BOI Promoted Companies: How to enter successfully the Thai market 

What establishes the BOI’s authority?

The Investment Promotion Act of 1977

The Board of Investment of Thailand derives its power from the pivotal Investment Promotion Act of 1977, legislation crafted to stimulate economic growth by drawing both domestic and foreign capital. This seminal statute accords the BOI the ability to offer an array of incentives to enterprises contributing to national economic progress, particularly in critical sectors to Thailand’s development.

The Investment Promotion Act delineates the BOI’s prerogatives and functions, outlining how it can champion investment, the types of inducements it can provide, and the qualifications a company must satisfy to reap these benefits. This statutory foundation has permitted the BOI to become a core player in shaping Thailand’s economic agenda, confirming the nation remains competitive in attracting global investment.

How has the legal framework evolved over time?

Since enactment, amendments to the Investment Promotion Act have kept pace with shifting global economic realities and Thailand’s evolving strategic priorities. These modifications have expanded the BOI’s purview, allowing it to foster investment in novel and emerging industries. Recently, reflecting the worldwide transition toward sustainability, the BOI has increasingly promoted investment in renewable resources, environmental protection, and green technology.

Additionally, legal changes have supported Thailand’s digital transformation. New provisions aim to spur investment in digital infrastructure, software development, and high-tech sectors. This evolution demonstrates Thailand’s commitment to becoming Southeast Asia’s innovation and technology hub, confirming BOI endorsed companies align with long-term economic vision.

How diligently does the BOI verify legal adherence?

The BOI has established robust compliance monitoring to ensure companies obey the Investment Promotion Act’s directives. Regular company reports, audits and site visits authenticate conformity with promotion terms. Failure to comply risks losing BOI privileges, highlighting the importance of transparency and accountability in operations.

What is BOI and how is it structured?

What defines the BOI’s framework?

The BOI, tasked with propelling Thai investment under the Prime Minister’s Office, has a multifaceted organization.

Ultimate oversight lies with the diverse Board of Directors comprising government and private representatives. They chart strategic course, approve major projects and ensure activities align with economic policies.

Separate departments focus on promotion, investor support and policy development for various industries and functions. Regional offices nationwide facilitate access and cooperation between local authorities, businesses and communities to stimulate local growth and investment.

What primary duties does the BOI perform?

The primary functions of the BOI are promoting and facilitating investment in Thailand which involves providing an array of incentives to attract businesses in critical sectors for the nation’s economic progress. As a one-stop service center, the BOI delivers complete support throughout the investment process from initial queries to project implementation. It aids with applying for investment incentives, guiding companies through Thailand’s regulatory environment, and offering post-establishment assistance to guarantee investments succeed in the long haul.

In addition, the BOI is engaged in championing Thailand as a premier global destination. This incorporates organizing roadshows, participating in worldwide trade fairs, and working with foreign embassies and chambers of commerce to attract investment from worldwide. Through these activities, the BOI aims to position Thailand as a competitive and attractive location for enterprises seeking to expand in Asia.

How does the BOI coordinate with other government entities?

The BOI works intimately with numerous government ministries and agencies to confirm that its work aligns with national economic strategies. This synchronization is fundamental for creating a cohesive investment environment that upholds the country’s developmental goals. The BOI partners with bodies for example the Ministry of Finance, the Ministry of Industry, and the Ministry of Digital Economy and Society to streamline procedures and furnish comprehensive support to investors.

For instance, the BOI may collaborate with the Ministry of Industry to advance investment in production or with the Ministry of Digital Economy and Society to attract investments in technology and innovation. This interagency cooperation guarantees that the BOI can offer investors a seamless experience, from the initial application to the implementation and expansion of their projects in Thailand.

How can a company be promoted by BOI?

The Board of Investment of Thailand offers incentives to qualifying businesses seeking to establish operations within the country. To be considered for these promotions, companies must demonstrate how their proposed investment meets key criteria aimed at fueling Thailand’s economic advancement.

Among the factors taken into account are the industry, level of innovation, job creation potential, and regional impact. Priority is given to advanced manufacturing, healthcare, renewable energy, digital technologies, and other strategically important sectors. Companies supporting infrastructure development, education, or research are also viewed favorably.

Those driving sustainability and knowledge-based growth through activities like green tech, digital transformation, or innovation find a receptive audience. By directing incentives toward lasting contributions in these areas, the BOI works to transition Thailand’s economy.

What steps must a company take to obtain BOI promotion?

Initially, a comprehensive application is prepared detailing the business plan and qualifications. Information provided includes proposed investment details, technologies employed, anticipated economic effects, and relevance to targeted industries. Upon submission, a thorough evaluation weighs how approval might accelerate Thailand’s progress while benefiting the application’s promoters.

Once the application was submitted, it underwent a meticulous assessment by the relevant departments within the BOI. This evaluation process involved numerous stages, starting with an in-depth examination of the project’s technical and fiscal aspects. Consultations were also conducted with other government agencies to gain additional perspectives. Furthermore, the BOI sometimes requested supplementary information or modifications to the proposal in order to ensure it fulfilled the necessary criteria.

If the application was approved, the company was granted BOI promotional status, allowing it access to the wide array of incentives offered. A legally binding agreement was then drawn up between the organization and business, delineating the terms and obligations. This included adhering to the authorized business plan and attaining specified economic and environmental benchmarks.

With BOI endorsement, the company could begin enacting its project while capitalizing on the incentives. Sustained assistance was provided throughout by the BOI, helping to navigate any hurdles and guaranteeing adherence to the promotional terms. Such aid incorporated acquiring permits, liaising with local authorities, and accessing infrastructure and resources.

What fiscal perks are obtainable for BOI endorsed companies?

One of the most enticing advantages of BOI endorsement is the broad spectrum of tax incentives available. Designed to lessen the financial burden, these incentives facilitate establishing and expanding operations within Thailand. Key tax benefits encompass corporate income tax exemptions or cuts, tremendously reducing a company’s tax liability for a set period.

For example, companies promoted by the Board of Investment may qualify for as long as eight years of corporate income tax exemption, based on the sector and the character of the investment. This exemption can stretch longer if the company meets certain criteria, such as engaging in research and progress or employing a high number of skilled workers.

In addition to income tax advantages, BOI promoted companies can also receive exceptions or decreases on import obligations for machinery, raw materials, and essential parts. These exceptions are particularly useful for manufacturing companies that rely on imported equipment or materials to produce their goods. By lowering the cost of imports, the BOI helps companies to stay competitive in the global market.

Furthermore, companies that invest in specific areas or activities, such as regional progress or environmental protection, may be qualified for extra tax motivations. These motivations are intended to encourage investments that contribute to the broader social and economic goals of Thailand, such as reducing regional inequalities and promoting sustainable progress.

What non-tax benefits do BOI promoted companies take pleasure in?

Beyond tax incentives, BOI promoted companies take pleasure in a diversity of non-tax benefits that can enhance their operations and competitiveness. One of the most significant non-tax benefits is the ability to own land in Thailand, which is otherwise restricted for foreign companies. This allows BOI promoted companies to secure land for their operations, whether for manufacturing, offices, or research facilities.

BOI promoted companies also benefit from streamlined visa and work permit processes for their foreign employees. The BOI provides assistance in obtaining the necessary permits, making it easier for companies to bring in skilled workers from abroad. This is particularly important for businesses that require specialized expertise or knowledge that may not be readily available in Thailand.

Additionally, the BOI offers support services to help companies navigate the complex regulatory environment in Thailand. They provide assistance with obtaining crucial licenses, adhering to intricate environmental regulations, and accessing indispensable infrastructure for operations such as utilities and transportation networks. Not only that, but the BOI also facilitates meaningful connections with potential local suppliers, partners, and helpful government agencies, which can make or break foreign-invested companies in Thailand.

The BOI’s dedication to aftercare services is another significant non-tax benefit. They continue supporting companies long after receiving coveted promotion status, aiding them in resolving any issues that inevitably surface during projects’ enactment. This enduring assistance encompasses solving bureaucratic quagmires to offering wise counsel on broadening efforts or accessing undiscovered markets.

Conclusion 

In closing, BOI promoted companies in Thailand gain a comprehensive suite of benefits intended to cultivate growth, innovation and long-lasting success. The legislation framing these incentives, established by the landmark Investment Promotion Act of 1977 and its subsequent revisions, accords the BOI authority to provide said perks. Their well-organized framework and transparent promotion standards ensure that companies aligning with Thailand’s strategic aims can reap these rewards.

The process for acquiring BOI promotion is rigorous, necessitating companies satisfy specific prerequisites and undergo meticulous application and review procedures. However, the returns are substantial, like considerable tax exclusions, non-tax advantages including land possession, as well as continuous support from the BOI.

For businesses aspiring to invest in Thailand, becoming a BOI promoted company can offer a pathway to amplified growth, diminished operational expenses and a sturdy foothold in one of Southeast Asia’s most dynamically developing economies. By harmonizing operations with Thailand’s economic goals, BOI promoted companies are not only equipped to thrive in the local market but also contribute to the nation’s overarching development aims.