New Seven-Year Plan at the BOI
The Board of Investment promotes certain investments to respond to current and future economic needs of Thailand. The Thai Board of Investment has recently approved a new seven year master plan. The new master plan is to promote inbound value added investments and Thai investment overseas. The new “Seven Year Investment Strategy will run from 2015 until 2021.
The Board of Investments will focus on innovative technology that supports a digital economy and industries which utilize local resources. These industries include high-tech and creative industries and service industries which can help Thailand achieve sustainable growth.
The BOI will target investment projects that are located in 20 lower income provinces by offering special incentives such as industrial estates. Industrial Estates are special designated areas for clusters of industries where foreign investors can own land, bring in foreign technicians to work with their families, and also provide exemptions from various taxes. Special economic zones in five border areas will be established. Businesses that setup operations in these special economic zones will be granted an additional three years of corporate income tax exemption on in addition to the standard incentives.
There are approximately 200 promoted types of businesses by the Board of Investments. The master plan will increase focus on supporting small and medium sized business. There will now be 38 eligible activities which will target small and medium size business for special tax and other non-monetary incentives including a two year corporate tax exemption.
In determining whether a project is approved for Board of Investment privileges, the BOI will assess the feasibility of the operation.
- The minimum capital investment required for each promoted activity is 1 million baht excluding the cost of land and working capital.
- The value added in relation to the expected sales revenue must not be less than 20 percent of the sales revenue.
- The debt to equity ratio must not exceed three to one for new projects and show be less for expansion projects.
- The Board of Investments requires the use of modern technological processes and new machinery unless the use of old machinery is granted special approval.
- Adequate environmental protection systems must be installed and an environmental impact statement must be submitted.
- For investments of over 80 million baht, a project feasibility study must be submitted to the BOI.
However, the investment promotions, incentives, and privileges are large. There are many incentives for companies that are granted to BOI companies.
- Some BOI companies are exempted from corporate income tax for up to eight years.
- Some BOI companies are also provided a 50% reduction of the normal corporate income tax rate for up to 5 years after the period of tax exemption.
- A BOI company can carry losses forward to the period of when they are required to pay taxes.
- Any dividends distributed during the income tax period are also exempt from income tax.
- There are tariff exemptions or reductions on the important of new machinery or raw materials.
- Work permits are provided for the foreign national owners and BOI companies may also bring skilled foreign workers and experts to work.
- Some BOI companies can own land for the purpose of their business operation.
- BOI companies can also take out or bring money into Thailand using a foreign currency.
The procedure for applying for Board of Investment incentives is completed (See the BOI application process flow chart here.). If you are interested in reviewing whether your business qualifies for BOI privileges, contact the experienced corporate attorneys at Siam Legal International. For this important process, it is recommended a company interested in applying for a Board of Investment’s exemptions seek the assistance of an experience corporate attorney. The attorneys at Siam-Legal International can provide the guidance that you require.
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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.