TAX OVERVIEW IN THAILAND

The Board of Investment (BOI) in Thailand is a government agency responsible for promoting and supporting investments in the country. The BOI offers incentives to both foreign and domestic investors who wish to set up and operate businesses in Thailand. By receiving BOI promotion, businesses can benefit from a range of advantages, such as tax exemptions, business operations in restricted sectors (including 100% foreign ownership), and more favorable conditions for establishing and running their companies.

Key Aspects of the BOI and Its Benefits:

What is BOI Promotion?
BOI Promotion is a set of incentives granted to businesses in Thailand that meet the requirements of the Board of Investment. These incentives are designed to attract foreign investment, stimulate economic growth, and promote industries that are seen as beneficial to the country’s development. The BOI focuses on sectors that align with Thailand’s economic goals, including high technology, manufacturing, research and development (R&D), and industries that can enhance exports.
Eligibility for BOI Promotion
To qualify for BOI promotion, a business must typically meet the following criteria:
– The business must be operating in an eligible industry or activity.
– The business should contribute positively to the Thai economy by creating jobs, promoting innovation, increasing exports, or supporting technology transfer.
– The company must meet investment requirements, which often include a minimum capital investment and a commitment to creating jobs.
– The business must be incorporated in Thailand as a limited company and demonstrate its operations will be in line with Thai laws.

Eligible sectors for BOI promotion generally include:
– Advanced technology and research.
– Automobile and automotive parts manufacturing.
– Electronics and digital industries.
– Energy and renewable energy.
– Health care and medical devices.
– Digital content, software development, and IT services.
Certain services, like regional offices, consulting firms, and certain manufacturing sectors, may also be eligible for BOI benefits.
3. Benefits of BOI Promotion
BOI promotion can provide a variety of incentives, depending on the nature of the business and the sector. These include:Tax Exemptions:
– Corporate Income Tax (CIT) exemptions for up to 8 years.
– Exemptions from import duties on machinery and raw materials used in production.

Foreign Ownership:
– Normally, foreigners can own up to 49% of a Thai limited company, with at least 51% of the company required to be owned by Thai nationals. However, with BOI promotion, foreign investors can own 100% of a company in most eligible sectors.

Work Permit Benefits:
– BOI-promoted companies can receive easier access to work permits for foreign employees.
– Foreign employees may be eligible for longer-term visas and work permits in certain industries.

Other Tax Incentives:
– Exemption from tax on dividends received from the promoted business.
– Accelerated depreciation for certain assets.
– Double deductions for expenses related to research and development (R&D).

Land Ownership:
– BOI-promoted businesses can apply to own land in Thailand (which is usually prohibited for foreign companies).

Exemption from Foreign Business Act:
– Companies that qualify for BOI promotion are often exempt from the restrictions set by the Foreign Business Act (FBA), meaning they can operate in sectors that are normally restricted to foreign ownership.

Categories of the eligible for BOI project approval
– Agriculture and agricultural products
– Mineral, ceramics and basic metals
– Light industry
– Metal products, machinery and transport equipment
– Electronics industry and electrical appliances
– Chemicals, paper and plastics
– Services and public utilities
– Technology and innovation development