Thailand has become an attractive destination for investors due to its strategic location, robust infrastructure, and supportive government policies. The Thailand Board of Investment (BOI) plays a pivotal role in promoting investment by offering various incentives and streamlined processes for company registration. This article provides a comprehensive guide to registering a company under the BOI, covering the benefits, eligibility criteria, application process, and essential considerations for prospective investors.
Benefits of BOI Promotion
- Tax Incentives
- Corporate Income Tax Exemption: Depending on the activity and location, companies can enjoy up to eight years of corporate income tax exemption.
- Additional Deductions: Double deductions for transportation, electricity, and water supply costs, along with a 25% additional deduction on infrastructure construction costs.
- Exemption of Import Duties: Exemptions are available for machinery, raw materials, and components used in production for export.
- Non-Tax Incentives
- Land Ownership: Foreign companies are permitted to own land for their promoted projects.
- Visa and Work Permit Facilitation: Streamlined procedures for obtaining visas and work permits for foreign employees.
- Foreign Ownership: Up to 100% foreign ownership is allowed in certain sectors.
- Other Benefits
- Permission to Bring in Foreign Experts: Companies can bring in foreign experts and technicians to work on their projects.
- Infrastructure and Utilities Support: Assistance in accessing necessary infrastructure and utilities for the project.
Eligibility Criteria
- Promoted Activities
- The BOI classifies promoted activities into various categories, such as agriculture, technology, manufacturing, and services. Each category has specific criteria and incentives associated with it.
- The BOI maintains an updated list of eligible activities, and prospective investors should consult the latest list to determine if their business activity qualifies for BOI promotion.
- Minimum Capital Investment
- The minimum capital investment requirement varies depending on the type of activity and location. Generally, a minimum registered capital of 1 million Thai Baht is required, but this can be higher for certain projects.
- Technology and Innovation
- Projects involving advanced technology, research and development (R&D), and innovation are highly encouraged and may receive additional incentives.
- Environmental Impact
- Projects must comply with environmental protection regulations. The BOI evaluates the potential environmental impact of proposed projects as part of the approval process.
Application Process
- Pre-Application Preparation
- Feasibility Study: Conduct a detailed feasibility study to assess the project’s viability and alignment with BOI criteria.
- Business Plan: Prepare a comprehensive business plan outlining the project’s objectives, investment, technology, production processes, market analysis, and financial projections.
- Submission of Application
- Submit the application online through the BOI’s e-investment platform. The application must include the business plan, feasibility study, and any other required documents.
- Review and Evaluation
- The BOI reviews the application to ensure it meets the eligibility criteria and aligns with national development goals. The evaluation process may involve discussions and site visits.
- Approval and Certification
- If the application is approved, the BOI issues a promotion certificate outlining the granted incentives and conditions. This certificate is essential for accessing the benefits and should be kept securely.
- Post-Approval Requirements
- Company Registration: Register the company with the Department of Business Development (DBD) within six months of receiving the promotion certificate.
- Compliance Reporting: Regularly report to the BOI on the project’s progress and compliance with the promotion conditions. Non-compliance can result in the revocation of incentives.
Essential Considerations
- Legal and Regulatory Compliance
- Ensure full compliance with Thai laws and regulations, including the Foreign Business Act, labor laws, environmental regulations, and sector-specific requirements.
- Local Partnerships
- Forming partnerships with local entities can facilitate smoother operations, access to local markets, and better understanding of the regulatory landscape.
- Human Resources
- Develop a robust HR strategy to attract and retain skilled local and foreign employees. Leverage the BOI’s visa and work permit facilitation services to manage foreign workforce requirements.
- Financial Planning
- Plan for initial capital requirements, operating costs, and cash flow management. Take advantage of available tax incentives to optimize financial performance.
- Market Research
- Conduct thorough market research to understand local consumer behavior, competition, and market trends. This information is crucial for strategic planning and market entry.
- Infrastructure and Logistics
- Evaluate the availability and quality of infrastructure, including transportation, utilities, and communication networks, to support business operations.
- Environmental and Social Responsibility
- Implement sustainable practices and corporate social responsibility (CSR) initiatives to contribute positively to the community and enhance the company’s reputation.
Key Steps in the BOI Application Process
- Initial Consultation
- Engage with BOI officers for preliminary consultations to understand the requirements and suitability of your project for BOI promotion.
- Application Submission
- Complete and submit the application form, ensuring all necessary documents and information are included. This step can be done online through the BOI’s e-investment platform.
- Project Evaluation
- The BOI conducts a thorough evaluation of the application, which may include meetings with the applicant and site visits to assess the feasibility and potential impact of the project.
- Approval Notification
- Upon approval, the BOI issues a notification, which includes the promotion certificate and outlines the incentives and conditions granted.
- Company Registration
- Register the company with the Department of Business Development (DBD) and fulfill any additional requirements specified by the BOI.
- Implementation and Reporting
- Start implementing the project in compliance with the approved business plan and BOI conditions. Regularly report to the BOI on progress and compliance.
Conclusion
Registering a company under the Thailand Board of Investment (BOI) offers significant advantages for both foreign and local investors. The BOI provides a comprehensive range of incentives, streamlined processes, and supportive services to foster a favorable investment climate. By understanding the benefits, eligibility criteria, application process, and essential considerations, prospective investors can effectively navigate the BOI promotion system and establish a successful business in Thailand. Engaging with the BOI and adhering to regulatory requirements ensures that companies can fully leverage the opportunities available and contribute to Thailand’s economic development.