How to Apply for Board of Investment in Thailand
The Kingdom of Thailand, the 2nd largest economy in South East Asia, standing at the heart of the ASEAN economic community. Also known as the “Gateway of Asia” due to its strategic location having millions of consumers, having excellent connections from other fast-growing countries, which is the reason it attracts investors all over the world.
It attracts investors not just because of the advantage gained in the location itself but because of what other numerous ranges of benefits Thailand offers to foreign investors to make it one of the most attractive investment destinations through the successful strategy brought by the Board of Investment (BOI) Thailand, established in the year 1997.
It is established by the Thai government with the goal to encourage, both local and foreign investors who are willing and interested in investing, to invest in the country’s promoted activities. Giving them the chance to take advantage of the benefits or privileges it offers; this includes the ability to own land (which is said to be impossible in the Kingdom).
On the other hand, the country will also benefit from their trust in BOI by: (1) Widening promotion of investment opportunities in the country. (2) Bringing innovation and advancement of technology in the country. (3) Decentralizing and increasing economic growth in the country.
For those who are eyeing applying their businesses to become a BOI company, you are in for a treat.
Knowing that one can own land even when you are a foreigner in Thailand is already a breakthrough. It was said to be impossible by many. But owning land is not the only privilege you will get when you own a BOI-promoted company. What else are there? Well, you will have the privilege of having Tax and Non-Tax incentives.
Thailand BOI Tax Incentives
- A 50 % reduction of the corporate income tax
- Exemption/reduction of import duties on machinery
- Reduction of import duties for raw or essential materials
- Exemption of import duties on materials imported for R&D purposes
- Double deduction from the costs of transportation, electricity, and water supply
- Additional 25 percent deduction of the cost of installation or construction of facilities
- Exemption of import duty on raw or essential materials imported for use in production for export
- Exemption of corporate income tax on the net profit and dividends derived from the promoted activity
Thailand BOI Non- Tax Incentives
- Permit to own land
- Permit to take out or remit money abroad in foreign currency
- 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
One more thing is the fact that you get to own the company 100% when you are an owner of a BOI company. Unlike the normal way of owning or registering of business in Thailand, you only get 49% of the business, and 51% is owned by Thai Nationals.
How to Apply for Board of Investment in Thailand
Did the privileges of becoming a BOI company interest you? If you do decide to apply, here are the steps that you will have to go through:
- Feasibility Study of Company (Preparation of Business Plan and Project Plan)
Before all the processing of the application. One must prepare for the idea of your business. Prepare your identity, name, vision, mission, and prepare what kind of business you are going to own. After laying all that out, one must identify what to offer in the business, either products or services. Also, prepare for how you are going to make it work in Thailand. How would your business become successful? Would it be successful in Thailand?
Think in advance, and organize your ideas. Also, check if your idea of a business or company is included in the eligible business activities for BOI promotion in Thailand.
- Submitting of Application and Presentation
If the company is feasible, lawyers will prepare the forms for you to fill and prepare documents based on the business and project plan, documents include the feedback of the feasibility study They will be the ones to submit the application form and they will schedule a date for the presentation of your business and project plan at BOI.
Be ready for the presentation, this will be the part where the officials will judge whether your plan business is approved or not. Impress and state your intention clearly.
- BOI Approval and Acceptance of Terms
If the business plan is approved, which will be received after 7 working days of the presentation, they will send you the conditions, privileges, and benefits that will be granted by the officials to your business. Upon receiving the official approval, the applicant will fill out the promotion acceptance and submit or send it back to BOI within 30 days.
If failed to submit within 30 days, one is required to send a letter of clarification of why you have not submitted the form on time. It can be extended for 30 days.
- BOI Company Registration
For the applicant to receive the BOI investment promotion certificate, the applicant shall start setting up his company in the country within 6 months after receiving the BOI approval. And at the same time, it is important to submit the documents listed below to the office of BOI:
- Application form for BOI promotion certificate
- Shareholder list
- Franchise Agreement
- Memorandum of association
- Certificate of company registration
- Form outlining human resource requirements
- Evidence of the transfer of funds from overseas, or an investment certificate issued by the Bank of Thailand
- A JV contract (Licensing or Franchise Agreement, Technical Assistance Contract, Technology Transfer Contract)
- Certificate stating the registered capital, authorized directors indicating signing authority, and the registered address
If these forms and documents are not submitted on time, they will have to send an explanatory letter or letter of explanation of why the deadline is not met to which there will be a possibility for an extension of the deadline.
- BOI Work Permits and Visa
Before applicants can hire foreign directors and employees. They are required to register in the e-expert system. It will allow companies to request for approval of employees that they are to let in their company.
Once approved, the applicant can work on the application for visa and work permit of the said directors and employees through BOI One-Stop Service Centre (OSOS).
- BOI Compliance and Reporting
After the issuance of the BOI investment promotion certificate. There are conditions that the company must comply with, and they are required to report the updates to BOI. Below are the following conditions that the company must comply with:
- To take advantage of the lower taxes and customs, the machinery and equipment must be imported. (Within 30 mos.)
- The factory’s construction must be finished, the machinery and equipment installed, and the plant must be ready to operate. (Within 36 mos.)
- If the operation needs be paused for more than two months, the corporation must seek approval from the OBOI.
- Before a promoted firm can mortgage, sell, lease, or transfer machinery that was imported either tax-free or at a reduced rate, the OBOI must issue formal clearance, written permission. Permission to utilize machinery for non-approved uses must also be secured.
If the conditions are not met by the company, there will be a possibility that the BOI promotion will be revoked if no explanations can be given to the OBOI.
- BOI Accounting
There are strict rules that a BOI company must follow, especially in accounting and reporting protocols. Other than the basic reporting of SSF, VAT, WHT, and auditing. Depending on their type of category of promotion, they are required to follow specific requirements and conditions. Revenue Department and BOI inspectors will monitor them.
It is highly suggested that one must seek help from experienced corporate lawyers in processing the BOI application. It is undoubtingly a long process; it takes a lot of patience and care for this to be achieved without any issues. With the help of experienced professionals, they can guide you on what is to be done and let you know what are the rules to be followed in the process. By trusting professionals, it will be easier for you.
You can also check the BOI Thailand Frequently Asked Questions page.
About the Author (Author Profile)
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.