Remark: Every year the Board of Investment Thailand will introduce new investment incentives and various other changes. We are currently expecting upcoming policy changes for review. Some of the below displayed information might be outdated as of 1st of January. For the latest updates please do contact us.
What is the BOI?
The Board of Investment (BOI) is a government agency that grants investment privileges to local and foreign investors.
How are incentives attributed by the BOI?
The amount and types of incentives that you may receive will depend of how well your investment fits the government’s goals. If you invest into an activity which is deemed a priority and locate the business investment in a favorable area of Thailand then you will generally receive the maximums benefits from the BOI. On the contrary, if you invest into a non-priority activity in Bangkok you will only receive the minimum incentives.
What are BOI incentives?
Investment incentives provided by the BOI range from
- Up to 8 years profit tax exemption
- Relief from or reduction of import taxes duties on both machinery and raw or other essential materials imported
- Deduction of transportation, electricity and water costs and deduction of the project’s infrastructure installation costs.
- Legal foreign majority ownership of the business allowed
- Legal foreign freehold landownership (for industrial related projects only),
- One stop work permits and visas for your foreign experts
- Less demanding requirements to obtain visas and work permits
This list is not exhausting and some objectives have slightly different privileges and additional requirements.
How can you check if an activity is promoted or not by the BOI?
You can go to the BOI and have a look at their list of supported activities as it is subject to changes from time to time.
Why do I need your company to help me with BOI?
You actually can do it alone without hiring our company or a lawyer because BOI officers are in general very helpful.
BOI forms are somehow excessive and quite mind struggling at first. In addition however, be careful because investors that obtain their BOI without a lawyer often do not understand what the BOI promotion is all about which can result in potential problems down the road.
Is the obtaining of the BOI promotion the end of it?
Foreign investors that handle the BOI process by themselves often think that once they obtained the BOI license the process is completed when the truth is that the obtaining of a BOI license is only the beginning.
Having the BOI promotion is only the beginning as there are special reporting requirements.
Is BOI promotion subject to conditions?
It is subject to conditions which mean that you will have to:
1. Implement every promise you made into your BOI application
2. Fulfill whatsoever conditions the BOI applies to your license.
For the whole duration of your investment, you will be under the BOI control and you will have to notify the BOI or file applications for permissions along the way.
The BOI will audit your business on a regular basis to ensure that you are fulfilling the conditions of your promotion.
Is there something else to consider once I obtain my BOI license?
Many foreign investors think that because they were granted tax privileges by the BOI they do not need to worry about the Revenue Department. It is actually on the contrary. Beside the exceptions granted by the BOI all the other revenue standards do apply. In fact the revenue department keeps BOI companies under constant scrutiny and considers them to be of special interest because they can generally pay their tax related fines more easily than non BOI companies as BOI promoted companies are generally of the larger variety. Accounting and auditing companies charge more to service BOI companies than non-BOI companies.
What are the most common problems BOI companies do encounter?
We found that the main problem is the accounting relief and reductions. This privilege generally creates the most trouble with the Revenue and Customs Departments.
If the investor does not keep strict and proper records of raw materials and stocks, including waste materials, this can result in problems for the investor as the exemption is only for the raw materials used by the BOI promoted company. It seems like a small problem but it can add up as it can take a couple of years for the Revenue Department or Customs Department to catch up.
Another thing is that BOI companies can run into trouble for the reason of having standards in their global accounting policies which unfortunately do not comply with Thai standards. If the management follow global accounting standards there can be a problem when the Revenue Department audits them. This can lead to hefty fines.
Even though operating your business with a BOI company does sound rather simple there are several exceptions to the above mentioned i.e. license requirements, higher Thai shareholding requirements, Thai directorship or even more favorable structures. For a detailed and accurate quote please kindly contact us for your personalized quote.
We are looking forward to help you grow your business and as well to receive your inquiry soon.
|Thai (51% Thai ownership)||■ Must not increase business||■ No legal ownership (51% Thai)|
|■ Not strictly controlled as BOI||■ Stricter Visa rules|
|■ Cheaper Setup fees||■ Stricter work permit rules|
|■ Faster company setup (4-6 weeks)||■ Must hire Thai employees for work permit|
|■ Business objectives can be altered easily|
|■ More option to pay up registered capital|
|Board of Investment (BOI)||■ Up to eight years profit tax holiday||■ Capital needs to be paid up in full within 3 years|
|■ One stop visa||■ Regular special reports and checking|
|■ One stop work permit||■ Must grow in business proportion|
|■ Legal Foreign ownership||■ Long setup time (4-6 months)|
|■ Legal Land ownership||■ More expensive setup|
|■ More expensive accounting fees for special reports|
|■ Difficult or impossible to change business objectives|
Legal Disclaimer: All information displayed on this site are compiled with the most amount of care. As law and life is bound to changes we cannot warrant that all information is accurate at all time and intended to be a guideline. In order to provide you a correct and up to scratch information please do contact our experienced business lawyers and associated accountants.