Medical Device Industry in Thailand: BOI Incentives 

Why Thailand for the Medical Device Industry?

Thailand’s medical device industry thrives on strong local and regional demand. Its strategic location within ASEAN has positioned the country as a major hub for both exporting and importing medical devices. High domestic consumption is fueled by the expansion of medical services. For instance, single-use medical devices are commonly manufactured locally, whereas more sophisticated devices like ophthalmic instruments are imported due to the limited domestic production capabilities. Thailand is particularly focused on encouraging the production of high-demand medical devices, including: 

• Thermoscanners and thermometers
• Personal protective equipment (e.g., N95 masks)
• Ventilators and respirators
• Testing apparatus (e.g., mobile lab equipment, COVID-19 test kits)
• Devices for the aging population (e.g., hearing aids, prosthetics)
• Other single-use devices

The COVID-19 pandemic initially had a significant impact on the medical device industry. However, the industry is projected to recover and experience steady growth in the coming years. This anticipated growth is driven by several factors, including:

• Rising incidences of both communicable and non-communicable diseases: The increasing prevalence of diseases among the Thai population fuels the need for medical devices.
• Aging population: Thailand’s growing elderly population necessitates more medical care and devices.
• Medical tourism: The return of foreign patients to Thai hospitals post-vaccination boosts demand for medical devices.
• Expansion of private hospitals: New hospital buildings and facilities require additional medical devices.
• Government support: Initiatives to promote medical tourism enhance the sector’s growth.

What are the business opportunities in this industry?

The medical device industry in Thailand is poised for steady growth, offering numerous opportunities for investors and manufacturers. Several factors contribute to this promising outlook:

1. Attractive BOI Investment Incentives

• The substantial support provided by the BOI is a key driver of investment in Thailand’s medical device industry. The BOI offers various incentives, like tax breaks, reduced import duties, and corporate income tax (CIT) exemptions. These incentives are especially helpful for projects involving research and development (R&D) and advanced manufacturing. By lowering the costs to start and run a business, the BOI attracts both local and foreign companies to invest in Thailand.

2. Strategic Position as an ASEAN Medical Hub

• Thailand’s strategic location as a medical hub in the ASEAN region offers great opportunities for medical device manufacturers. The country has a strong healthcare system and a business-friendly environment, making it an ideal place for companies wanting to enter the ASEAN market. The BOI’s incentives make Thailand even more attractive by lowering operational costs and promoting innovation.

3. Established Infrastructure and Skilled Workforce

• Thailand’s well-developed infrastructure, including industrial parks, utilities, and logistics systems, supports efficient and scalable production of medical devices. The country also has a skilled workforce, especially in the electrical and electronic industries, who can easily transition into medical device manufacturing. This blend of strong infrastructure and talented workers helps companies maintain high production standards and meet increasing demand.

What are the BOI incentives?

The BOI offers a range of attractive incentives to encourage investment in the medical device industry. These incentives are designed to reduce financial barriers, promote innovation, and support the overall growth of the sector. Key incentives include:

Tax Exemptions for the Medical Device Industry

• Exemption of import duties on machinery: This significantly reduces the initial costs of setting up production facilities, making it easier for new businesses to start operations in Thailand.

• Exemption of import duties on raw materials: Reduces production costs and enhances the competitiveness of Thai-made medical devices in the global market.

Corporate Income Tax (CIT) Exemptions

• The BOI offers significant corporate income tax (CIT) exemptions to encourage investment in the medical device industry. Companies can receive up to eight years of CIT exemption, especially for projects focused on research and development (R&D) and innovation. This incentive is highly competitive within the ASEAN region and aims to attract high-tech and innovative medical device manufacturing to Thailand. Specific details include:

• • High-risk or high-technology medical devices: Such as x-ray machines, MRI machines, and implants, or devices resulting from public sector or collaborative research, are eligible for an 8-year CIT exemption with no limit on the maximum exemptible CIT.

• • Other medical devices: Except those made of fabrics or fibers, qualify for a 5-year CIT exemption.

• • Medical devices made of fabrics or fibers: Such as gowns, drapes, caps, face masks, gauze, and cotton wool, are eligible for a 3-year CIT exemption.

Non-Tax Incentives

• The BOI provides several non-tax incentives to facilitate business operations. These incentives are designed to simplify the investment process and help companies establish a strong presence in Thailand’s medical device industry.

• • BOI business facilitation services: Assist investors in navigating regulatory requirements and administrative procedures.

• • Investment promotion certificates: Support companies through the provision of certificates and guidance on obtaining necessary permits and licenses.

Government and BOI support for the Medical Device Industry

The BOI’s support in the medical device industry extends beyond tax incentives, encompassing a range of services designed to enhance the ease of doing business in Thailand. Key support areas include:

• Facilitation of R&D: The BOI encourages R&D activities by offering additional incentives for projects involving significant innovation and technological advancement.
• Intellectual Property Protection: Systems are established to ensure that innovations in the medical device industry are securely protected, creating a safe environment for investment and development.
• Regulatory Assistance: The BOI helps companies understand and comply with Thailand’s regulatory framework, ensuring smooth and efficient business operations.

Institutional Support:  Several Thai institutions work in tandem with the BOI to support the medical device industry. These include:

• National Science and Technology Development Agency (NSTDA): Provides R&D support and technological innovation.
• Thailand Center of Excellence for Life Sciences (TCELS): Facilitates life sciences research and development.
• Thailand Food and Drug Administration (FDA Thailand): Regulates the production and importation of medical devices, ensuring compliance with safety and quality standards.

What are the step-by-step procedures?

Establishing a business in the medical device industry in Thailand involves several steps, from applying for BOI incentives to obtaining necessary licenses and permits. Here is a detailed overview of the procedure, including the estimated time required and key permits and licenses needed.

1. Apply for BOI Incentives

• Submit the application: Prepare and submit the investment promotion application to the BOI.
• BOI review and approval: The BOI will review the application and, if approved, issue a certificate of investment promotion.

2. Register Your Entity

• Register with the Department of Business Development: Submit the necessary documents to the Ministry of Commerce.
• Obtain a company registration certificate: This official document signifies that your business is legally recognized.
• Estimated time: This process usually takes about 7-10 days.

3. Obtain the Certificate of Investment Promotion

• After your business is registered, obtain the official certificate of investment promotion from the BOI.
  • Submit required documents: Provide the BOI with the necessary documentation, including your company registration certificate.
  • Receive the certificate: This certificate confirms your eligibility for BOI incentives.

4. Apply for Necessary Permits and Licenses

• Several permits and licenses are required to operate a medical device business in Thailand. Key permits and licenses include:
  • Building Permit and Occupancy Permit: Apply at the Civil Works Department of the area where your establishment is located.
  • Factory Construction Authorization: Obtain authorization for new factory construction or rental factory renovations from the Industrial Estate Authority of Thailand (IEAT) or the Ministry of Industry (MOI).
  • Manufacturing License: Submit your application to the Department of Industrial Works.
  • Import and Export License: Use the e-Customs system to apply for licenses required for importing and exporting medical devices.
  • Foreign Business License: If applicable, obtain a foreign business license from the Ministry of Commerce.
  • FDA Approval: Submit your application and required documents to the Thailand Food and Drug Administration (FDA) for approval of your medical devices.

5. Operationalize Your Site

• Ensure that your site is fully operational by connecting essential services and obtaining necessary operational permits.
  • Connect utilities: Apply for water, electricity, and telephone services with the relevant authorities.
  • Recruit staff: Understand Thai labor laws and business incentives for skill upgrading and training.
  • Register property: Submit documents at the Land Office, Department of Lands, for property registration.

6. Begin Operations

• Once all permits and licenses are obtained, you can start your business operations. The entire process, from application to full operational status, generally takes between 3 to 6 months, depending on the project’s complexity and the efficiency of document preparation and submission.

Thailand has a supportive regulatory environment for the medical device industry. The BOI, along with other government agencies, provides comprehensive support to companies throughout the investment process. Benoit & Partners can further enhance this process by offering expert legal guidance and personalized consultation services. Our firm specializes in navigating the complex regulatory landscape, ensuring that your business complies with all local regulations and standards. Contact us so you can confidently establish and grow your medical device business in Thailand.