How the Board of Investment (BOI) Supports Foreign Businesses Setting up in Thailand
Throughout the world, Thailand is known as a friendly haven for business. That reputation is backed up by international rankings. For instance, the World Bank awarded Thailand a 78.45 Ease of Doing Business (EODB) score in its 2019 report. That score—up 1.06 points from the prior year—earned Thailand 27th place in the EODB ranking. Thailand was 8.14 points away from list-leader New Zealand, which scored 86.59.
The Swiss-based International Institute for Management Development (IMD) ranked Thailand 25th in its 2019 World Competitiveness Index. The United Nations placed Thailand 40th in the world and first in Southeast Asia in its latest Sustainable Development Goals Report, an improvement of 19 places.
The world agrees that Thailand is a friendly home for business. It also recognizes that one of the reasons for Thailand’s favorable business climate is its Office of the Board of Investment (BOI). The BOI is the government agency under the Office of the Prime Minister that is charged with promoting investment into Thailand and Thai overseas investment.
Since 1966, the BOI has been the leading voice promoting both domestic and international investment in Thailand. Its objectives are to increase Thai competitiveness and help Thailand emerge from the middle-income trap by assisting the country in maintaining balanced, sustainable growth.
Policies, Processes and Exemptions
The BOI sets investment promotion policies under Investment Promotion Act No. 2 B.E. 2534, No. 3 B.E. 2544, and No. 4 B.E. 2560. Its influence extends overseas through regional offices in major world cities, including Osaka, Beijing, Stockholm, Taipei, Sydney, Frankfurt, Los Angeles, Mumbai, and Paris.
The BOI streamlines the process for businesses to set themselves up in Thailand, and it rewards those that serve spelled-out objectives through a host of enticing tax and non-tax incentives. For instance, eligible businesses can receive corporate income tax exemptions for up to 13 years. Except for certain specified businesses, 100% foreign ownership is permitted.
How the Board of Investment helps companies planning to do business in Thailand:
- Advising and informing companies about investment opportunities and rules and regulations on BOI investment promotions
- Linking investors with government agencies and the private sector to facilitate business operations, including establishing a company and applying for work permits
- Providing support to source local suppliers and potential investors
- Helping to identify and recognize foreign specialists or science and tech researchers through the BOI Strategic Talent Center (STC)
- Providing a one-stop shop for visas, work permits, and investment in International Business Centers (IBC) and Special Economic Zones (SEZ)
Per Thailand’s vision for its future, Thailand 4.0, the BOI maintains a general list of activities that are eligible for investment promotion. Tax exemptions are dependent on the amount invested or the expenditure for enhancing competitiveness.
The BOI clearly lists activities for which it offers incentives. In order of preference, here are businesses and industries that the agency rewards with incentives:
- Knowledge-based activities that focus on research, development, and design to enhance the Kingdom’s competitiveness.
- Infrastructure activities for the country’s development; value-added activities using advanced technology with no or very few existing investments in Thailand.
- High-tech activities that are important to the country’s development with a few investments already existing in Thailand
- Activities with lower technology than A1-A3 but still add value to domestic resources and strengthen the supply chain.
- Supporting industry that does not use high technology but is still important to the value chain.
- Other activities which support the development of targeted technology and have cooperation according to the BOI-specified conditions
- Technology and Innovation Development; this includes targeted core technology development in the areas of biotechnology, nanotechnology, digital tech, and advanced materials
In conclusion, Thailand’s Board of Investment (BOI) helps smooth the path for foreign investors looking to do business in Thailand. Especially for those who perform Thailand’s promoted activities in the targeted Eastern Economic Corridor (EEC) near Bangkok, the BOI grants generous incentives.
Are you looking to set up your business in Thailand and make your first hire? You can also check out this article on Navigating Thai Labor Law
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Aster Lion is an Employer of Record (EOR / PEO) & Payroll provider headquartered in Thailand that can assist with visa & work permit application, employee contractor management and payroll solutions. You can reach out to us for any inquiries on how we can assist you with your staffing & employment requirements in Thailand.