The Board of Investment has developed a 5-year Investment Promotion Strategy primarily targeting the competitiveness of Thailand in the global market. With the help of this new plan, Thailand’s economy will be developed, its marketability will increase, and the country will eventually become a regional investment center. In this process of facilitating Thai and foreign businesses for national growth, BOI Benefits for Real Estate Business in Thailand can never be underrated. Read through this article to know all about them.
- Objectives of the New 5-year Investment Promotion Strategy of BOI Thailand
- The New Announcements of BOI Thailand
- What Does the New BOI Announcement Have for the Real Estate Industry in Thailand?
- Access BOI Thailand Benefits with Ease!
In line with the current National Economic and Social Development Plan and the nation’s development goals, the BOI seeks to promote innovation, competitiveness, inclusion, and sustainable economic growth in Thailand. To accomplish its objectives, the BOI will employ the following three crucial elements under the new strategy:
- Tax and non-tax investment promotion benefits
- One-stop service before and after investment
- Establishment of a suitable environment and amendment of regulations to support investment.
Objectives: New Investment Promotion Strategy of BOI Thailand
The new announcements of the Board of Investment of Thailand aim to solve various industry challenges. Additionally, it has included some new incentive packages and schemes which primarily target the following themes:
- Upgrading current industries through supply chain improvement and promotion of new industries in which Thailand has high potential while also promoting current industries.
- Through investments in automation, digital adoption, and decarbonization, the industrial transition to green and smart sectors is being accelerated.
- The development of Thailand as a hub for global trade and an entry point for regional investments.
- SMEs and startups must be strengthened in order to maintain connections to the global market and supply chain.
- The encouragement of investments in various Thai regions on the basis of their capacity to support inclusive growth.
- Encouragement of investments that will foster social and communal growth.
- Encouragement of foreign investment to increase commercial prospects for Thai businesses.
The New Announcements of BOI Thailand
These announcements outline the BOI’s investment promotion rules, major requirements, and the most recent list of activities that qualify for investment promotion. Since the primary announcement was made in 2014, the BOI has periodically produced lists that this list repeals and replaces. Following are the new announcements:
- Announcement of the Board of Investment No. 8/2565 Policies and Criteria for Investment Promotion
- Announcement of the Board of Investment No. 9/2565 re. Measures to Promote Investment in Industries that are Important to the Country’s Development
What Does the New BOI Announcement Have for the Real Estate Industry in Thailand?
Board of Investment No. 9/2565 has some special provisions facilitating the benefits of real estate investment in Thailand. As the BOI is aiming for the upscaling of the industrial and manufacturing facilities in Thailand, infrastructure is very essential for their sustenance. In order to escalate the process of industrial growth and transform Thailand as the regional manufacturing hub, this time the body has focused greatly on real estate investment in Thailand.
Eligibility of Real Estate Projects to get BOI Promotion in Thailand
BOI Thailand has categorized real estate investments primarily into the following segments:
- Development of Industrial Zone or Industrial Estate
- Smart Industrial Zone or Estate Development
- Real Estate Development of Specific Industrial Estates
- Food Innovation Industrial Zone
- Science and Technology Park
- Gem and Jewelry Industrial Zone
- Logistic Park
- Aircraft of Aerospace Industrial Zone or Estate
- Agri-food Industrial Zone or Estate
- Building development for industrial plant and warehouse
The Board has set different eligibility criteria for different segments on the basis of their significance and importance in the upscaling of the target objectives and industries in Thailand.
The following are the segment-wise eligibility criteria:
Industrial Zone or Industrial Estate Projects
- Must have Thai shareholders of not less than 51 percent of its registered capital.
- Projects in Bangkok and Samut Prakan are not eligible for promotion.
- The total land area must not be less than 500 rai.
- Factory-designated areas must not be less than 60 percent and not more than 75 percent of the total area, except projects with a total area of over 1,000 rai.
- Wastewater treatment must be suitable for wastewater characteristics and according to legal effluent standards. Projects must have a post-treatment effluent pool. The wastewater discharge system must be completely separate from the rainwater discharge system.
- The project must have an appropriate system of collection and elimination of garbage, as approved by the Board.
- Projects in industrial zones must be according to target industries, complying with the specifications of the environmental impact assessment report approved by the Expert Review Committee of the Office of Natural Resources and Environmental Policy and Planning (ONEP).
- The zone must provide factories located in the zone with sufficient public utilities, electricity, water, telephone service, and a post office.
- The zone must develop about 25 percent of its total land area, or as approved by the Board, for public utility services within 2 years from the date of investment promotion certificate issuance.
BOI Benefits for Real Estate Business in Thailand: If a Project satisfies the said conditions, it will be eligible for the A3 slab of BOI Thailand Incentives and Privileges.
Smart Industrial Estate or Industrial Zone Projects
- Must have Thai nationality shareholders of min. 51% of registered capital.
- Must provide all of the 5 smart systems – Smart Facilities, Smart IT, Smart Energy, Smart Economy along with other smart systems at least 1 among Smart Good Corporate Governance, Smart Living, and Smart Workforce.
- Receive approval from the joint committees from the Industrial Estate Authority of Thailand and the Thailand Board of Investment before submitting an investment promotion application.
- The total land area of the project must not be less than 250 rai.
- Factory area must not be less than 60 percent and not over 75 percent of the total land area. An exception is given to businesses with over 1,000 rai of land, conditions of which shall be in conformity with the approval of the Board.
- Wastewater treatment systems must be appropriate for wastewater quality and in conformity with legal wastewater standards.
- Appropriate waste collecting, storage, and disposal system as approved by the Board.
- Factories using the area must be in conformity with the targeted industries and prohibited industries as stipulated in the environmental impact assessment report approved by the committee of experts of the Office of Natural Resources and Environmental Policy and Planning Project must provide public utility systems namely electricity, water supply and tap water, telephone, and postage service sufficient for factories in the industrial area.
- The project must arrange for land improvement for about 25 percent of the total area or for the area as approved by the Board in order that public utilities shall be ready for service within 2 years from the date of promotion certificate issuance.
- The project must be fully operated as approved by the Board within 5 years after its first income.
BOI Benefits for Real Estate Business in Thailand: If a Project satisfies the said conditions, it will be eligible for the A2 slab of BOI Thailand Incentives and Privileges.
Specific Industrial Estates
Food Innovation Industrial Zones
- Have Thai nationality shareholders of not less than 51 percent of its registered capital.
- Be located in the areas approved by The Ministry of Higher Education, Science, Research and Innovation and the Office of the Board of Investment.
- Have the science, technology, and innovation infrastructure ready to support commercial R&D such as operational R&D laboratories, pilot plants, production trial areas, market testing areas (Living lab), and space for rent for the private sector to establish an R&D and innovation center.
- Have a central lab with equipment and apparatus necessary for R&D and innovation activities, as well as stationed technicians to support the private sector in conducting R&D and innovation activities.
- Provide facilities such as a conference room, seminar room, communication, systems, and electrical backup system.
- Have appropriate wastewater and sewage treatment systems in accordance with the regulation.
BOI Benefits for Real Estate Business in Thailand: If a Project satisfies the said conditions, it will be eligible for the A1 slab of BOI Thailand Incentives and Privileges.
Science and Technology Park
- Must have Thai nationality shareholders of not less than 51 percent of its registered capital.
- Have an Incubation Center.
- Must have a modern system for both domestic and international communication and telecommunication.
- Have a continuous electricity backup system and other facilities as approved by the Board.
BOI Benefits for Real Estate Business in Thailand: If a Project satisfies the said conditions, it will be eligible for the A1 slab of BOI Thailand Incentives and Privileges.
Gems and Jewelry Industrial Zone
- Must have Thai nationality shareholders of not less than 51 percent of its registered capital.
- The total area must not be less than 100 rai.
- The area for operations related to gems or jewelry must not be less than 40 percent of the total area.
- Must provide appropriate security systems.
- Have meeting rooms, exhibition halls, and business centers.
BOI Benefits for Real Estate Business in Thailand: If a Project satisfies the said conditions, it will be eligible for the A3 slab of BOI Thailand Incentives and Privileges.
Logistics Park
- Must have Thai nationality shareholders of not less than 51 percent of its registered capital.
- The total area must not be less than 200 rai and the project must invest in establishing a warehouse for lease or sale with a total area of not less than 50,000 square meters.
- Must be located either within 50 kilometers of a port, an airport, a customs checkpoint, and an Inland Container Depot (ICD) or in a Free Zone.
- Designate some or the entirety of its area as a Free Zone.
- Have a station to load and unload containers, or a truck terminal and a container depot that can handle at least 50 containers.
- Must install main telecommunication infrastructure that provides high-speed communications that link the logistics park to domestic and international communication hubs.
BOI Benefits for Real Estate Business in Thailand: If a Project satisfies the said conditions, it will be eligible for the A3 slab of BOI Thailand Incentives and Privileges.
Aircraft or Aerospace Industrial Zone or Industrial Estate
- Must have Thai nationality shareholders of not less than 51 percent of its registered capital.
- The total area must not be less than 100 rai.
- Allocate some or all of its area for bonded warehouse or free zone.
- Have an area for aircraft and parts maintenance and repair centers.
- The project must have sufficient public utilities and facilities such as roads, rainwater drainage and flood prevention systems, waterworks, wastewater treatment system, telecommunications and electricity systems, fire protection systems, industrial waste management systems, and an appropriate security system as approved by the Board.
BOI Benefits for Real Estate Business in Thailand: If a Project satisfies the said conditions, it will be eligible for the A3 slab of BOI Thailand Incentives and Privileges.
Agri-food Industrial Zone or Industrial Estate
- Must have Thai nationality shareholders of not less than 51 percent of its registered capital.
- The project must not be located in Bangkok and Samut Prakan provinces.
- The project must have an area of 200 rai minimum. The area for the industrial operation shall not be less than 60% and not more than 75% of the total area.
- The project must have areas for operation facilities in the agricultural industry; agricultural processing; food processing; activities utilizing agricultural products, byproducts, agricultural scraps, or wastes as main raw materials. The area shall also include scientific and technological support and personnel development services in a proportion of not less than 80% of the total area for the operation facilities.
- Must have the following services and facilities:
- Laboratory/testing facilities
- Institutions for training or developing agricultural or food knowledge
- Basic utilities which are suitable and standardized or as per details approved by the Board
BOI Benefits for Real Estate Business in Thailand: If a Project satisfies the said conditions, it will be eligible for the A3 slab of BOI Thailand Incentives and Privileges.
Building Development for Industrial Plant and Warehouse
The project must be located in Southern Border Provinces and Special Economic Zone.
BOI Benefits for Real Estate Business in Thailand: In this category, the project will be eligible for the A2 slab of BOI Thailand Incentives and Privileges.
Access BOI Thailand Benefits with Ease!
There are various factors and parameters that need to be taken into consideration whenever you plan to avail of BOI benefits and privileges. Some of these factors include your eligibility scrutiny, knowledge of the different slabs of BOI privileges and benefits, and the correct authority to communicate with.
If you are a Thai, you may find out some way or the other, but for foreign investors, sometimes it becomes difficult to break through. Additionally, there are requirements for various translatory and notarial activities to maintain documental compliance. Therefore, we advise foreign investors to take the help of a reliable local Thai corporate law firm to get all things sorted at once.
However, as a foreign investor, you should also note that just setting up a company and getting the BOI Promotions in Thailand can never be your only key to success. BOI Thailand is very strict in terms of regulatory compliance, be it in terms of law or accounting, audit, and taxation. Therefore, it will be the best idea to share your requirement with some expert firm that can handle all these for you. To get all these at a single point, email us your requirement at [email protected].
We are a team of expert corporate lawyers, accounting, and tax professionals and have a track record of incorporating more than 1000 companies of all scales in Thailand. Write to us about your requirement and we will be happy to include you in our clientele.
