers, attorneys, and solicitors both in Thailand law and international law. This Thailand law firm offers comprehensive legal services in Thailand to both local and foreign clients for Litigation such as civil & criminal cases, labor disputes, commercial cases, divorce, adoption, extradition, fraud, and drug cases. Other legal expertise of the law firm varied in cases involving corporate law such as company registration & Thailand BOI, family law, property law, and private investigation.