Getting Started with BOI Registration: An Overview
For foreign residents of Thailand, owning your own business can be a tempting – if somewhat daunting – prospect. Competitive costs and an attractive business climate are among the many upsides, but legal and technical questions soon begin looming large for expats who begin looking into the possibilities. As an added hurdle, some features of BOI affiliation change year to year, as policies are tweaked while Thailand’s economy develops.
At the center of this potentially confusing outlook is the array of requirements and incentives raised by Thailand’s Board of Investment. BOI company registration is so often discussed because the benefits are so dramatic. In order to boost foreign investment, Thailand offers exemptions on corporate income tax, import duties on both machinery and materials, as well as deductions for transportation, utilities and construction costs. Many other non-tax incentives apply to some types of BOI company as well, including the ability to bring in foreign workers, own land, and transfer foreign currency.
Some of these exemptions and benefits can continue for years, but the period of time varies depending on the type of business you are running – and in that variance lies much of the complexity that gives the Thailand BOI registration process a big part of its reputation. Not everyone who submits a BOI application is accepted, and many are put into a category that they had not anticipated, so the rules and procedures within the BOI are well worth studying.
Given the terrific benefits that BOI registration has the power to confer, much indeed rides on knowing the rules before doing too much business planning. BOI eligible activities range from agriculture and mining to light industry and metal products, as well as electronics, chemicals, paper and plastics, and utilities / public services. These categories are then broken down even further, and a fuller description is available here.
Some categories receive longer-term benefits than others, and those benefits can potentially be extended if the business meets ‘competitiveness enhancement’ benchmarks set by the Thailand Board of Investment. Research & Development, advanced technology training, product & packaging design, and IP acquisition / licensing fees for developing technology in Thailand for sales purposes are among the activities that can earn a foreign-owned company substantially extended benefits courtesy of the BOI.
Additionally, the location of your business can have an effect on the number of benefits it is entitled to as a BOI company, even apart from the type of business it conducts. Twenty provinces within Thailand promote investment by granting additional benefits to foreign-owned businesses located there. Moreover, companies operating from within industrial estates or promoted industrial zones are potentially entitled to longer-lasting benefits as well.
With an understanding of the types of variables in play, foreign business owners can put themselves in the best possible position to run a company primed for success. Thailand’s Board of Investment has a good track record of supporting many successful foreign companies, with excellent results for both the businesses themselves and the Thai economy as a whole.