Biopharmaceutical Industry in Thailand: BOI Incentives

What is the landscape of the  biopharmaceutical industry in Thailand?

Thailand’s biopharmaceutical industry is strengthened by the Bio-Circular-Green Economy Model (BCG), designed to ensure sustainable recovery and long-term growth following the Covid-19 pandemic. This model prioritizes sustainability, efficient resource use, and environmental protection. In the biopharmaceutical sector, the BCG model aims to reduce dependency on imported drugs and vaccines.

The Ministry of Higher Education, Science, Research, and Innovation (MHESI) leads this initiative, coordinating the efforts of educational and research institutions to meet industry demands. Through these collaborative efforts, Thailand is set to emerge as a key player in the global pharmaceutical market.

What are the investment opportunities in the Thailand biopharmaceutical industry?

The Thailand biopharmaceutical industry is a priority sector for post-Covid-19 recovery, offering vast investment opportunities supported by significant government and BOI initiatives. 

1. Vaccine Development and Production

• Thailand plays a crucial role in vaccine production, demonstrated by its significant contribution to the Covid-19 response. The government provides substantial funding and incentives for vaccine research and development, fostering opportunities for partnerships and investments in creating vaccines for various diseases.

2. Biopharmaceutical R&D

• The Thai government promotes biopharmaceutical R&D, creating an innovation-friendly environment. This support attracts investors to develop new biopharmaceutical products and technologies, driving growth in the sector.

3. Manufacturing and Production Facilities

• Thailand’s advanced infrastructure and strategic location make it perfect for biopharmaceutical manufacturing. Key incentives, such as CIT exemptions for manufacturing APIs, targeted medicines, and conventional medicines, facilitate efficient establishment and expansion.

4. Genomics and Precision Medicine

• Thailand’s Genomics project plans to sequence 50,000 Thai genomes, advancing precision medicine. Investors in genomic research and personalized medicine can take advantage of BOI incentives and a favorable regulatory environment to establish themselves in this sector.

5. Clinical Trials and CROs

• Thailand provides an excellent setting for clinical trials and Contract Research Organizations (CROs), offering access to diverse patient populations and advanced medical facilities. Investors can set up CROs to deliver essential services, speeding up drug development and boosting research efficiency.

6. Medical Tourism and Biopharmaceutical Products

• As a top medical tourism destination, Thailand generates demand for advanced biopharmaceutical products. Investors can develop specialized treatments for international patients, ensuring a consistent market for high-quality medical products and services.

What are the BOI incentives for the Thailand biopharmaceutical industry?

The BOI offers attractive incentives for biopharmaceutical-related activities, ensuring a supportive environment for investors. Key incentives include:

1. Active Pharmaceutical Ingredients:

• Requirements: Must be for the production of active or raw materials of active pharmaceutical ingredients (APIs).
• Incentive: 8-year CIT exemption

2. Manufacturing of Targeted Medicines: 

• Requirements: Must engage in the manufacturing of targeted medicines as announced by the Ministry of Public Health and must be GMP certified in accordance with PIC/S guidelines.
• Incentive: 8-year CIT exemption

3. Manufacturing of Conventional and Traditional Medicines:

• Requirements: Must be GMP certified in accordance with PIC/S guidelines.
• Incentive:  5-year CIT exemption

4. Research and Development (R&D) Activity and/or Manufacturing of Biopharmaceutical Agents Using Biotechnology:

• Granted import tax incentives on goods imported for research and development and all related experimentation for a period of one year on each occasion. Projects located in a science and technology park will receive an additional 50% reduction of corporate income tax for 5 years after the end of its corporate tax exemption period.
• Incentive: 8-year CIT exemption (no cap)

Government and BOI support 

The Thai government and the Board of Investment provide extensive support to the Thailand biopharmaceutical industry through various agencies:

• BIOTEC: Focuses on tropical and emerging diseases, fostering collaboration between academia and industry. Situated in Thailand Science Park, it provides essential infrastructure and policy support.
• TCELS: Focusing on the pharmaceutical and biotechnology sectors, it serves as a key link between innovation and investment, collaborating with both national and international institutions.
• National Biopharmaceutical Facility (NBF):  Provides GMP production for clinical trials, contract manufacturing, process development, technology transfer, and consultancy services.

• Chulabphorn Research Institute:  Aims to produce high-quality, affordable alternative drugs, supporting the biopharmaceutical industry’s development.

These facilities provide a conducive environment for biopharmaceutical research, development, and commercialization, attracting global investors and fostering innovation.

What are the steps to apply for BOI incentives?

Applying for BOI incentives under the biopharmaceutical industry involves several key steps that ensure your business meets the necessary requirements and can fully benefit from the available support. 

1. Register Your Entity: Complete business registration at the Department of Business Development.

2. Submit Application: Apply for investment promotion from the BOI, ensuring compliance with all regulatory requirements.

3. Obtain Certification: Secure the certificate of investment incentive from the BOI, enabling access to tax and non-tax benefits.

4. Establishment of a Manufacturing Site: Obtain building permits and occupancy permits from the Civil Works Department.

• Connect with the TOT Public Company Limited for telephone services.
• Apply for water services at the Provincial or Metropolitan Waterworks Authority.
• Connect with the Metropolitan Electricity Authority or the Provincial Electricity Authority for electricity services.

5. Register Property: Submit your documents at the Land Office, Department of Lands.

6. Manufacturing License: Apply for authorization to use land, new factory construction, or factory renovations, and authorization to begin factory operations.

•  Connect with the Industrial Estate Authority of Thailand (IEAT) or the Ministry of Industry (MOI) Provincial Offices.

7. Drug Registration: Register drugs according to ASEAN Harmonization guidelines, ensuring compliance with regional standards.

8. Import and Export License :Use the e-Custom system for importing and exporting goods.

9. Foreign Business License: Obtain a foreign business license if required, depending on your business type.

By following these steps, you can ensure a smooth application process and take full advantage of the incentives provided by the BOI for the Thailand biopharmaceutical industry.

The regulatory landscape is crucial for establishing and operating a business in the biopharmaceutical industry. Legal compliance with Thai regulations, including environmental and safety standards, is essential for securing BOI incentives and successfully operating in the market. Benoit & Partners can assist you in this journey by providing expert legal advice and support to ensure compliance with all local regulations. Our team can help you prepare the necessary documentation, navigate the application process, and secure the incentives you need to establish and grow your business in Thailand.