In an effort to attract foreign direct investment, Thailand has established policies and incentives designed to promote certain types of businesses within the country. The Thailand Board of Investment (BOI) plays a key role in this initiative. By registering a company under the BOI, businesses can take advantage of a number of investment privileges and incentives. This article explores the BOI policies, conditions for investment, the privileges offered, incentives, and the process for BOI application.
Thailand BOI Policies and Conditions
The BOI offers incentives to both Thai and foreign investors who wish to start businesses in sectors that are deemed desirable for the economic and social development of the country. The BOI’s policies focus on sustainable development and are divided into seven categories:
- Agriculture and Agricultural Products
- Minerals, 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
To qualify for BOI incentives, a company needs to satisfy certain conditions. These include the incorporation of the business under Thai law, a commitment to meeting specific technological and environmental standards, and, in some cases, a minimum level of investment capital.
Investment Privileges and Incentives
Companies registered under the BOI can enjoy a variety of investment privileges. These include:
- Tax Incentives: Depending on the category and location of the project, the BOI offers exemption or reduction of import duties on machinery and raw materials, corporate income tax exemptions for up to 8 years, and a 50% reduction of the corporate income tax rate after the exemption period.
- Non-Tax Incentives: These include permission to own land, to bring in foreign experts and technicians, and to take or remit foreign currency abroad.
- Protection and Guarantees: The BOI provides protection against the nationalization of the business, guarantees against competition from new state-owned enterprises, and against state monopolization of the sale of certain products.
The BOI Application Process
To avail of these incentives, businesses need to go through the BOI application process, which includes the following steps:
- Project Proposal Submission: The first step is to submit a detailed proposal outlining the business plan, capital investment, and the number of employees. This is usually submitted online through the BOI’s online investment application portal.
- Interview and Preliminary Inspection: After submission, the BOI may require an interview or preliminary inspection of the proposed business facilities.
- Review and Approval: The BOI will review the application based on its policies, the sector of the economy in which the business will operate, and the overall benefit to Thailand. The process may take 40-90 days depending on the project’s size and nature.
- Issuance of the BOI Certificate: If the application is approved, the BOI will issue a certificate outlining the privileges granted to the company. This certificate is generally valid for one year, during which the company must begin its operations.
Registering a company under the Thailand Board of Investment can offer significant advantages for both local and foreign businesses, particularly those that align with Thailand’s strategic economic objectives. However, the process requires careful preparation and a thorough understanding of the BOI’s policies, conditions, and privileges. As with all business ventures in a foreign country, it is recommended to seek legal or professional advice to ensure a smooth and successful registration process.