When setting up a company in Thailand, foreign investors have to decide whether they want full ownership of the company. If that is the case, they will not only have to follow regulations set by the Foreign Business Act (FBA) but also obtain a Foreign Business License (FBL) issued by the Department of Commercial Registration. An alternative is to apply for Thailand Board of Investment (BOI) company promotion.
Part Two: Board of Investment Promotion
What is a BOI Company Promotion?
BOI Law is a promotional policy established by the government in 1954 when it announced the Industrial Promotion Act. Thailand BOI assists foreign companies in establishing operations in Thailand while also ensuring that their activities benefit the country.
Each new cabinet since 1954 has issued new policies to provide more non-tax incentives and support to foreign investors and foreign investment in Thailand. Encouraging investment is an integral part of the BOI. The "Seven-Year Investment Promotion Policy (2015–2021)" is the most recent policy to be issued. Here are some additional details:
- Encourage investment in research and development, innovation, value creation in the agricultural, industrial, and service sectors, SMEs, fair competition, and the reduction of social-economic disparities to help boost competitiveness.
- Promote balanced and sustainable growth, encourage activities that are environmentally friendly, save energy, or use alternative energy.
- Promote clusters to create investment concentration in accordance with regional potential and to strengthen value chains.
- Promote special economic zones, particularly in border areas, both inside and outside industrial estates, to improve economic connectivity with neighbors and prepare Thailand for membership in the ASEAN Economic Community (AEC).
Your company can enjoy a range of benefits from being certified by the BOI. Besides having the possibility to obtain 100% ownership of the company, foreign investors also enjoy many privileges offered by the BOI for promoted projects, which are:
Tax Incentives and Privileges:
- Exemption/reduction of import duties on machinery;
- Reduction of import duties for raw or essential materials;
- Exemption of import duties for R&D purposes;
- Exemption of corporate income tax on the net profit and dividends derived from the promoted activity;
- A 50% reduction of the corporate income tax;
- Double deduction of the costs of transportation, electricity and water supply;
- Additional 25% deduction of the cost of installation or construction of facilities;
- Use of Corporate Income Tax Incentives.
Non-Tax Incentives and Privileges:
- Permit for foreign nationals to enter the Kingdom for the purpose of studying investment opportunities;
- Permit to bring into the Kingdom skilled workers and experts to work in investment promoted activities;
- Permit to own land;
- Permit to take out or remit money abroad in foreign currency.
Establishing a BOI Company
To be eligible for a BOI Thailand promotion, your business has to fall within either of these categories:
- Section 1: Agricultural, Bio and Medical Industries;
- Section 2: Basic and Supporting Industries;
- Section 3: Advanced Manufacturing Industries;
- Section 4: Digital, Creative Industries and High Value Services;
- Section 5: Research and Development, Targeted Core Technology Development;
The procedure to establish a BOI company is as follows:
- BOI application and interview process;
- BOI approval and acceptance of terms;
- Registration of Thailand BOI company;
- BOI work permits and visa;
- BOI reporting & compliance;
- BOI accounting;
The Thai BOI certification process can take a long time depending on the venture and, if done incorrectly, can jeopardize the company's investments. Understanding this, Viettonkin is honored to provide the necessary services to aid you in your application for BOI certification. With your permission, our team will submit all BOI application forms and maintain direct contact with the officers to track your progress through the system. Viettonkin will ensure your business is incorporated and certified in accordance with Thai law, saving you time and resources, and ensuring your company gets the best possible start. For more information, feel free to contact us.
