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BOI in Thailand: Benefits, Filing, and Technology Transfer

Mar 6

If you find that your company is eligible, you can enjoy several BOI Thailand benefits after you register your company. Incentives are available to companies based on the eligibility group – that receive different incentives and benefits.

A 10-year Tax Benefit

By signing up as a BOI company, you may also be able to receive a 10-year tax benefit, uncapped, in one of four technologies - nanotechnology, biotechnology, digital technology, or advanced material technology. To enjoy this advantage, your company must participate in BOI-approved educational institutions or research centers.

Merit-based Benefits

To encourage competitiveness, the BOI offers the following merit-based benefits:

  • Tax deductions up to five years;
  • Corporate tax-exempt status for up to three years; and
  • Tax deductions for utilities and infrastructure costs.

Locating Your Company

To qualify in this area, your company’s location is important. You need to base your business in one of Thailand’s 20 provinces, the country’s industrial zones, or in one of the four provinces situated in South Thailand. In addition, your company must prove that it has the minimum workforce or investment value for a specific location.

Some Things to Keep in Mind

While a company that gets promoted by the BOI enjoys distinct advantages, it also faces some challenges. These challenges include a complex setup process, regular inspections by the BOI, and the keeping of detailed accounting records.

For example, it can take as long as six months to set up a BOI business. Accounting can become confusing, as BOI benefits only apply to certain areas of your company – not to the company as a whole. Therefore, you need to rely on the services of a good lawyer and accountant.

In addition, the BOI requests financial reports regularly, depending on the period of the promotion. Moreover, the Revenue Department in Thailand conducts inspections on a routine basis. This is done to ensure that you are applying your incentives properly.

Rely on Ongoing Legal Advice

Be forewarned – if you answer an inspection question incorrectly, you could face a legal inquiry and end up in a Thai court. That is why you need to rely on ongoing legal advice. To prevent any misunderstandings along these lines, you need to do the following:

  • Understand the details of the BOI promotion involving your company.
  • Make sure you have covered all the legal facets of operating as a BOI business.
  • Use the services of an attorney and accountant who are experienced in BOI legal practices and accounting.

While the application process for a BOI promotion can take as long as six months when you use legal counsel, it can take far longer if you try to do things yourself. A Thai attorney who is well-versed in BOI practices knows how the governmental organizations in Thailand work, all of which make the application process easier.

BOI Filing

The forms used for applying for a BOI promotion can be accessed via an e-investment platform or from Bangkok’s BOI headquarters. Application forms are about 8 to 10 pages in length and require information related to the following:

  • Your company’s plans for investment
  • Your company status
  • Your business’s shareholders
  • Product development
  • Customer base
  • Technology transfer

What the BOI Wants to See

Specifically, the BOI wants the following details:

  • Your total registered capital and an outline of how the capital will be used.
  • Project information, such as the type of machinery or software you will use and the related operations.
  • The number of foreign and Thai employees you plan to hire, along with yearly compensation. (The BOI may require a minimum salary for key employees in your company.)
  • An employee training plan for Thai workers that features the curriculum or plans for a transfer of technology.
  • Management team information that includes each member’s qualifications, experience, and skills.
  • Projected earnings and costs for the first three years of your business.

BOI The Transfer of Technology

Keep in mind that the BOI likes applicants who emphasize the transfer of knowledge to Thai workers, so you need to elaborate on how you will do this on your application. Therefore, it is important to answer the following questions:

  • What teaching modules will your company be using?
  • What kinds of technology will your business transfer to its Thai workforce?

Make sure you completely fill out your form to avoid rejection or resubmittal of the application. Doing things right the first time and using Thai legal services can prevent a good deal of frustration.