Thailand BOI Board of Investment Application
The Thailand Board of Investment (BOI) is an agency of the Government of Thailand. It was set up in order to promote investment in Thailand by providing privileges to local companies or foreign entities planning on incorporating under Thai law that perform certain activities selected by the Thai Government.
Privileges offered by the BOI include:
• Permission to own land
• Permission to operate under 100% foreign ownership
• Permission to bring in as many foreign technicians and experts as you need
• Permission to remit foreign currency abroad
• Other financial benefits include Tax holidays up to 8 years and reductions in customs and duties when importing machinery
Thailand BOI – Overview
If you are considering a significant investment in Thailand, then you should inquire whether your investment is eligible for Thailand’s Board of Investment (BOI) privileges.
The Thailand BOI has the power to grant the following privileges depending on the specifics of the investment plan:
• Exemption from rules restricting foreign ownership of companies;
• Exemption from corporate income tax for up to 8 years;
• Exemption of import duties on machinery and raw materials;
• Exemption from rules restricting foreign ownership of land;
• Exemption from work permit and visa rules; and
• Exemption from rules restricting overseas remittances.
The Thailand BOI promotes projects in the following areas:
• Agriculture and Agricultural Products
• Mining, Ceramics and Basic Metals
• Light Industry
• Metal Products, Machinery, and Transport Equipment
• Electronic Industry and Electric Appliances
• Chemicals, Paper, and Plastics
Thailand BOI applications can be made before or after the establishment of a company in Thailand.
The minimum level of investment capital required to obtain BOI privileges is 1,000,000 Baht (excluding the cost of land and working capital).
Thailand BOI – Criteria for Approval
The BOI uses the following criteria when deciding whether to grant promotion privileges:
• Value-added is not less than 20 percent of sales revenue, except projects that manufacture electronic products/parts, process agricultural products, and projects granted special approval by the Board;
• The ratio of liabilities to registered capital should not exceed 3 to 1 for a newly established project;
• Modern production processes and new machinery are used;
• Old machinery can be used if certified by reliable institutions and the Board’s approval is obtained; and
• Adequate environmental protection systems are installed.
Thailand BOI – Priority Activities
The Board places priority on promoting the following types of projects:
• Agriculture and agricultural products;
• Direct involvement in technological and human resource development;
• Public utilities and infrastructure;
• Environmental protection and conservation; and
• Other targeted industries.
Thailand BOI – Investment Zones
There are three Investment Zones divided by economic factors including the level of income and the availability of infrastructure as follows:
Zone 1 – High Income and Infrastructure
• Bangkok, Samut Prakan, Samut Sakhon, Pathum Thani, Nonthaburi, and Nakhon Pathom
Privileges:
• 50 percent reduction of import duty on machinery that is subject to import duty of not less than 10 percent;
• Corporate income tax exemption for 3 years for projects located within industrial estates or promoted industrial zones, provided that such a project with capital investment of 10 million baht or more (excluding cost of land and working capital) obtains ISO 9000 or similar international standard certification within 2 years from its start-up date, otherwise the corporate income tax exemption will be reduced by 1 year; and
• Exemption of import duty on raw or essential materials used in the manufacturing of export products for 1 year.
Zone 2: Moderate Income and Infrastructure
• Samut Songkhram, Ratchaburi, Kanchanaburi, Suphanburi, Ang Thong, Ayutthaya, Saraburi, Nakhon Nayok, Chachoengsao, Chon Buri, Rayong and Phuket
Privileges:
• 50 percent reduction of import duty on machinery that is subject to import duty of not less than 10 percent;
• Corporate income tax exemption for 3 years, increased to 5 years for projects located within industrial estates or promoted industrial zones, provided that such a project with capital investment of 10 million baht or more (excluding cost of land and working capital) obtains ISO 9000 or similar international standard certification within 2 years from its start-up date, otherwise the corporate income tax exemption will be reduced by 1 year; and
• Exemption of import duty on raw or essential materials used in the manufacturing of export products for 1 year.
Zone 3: Low Income and Infrastructure
• All other Thailand provinces not mentioned above.
Privileges:
• Exemption of import duty on machinery;
• Corporate income tax exemption for 8 years provided that a project with capital investment of 10 million baht or more (excluding the cost of land and working capital) obtains ISO 9000 or similar international standard certification within 2 years from its start-up date, otherwise the corporate income tax exemption will be reduced by 1 year; and
• Exemption of import duty exemption on raw or essential materials used in the manufacturing of export products for 5 years.
A project located in one of the following 36 provinces: Krabi, Kamphaeng Phet, Khon Kaen, Chanthaburi, Chai Nat, Chumphon, Chiang Rai, Chiang Mai, Trang, Trat, Tak, Nakhon Ratchasima, Nakhon Si Thammarat, Nakhon Sawan, Prachuab Khiri Khan, Prachin Buri, Phangnga, Phattalung, Pichit, Phitsanulok, Phetchaburi, Phetchabun, Mukdahan, Mae Hong Son, Ranong, Lop Buri, Lamphang, Lamphun, Loei, Songkhla, Sa Kaew, Sing Buri, Sukhothai, Surat Thani, Uttaradit, and Uthai Thani shall be granted additional tax and duty privileges as follows:
Project Inside Industrial Zones
• 50 percent reduction of corporate income tax for 5 years after the exemption period;
• Double deduction from taxable income of transportation, electricity and water costs for 10 years from the date of first revenue derived from promoted activity;
Project Outside Industrial Zones
• A deduction can be made from the net profit of 25 percent of the project’s infrastructure installation or construction cost for 10 years from the date of first sales, and net profit for one or more years of any year can be chosen for such deduction. The deduction is additional to normal depreciation.
A project located in one of the following 22 provinces: Chaiyaphum, Kalasin, Nakhon Phanom, Narathiwat, Nan, Nong Khai, Buri Ram, Pattani, Phayao, Phrae, Maha Sarakham, Yasothon, Yala, Roi Et, Si Sa Ket, Sakhon Nakhon, Sathun, Surin, Nong Bualamphu, Amnat Charoen Udon Thani, and Ubon Ratchathani shall be granted additional tax and duty privileges privileges as follows:
• 50 percent reduction of corporate income tax for 5 years after the exemption period;
• Double deduction from taxable income of transportation, electricity and water costs for 10 years from the date of first revenue derived from promoted activities;
• A deduction can be made from the net profit of 25 percent of the project’s infrastructure installation or construction cost for 10 years from the date of first sales, and net profit for one or more years of any year can be chosen for such deduction. The deduction is additional to normal depreciation.
For more detailed information on the Board of Investment please visit the official website www.boi.go.th/english/
