Bioplastic Industry in Thailand: BOI Incentives

How is Thailand as a bioplastic hub?

The bioplastic industry focuses on creating plastics from renewable biomass sources like vegetable fats, oils, and agricultural byproducts, providing an eco-friendly alternative to traditional petroleum-based plastics. Thailand is on track to become a leading bioplastic hub, utilizing its plentiful raw materials such as cassava and sugarcane, advanced technology, and strategic Southeast Asian location. This position offers excellent access to regional markets and, together with a strong logistics network and proximity to major consumer bases, gives Thailand a competitive edge in the growing bioplastic sector.

Thailand’s bioplastic industry also benefits from cutting-edge technology and extensive expertise across its supply chain. The country’s developed infrastructure and skilled labor force facilitate the efficient production and export of premium bioplastic products. Furthermore, investments in research and development, along with collaborations with international partners, continue to advance Thailand’s technological capabilities in this field.

What are the BOI incentives?

The Thai government, via the Thailand Board of Investment (BOI), provides a range of incentives to promote investment in the bioplastic industry. These incentives include both tax and non-tax benefits, each offering substantial advantages to investors.

Tax Incentives

1. Group A2:

• Eligible Activities:
  • Manufacture of eco-friendly chemicals or polymers or manufacture of products from eco-friendly chemicals or polymers incorporated within the same project.
• Incentives:
  • 8 years of corporate income tax exemption.
  • Exemption of import duty on machinery.

2. Group A3:

• Eligible Activities:
  • Manufacture of products from eco-friendly polymers.

• Incentives:
  • 5 years of corporate income tax exemption.
  • Exemption of import duty on machinery.

3. Group A4:

• Eligible Activities:
  • Manufacture of paper containers coated with bioplastics.
• Incentives:
  • 3 years of corporate income tax exemption.
  • Exemption of import duty on machinery.

Non-Tax Incentives

1. Permit to Bring in Expatriates: Investors are allowed to employ foreign experts and technicians.
2. Permit to Own Land: Foreign investors are permitted to own land for business operations.
3. No Restriction on Foreign Currency: Investors can freely remit foreign currencies into and out of Thailand.

What are the legal considerations for the bioplastic industry?

Investing in the bioplastic industry in Thailand involves navigating a comprehensive regulatory framework. Key regulations include:

• Factory Act: Governs the establishment and operation of manufacturing facilities.
• Industrial Estate Authority of Thailand Act: Provides guidelines for setting up in industrial estates.
• Environmental Laws: Compliance with environmental protection laws is mandatory, including the Environmental Quality Promotion Act.

What is the step-by-step procedure for establishing a bioplastic business?

Setting up a business in Thailand’s bioplastic industry requires following a series of strategic and regulatory steps aimed at seamlessly integrating your business into the nation’s rapidly growing bioplastic sector.

1. Initial Research and Feasibility Study: Assess market potential, availability of raw materials, and investment climate.

2. Business Plan Development: Outline objectives, strategies, financial projections, and operational plans.

3. Application for BOI Promotion: Submit required documents and business plan to the BOI for approval.

4. Company Registration: Register the business entity with the Department of Business Development (DBD).

5. Obtain Necessary Licenses and Permits: Secure factory licenses, EIA approval, and other relevant permits.

6. Infrastructure Setup: Acquire land, construct facilities, and install machinery.

7. Commence Operations: Begin production, adhere to regulatory compliance, and implement marketing strategies.

What are the licences and permits needed?

Establishing a manufacturing plant in the bioplastic industry in Thailand requires obtaining several licenses and permits:

• BOI Promotion Certificate:  Essential for accessing BOI incentives.
• Factory License (Ror Ngor 4): Required for operating a manufacturing facility.
• Environmental Impact Assessment (EIA): Necessary for certain types of projects to ensure environmental compliance.
• Import and Export Licenses: Needed for the import of raw materials and export of finished products.

Attracting foreign investment to Thailand’s bioplastic industry

Thailand’s bioplastic industry is attracting more foreign investors, supported by extensive government initiatives and positive market conditions. The Thailand Board of Investment (BOI) provides significant incentives to both local and international entrepreneurs interested in the bioplastic sector, aligning with wider efforts to promote sustainable and eco-friendly development in the petrochemical and plastics industries. Moreover, Thailand’s strategic position in Asia and robust export capabilities make it an excellent hub for the global distribution of bioplastics, increasing its attractiveness to international investors focused on environmentally sustainable industries.

At Benoit & Partners, we specialize in providing comprehensive legal services to investors in the bioplastic industry. Our experienced team can guide you through every step of establishing your business in Thailand, from navigating BOI incentives and legal compliance to securing necessary licenses and permits. Contact us today to learn more about how we can assist you in this exciting endeavor.