A phenomenal shift in the global corporate landscape is one of the outcomes of the rapid improvements in the Fintech Industry. This evolution has brought about a significant transformation in global commerce. Southeast Asia is one of the areas driving this revolutionary shift, setting the pace for emerging trends and adopting fintech technology first. Thailand, as one of the leading Southeast nations, embraces business evolutions wholeheartedly and welcomes foreign investors to start fintech businesses in Thailand.
Thailand is a prominent focus for international firms seeking to create a presence in Southeast Asian countries through fintech expansion. With the help of thoughtfully crafted legal frameworks and government incentives that actively assist the development of fintech ventures, Thailand’s digital marketplace is expanding at a remarkable rate. Thailand has a talent pool full of tech-savvy people.
The combination of all of these factors fosters an incredibly favorable atmosphere for the growth of the fintech business in Thailand. Yet it’s important to understand that there are obstacles as well as opportunities when entering this industry, not the least of which is figuring out how to set it up. Amidst all options incorporating a fintech business via the Board of Investment in Thailand (BOI) is the most convenient one. This article discusses the process in detail.
Start a Fintech Business in Thailand through the BOI
Promoting and enabling foreign direct investment is the responsibility of the BOI, a government agency. Attracting high-value investments that boost the nation’s technological and economic development is its main goal. To promote investment and expansion in strategically important industries, the BOI grants various incentives and privileges to qualified companies, including those in the fintech industry.
The BOI application is the most effective way for fintech companies to access the Thai market out of all the available options. The substantial advantages of the BOI application are examined in this article, with particular attention paid to tax breaks, industries that are promoted, fintech business categories, regulatory obstacles, and the application procedure. Fintech companies can strategically navigate Thailand’s rapidly expanding digital market by thoroughly understanding the benefits and considerations of the BOI route.
Benefits of BOI Certification for Fintech Business in Thailand
For international fintech companies looking to enter the Thai market, the BOI certification is a favorable option due to its several benefits. These advantages cover both BOI tax and non-tax incentives, fostering a favorable atmosphere for the development and expansion of businesses.
BOI Tax Incentives
The alluring tax incentives are among the biggest benefits of earning BOI certification. While the manufacturing and industrial sectors are the focus of many BOI programs, tax exemptions or reductions are available to BOI-certified fintech businesses for a maximum of eight years, contingent upon the amount of investment and the nature of the business operations. Some of the exclusive tax benefits are as follows:
- Exemption for a duration of three to eight years from corporate income taxes
- Dividends from initiatives marketed during the corporate income tax holiday are exempt from taxes.
- Permit to deduct losses from income for a maximum of five years.
It is important to keep in mind that depending on the exact good or service associated with the project being promoted, the BOI tax incentive details may change. Furthermore, as decreasing regional disparities within Thailand is one of the BOI’s duties, the project’s geographic location may have an impact on the degree of benefits.
BOI Non-Tax Incentives
Foreign Business Ownership
Full foreign ownership is permitted for a portion of fintech companies with BOI certification, allowing them to circumvent usual limits. For foreign investors looking to get into the Thai market, this exemption could be advantageous.
Easy Work Permit and Visa Issuance Process
Companies that have earned BOI certification are entitled to expedited procedures for securing work permits and visas for foreign experts, executives, and skilled laborers. This makes it easier to find and hire talent from around the world, which adds to a workforce that is both talented and diverse.
Licensing Support and Facilitation
The BOI provides assistance and facilitation services to certified fintech businesses. These services help businesses get the licenses they need, interact with the right government bodies, and successfully navigate regulatory requirements.
Land Ownership Permissions
Companies with BOI certification, as opposed to those without, can possess land in Thailand to conduct business.
Remittance of Foreign Currency
Remittances in foreign currencies are made possible by BOI certification, which facilitates more seamless financial operations for global companies.
Repatriation of Profits
Entities holding a BOI certification are allowed to freely repatriate investment profits and funds.
Protection from Business Nationalization
Companies with the BOI certification are shielded from having their firm nationalized, protecting their operations and investments.
BOI Promotion Schemes for the Fintech Industry in Thailand
For a variety of tech industries that fall under Category 5 of BOI-promoted activities, the BOI provides promotion schemes. Among the well-known tech sectors in this category are:
Under Category 5.7, two distinct types of software industries are eligible for BOI promotion:
- Embedded or High Value-Added Software
- Enterprise Software and/or Digital Content
Category 5.8: E-Commerce
Category 5.9: Digital Services (Including fintech). Digital services encompass a wide range of offerings. It includes software platforms, managed services, digital architecture design, and various industry-specific fintech services like insurtech, regtech, medtech, agritech, etc.
Eligibility of Fintech Business for BOI Certification in Thailand
- To apply for BOI investment promotion, approval from Thailand’s Ministry of Digital Economy and Society is necessary.
- The hiring of digital experts is mandatory. Additionally, the project must have a financial expenditure of at least one million baht (approx. USD 28,000). However, this expenditure excludes fees for land and operating capital.
- The project must deliver digital services and have the mentions in the reports.
- Within two years of the start of full operations, projects that need investments of 10 million baht or more. Note that, this investment excludes land and working capital expenses. Additionally, it must receive ISO2000 certification or other quality standards certified by Thailand’s Ministry of Information and Communication Technology.
- The revenue for the promoted business will be derived from sales or services that are directly associated with the digital services firm that is being marketed.
Fintech Business Categories Eligible for BOI Certification
Due to their considerable strategic significance and ability to propel strong economic growth in the nation, the BOI actively promotes and supports investments in particular fintech sector segments. The following types of Fintech businesses are eligible for BOI promotions easily:
Peer-to-peer (P2P) Leding Platforms
The BOI promotes fintech companies that facilitate peer-to-peer lending. Promoting investments in P2P lending platforms helps to diversify Thailand’s financial environment. Additionally, it facilitates greater financial inclusion, as the BOI holds the responsibility to minimize regional disparity.
Digital Payment Platforms
Electronic wallets and digital payments are some of the fintech topics that the BOI pays particular attention to. The BOI’s incentive helps improve the convenience and accessibility of digital financial services for the Thai populace. Additionally, it fosters innovation in payment technologies.
Blockchain Technology
Blockchain technology adoption and use is another area that the BOI actively promotes within the fintech industry. BOI assists blockchain technology businesses focusing on identity verification, smart contracts, and supply chain management.
Insurance Technology or Insurtech
The BOI encourages investments in insurtech businesses because it acknowledges the revolutionary potential of technology in the insurance industry. The benefits of receiving support from the BOI can be numerous and include access to partnerships and investment, regulatory guidance specific to the insurtech industry’s difficulties, and the chance to work with well-established players in the insurance sector.
How to Apply for BOI Promotion and Registration for Fintech Business in Thailand?
To Apply for BOI Promotion and start fintech business in Thailand, you need to follow these steps:
A substantial time and effort commitment is necessary due to the intricate application process for the BOI certification. Getting approvals for hiring and business operations can be difficult, and even after establishment, meeting the operational requirements of the BOI can be difficult. Common obstacles to attaining and preserving compliance include:
- Drafting and submitting an effective feasibility study to the approvals committee
- Proving the importance of particular positions held by foreigners in management and staff
- Providing compelling evidence of the qualifications and experience of foreign workers
- Following Thai accounting and financial reporting regulations to the letter
Konrad Legal, the leading corporate law firm in Thailand, stands out among these complications as a highly-skilled partner to help with BOI certification in Thailand. Businesses may easily traverse the BOI Thailand application process, including completing the required paperwork, participating in crucial interviews, and upholding compliance duties with the extensive help of the Konrad Legal team. Fintech businesses that work with Konrad as a strategic partner may get past regulatory roadblocks like creating convincing feasibility studies, validating important responsibilities, and adhering to strict accounting regulations.
Get in touch with us right now to start your road toward success, growth, and innovation in Thailand’s thriving fintech sector. Please email us at [email protected] and our team will get back to you within one Thai working day to help you start your fintech business in Thailand.
