How to apply for BOI promotions?

Thailand’s BOI (Board of Investment) promotion is an important policy in attracting foreign investment. If you plan to do business in Thailand, BOI incentives can provide you with various benefits, including corporate income tax reduction, 100% foreign share ownership, land holding in the name of the company, and other preferential measures. This article will explain in detail the application process and required documents for getting promoted by BOI.

Step 1.1: Research BOI offers

Before starting the application, I suggest that foreign business owners should carefully study the BOI promotion incentives (step 1.1) and criteria (step 1.2). BOI provides two major type of incentive measures: tax incentives and non-tax incentives. I’ll briefly explain it below:

Tax incentives:

1. Exemption/reduction of import duties on machinery (Section 28/29): After getting the BOI approval, you can use the EMT (Electronic Machine Tracking) system to apply for tax exemption for imported machines within a limited period.
2. Reduction of import duties for raw or essential materials (Section 30): Reduction of import tax for some material.
3. Exemption of import duties on material imported for R&D purposes (Section 30/1): Items such as molds are also exempt from import duties.
4. Exemption of corporate income tax on the net profit and dividends derived from the promoted activity (Section 31, 31/1 and 34): In most cases, businesses can receive tax exemption for 8 years at most, but the duration can be increased if you meet certain conditions. The tax exemption amount and period of each industry vary greatly. The actual tax exemption amount and period depend on the activity and requirements approved by the BOI.
5. A 50 percent reduction of the corporate income tax (Section 35(1)): If you have received a corporate income tax exemption, the 50% corporate income tax reduction will only start after the tax exemption period ends.
6. Double deduction from the costs of transportation, electricity and waters supply (Section 35(2)): Transportation, electricity and water costs will be counted double when calculating/deducting income tax.
7. Additional 25 percent deduction of the cost of installation or construction of facilities (Section 35(3)): For examples: access road, bridges and etc.
8. Exemption of import duty on raw or essential materials imported for use in production for export (Section 36): Raw materials for approved export products are exempt from import duties.

Non-tax incentives:

1. Permit for foreign nationals to enter the Kingdom for the purpose of studying investment opportunities (Section 24): More or less the same as regular business visa, nothing special here.
2. Permit to bring into the Kingdom skilled workers and experts to work in investment promoted activities (Section 25 and 26): Most projects are granted 2 years non-immigration type B visa and work permit.
3. Permit to own land (Section 27): BOI promoted companies can own land.
4. Permit to take out or remit money abroad in foreign currency (Section 37): Investors are free to transfer their earnings to foreign bank accounts.

If you are interested in the above incentives, we will proceed to the next step.

Step 1.2: Research BOI promotion criteria for approval

There are three main factors for which BOI considers when giving out promotional incentives. They are eligible activities, location and competitive enhancement.

Eligible activities: BOI will grant different incentives according to the industry and activity. For example, the tax exemption period for high-tech industries may be longer than the normal eight years. The tax exemption value for general industries is usually limited to no more than the amount invested, but if it is an industry that is specifically targeted by Thailand, it is possible to get an unlimited tax exemption value. But on the other hand, if it is a less promoted industry, although there are non-tax-related incentives in place, the project owner may not be able to obtain income tax exemption. The following is the list of industries eligible for investment promotion:

• Agriculture, Food and Biotechnology Industry
• Medical Industry
• Machinery and Vehicle Industry
• Electrical Appliances and Electronics industry
• Metal and Material Industry
• Chemical and Petrochemical Industry
• Public Utilities
• Digital Industry
• Creative Industry
• High Value Service

Location: Another major factor for granting incentives is the location where the investor chooses to invest. In special economic zones (SEZ), rural areas, or designated industrial zones, you can get additional period for corporate income tax exemption, and the increase is generally between +1 and +5 years.

Competitiveness enhancement: If the applying investor can assist Thailand’s industrial transformation, the investor can get up to +5 years of tax exemption. Activities include: research and development, product and packaging design, university-industry cooperation, personnel development, technical training, local supplier development and etc.

For the actual tax exemption value and duration, you can contact BOI or you can take advantage of my free consultation service.

Step 2: Submit application for investment promotion

When applying for BOI, you need to provide revenue forecast, domestic and foreign sales ratio, machinery list, raw material list, production process, waste disposal, local supplier labor development plan, investment amount, loan ratio and other plans or lists.

After completing the application form for the BOI investment promotion, you can submit it online.

Step 3: Project clarification

Within ten days after submitting the application, BOI will invite the owner to the Bangkok headquarters for an interview to discuss sales plans, raw materials, production, machinery imports and other topics.

Step 4: Project analysis

Once you submit your application, BOI will review your application. The length of the review process depends on the amount of investment you submitted.

Investment not exceeding 200 million baht: within 40 days
Investment exceeding 200 million baht but not exceeding 2 billion baht: within 60 days
Investment exceeding 2 billion baht: within 90 days

Step 5: Notification of results

After the BOI internal review, the owner will be notified of the results within seven days.

Step 6: Acceptance of investment promotion

If you are satisfied with the incentives granted and conditions stipulated by BOI, you may proceed to accept the investment promotion. At this stage the owner needs to establish a company and open a company bank account. After opening an account, you must remit at least 25% of the registered capital from abroad.

Step 7: Apply for promotion certificate

After the above documents are completed, the owner must fill out the application form and attach the company certificate and remittance note. You will receive a notification within approximately 10 days after submission.

Step 8: Receive your BOI certificate

After receiving the notification, you can go to the BOI headquarters to obtain the BOI certificate. After BOI approval, you need to report your business operations to BOI regularly. This ensures that you meet your obligations under the agreement.

Conclusion

Thailand’s BOI investment promotion provides investors with an opportunity to expand their business in Thailand. However, please remember that before applying for a BOI offer, you should carefully research and understand the relevant requirements and procedures to ensure everything goes smoothly.

Most importantly, it is recommended that you consult a professional before applying for BOI investment promotion to ensure that your investment plan complies with Thai laws and regulations and can benefit from BOI preferential policies to the greatest extent. I hope this article will help you understand how to apply for BOI promotion in Thailand. If you are looking for consulting services, please call or email me to get your first consultation session for free. For detailed service content and consulting fees, please click “Services” at the bottom.