Starting a Business in Thailand is easier when you have the status of being promoted by the Board of Investment (BOI). Business owners may apply for investment promotion from the BOI if the nature of their business falls under one of the promoted activities. If a business is eligible for BOI promotion, they would be entitled 100% foreign ownership with the foreign business license (without the usual capitalization requirement) and would be permitted to bring in foreign skilled workers without having to comply with the general ratio of 4 Thai employees to 1 foreign national working in the company. In addition to the benefits previously mentioned, BOI promoted businesses are eligible for a corporate income tax exemption of up to 13 years.
The BOI was established pursuant to the Investment Promotion Act, A.D. 1977, for the purpose of promoting certain foreign and domestic investments that are regarded as welcome in Thailand.
The BOI has set policies to promote:
There is no government fee for applying for BOI privileges. This, among other reasons make it a highly recommended option for foreign investment. The application for promotion takes approximately four – six months overall, including the preparation, submission, interview, and consideration period.
The BOI bases its determination on promotion privileges upon the following general criteria:
In addition to the above general criteria, there are specific criteria for each business category. The BOI has a list of approximately 100 categories and more sub-categories, each has specific criteria. The BOI certificate, once it is granted, is accompanied by a list of conditions. Failure to meet the conditions (and remain in compliance therewith) may lead to revocation of the BOI certificate.
The BOI officers in charge usually speak English well and they make themselves available to clarify any questions regarding the application requirements.
The tech industry is one of the fastest growing industries in Thailand, and the Thai government wants to make Thailand the center of technological innovation in ASEAN. The tech industries that may qualify for BOI promotion can be found under Category 5 of the list of BOI promoted activities.
The most popular tech industries under section 5 of the BOI promoted activities are outlined below.
a. Category 5.7: Software
Two categories, distinguished by product description:
General conditions for all software categories:
b. Category 5.8: E-Commerce
Thailand is currently experiencing a massive growth in opportunities related to e-commerce with current estimates for the next five years predicting an average growth of 18.2% per year. Thailand has one of the highest internet and mobile internet adoption rates throughout Southeast Asia.
General conditions for promotion in this category:
Definition of “e-commerce” is somewhat unclear and contradictory. According to the BOI, any business that is based on online transactions is regarded as e-commerce. The standard case is the “online marketplace,” where the operator acts as a broker who establishes the contact between customers and sellers and/or service providers. The income of the e-commerce operator is then based on agency commissions.
c. Category 5.9: Digital Services
Digital services include all types of digital services, including:
The conditions for a Digital Services company to be eligible for BOI promotion are as follows:
The BOI has discretionary authority to grant certain taxation, employment, financial and other benefits.
Non-Tax Incentives Non-tax incentives are available at BOI’s discretion and include such investment privileges as majority foreign ownership, land ownership and expedited visas and work permits for foreign executives and technicians (and their families).
BOI’s basic package of tax incentives includes the following (subject to modification by the BOI on a case-by-case basis):
BOI tax incentives vary in accordance with the specific product or service under the promoted project, and the geographic location of the promoted project.
As you can see, applying for BOI promotion is a highly recommended option for foreigners wanting to own 100% of a business in Thailand, and receive both tax and non-tax incentives. With such attractive benefits provided by the BOI promotional certificate, and Thailand’s tech industry being one of the fastest growing industries in ASEAN, the option of starting a tech business in Thailand is becoming increasingly attractive for foreigners.
Our firm can assist you in applying for BOI promotion. If you have any questions related to BOI promotion or setting up a business in Thailand, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2.