The Board of Investment (BOI) Thailand is a pinnacle organization in the kingdom supporting and uplifting investors, be they, Thai or foreigners. In this process, the BOI comes up with new policies, investment opportunities, and amendments that can benefit existing businesses. In the stretch of continuity of this investor-friendly journey, New Incentive Plan is announced by BOI Thailand for Investors.
The Thailand Board of Investment (BOI) recently announced new incentive packages. This is a follow-up to its new five-year strategy, which was unveiled last month. These incentive packages include the following:
- A set of special privileges to support expansion by long-standing investors
- A comprehensive relocation program covering headquarters and research & manufacturing facilities, and
- Package for investment in sustainable activities like the production of hydrogen vehicles and the development of biofuels.
This article intends to explain all through the new plan so that it becomes easy for you to focus on your new business plan in Thailand.
The Announcement
The BOI board met on November 04, 2022, to approve the measures. The measures include premium incentives for high-tech and innovative industries. Primary industries of focus are biotech, nanotech, and advanced materials. The new announcement support measures for the development of novel foods. Additionally, the creation of new economic corridors or SEZs in four regions of Thailand is something that it focused on. The new policies cover the implementation of a unique mechanism to enhance the ease the doing business in Thailand.
According to the BOI’s Secretary General, Mr. Narit Therdsteerasukdi, the strategy aims to upgrade the industrial capacity with a focus on high technology and innovation. Additionally, it aims to build the industrial base of the future. Nevertheless, this is to make Thailand the center of international business and the technology hub of the region.
BOI wants to emphasize Thailand’s capabilities to help address some concerns like food security. It also aims to explore renewable energy sources and enhance supply chain operations.
The 2023–2027 Investment Promotion Strategy, aims to assist in Thailand’s economic restructuring. Additionally, it is also to ensure that the nation is progressive, competitive, and open to all after Covid–19. To present Thailand as a regional hub for commerce, trade, and logistics, the plan aims to promote technological advancement. Additionally, it supports the transition to green and smart industries, talent development, as well as creativity, and innovation. The bio-circular-green (BCG) sector, the EV supply chain, electronics manufacturing, the digital economy, and creative industries are the other five important areas in the strategy as priority industries.
According to the special packages released on November 04, 2022, the following are specifics of the approved measures and additional benefits for investors.
Retention & Expansion Program
With approval for a new project or expansion project with an investment of 500 million baht or more, long-standing investors or businesses over the previous 15 years have been granted investment benefits for at least three projects totaling at least 10 billion baht (roughly 265 million US dollars)—will be given special incentives, such as an additional corporate income tax (CIT) exemption for up to three years or a 50% CIT reduction. This is the first time the BOI has offered a package to thank investors who have shown faith in Thailand and actively contributed to the long-term industrial growth of our nation, according to Mr. Narit.
Relocation Program
Companies moving all of their operations, including their regional headquarters, research and development (R&D) centers, and manufacturing facilities to Thailand will be eligible for an additional CIT exemption for 5 years under the relocation program. However, according to the industry, businesses moving their manufacturing and regional headquarters will earn an additional 3 years of CIT exemption, whereas businesses moving their manufacturing and R&D center will receive an additional 1 to 5 years of CIT exemption. Only revenue from the manufacturing activities that have been relocated is eligible for any CIT exemptions.
Creation of New Industry Categories
The board approved the formation of new supported industry sectors, particularly sustainable activities, that would receive specific incentives in order to hasten the transition to the new economy. Note that, the creation of electric vehicle (EV) battery switching stations, the production of hydrogen vehicles, novel foods, organic foods, etc. are some of the new categories. In terms of renewable energy, the newly promoted businesses kinds include those that produce hydrogen and its related products, such as green ammonia, as well as those that produce power and steam using hydrogen.
Advanced Technology Sectors
Investments in upstream high-tech industries including biotech, nanotech, and advanced materials that involve technology transfer and collaboration with Thailand’s higher education institutions and research organizations will receive premium incentives. According to the BOI’s nomenclature, these projects, which are categorized as “A1+,” will be eligible for 10 to 13 years of CIT exemption without a cap, depending on the activity. Wafer fabrication has been moved up to this category and will now qualify for a 13-year CIT exemption, as opposed to the prior 10-year exemption.
New Economic Corridors
The board also approved the designation of four areas of Thailand, totaling 16 provinces, as special investment zones for new economic corridors. Numerous incentives are offered for investments in these sectors. The four regions, which are the Northern Economic Corridor, North-Eastern Economic Corridor, Central-Western Economic Corridor, and Southern Economic Corridor, will expand the current Eastern Economic Corridor, a region of industrial and high-tech development.
Ease of Doing Business
The board also approved the creation of a Sub-Committee on the Resolution of Obstacles and Facilitation of Investment, which will act as a special mechanism to further increase the ease of doing business by addressing particular pain points raised by investors. This committee will work in conjunction with the Prime Minister’s Office and other state agencies.
Beginning in January 2023, the new incentives will be in place.
The Bottomline
If you have planned to start your business in Thailand, go for the BOI advantages. If you are a foreign investor, you can easily get the following privileges and benefits:
- Permission for foreign investors to own land
- Permission to operate under 100% foreign ownership
- Exemption from work permit and visa rules
- Exemption of import duty on machinery
- Corporate income tax exemption for up to 8 years
- Deduction of Transportation, Electricity, and Water Costs
- Deduction of the Project’s Infrastructure Installation
- Exemption of import duty on raw or essential materials used in the manufacturing of export products for 5 years
- Permission for foreign technicians, experts, and their spouses or dependents to work and stay in Thailand
There are various legal, documental, and financial requirements to get BOI approval for your business in Thailand. But the thing that is more pristinely necessary is local legal support. It won’t be possible for a foreigner to move around and meet and communicate with authorities, where language is a great barrier.
Although English is the official business language in Thailand, yet, all people here may not be comfortable with that. Additionally, you need to have local guidance on legal and taxation requirements.
Therefore, so that your business idea gets noticed by the BOI and you get easy approval from there, let us help you. Email us your idea and requirements at [email protected] and book your free round of consultation with our team of experts. So, reach out to us today to avail all the benefits that BOI Thailand has for investors.
