Tag Archive: privileges

  1. Overview of the Board of Investment (BOI) privileges

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    The Board of Investment (BOI) was established pursuant to the Investment Promotion Act (B.E. 2520; 1977, as amended) for purposes of promoting certain foreign and domestic investment that are seen as welcome in Thailand.

    1. BOI Policies

    The Board of Investment has set investment promotion policies as follows:

      1. Promote investment that helps enhance national competitiveness by encouraging R&D, innovation, value creation in the agricultural, industrial and services sectors, SMEs, fair competition and inclusive growth;
      2. Promote activities that are environment-friendly, save energy or use alternative energy to drive balanced and sustainable growth;
      3. Promote clusters to create investment concentration in accordance with regional potential and strengthen value chains;
      4. Promote investment in border provinces in Southern Thailand to help develop the local economy, which will support efforts to enhance security in the area;
      5. Promote special economic development zones, especially in border areas, both inside and outside industrial estates, to create economic connectivity with neighboring countries and to prepare for entry into the ASEAN Economic Community (AEC); and
      6. Promote Thai overseas investment to enhance the competitiveness of Thai businesses and Thailand’s role in the global economy.
    1. BOI Incentives

    In addition to authorizing foreign majority ownership and control over Thai corporations, the BOI has discretionary authority to grant certain trade, taxation, employment, financial and other benefits.

    BOI incentives are divided into two categories (tax incentives and non-tax incentives) and specified in the BOI certificate granted to successful applicants.

    The BOI certificate is accompanied by a list of conditions. If the applicant fails to meet the conditions (and remain in compliance therewith) the BOI certificate is subject to revocation.

    • 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).

    • Tax Incentives

    BOI’s basic package of tax incentives includes the following (subject to modification by the BOI on a case-by-case basis):

      • Exemption or reduction of import duties on imported machinery;
      • Exemption or reduction of import duties on imported materials and components;
      • Exemption of corporate income taxes for three (3) to eight (8) years, with permission to carry forward losses as deductible expenses for up to five (5) years;
      • Exclusion of dividends derived from promoted projects from taxable income during corporate income tax holiday.

    BOI tax incentives vary in accordance with the specific product or service under the promoted project, and the geographic location of the promoted project.

    1. Promotion Criteria

    BOI bases its determination on promotion privileges upon the following factors:

    • Total capital investment;
    • Debt to equity ratio (3:1 for newly established projects)
    • Projected number of Thai employees;
    • Foreign technology transfer, technical assistance, and training;
    • Environmental impact of projects; and
    • Project location.

    Under the current policy, the BOI distinguishes between so-called activity based and merit based incentives.

    1. Application procedure

    After submission of the complete application, the process of approval will require 40 days. Upon such approval, the business may start to operate. However, in the following there will be an additional process required for obtaining 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.

    Please feel free to contact us if you have any inquiries: [email protected]

  2. BOI Privileges 2017

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    The Thai Board of Investment (BOI) has introduced its new policy for incentives for qualified investment projects.

    Under the new policy, following tax and non-tax incentives may be granted to successful applicants:

    • Exemption of corporate income tax for up to 15 years
    • Exemption of import duties:
      • on machinery
      • raw or essential materials imported for use in production for export
      • goods for R&D
    • Matching grants for:
      • investment
      • R&D
      • Innovation
      • Human Resources Development
    • For targeted industries:
    • Permission to own land for BOI promoted projects
    • Right to state’s land lease for 50 years and, upon approval, renewal for a further 49 years.
    • 15% personal income tax rate, the lowest rate in ASEAN, for foreign executives working for regional headquarters or international trading companies, treasury centres, along with regional R&D centres.
    • One stop service center to facilitate foreign investors (Providing useful information, and issuing permits for trading, export and import – all in one location)
    • Up to five year work visa issuance

    These major changes are intended to show strong determination of the royal Thai government in reinforcing the existing foundation and create sustainable business growth with the best mutual benefits for investors, Thailand and all Thai people.

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  3. Extension of Capital Expenditure Corporate Tax Deduction

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    Under the Royal Decree No. 604 of 2016 (B.E. 2559), tax benefits were given to companies or partnership’s expenses of domestic investment. On 24th January 2017, the cabinet approved a one year extension of this tax measure, that is for the period from 1st January 2017 until 21st December 2017.

    It should be noted that the privileges have been amended, in particular the multiple for the calculation of tax expenditure deduction has been reduced from 2 to 1.5.

    Accordingly, under this tax measure, expenses can be deductible 1.5 times if they were incurred for the investment in these following assets: –

    • Machinery, parts, equipment, tools, appliances, decorations and furniture;
    • Computer programs;
    • Vehicle except less than 10 seater cars; and
    • Permanent building which lands and housing are included.

    Eligible for deduction are the following assets:

    • New assets which are invested in 2017 and will be ready for use within 31st December 2017 (but not including machinery and permanent buildings which may be ready for use afterwards).
    • Assets which already obtained the 2 times deduction from the Royal Decree no. 604, ifthe assets’ expenses for investment have not been completed and are still carried on in 2017. The multiple of 1.5 will then apply for the deduction under this tax measure.

    Please be informed that the company or partnership which applies for this benefit must prepare investment project and expense plans and present these to the Revenue Department.

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  4. BOI Privileges for E-Commerce

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    The Thailand Board of Investment (BOI) is an agency of the Government of Thailand to promote investment in Thailand. It provides investment information and services for investors, as well as many incentives.

    E-commerce is one of the business categories that are promoted by the BOI. In case a foreign company would like to conduct e-commerce business in Thailand, under the current laws it may apply for BOI certificate under category 5.8 E-Commerce and after obtaining a BOI certificate, apply for Business Certificate under FBA.

    Rights and benefits under new policy: E-Commerce under the new policy falls under the B2 group. Privileges for this group may include exemption from import duty on raw materials and non-tax incentives.

    Non-Tax Incentives are upon discretion of the BOI (case by case basis) and may be as follows:

    1. 100% foreign ownership
    2. Rights to own land for an office and factory
    3. Visa & work permit supports for foreign experts (and their families).

    Remark: This category will not be granted corporate income tax incentives.

    There is no government fee for applying for BOI privileges. BOI promotion is highly recommendable and very much sought after by foreign investor starting e-commerce businesses in Thailand.

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