The primary governing agency that is responsible for the promotion of business activity from abroad is the BOI, or the Board of Investment, with regard to Thailand. This is a government entity and provides all the incentives which are necessary to start a business from outside the country. The Board of Investment in Thailand also has a key role in offering services, details and information pertaining to how businesses operate in Thailand. Incentives given to foreign concerns may range from import duty and its exemption to corporate income exemption of tax on raw material. When businesses work with the BOI, they gain the advantage of having the status of “100% foreign ownership”.
Investing with Incentives – Thailand’s BOI Shows the Way
Any incentives for business activity conducted in Thailand, from basic benefits to lucrative solutions, are issued by the BOI. The BOI has the job of offering foreign business investment the best benefits to promote business in Thailand. This not only helps potential investors but also the Thai economy. Established with the main aim of spearheading business investment from abroad, the BOI was created in 1966. Within the bounds of Thailand’s Investment Promotion Act or IPA, the BOI holds the power to grant any fiscal and other incentives to local and foreign businesses. Businesses that receive entitlements from the BOI are “100% foreign-owned” if involved in any of the following businesses:
- Plastic, paper and chemicals
- Agriculture and its products
- Public utilities and other public services
- Light industries
- Electronics production
- Technology and its development
- Transport and its equipment
- Metals and their production
- Base metals, mining and ceramics
Here’s What You Get for Starting a Foreign Business
The Thai government has been spot on regarding the promotion of business, locally and from foreign markets, in a robust effort to keep its GDP up. In Thailand, the key industrial sectors are tourism and agriculture. With a view to an expansion of these, and the introduction of more kinds of industrial activity, the Thai government makes the following incentives available to foreign investors in business:
- Incentives According to Activity
Business operations are categorised accordingly and incentives are offered. Group A activities have the most important and gain non-tax and tax advantages. Activities that fall under the Group B umbrella have less importance and are offered mainly incentives that are of a non-taxable nature. They may also get certain import duty perks.
Group A includes all activities involved in R and D, and those known as “knowledge-based”. Other categories A activities constitute infrastructure development, highly technological activities, activities that bolster supply chains, and any that forge Thailand ahead in its economy. In Group B, all those industries that support those in Group A are included.
Key Incentives for Business Types
Another way to classify the method in which incentives work is by the business activity, but this also translates to the type of business. In any country, key incentives get distributed to those foreign business investors who promise to lift economies from the drudgery of their current conditions. Consequently, any business that has prospects of employment and development for the Thai people and the country will be given the best incentives. The incentives to foreign companies engaged in R and D and other HR activities are optimal in Thailand.
Foreign investment in the form of businesses that provide innovation and other solutions that boost the economy are given important incentives like heavy tax exemptions, tax holidays with extensions, etc. Such companies must qualify for these sought-after incentives with an investment of a minimum amount of US$5.5 million (200 million baht).
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