“Benefits of Foreign Investors” and “Board of Investment (BOI) of Thailand” are pretty synonymous expressions. Due to the great advantages of Thailand as a business location, foreigners prefer Thailand to set up or expand their existing business in Thailand. On the other hand, BOI Thailand Promotion offers privileges and incentives for foreign investors to ease their operations in the kingdom.
Many foreign investors, both inside and outside of Asia, are quickly choosing Thailand as a place to invest. Many consider Thailand to be a business-friendly nation, with year-over-year growth anticipated to continue. Thailand has attracted a lot of foreign investment, and this trend is certain to continue. Before establishing a Thai company with 100% foreign ownership, there are numerous factors to take into account.
The BOI of Thailand is a company whose motto is to help foreign investors launch their businesses in the nation. The government is the owner of the BOI. The organization’s only purpose is to help entrepreneurs who are investors launch their businesses. Additionally, it supports the introduction of novel concepts, company growth, and technical improvements. They give investors the chance to investigate and take advantage of domestic and international investment opportunities. The BOI’s methods are advantageous to both the nation and the investor.
The basic logic is that foreign investors must seek BOI Thailand Promotion for the benefit and growth of their business in the kingdom. But questions like how, why, and when may traumatize your decision in this aspect. This article intends to clear all these contradictions and manipulations from your decision of starting your business in Thailand.
BOI THAILAND ANNOUNCEMENTS 2023
- What is the Board of Investment of Thailand?
- BOI Thailand Promotion Benefits for Foreign Investors
- Tax Benefits from BOI Thailand
- The Bottomline
What is the Board of Investment of Thailand?
In 1966, the Office of the Board of Investment was founded. It is a government agency that works under the Office of the Prime Minister and creates investment policies to aid in increasing foreign direct investment in Thailand. As a result, a BOI-promoted company can benefit greatly and receive numerous incentives, which can help entrepreneurs build prosperous businesses.
Additionally, the following are the main functions of BOI Thailand:
- Promoting investment possibilities in Thailand and abroad
- Technology advancement and innovation in Thailand
- Increasing Thailand’s economic growth
Their primary goal is to encourage investment through the provision of both tax and non-tax-based incentives. Additionally, part of their aim is to assist Thai investors who want to make investments abroad. Moreover, the BOI has served as Thailand’s primary public organization promoting foreign and domestic corporate investment for the past 50 years. Therefore, by contributing to balanced and sustainable economic growth in the nation, their goals are to improve Thai competitiveness and aid Thailand in avoiding the middle-income trap. Its primary duties and roles are to encourage direct investment.
BOI Thailand Promotion Benefits for Foreign Investors
As a new foreign investor in Thailand, you can avail of great tax and non-tax benefits from BOI Thailand. These benefits come in different scales on the basis of the following metrics:
- Industry to which your business belongs
- Type of Company you want to register in Thailand
- Investment volume
- Amount of benefit your business can bring to Thailand & its Citizens
- Contribution of your business to the Thai GDP
- Location of your business in Thailand
Depending upon the said parameters, your business can be eligible for tax and/or non-tax privileges from BOI Thailand.
Tax Benefits from BOI Thailand
- For a maximum of eight years, the corporation may be excused from paying taxes.
- Reduced corporation taxes will also be advantageous to the company.
- The majority of foreign companies and businesses that are likely to import machinery and raw materials may be subject to high import taxes. Businesses that submit a BOI application and receive approval are given the leverage to negotiate lower import duty payments.
- Costs associated with research and future advancements will also increase as a result of BOI promotion.
- Some manufacturing and export charges are waived for foreign businesses that register with the BOI.
Non-tax Benefits from BOI Thailand
- The possibility to acquire complete ownership of their business is provided to the foreign investor.
- They will have the chance to obtain work permits and visas thanks to the BOI promotion.
- Additionally, they will be given the chance to own land and property. Promotion by BOI has many advantages. Before registering for a BOI promotion, company owners must have a thorough understanding of a few vital issues.
- The advantages of the campaign are intended for selective groups within your firm and are not intended to apply to everyone. For instance, a business that deals with both transportation and software might only be eligible for one BOI promotion. The investment promotion may not be used in the software area if it is offered for transportation.
- As soon as they receive the promotion certificate, your company will begin to benefit from the investment promotion. All businesses that have been accepted for BOI promotion are issued a promotion certificate as proof of their approval.
- The BOI will give you written notice of every advantage that accrues your business.
Tax Incentives from BOI Thailand
In Thailand, it is mandatory for all businesses to pay corporate income taxes. Taxes payments are typically due on annual basis. However, the amount depends on the size of the business as well as the industry in which it operates.
Tax Exemptions
For a period of eight years, businesses that have received a promotion from Thailand’s BOI are exempt from paying corporate income taxes. Different corporations may only receive a five-year exemption, while other companies may receive no exemption at all. Both the city in which the business is located and the industry is important factors.
The constraints may be greater or lesser than that. However, in some circumstances, there can be a decrease in the income tax rate by 50% of the whole investment. Depending on the type of business, this may be.
A 50% tax exemption is particularly advantageous for the corporation, and these enterprises would be free to operate their businesses in Thailand at very low costs.
If your company is planning to do business in a focus industry of BOI that is essential for investment, you may be eligible for up to 70% in corporate income tax deductions over a five-year period.
Companies are divided into groups based on a few criteria. Companies in the “A1” categories and those covered by “Section 8” typically receive a 100% exemption from corporate tax as well as a 100% exemption from corporate income tax.
Section A1 Companies that fall under this category need complete registration and BOI Approval. Only 120 days following the conclusion of the company’s financial cycle may this permission go into effect.
Import Duty Exemptions
Import duty exemptions are highly advantageous for businesses that deal with the export of raw materials and research. In those circumstances, import charges for the manufacture of machines and other raw materials won’t be levied against manufacturing firms with the goal of conducting research and development.
Non-Tax Incentives from BOI Thailand
There are some non-tax incentives that come with successfully registering and promoting your business with Thailand’s BOI. These incentives, as examples, include:
100% Company Ownership for Foreign Investors
Foreign investors who have not registered their firms with Thailand’s BOI are only permitted to own 49% of the company’s shares. However, if they do so, they will attain 100% ownership of the share. Three shareholders must be there to register a company.
Simplified Visa & Work Permit Processing
You can get visas and work permits by promoting your business at BOI. Visa and work permit applications and processing take a long time and are quite tedious. You will be switching back and forth between the ministry of labor and immigration if you don’t have a BOI registration. The registration, renewal, and extension of your visas and work permits are simpler if your business gets a BOI promotion. This includes your workers as well. You and your personnel don’t need to go to the Immigration Center to get visas. The application and processing of work permits also fall under this.
You and your team don’t need to go to the ministry of labor. With less stress, you can do everything simultaneously from one location. Typically, you can complete all of these tasks at the Bangkok one-stop service center. This clause also applies to your partner, kids, and family members. They will also receive the necessary permits and paperwork to live with you in Thailand.
Land Ownership Rights for Foreign Investors
Foreigners cannot own land in Thailand under Thai law. However, if a foreign company obtains BOI registration, it can hold land in Thailand. Section 27 of the Investment Promotion Act of 1977 makes this possible.
Additionally, companies with BOI promotion can acquire land in Thailand. However, the purpose of land acquisition must be for the construction of factories, offices, and staff housing. In accordance with the clause, the land must be sold within a year of the company’s closure.
The Bottomline
The Board of Investment of Thailand keeps on announcing new policies and enforces amendments for the benefit of foreign investors. Recently, BOI announced some new policies to enhance the level of cooperation of the Royal Thai Government with foreign investors. To know all about the recent BOI announcements, go through our previously published article.
However, to avail of the benefits of BOI, as a foreigner, you will need local Thai support. The major reasons behind this are as follows:
- Proper understanding of the Siam Civil and Commercial Code
- Knowledge of the Thai Corporate and Regulatory Obligations
- Practical experience in Thai Accounting, Auditing, and Taxation policies
- Communication in the Thai Language
- Immigration and Work Permit for your overseas employees
- Acquisition of Office, Warehouse, or Business Premises
There can be many other reasons as well that can vary depending upon the level of research and your skillset at the time of incorporating your BOI-promoted company in Thailand. But we are there for all. Email us your requirements at [email protected] and book a free round of consultation to ease out your BOI Thailand Promotion Application process.
