In a meeting held by the Thailand Board of Investment (BOI Thailand) last June 13, 2022, the governing body approved a total of 209.5 billion THB or 6.2 billion USD in infrastructure and manufacturing investments.
The Board also gave the thumbs up to a new set of investment incentives.
What is the BOI Thailand ?
BOI Thailand is a government agency that has been mandated to encourage foreign direct investment (FDI) in Thailand. It does so by promoting industrial projects, certifying overseas companies that will invest in those projects, and lifting many constraints placed upon foreign companies by regulations such as the Foreign Business Act. More than removing investment obstacles, BOI also attracts investors with generous incentives, such as:
- Tax benefits like fixed period income tax exemptions
- 100% foreign ownership of a company
- Fewer requirements and barriers to obtaining and retaining work permits (e.g., no limit for hiring non-Thai workers)
- The privilege of owning land in Thailand
What FDIs were approved by BOI Thailand?
Of the nearly 210 Billion THB worth of investment approved by BOI Thailand, 36.1 Billion THB was for Horizon Plus Co., Ltd. Horizon Plus is a joint venture between Thailand’s PTT PCL and Taiwan’s Foxconn to manufacture battery electric vehicles (BEV). The investment is timely since Thailand aims to become a leading development hub for BEVs in the world.
What incentives did the BOI pass during the meeting?
Thailand’s Board of Investment approved the creation of new incentives, namely perks for investing in smart industrial estates and zones, and the facilitation of purchasing land by foreign juristic persons.
Incentives for investments in smart industrial estates and zones
BOI approved two incentive packages, both of which are related to Smart Industrial Estates. The first grants benefits to projects for building totally new industrial estates and zones that feature intelligent system services. The second package is for projects that “smarten up” general industrial estates and zones that already exist.
Regardless of the incentive package you vie for, your project must offer intelligent system services to your clients in these key areas:
- Smart Economy
- Smart Energy
- Smart Facilities
- Smart IT
- and one of the following: Smart Workforce, Smart Living, or Smart Good Corporate Governance
Note that incentive packages may also be given to industrial estate zone smart system development projects.
Projects that fulfill the above criteria will be given a corporate income tax exemption for eight years. Furthermore, let’s say your projects are located along the country’s Eastern Economic Corridor area. After completing eight years of income tax exemption, you’ll get a 50% corporate income tax reduction five years hence.
Do keep in mind that, to qualify for benefits, investments in the creation of smart industrial estates and zones must have at least 51% of their shareholders to be Thai nationals. As for projects involving the development of smart systems, there are no ownership restrictions.
BOI makes it easier for foreign juristic persons to own land
BOI now permits foreign juristic persons such as foreign corporations and the like to own land. These persons must be registered, BOI-certified, and have at least 50 million THB in paid-up capital to buy land. Such land may only be used to build offices and/or homes for foreign experts and executives.