The Advantages of Starting a BOI Business in Thailand

Starting a business in Thailand always comes with risks, no matter the industry. But, if your business is in the right industry, you can reduce your risks significantly by being a member of Thailand’s BOI program.

It’s hard to get into the program. But, it's for good reason because any company that can qualify can enjoy many lucrative benefits that make the difficulty of getting into the program worth taking your chance.

The Thailand Board of Investment is a government agency mandated to encourage and promote foreign investments.

To make starting a business in Thailand a financially-appealing proposition for foreign investors, the BOI offers a package of tax and non-tax incentives to eligible companies whose business works in specific categories or industries:

Agriculture and agricultural products
Chemical industry, including paper and plastics
Mining, ceramics, and basic metals
Electronics and electric appliances
Light industry
Metal products, machinery and transport equipment
Services and public utilities
Technology and innovation

If your business is in any of these industries, you can apply to become a BOI company Thailand to ensure that your business gets additional support from the government and help your company improve its chances of success.

Tax incentives

Corporate Income Tax Exemptions

You can qualify for exemptions without a cap or reduction of corporate income tax, depending on what kind of business you do and the industry you belong to. Of course, you can only apply for this exemption within the applicable period, which can go up to eight years. The applicable period and the level of exemptions can be seen in what group your business belongs to because these groups can vary, such as from Group A1 to A4 and Group B1 to B2.

If your business is in any of the following sectors, you are eligible for eight-year corporate income tax exemptions:

Research and development in technology and innovation
Infrastructure projects that help the country’s development
Businesses that use advanced technology that boosts value-adding services

You can apply for five-year corporate income tax exemptions if you deal in:

Advanced technology that helps that country’s development

You can apply for three-year corporate income tax exemptions if you deal in:

Businesses that don’t use advanced technology but still help value-adding services to local supply chains and resources
BOI companies in specific provinces can enjoy a reduced corporate income tax for a period after the expiration of the initial corporate tax exemption period. If your business is in these promoted industrial zones or land, your business can also get a year of extension to your corporate income tax exemption if the total allowable period doesn’t go over 8 years.

Aside from those mentioned above, the BOI may also grant exemptions to a juristic person’s income tax and dividends.

Import Duties

Depending on the type of activity, the BOI may give an exemption on import duty applicable to machinery.

The BOI may also give exemptions on import duties on raw materials if the materials are to be used to produce products for export. However, this type of exemption only lasts one year and can only be extended if deemed fit by the BOI.

Also, the level of exemption may vary depending on what your business does.

Transport and Utility Costs

If your company is in specific promotion provinces, you may receive an additional financial incentive of double deductions on transport and water and electricity costs. This exemption can last up to ten years from when your business first gains revenue from the promotion.

Infrastructure Installation and Construction Costs

You can get a 25% reduction from your net profit of the project’s installation and construction costs, which also includes normal depreciation, for a predetermined period, if your company is in specific promotion provinces.

Non-Tax Incentives

Foreign Ownership

If your business qualifies, your business can enjoy the fact that the BOI allows 100% foreign shareholding.

While the law only allows foreign business ownership for only up to 49% shareholding, businesses can be 100% foreign-owned if the company is a member of the BOI program. However, this law exempts projects under the Foreign Business Act List One or those covered by other exceptions.

However, for this to be allowed, the company must have at least three shareholders for the BOI to even consider their membership.

Foreign Workers

BOI companies may be allowed to hire and bring in foreign skilled workers and experts for research on new local investment opportunities. The BOI can also allow foreign technicians and experts for specific projects.

If you’re looking to bring in foreign skilled workers and experts, you can handle the processing of visas and work permits in a single day because the BOI has its One-Stop Service Centre for Visas and Work Permits. The good thing is that it also covers their spouses and children.

Due to this benefit for BOI companies, you can bring in new workers without too much trouble.

Land Ownership

BOI companies can receive the right of land ownership from the BOI, depending on the project or industry. Due to this, your business can own land for building offices, factories, residential apartments, and other infrastructure for business. However, if the business has to close, these properties should be sold within a year of closure.

Nationalization

Your company will be protected from nationalization by the BOI.

Money Remittance

The BOI can allow you to remit money in foreign currency abroad.

The BOI formation in Thailand has allowed many businesses to flourish and foreign investors to establish their businesses with less financial risk. If you’re looking to start a business, getting a BOI membership can significantly help you.