Board of Investment (BOI) and the Eastern Economic Corridor (EEC) are facilitating investment in Thailand in 2021. Thailand’s legislation on the BOI and the EEC encourage both domestic and international investors to participate in the country. They offer tax and non-tax benefits to projects that are promoted. The article provides an overview of the major incentives available under the BOI and EEC rules, as well as the application procedures. Both BOI and EEC are facilitating investment in Thailand in 2021 in industries of strategic importance to the nation.
Investment in Thailand: Board of Investment
For more than 50 years, the BOI has been the primary regulator in charge of promoting investment in Thailand. It is chaired by Thailand’s Prime Minister. To attract local and foreign investors to invest in the selected industries, the BOI offers tax and non-tax advantages.
BOI Incentives for Foreign Investment in Thailand
BOI incentives can be broadly categorized as Tax and Non-tax incentives. This implies that not only the Board provides tax reliefs, it also facilitates investors with other resources to do business with ease. Let us check it –
Tax Incentives:
- Corporate income tax (CIT) and import duty exemptions for a period of 5 to 8 years.
- Reductions in CIT and import tariffs by 50% for a period of five years.
Non-Tax Incentives:
- The right to own land for the promoted company if foreign investors possess more than 49 per cent of the company.
- The ability to hire long-term foreign workers with fewer visa and work permit requirements.
- Foreign investors have the right to own more than 49% of the equity shares in the promoted firm.
Investment Acceleration Measures of BOI for 2021
In addition to the regular incentives, the BOI has released new accelerated measures for qualifying projects with applications filed in 2021 to earn a 50% CIT deduction for 5 years. The major requirements for such projects include:
- The project must be in Group A1 (knowledge-based activities focusing on R&D and design to improve the country’s competitiveness). Secondly, Group A2 (infrastructure activities for country development, activities using advanced technology to create value-added, with no or very few existing activities in Thailand). Elsewise, Group A3 (high technology activities that are critical to the country’s development).
- The project must be for an activity that qualifies for up to eight years of CIT exemptions.
- Within 12 months of receiving the investment promotion certificate, the project must have a realised investment capital of at least THB1 billion.
- It is not possible to extend the deadline for accepting the investment promotion and receiving the investment promotion certificate.
- For this additional incentive, evidence of actual and realised investment capital must be provided with the BOI within 18 months of the issuing of the investment promotion certificate.
BOI Application Procedure for Investment in Thailand
BOI applications can be submitted online or in person at the BOI Office, No. 555 Vibhavadi-Rangsit Road, Chatuchak, Bangkok 10900, Thailand. A BOI certificate is given or rejected after 3 to 6 months for each application. However, the application requirements differ depending on the project size and industry type.
Investment in Thailand in 2021: Eastern Economic Corridor
The EEC is a geographical area that encompasses three provinces on Thailand’s Eastern Seaboard. They are Chacheongsao, which is immediately east of Bangkok, and Chonburi and Rayong, which are a little further east. In the EEC, both the public and private sectors can establish Special Economic Promotion Zones (SEPZs). Furthermore, approved investment projects in the EEC are eligible for premium tax and non-tax benefits.
EEC Incentives
Qualified projects in the EEC will be eligible for higher incentives than the standard BOI incentives. In companies set up to invest in the EEC, foreign investors can own 100% of the shares. Land ownership and a 50-year land lease with a 49-year renewal are both options.
The premium tax incentives include CIT exemptions for 5 to 10 years. It also includes additional tax exemptions of up to 2 years. An additional 50 per cent tax deductions of up to 3 years for development projects. These projects target industries, or projects in Group A1, A2, or A3 that provide HR development.
As of May 2021, the EEC has 6 special industries promotion zones, 21 targeted industries promotion zones. Additionally, it includes 2 particular targeted industries (clusters) promotion zones, and various industrial estates and industrial parks.
A significant number of infrastructure projects have already started construction. Deep seaports, the U-Tapao International Airport, and high-speed train are some of these projects. The dual-track railway projects connecting the EEC to Bangkok and other parts of Thailand is also one of them.
Target Industries of EEC
The EEC has designated 12 targeted industries. These are:
- The next-generation automotive,
- Smart electronics,
- Medical tourism,
- Agriculture and biotechnology,
- Food for the future,
- Robotics,
- Aviation and logistics,
- Biofuels and biochemicals,
- Digital technology,
- Medical hub,
- The defence industry, and,
- Education and human resources development.
EEC Application Process
Investors can apply for EEC investments online or in person at the EEC Office. Note that it is located at the CAT Tower’s 25th Floor, 72 Soi Wat Maungkhae, Charoenkrung Road, Bangrak, Bangkok 10500, Thailand.
Final Thoughts
It is good news for investors planning to start their business in Thailand. However. before getting BOI or EEC support, you must ensure the following:
- Your investment must focus on the target industries of BOI or EEC;
- BOI and EEC are encouraging investors to focus on Creativity and Innovation. So make your business plan with the motive to do something new;
- Plan your investment to be implemented in the geographical locations of economic importance, especially if you are thinking of getting EEC benefits;
- THB 1 Billion or US$ 33 million should be your investment value to avail all benefits either from the BOI or EEC.
You must know that the most important factor is to get proper legal guidance and assistance. Therefore, you will need eminent law professionals who can help you yield the most out of these benefits announced by BOI and EEC. Feel free to book a free consultation with Konrad Legal by mailing us at [email protected]. We will help you throughout the process of our investment in Thailand!
