Board of Investment of Thailand

The Board of Investment of Thailand or BOI is explained below. They do offer a range in incentives to invest in Thailand. This is done to encourage investment both locally as well as for foreigners. The Thai government wants to encourage investment and increase exports as well as competitiveness in Thailand. The are also other options that the Thai government has on offer.

These are the industrial parks in Thailand. There are a number of these. Some of joint ventures with private companies. The other is government managed through the IEAT in Managing Industrial Parks. This is explained elsewhere on this website. Most of these investments are based on applying for a Thai factory license. See the rest of the website for more of these options. There is a much smaller article on the BOI as well. 

1. Tax Incentives

When it comes to tax incentives, then these may include exemptions or reductions on taxes. This allows you to reduce your operational costs during the start-up and expansion phases. This encourages you to invest further in Thailand. We can see the process to apply for a license to expand your factory on here as well. There are also those who benefited that are not into manufacturing but digital. So lets look at what could be on offer.

Corporate Income Tax (CIT) Exemption

• There are incentives such as being CIT exemption for up to 8 years. Now this will depend on the type of business as well as its contribution to Thailand’s development.

• Likewise those businesses which the government considers high-priority industries. These tend to be technology, green energy as well as advanced manufacturing. Those can qualify for the full 8-year exemption. These types of industries are usually very costly to setup. Likewise see the article that we wrote on Corporate Income Tax in Thailand.

CIT Reductions

• Likewise after the exemption period has come to and end. You will note that some some businesses may receive a 50% reduction on CIT for up to 5 additional years after this. Again you will need to meet the requirements for this.

Import Duty Exemptions

• Machinery: There is the exemption from import duties on machinery and equipment.

• Raw Materials for Export Products: Likewise there is also the offer of exemption from import duties on raw materials which are used in manufacturing process for the export market.

Additional Tax Deductions

• Additional deductions for costs incurred in infrastructure improvement, such as building roads or setting up utilities for the factory.

• Likewise double deduction (200%) is available for costs related to training employees in skills that enhance productivity as well as many others.

2. Board of Investment of Thailand Non-Tax Incentives

The non-tax incentives are designed to make it easier for businesses to operate. This will be welcomed by those who have foreign ownership. See below what is also on offer.

Streamlined Work Permits and Visas

• Smart Visa Program: With this program it allows foreign personal such as the executives as well as the experts, as well as their families to work and reside in Thailand with less bureaucratic immigration hurdles.

• Likewise the procedures for obtaining a work permit in Thailand as well as long-term visas for foreign employees are much faster and easier. Likewise also see the personal income tax for foreigners in Thailand.

Import of Skilled Workers

• As explained before the companies with the Board of Investment of Thailand incentives can bring in skilled technicians and experts as needed for their business operations.

Relaxation of Foreign Ownership Limits

• Board of Investment of Thailand-promoted businesses may own 100% of the shares in certain industries, bypassing restrictions under Thailand’s Foreign Business Act.

3. Incentives Based on Zone and Activity

If you did not know. The Board of Investment of Thailand divides Thailand into investment promotion zones. Each zone comes with different levels of incentives based on the project’s location and industry:

Zone-Based Incentives

• Zone 1 (Central regions): There are less tax incentives but better access to infrastructure and skilled labor. This would be Bangkok as an example.

• Zone 2 (Intermediate regions): These have moderate tax incentives. These include the CIT reductions as well as customs duty exemptions. The best example of this would the Chonburi.

• Zone 3 (Remote or underdeveloped regions): These regions offer better incentives such as longer tax exemptions. Likewise investment support to promote a more balanced development across the country. Likewise this would be Mae Sot (Tak Province) as an example.

Activity-Based Incentives

As explained above there are incentives Board of Investment of Thailand prioritizes. These tend to be for very specific industries. These incentives are for projects that align with Thailand’s economic goals:

• Technology and Innovation: These include advanced manufacturing. As an example this would include robotics as well as biotechnology as an example.

• Green and Renewable Energy: The government has been big on solar power, wind farms, and biomass energy projects.

• Healthcare and Biotechnology: The sectors for this is the manufactures in pharmaceuticals, medical equipment, and biotechnology research.

• Food Processing: These mainly include value-added processing of agricultural products.

4. Investment Protection and Support Services

These are further investment incentives:

• Investment Guarantees: The government ensure that there is protection against nationalization, expropriation, and free from government interference.

• One-Stop Service Center: The BOI helps to facilitate with business registration, factory permits, and other administrative requirements.

• Investment Zones and Clusters: You will also have access to industrial estates and special economic zones with ready-to-use infrastructure and support.

5. Industry-Specific Incentives

BOI provides specialized incentives for targeted industries:

• Automotive and Electronics: There has been a big focus on electric vehicles (EVs) production and parts as well as smart electronics.

• Agriculture and Biotechnology: There is the pish for development of sustainable agriculture as well as precision farming.

• Logistics and Distribution: These tend to be projects that improve Thailand’s connectivity and logistics infrastructure.

Cost Savings

• Depending on the industry, there may be significant reductions in corporate income taxes as well as your import duties. These lower the financial burden during the initial and expansion phases of the business.

• There may also be tax deductions for infrastructure and utility costs. This will further reduce your operating expenses in Thailand. Speak to us as a law firm in Bangkok.

·Operational Flexibility

• There can be 100% foreign ownership which is allowed for many BOI-promoted activities. This offers you greater control over the business.

• Likewise streamlined import/export procedures and on-site customs facilities in BOI-designated industrial estates.

Global Competitiveness

• The BOI incentives make does make Thailand an attractive location for export-oriented industries. This is done by reducing operating costs and simplifying procedures.

• The proximity to key Asian markets as well as having trade agreements and logistics networks helps you company grow. Speak to us as an English speaking law firm in Bangkok for more assistance.

The information contained in our website is for general information purposes only and does not constitute legal advices. For further information, please contact us.