Under Thai law, foreigners doing business in Thailand must apply for a Foreign Business License (also known as FOREIGNER BUSINESS LICENSE, or FBL) in accordance with the Foreigner Business Regulation. (also known as FOREIGNER BUSINESS LICENSE, or "FBL"). This regulation has imposed a number of restrictions on the scope of foreign investment in Thailand, as well as on the requirements of the foreign businessmen themselves, which have affected the interest of foreign investors in Thailand, limiting the income of the Thai economy and reducing the number of jobs in the country.
The Board of Investment (hereinafter referred to as "BOI") was established to promote Thailand's economic development, to stimulate foreign investment, and to introduce foreign high-tech technology.
The BOI is a governmental organization responsible for formulating investment incentives and providing assistance to investors, as well as providing consulting services for foreign investment in Thailand.
The BOI opens up an alternative route to business for foreign investors interested in investing in Thailand by screening qualified capitalists, avoiding the cumbersome process of applying for a Foreign Business License, and reducing the number of industries in which foreign investors can invest. By allowing foreigners to hold land ownership in Thailand, allowing foreigners to work in Thailand without limiting the amount of registered capital or the number of employees, and reducing or exempting import taxes on machinery or raw materials, the BOI has stimulated foreign investment in Thailand, which has led to economic development, the dissemination of knowledge and technology, and an increase in the number of jobs. It can be said that the BOI has opened up a shortcut for foreign investors to invest and operate in Thailand.?
At present, applying for an <investment promotion license> from BOI is a highly favored way for Chinese companies to invest in Thailand.
Industries open to BOI
BOI has incentives for different types of industries. There are more than 300 types of projects open to foreign investment.
By type of industry
The first category is agriculture and agro-processing industry.
The second category: minerals, ceramics and base metals.
Third category: light industry category.
The fourth category: metal products, machinery, equipment and means of transportation.
Category 5: Electronics and electrical industry.
Sixth category: chemical products, plastics and paper category.
Category VII: Services and Utilities.
Category 8: Development of Science, Technology and Innovation.
By the importance of the industry
Divided into A1, A2, A3, A4, and B1, B2 six classes to enjoy investment incentives, and according to the value of the project to give additional preferential rights.
By the nature of the project
BOI emphasizes on investment promotion
1. industries that can improve Thailand's national competitiveness and increase the added value of the agricultural, industrial, and service sectors;
2. environmentally friendly industries;
3. industries that can boost the economic prosperity of the Thai economy;
4. industries that can encourage the industrial clusters, and that have an important impact on the industrial chain;
5. industries that have a significant influence on the industrial chain;
6. industries that have a significant influence on the industrial chain.
5. Developing special economic zones and strengthening the infrastructure construction industry in the eastern region of Thailand;
Projects approved enjoy tax and non-tax incentives based on their rank.
Tax incentives
Exemption/reduction of corporate income tax for a minimum of three years and a maximum of eight years
Exemption/reduction of import tariffs on machinery and equipment/raw materials
Exemption from calculating income tax due to dividends
Double inclusion of utilities in the company's expenditures
Non-taxes Preferences
Free remittance of foreign currencies
One-stop processing of visas and work permits for foreign technicians
Land ownership is permitted in the name of the company
Most of the projects are allowed to be wholly owned by the foreigners
<Investment Promotion License> application is not the establishment of a corporate entity in Thailand. It is merely an investment promotion certificate. Upon obtaining the Investment Promotion License, the foreign investor is required to establish a business entity in Thailand in accordance with the Thai Civil and Commercial Code.
Projects approved by the Board of Investment Promotion (BOI) still have to apply for a Foreign Business License (FBL), but this time applying for a FBL is easy. Only after obtaining this license can a foreign company officially begin operations in Thailand.
<Investment Promotion License> The application procedure is:
Production type industry: project - submit application - project explanation - project approval - set up the enterprise - get the Investment Promotion License - apply for the Foreign Business License - import machinery, equipment, and raw materials - put into operation
Service type industry: Project Creation - Submission of Application - Project Interpretation - Project Approval - Establishment of Enterprise - Receipt of Investment Promotion License - Application for Foreign Business License - Commencement of Service
Based on past experience, it takes about two to three months to complete the project from project creation to closure
Six months from the date of obtaining the Investment Promotion License, one year, and two years are required to report on the progress of the project to the Board of Investment. Within 36 months from the date of obtaining the IPP, the project must be reported to the BOI for start-up, and the BOI will review the project process and approve the start-up.