BOI or Board of Investment in Thailand is a form of business entity wherein it is foreign majority-owned company without having to apply for foreign business license. BOI certificate suffices because BOI overrides the FBL. In the event that the company is foreign majority owned, it necessary to further gain the Foreign majority own certificate from the Department of Business Development. BOI promotes investment in strategic industries. BOI seeks to provide investment incentives for foreign and local entrepreneurs who are interested to capitalize in the agency’s promoted activities. Investment promotion policies were tailored fit to decentralize Thailand’s industrial centers. Projects may apply for incentives and privileges if they meet the criteria: 1.) the location of the promoted activities; 2.) whether these are priorities or not. Investors get the following advantages if they choose the BOI structure:
- Reduce the risks associated with investment
- Reduce initial investment costs and to improve the rate of return on investment
- Support services at all times
What are the BOI Privileges?
BOI promotes investment by providing the following privileges:
- Tax incentives – If the company is promoted by BOI, the company might be exempted or reduced from the corporate income tax with the maximum of 8 years exemption. It also includes tariff exemption or reduction on import machinery and tariff exemption or reduction on import raw material. Granting tax incentives depend on the category of business activities and the investment zone.
- Non-tax incentives – This is available to all BOI-promoted projects. This includes permission to own land, permission to bring foreign expert to work on the promoted projects, exemption on foreign ownership of companies and exemption from work permit and visa rules, import duty exemptions for equipment and corporate income tax holidays, including permission to remit currency abroad, permission to hire foreign workers, and permission for foreign entities to own land. The non-tax incentives are especially helpful to foreign entities interested in investing in Thailand because they allow majority foreign-owned companies to overcome the restrictions imposed by the Foreign Business Act.
Requirements for BOI Promotion:
- Value added should be at least 20% for most industries (except agricultural processing and electronics manufacturing)
- Liabilities should not exceed three times the registered capital
- Modern production equipment and processes should be used
- A minimum investment of 1 million THB exclusive of working capital and land acquisition costs must be made. This threshold is higher for certain industries.
- Environmental protection measures must be in place if they are necessary
- A feasibility study is required for projects with an investment of 80 million THB or more (exclusive of land acquisition costs and working capital).
Promoted Activities Eligible for BOI Privileges:
- 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
- Services and Public Utilities
BOI Promotion Application Process:
- Know the project eligibility requirements by consulting BOI experts or BOI officials.
- BOI application and submission of related documents
- Within 10 days from application, schedule an interview with the BOI. The interview gives you a chance to pitch your project to the BOI and address any concerns they may have.
- BOI will evaluate the project.
Timeframe for evaluation of the project depends on the investment cost:
- Projects with an investment of 80 million THB or less will be considered within 40 days.
- Projects with an investment between 80 million THB and 750 million THB must be submitted to a BOI subcommittee and will be evaluated within 60 days.
- Projects with an investment over 750 million THB must be sent to the full BOI board and will be evaluated within 90 days of the interview.
- Once a decision has been made, a notice will be sent out within 7 days. Businesses who are accepted for BOI promotion have 30 days to accept BOI promotion. Once the acceptance is received, the BOI will submit a promotion certificate. Businesses have 6 months from the time of acceptance to submit company establishment documents to the Department of Business Development.
Regulations for the Foreign Ownership of Land Under BOI
BOI promoted companies may be granted the right of land ownership in Thailand which is normally very restricted. However, the amount of land that the foreign promoted companies may own is limited as follows:
- Land for the establishment of offices for promoted projects must not exceed 5 rai
- Land for the residence of executives must not exceed 1 rai
- Land for the residence of employee must not exceed 2 rai
See also Thailand BOI related resources.