Special incentives are available to businesses who have been given the go-ahead for a BOI promotion.

While BOI companies are eligible for a range of benefits, 100% foreign ownership of the company and less restrictions on hiring foreign workers are a big plus for businesses. For international enterprises wishing to establish a presence in Thailand, these incentives may be quite helpful.

Completely foreign ownership

It is likely that foreign ownership of a standard Thai Limited company would be limited to 49.99%, depending on the activities a company engages in. This restriction results from the Foreign Business Act’s prohibitions against foreign-owned enterprises engaging in specific commercial activities. I encourage you to read this post for further details on this.

Companies that are supported by the BOI are exempt from these limitations and, with certain exceptions, are often allowed to have 100% foreign ownership.

Reduced foreign employee hiring quota

Contrary to other company structures, BOI sponsored businesses are not constrained by recruiting quotas for foreign workers. For instance, Thai Limited Companies are prohibited from hiring a foreign worker unless the following quotas are met:

Thai employees outnumber foreign workers 4:1. In essence, the corporation must employ 4 Thai workers for every 1 foreign worker.

The elimination of this quota eliminates a significant barrier to hiring foreign workers and is a substantial benefit to a BOI promotion.

Incentives that are not taxed:

Allowance to own land

Authorization to send money abroad in a foreign currency

Protection from the enterprise being nationalized

For businesses already operating under a BOI license, the BOI will also announce a wide range of extra incentives, many of which are time-sensitive.

Fiscal incentives

Import taxes are waived or reduced

Tax and dividend exemptions for legal entities

Double the deductions for transportation, power, and water supply expenses

Exemption from corporate income tax for eight years for knowledge-based activities that focus on R&D and design to increase Thailand’s competitiveness, or for projects that improve infrastructure to promote Thailand.

High-technology activities that are crucial to Thailand’s development and have only a few current investments are free from corporate income tax for five years.

Activities that use less technology than those mentioned above but nonetheless bring value to domestic resources and the supply chain are exempt from corporate income tax for three years.

What steps are involved in setting up a BOI company in Thailand?

Feasibility Study.

Businesses can evaluate the viability and prospects of a BOI application by conducting a business feasibility study.

The feasibility study is a crucial step since it could ultimately save the client a lot of time and effort. You can get assistance from Belaws BOI professionals to conduct a company feasibility check. Click here for additional details.

Duration: three business days

BOI interview and application procedures

Companies are required to submit application forms for their particular business category as part of the application procedure.

The following information is needed by the BOI:

The entire registered capital as well as the method by which the company will supply this capital.

Information about the company’s project; staff specifics, such as the number of foreign and Thai employees the company plans to hire; information on the management team’s qualifications and expertise; and projected financial results for the first three years of the business.

A BOI officer will assess the application after it has been submitted and will frequently request additional information. The BOI officer specifically verifies that the figures in the business plan align and make sense economically. The back and forth may continue up until the BOI officer is pleased with the extra responses given (the number of additional inquiries ranges from 2 to more than 10 for complex projects with a high capital expenditure).

Following the approval of the application, a meeting with the applicant to discuss the project is scheduled at the BOI office. The meeting typically lasts one hour.

The proposal will be presented for approval at the following BOI officer meeting by the BOI officer following the meeting. Some applications may be promptly approved, while others will be delayed by further inquiries and information requests. Due to these additional requests, poorly handled BOI applications may be delayed for up to a year.

one to three months

BOI clearance and terms acceptance

The investment value of the BOI application will determine how quickly it is approved.

Within 40 business days, the project will gain permission for not more than 200 million Baht.

Within 60 business days, the project will be approved for a maximum of 2,000 million Baht.

Within 90 business days, the project will be approved for more than 2,000 million Baht.

Duration: up to three months

Within seven days, the BOI officer will write to the applicant to inform them of their choice. The applicant will be informed of the requirements for approval, BOI privileges, and benefits in this communication. The conditions offered by the BOI must be accepted or rejected by the applicant within 30 days.

If the applicant does not answer within 30 days, they are required to send a letter of clarification to the BOI outlining their reasons for missing the deadline (the BOI may give up to three extensions of 30 days).

BOI Company Registration and BOI Certificate in Thailand

Within six months of acceptance, a limited business must be incorporated in Thailand after receiving approval to acquire a BOI promotion. The applicant must provide the following records in order to receive the BOI Certificate:

The BOI promotion certificate application form

Company’s memorandum of affiliation

Document proving company registration

a certificate including the registered capital, the registration address, and approved directors who have the right to sign

company’s list of shareholders

Proof of the transfer of funds from abroad meeting the minimum capital requirement as specified in the BOI approval letter as sought by the BOI

Please be aware that a corporation must have at least 51% of its capital from Thai shareholders if the business activities of an investment project fit within List 1 of the FBA.

If this is not feasible, the applicant must write to the BOI with a reason and request a four-month deadline extension (this can happen up to three times).

Calendar: One month

Certificate for Foreign Businesses

A Foreign commercial Certificate permitting the company to engage in the aforementioned regulated activities is necessary if the commercial activities for which the BOI Certificate has been awarded include activities governed by the Foreign Business Act, which is highly likely.

Time frame: two weeks

BOI Work Visas and Permits

The company must register with the e-expert system in order to be able to hire overseas workers. The organization will be able to post future job postings for international employees after registering on the e-expert system.

The applicant may submit an application for their visa and work permit at the BOI one-stop service center (OSOS) following the submission, opening, and acceptance of a post via the e-expert system.

Calendar: One month

Reporting and Compliance for BOI .

The business must fulfill the following criteria after receiving their investment promotion certificate:

To take advantage of the reduced taxes and charges, the machinery and equipment must be imported within 30 months.

Construction must be finished, equipment must be installed, and the factory must be operational within 36 months.

If the operation needs to be stopped for a period of time longer than two months, the company must request permission from the BOI.

A promoted firm cannot mortgage, sell, lease, or transfer machinery that was imported with a lower tax rate or exemption without the BOI’s express consent. Additionally, authorization is required before using machinery for an unapproved purpose.

Furthermore, within 36 months after the BOI certificate’s issue, the Company must file an application for the start of activities. This is necessary as evidence that the Company is complying with the BOI requirements. The BOI may revoke the promotion from the company if this criterion is not met. If this occurs, the business will need to pay an exemption tax in the past. The corporation would be subject to this tax as if it had never gotten a promotion.

A corporation will receive a formal warning notice from the BOI if it fails to meet any of the conditions outlined by the BOI. The BOI may suggest to the Board that the promotion be rescinded if there is no good basis for the failure.

Lastly: BOI Accounting

Companies that have been supported by the BOI are eligible for generous incentives, but they are also subject to particular rules and extra regulatory scrutiny.

Your company’s accounts are one of the things that are frequently examined; it’s crucial to keep in mind that accounting does not lie, so be sure you are conscious of this.

Furthermore, as part of their specialized promotion category, BOI firms will be subject to special accounting standards. Please be aware that BOI companies must comply with the same mandatory reporting standards for VAT, WHT, and SSF as well as the submission of half-year and annual auditing.