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Thailand’s innovation as a BOI-led legal and investment strategy
Thailand’s innovation has become one of the cornerstones of the Kingdom of Thailand’s economic, industrial and legal policy. Faced with the evolution of global value chains, increased regional competition and rapid technological change, the Thai authorities have embarked on a gradual transformation of their development model, aiming to reposition the country as a regional platform for innovation, research and advanced technologies.
This transformation is not based on a purely declarative approach. It is underpinned by a precise legal framework, structured around several fundamental texts, foremost among which are the Investment Promotion Act B.E. 2520 (1977), the notifications of the Board of Investment (BOI), the Foreign Business Act B.E. 2542 (1999), the Revenue Code, and regulations relating to immigration, labour and intellectual property.
In this context, Thailand’s innovation should not be understood as a simple technological concept. It constitutes a legal and regulatory category used by the BOI to identify, qualify, and supervise projects deemed strategic to the country’s economic development. These projects benefit, under strict conditions, from substantial tax and non-tax incentives, but are also subject to enhanced compliance obligations.
For foreign investors, the success of an innovative project in Thailand therefore depends as much on its technological relevance as on its legal structure, regulatory compliance, and alignment with the Thai government’s public policies.
Table of Contents
How does Thailand’s innovation fit within the BOI legal framework and Thailand 4.0 policy?
Thailand 4.0 as a normative and regulatory policy
The Thailand 4.0 policy is the strategic framework within which Thailand Innovation operates. It aims to transform the Thai economy into one based on knowledge, technology, creativity, and innovation, breaking with the historical model of low-value-added mass production.
From a legal standpoint, Thailand 4.0 is reflected in a gradual adaptation of the texts applicable to investment, in particular through:
- The revision of the lists of activities promoted by the BOI
- The creation of priority investment categories
- The introduction of specific regimes for R&D and advanced technologies
- The targeted relaxation of foreign ownership rules
Thailand Innovation is thus integrated into the BOI’s regulatory instruments, particularly through its sectoral notifications and internal guidelines.
The role of the BOI under the Investment Promotion Act
The Board of Investment derives its powers from the Investment Promotion Act B.E. 2520, which grants it authority to determine which activities are eligible for promotion, to grant tax and customs exemptions, to authorise derogations from common law rules—particularly those relating to foreign ownership—and to monitor and sanction promoted companies. As a result, Thailand’s innovation is legally governed by this statutory framework, which allows the BOI to condition the granting and retention of incentives on the effective and verifiable achievement of the innovation objectives declared by the investor.
What is the BOI’s role in structuring Thailand Innovation projects?
An administrative authority with quasi-regulatory powers
The BOI is not limited to a registration or validation function. It acts as a specialised administrative authority with extensive powers of assessment, control and sanction.
In the context of Thailand innovation projects, the BOI assesses, in particular:
- The actual degree of technological innovation
- The existence of local R&D activities
- The project’s contribution to the Thai economy
- The consistency between the declared activity and the legal structure
This analysis is based on a combined reading of the Investment Promotion Act, BOI notifications and internal administrative practices.
In-depth review of the BOI application file
Submitting a promotion application for a Thailand innovation project requires preparing a particularly detailed legal and technical file. This file must include an in-depth technical description of the activity, a structured business plan, an investment plan compliant with BOI minimum thresholds, a shareholding structure aligned with Thai corporate and foreign ownership rules, and a precise implementation schedule. During its review, the BOI may request technical or legal clarifications, organise hearings with the project sponsors, and require additional supporting documents, in particular to verify the genuine and effective nature of the innovation claimed.
Which innovation activities qualify for BOI promotion in Thailand?
BOI classification A1 to A4 and the hierarchy of Thailand innovation
Thailand’s innovation projects are mainly classified in categories A1 to A4, as defined by BOI notifications.
Category A1 – Advanced innovation and R&D-intensive activities
A1 activities represent the highest level of innovation recognised by the BOI. They include, in particular:
- Advanced research and development centres
- Biotechnology, nanotechnology and life sciences
- Advanced medical technologies
- Applied artificial intelligence and deep tech
These projects benefit from the most significant incentives, including a corporate tax exemption of up to 8 years, with no upper limit.
Category A2 – High-technology and strategic industries
A2 activities concern strategic technology sectors with a high level of innovation, such as:
- Manufacture of advanced electronic components
- Robotics and industrial automation
- Advanced energy technologies
Category A3 – Technology-based industrial upgrading
A3 projects aim to modernise existing industrial sectors through technological innovation, with a significant but less intensive level of innovation than in the higher categories.
Category A4 – Value-added and knowledge-based activities
A4 activities incorporate a technological or know-how dimension, but with a lower level of innovation.
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Which BOI incentives support Thailand’s innovation in practice?
Tax incentives under the Revenue Code and BOI notifications
Companies promoted under Thailand innovation can benefit from several tax advantages provided for in BOI notifications and the Revenue Code, including:
- Corporate Income Tax exemption
- Tax reduction after the exemption period
- Exemption from import duties on machinery
- Exemption from customs duties on raw materials intended for export
These incentives are strictly conditional on compliance with the commitments made in the BOI application.
Non-tax incentives and derogations from general law
Beyond tax incentives, the BOI may grant significant derogations from common law, including:
- 100% foreign ownership, as an exemption from the Foreign Business Act
- Authorisation to own land for the promoted activity
- Facilitation of administrative procedures
These exemptions are a key factor in Thailand’s attractiveness to foreign investors.
How does the BOI support R&D and technology-based activities?
Legal requirements for R&D recognition
To be recognised as falling within the scope of Thailand innovation, a project must demonstrate genuine and identifiable research and development activities. In practice, this generally requires a dedicated R&D budget, the employment of qualified personnel such as engineers or researchers, and the production of measurable technological outputs, including patents, prototypes or other concrete deliverables. The BOI does not rely solely on declarations. It may require supporting documentary evidence and on-site inspections to verify the effectiveness, continuity, and substance of the R&D activities declared by the promoted company.
Interaction with the Thai research and innovation ecosystem
Beyond internal R&D capabilities, the BOI actively encourages interaction with the local innovation ecosystem. Collaborations with Thai universities, public research centres and technology institutes are viewed positively, as they contribute to local knowledge transfer and talent development. Such partnerships strengthen the eligibility of projects under the Thailand innovation framework and reinforce their alignment with the structural objectives of the Thailand 4.0 policy, particularly in terms of sustainable innovation and long-term economic value creation.
Why is intellectual property central to BOI-backed Thailand innovation?
Intellectual property as a legal and fiscal asset
In Thailand, innovation projects and intellectual property constitute a central asset from both a legal and fiscal perspective. The BOI pays close attention to the ownership of patents, software and technological know-how, to the structure of intra-group licensing arrangements, and to the jurisdiction in which the intellectual property is legally located. Inadequate or inconsistent structuring may pose significant risks under the Revenue Code, particularly in relation to transfer pricing rules and the allocation of taxable profits.
Legal risks associated with poor IP structuring
Inappropriate structuring of intellectual property may result in the refusal or withdrawal of BOI promotion, trigger tax adjustments under the Revenue Code, and give rise to intra-group disputes affecting the stability of the Thailand innovation project.
How does BOI promotion facilitate foreign investment and talent mobility?
BOI promotion significantly facilitates foreign investment and skilled workforce mobility within Thailand innovation projects by providing coordinated immigration and labour support. BOI-promoted companies benefit from streamlined procedures for Non-Immigrant B visas and work permits for foreign executives, specialists and technical experts, usually processed through the BOI One-Stop Service Center.
For innovation-driven activities, BOI promotion may also support access to the SMART Visa regime, designed for highly skilled professionals and R&D personnel operating in sectors aligned with Thailand’s innovation and Thailand 4.0 objectives. In certain cases, senior experts or investors involved in BOI-promoted projects may additionally qualify for the Long-Term Resident (LTR) Visa, subject to statutory eligibility criteria.
What compliance obligations apply to BOI-promoted innovation companies?
Ongoing obligations under the Investment Promotion Act
Companies promoted under the Thailand innovation framework are subject to strict and ongoing obligations under the Investment Promotion Act. They are required to officially report the commencement of the approved operation, follow up on the investment schedule indicated in the promotion certificate, and operate the promoted activity continuously in accordance with the terms and conditions agreed with BOI.
Sanctions and withdrawal of promotion
In the event of non-compliance, the BOI has extensive statutory powers to suspend tax and non-tax benefits, withdraw the promotion certificate, and require the repayment of incentives or benefits that were unduly received.
How can legal guidance secure long-term Thailand innovation under BOI rules?
Securing a Thailand innovation project under BOI rules requires a multidisciplinary legal approach that combines Thai company law, tax and customs regulations, immigration and labour compliance, and intellectual property structuring. Each of these areas directly affects the eligibility, stability and sustainability of BOI promotion. Legal guidance is therefore essential not only at the application stage but throughout the life of the promoted project, to ensure continuous compliance with the conditions set out in the promotion certificate and the Investment Promotion Act.
Benoit & Partners supports innovation-driven investors from the initial structuring phase through ongoing regulatory compliance, helping to secure Thailand innovation projects within an increasingly complex and closely supervised legal environment.
Conclusion
Thailand’s innovation, supported by the Board of Investment, constitutes a key pillar of Thailand’s strategy to attract high-value, technology-driven investment. Through targeted incentives, regulatory exemptions and dedicated support mechanisms, the BOI offers a highly competitive environment for innovation-oriented projects. However, these advantages are inseparable from a demanding, closely supervised legal framework grounded in the Investment Promotion Act and the detailed BOI notifications.
In practice, the sustainability of a Thailand innovation project depends not only on its technological relevance, but also on the legal coherence of its corporate structure, the accuracy of its BOI application, and the investor’s ability to comply with ongoing regulatory, tax and operational obligations. Inadequate structuring or insufficient compliance may result in the suspension or withdrawal of incentives, thereby undermining the project’s economic viability.
For these reasons, rigorous legal structuring and specialised legal support remain essential to secure BOI promotion in the long term and to transform Thailand’s innovation incentives into durable, legally sound investment success.
FAQ
No. Thailand’s innovation is not defined by a single statute. It results from the Investment Promotion Act B.E. 2520 (1977) and BOI notifications applied on a case-by-case basis.
Thailand innovation projects are governed mainly by the Investment Promotion Act, BOI Notifications, the Foreign Business Act, the Revenue Code, and IP, labour and immigration laws.
The BOI conducts a substantive assessment, focusing on technological content, R&D activities, intellectual property, know-how transfer and economic contribution.
Yes. Under the Investment Promotion Act, BOI promotion for a Thailand innovation project may be suspended or revoked for non-compliance.
No. Full foreign ownership is granted only if expressly authorised in the BOI promotion certificate and limited to Thailand innovation activities.
Depending on the category, Thailand innovation projects may benefit from corporate income tax exemptions, tax reductions and customs duty exemptions.
Yes. BOI-promoted Thailand innovation companies must comply with reporting, investment and operational obligations throughout the incentive period.
Because the BOI examines IP ownership, licensing, and alignment with the promoted entity to confirm genuine Thailand innovation.
Yes. BOI-promoted Thailand innovation projects benefit from simplified procedures for Non-Immigrant B, SMART and, in some cases, LTR visas.
Because Thailand innovation projects combine corporate, tax, immigration and IP law, with strict BOI compliance and audit exposure.