Thailand Board of Investment

The Thailand Board of Investment (BOI) is the inward investment promotion agency for Thailand that assists foreign investors in identifying business opportunities, providing tax incentives and privileges, and supporting foreign companies seeking to expand into the Asian market. The services are free of charge and customized to help business succeed in Thailand.

The Office of the Board of Investment (BOI) is the best guide for doing business in Asia. Whether someone is selecting sites for a manufacturing project, conducting a market study or looking to open an office in Thailand. BOI operates under the Ministry of Industry and is the principal government agency for supporting international business and encouraging investment in Thailand.

In the United States, are BOI’s North America offices in New York and Los Angeles. The offices serve as investment assistance and service centers and provide information and consulting for North American investors seeking to do business in Thailand.

Investment Promotion Services

Thailand is the country’s liberal investment policies. The Thai Government has supported and will continue to support foreign investment. There are no restrictions on foreign currency remittances, no export requirements, no foreign equity restrictions in manufacturing sectors, and no local content requirements.

What can the BOI offer?

BOI provides tax and non-tax incentives for investors to help alleviate the costs of an international expansion and enhance their global competitiveness, which generally includes the following:

Tax incentives

·Corporate income tax (CIT) exemption up to 8 years

·Additional 50 percent reduction of the corporate income tax for another 5 years

·Exemption or reduction of import duties on machinery and raw materials

Double deduction of transportation, electricity, and water supply costs

·Additional 25 percent deduction of infrastructure construction / installation costs

·Non-tax incentives

·Permit to bring in foreign skilled workers and experts to work

·Permit to own land

·Permit to take out or remit money abroad in foreign currency

Activities eligible for BOI promotion

There are 7 categories covering over 300 activities in both manufacturing and services eligible for BOI investment promotion:

·Agriculture and agricultural products.

·Mining, ceramics, and basic metals.

·Light industry.

·Metal products, machinery, and transport equipment.

·Electronics and electrical appliances.

·Chemicals, paper, and plastics.

·Services and public utilities.

Category 1.3: Economic forest plantations (except for Eucalyptus).

Category 3.9: Creative product design and development centers.

Category 4.11.1: Manufacture of airframes, airframe parts, and major aircraft appliances, e.g. engines, aircraft parts, propellers, and avionics.

Category 5.6: Electronic design.

Category 5.7: Software.

Category 7.1.1.1: Production of electricity or steam power from waste or refuse-derived fuel.

Category 7.8: Energy Service Companies (ESCO).

Category 7.9.2: Industrial zones or technology industrial estates or industrial zones.

Category 7.10: Cloud services.

Category 7.11: Research and development.

Category 7.12: Biotechnology.

Category 7.13: Engineering design.

Category 7.14: Scientific laboratories.

Category 7.15: Calibration services.

Category 7.19: Vocational training centers.

One change is that the Board will now consider promoted activities as either being activity-based incentives, Group A or Group B, or merit-based activities.

Group A consists of activities that shall receive corporate income tax incentives, machinery and raw materials import duty incentives, and other non-tax incentives and is divided into four4 subgroups, as follows:

A1 activities can receive an 8-year corporate income tax exemption without being subject to a corporate income tax exemption cap; exemption of import duty on machinery; exemption of import duty on raw or essential materials used in manufacturing export products, and other non-tax incentives.

A2 activities can receive an 8-year corporate income tax exemption, accounting for 100% of investment (excluding the cost of land and working capital); exemption of import duty on machinery; exemption of import duty on raw or essential materials used in manufacturing export products and other non-tax incentives.

A3 activities can receive a 5-year corporate income tax exemption, accounting for 100% of investment (excluding cost of land and working capital) unless it is specified in the list of activities eligible for investment promotion that the act shall be granted corporate income tax exemption without being subject to a cap; exemption of import duty on machinery; exemption of import duty on raw or essential materials used in manufacturing export products and other non-tax incentives.

A4 activities can receive a 3-year corporate income tax exemption, accounting for 100% of investment (excluding the cost of land and working capital); exemption of import duty on machinery; exemption of import duty on raw or essential materials used in manufacturing export products and other non-tax incentives.

Group B consists of activities that can only receive machinery and raw materials import duty incentives and other non-tax incentives. This group consists of 2 subgroups, as follows:

B1 activities can receive an exemption of import duty on machinery; exemption of import duty on raw or essential materials used in manufacturing export products, and other non-tax incentives.

B2 activities can receive the exemption of import duty on raw or essential materials used in manufacturing export products, and non-tax incentives only.

The merit-based category is new to the promotion policy with incentives based on the merits of the project, such as competitive enhancement. This would include projects that have investments or expenditures on:

Research and development in technology and innovation including in-house R&D, outsourcing research in Thailand or joint R&D with overseas institutes.

Donations to Technology and Human Resources Development Funds, educational institutes, specialized training centers, research institutes or governmental agencies in the science and technology field in Thailand, as approved by the Board.

IP acquisition/licensing fees for commercializing technology developed in Thailand; advanced technology training; development of local suppliers with at least 51% Thai shareholding in advanced technology training and technical assistance, or product and packaging design, either in-house or outsourced in Thailand, as approved by the Board.

Benefits under the merit based incentives include one additional year of CIT exemption if qualified investments or expenditures are not less than 1% of the project’s total revenue of the first 3 years combined, or not less than 200 million baht, whichever is less, with the total CIT exemption period not exceeding eight years; two additional years of CIT exemption if qualified investments or expenditures are not less than 2% of the project’s total revenue of the first 3 years combined, or not less than 400 million baht, whichever is less, with the total CIT exemption not exceeding 8 years; or three additional years of CIT exemption if qualified investments or expenditures are not less than 3% of the project’s total revenue of the first 3 years combined, or not less than 600 million baht, whichever is less, with the total CIT exemption not exceeding 8 years. It should be noted that for Group B activities only certain activities are eligible for merit-based incentives and to receive these investors need to submit the plan at the same time as the project submission is made. Also, those projects receiving incentives in Group A1 and A2 which already have an 8-year corporate income tax exemption and which also qualify for merit incentives for decentralization, will receive merit incentives in the form of a 50 percent reduction of corporate income tax on net profit derived from the promoted activity for 5 years after the initial exemption expires.

There is a cap on additional CIT exemption set at 200% for investments and expenditures specified in No.1 above, and at 100% for investments and expenditures specified in Nos. 2-6 above.

Another change to the policy includes a revision of the BOI Zoning, which has become only Investment Promotion Zones that now include 20 low income provinces, down from the previous count at 58 provinces: Kalasin, Chaiyaphum, Nakhon Phanom, Nan, Bueng Kan, Buri Ram, Phrae, Maha Sarakham, Mukdahan, Mae Hong Son, Yasothon, Roi Et, Si Sa Ket, Sakhon Nakhon, Sa Kaew, Sukhothai, Surin, Nong Bua Lamphu, Ubon Ratchatani and Amnatcharoen.

Projects located in the above areas are eligible to receive 3 additional years of CIT exemption, but the total period of the exemption cannot exceed 8 years. If a project with activities in Group A1 or A2 already receives an 8-year CIT exemption it will instead receive a 50% reduction of CIT on net profit derived from the promoted activity for 5 years after the CIT exemption period expires. All projects in the above areas are eligible for double deduction for transportation, electricity and water costs for ten years from the first date that revenue is derived from the promoted activity; and a deduction from the net profit of 25% of the project’s infrastructure installation or construction costs, in addition to normal depreciation; this deduction can be made from the net profit of one or several years within 10 years from the first date such revenue is derived.

The BOI application procedures application forms can be downloaded online through Office of the Board of Investment’s website. All application forms and related publications can be submitted to BOI Headquarters or through one of one of the overseas offices.