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Archives for Thailand BOI

Thailand Aims to Become Center for Regional Operating Headquarter (ROH)

In line with the ASEAN Economic Community (AEC) which will take effect in 2015, the Thai government aims to become center for Regional Operating Headquarter (ROH) for multinational companies who would like to setup their ROH to expand their operation within the ASEAN region or to prepare itself for the upcoming AEC. Being strategically located within the Southeast Asia region with networks of modern infrastructures, quality skilled labor, easy access to raw materials and attractive tax incentives significantly represent as a cost-effective investment for any companies who want to save costs and at the same time, still remain competitive. Government policies also contribute to Thailand’s apparent strengths in its position as a strategically located business hub and center for production and regional outsourcing.

The Thailand Board of Investment (BOI) act as a focal point for the investors in dealing with different government agencies by bringing together under one roof the representatives from different relevant ministries. The Thailand BOI offers assistance on applications for business licenses, factory certification, environmental impact assessments and many other matters. Besides Regional Operating Headquarter, the Board of Investment of Thailand is also promoting the following related activities with tax and non-tax incentives vary depending on the activities.

  • International Procurement Offices, involving sourcing, quality control and packaging
  • Trade and Investment Support Offices
  • International Distribution Centers
  • Distribution Centers
  • Research and Development

For investors who are interested in establishing the Regional Operating Headquarter in Thailand, please visit the BOI’s website www.boi.go.th for more details on incentives and conditions in setting up a ROH. Need further assistance in setting up Regional Operating Headquarters and other business forms in Thailand, contact English speaking ThaiLawyers for business registration, license application, visa and work permit services.

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Thailand Board of Investment extended 2 more years permission for 101 promoted companies

The Board of Investment of Thailand has approved a 2 more year permission for 101 promoted companies to employ foreign unskilled labor.

Under the relief measure on foreign unskilled labor employment, the BOI permits 101 promoted companies to continue hiring foreign unskilled laborers until December 31, 2014. However, these 101 companies are required to propose a concrete plan to gradually reduce the number of foreign unskilled workers to BOI within February 28, 2013. During the extended period, they must implement a plan to reduce the number of foreign unskilled workers by 25% every 6 months until no foreign unskilled labor is hired by January 1, 2015. Any of these 101 companies that fail to implement the plan as proposed will have their corporate tax exemption terminated.

Inquire now with MSNA about Thailand BOI promotion and other options in doing business in Thailand.

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New investment promotion strategy for knowledge-based industries

Thailand is working out a new investment promotion strategy which will focus on industrial restructuring toward knowledge-based or high-technology industries.

Five seminars have been prepared to offer opportunities for business operators across the country to express their opinions. Suggestions and recommendations offered at the seminars will be included in the proposal on the new investment promotion strategy to be presented to the Board of Investment’s board meeting. The new investment promotion policy under this new strategy is likely to be implemented in June 2013 and is believed to push for the development of Thailand as a leading production base I the world.

It is expected that BOI would place more emphasis on investment which promoted a good balance between economic growth and social and environmental development, as well as a balance between agricultural, industrial and service sectors. This includes the industries in which Thailand has good potential, such as those involved with food processing, rubber products, health care and creative industries. Other industries to receive greater attention are those related to future global trends, such as alternative energy, biotechnology and high-value-added services.

While basic incentives will be minimized, BOI will offer additional incentives for companies that have more investment in research and development, human resource training and environmental protection. It will also adjust investment rules and regulations on non-tax benefits and services to improve the business environment while encouraging Thai investors to invest more in other countries.

Interested in doing business in Thailand? ThaiLawyers can help you in business set up, work permit application and Thai visa extension. Contact now for further consultation.

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Extended deadline on replacement machine import duty

The Thai BOI has decided to extend a flood relief measure on machinery replacement until 31 December 2012 allowing more than 150 companies in Pathum Thani and Ayutthaya to have access to this incentive and to help entrepreneurs who need assistance to renovate their facilities.

The Board considered that many BOI-promoted companies that had been seriously affected by the massive flood were preparing to make or were making decisions to apply for the investment incentives both for replacement of damaged equipment or as new investments.

As of 30 June 2012, the Board has found that the total number of projects receiving approval for import duty exemption for machinery replacement is 490 projects with the total imported machinery value of Baht 108.65 billion.

Further details of this extended flood relief measure have yet to be announced. Contact MSNA for expert advice on BOI promotion and Thai taxation.

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New immigration development for BOI promoted companies

In order to improve the work permit and immigration processes, the Board of Investment (BOI) has recently introduced the e-Expert System. This system allows for online processing of expatriate work permits and immigration formalities, including review and approval, through the Thailand BOI’s website whereas a user ID and password will be provided to BOI promoted companies for access and uploading of supporting documents.

This initiative towards an online environment is aimed to lessen the lead time at the One Stop Service Center and minimize paperwork. However, once approval is granted, the expatriate is still required to be physically present at the One Stop Service Center to collect and sign for the work permit and attend a short interview with the Immigration officer.

Furthermore, the benefits of this initiative can be summarized as follows:

  1. Greater transparency in the consideration process for work permit and visa extension
  2. Real time tracking of the status of applications
  3. Reduced time spent by expatriates at the One Stop Service Center

The twist is that users will need to have knowledge of the relevant BOI, work permit and immigration regulations.

MSNA team has broad range of experience assisting clients to understand the complex rules and regulations involved as well as dealing with the relevant officials. Contact us for more information and expert advice.

 

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Thailand BOI extends measures to support production capacity

In addition to the recent implemented measures by the BOI of Thailand, it has been approved that incentives for machinery and technology improvement for increased production capacity will also be extended until the end of this year, 31 December 2012.

This is a part of the government’s efforts to help manufacturers affected by the massive flood last year. Since it will promote machinery and technology improvement to boost production capacity, this policy is viewed as a significant step in enhancing the country’s competitiveness and investment.

With the aim of encouraging entrepreneurs to invest in new machinery for production improvement – automated production systems, for example – the government offers import duty exemption for machinery imported for this purpose. Additionally, participating investors will be entitled to three-year corporate income tax exemption, which is subject to a 70% cap on total investment (not including land and working capital). The tax exemption is based on existing business revenue and it will be effective until 31 December 2012.

Contact MSNA for your Thailand BOI and its flood relief measures questions.

 

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Thailand BOI extends unskilled foreign workers employment

The BOI has recently announced that it would allow 101 companies registered with the Ministry of Labour to continue hiring unskilled foreign workers until 31 December 2012, extended from an earlier announced deadline 31 May 2012. This is a part of the government’s efforts to help manufacturers affected by the massive flood last year.

This measure will also help reduce the impact from the labour shortage in the country although it is just for temporary period only because the BOI also considered Thailand to be moving from labour-intensive to high technology industries so that the need for unskilled labour would be less in the long run. As a result, the board resolved to maintain its policy of not promoting the employment of unskilled foreign workers.

As the BOI had earlier announced its measures allowing the 101 BOI-promoted companies which have registered with Ministry of Labour to hire unskilled labour until 31 May 2012, it further extended this period until the end of this year. The extension was aimed at giving the entrepreneurs sufficient time to prepare for the changes and ease the burden caused by last year flood.

Considering this as a significant agenda for the country, the Board will further discuss this issue with related government agencies in order to prevent or find a solution to possible future labour shortage problems.

Contact MSNA for more information on this recent measure.

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Thailand BOI Give Tax Incentives for Promoted Company

Here is the summary of the recent tax incentives offered by Thailand Board of Investment for directly flood-affected companies.

I. Tax incentives for directly flood-affected companies

Conditions:

  • Existing BOI-promoted projects directly affected by flood
  • Still have remaining unused corporate tax exemption period

REMARK: An official announcement is to be issued soon.

Tax Incentives:

1. Projects subject to a corporate income tax exemption cap

Remaining at original province

-8 year corporate income tax exemption (subject to 150% cap on new investment * + remaining unused cap)

Relocation to another province

-8 year corporate income tax exemption (subject to 100% cap on new investment * + remaining unused cap)

* All fixed assets (except land) including repairs of existing machinery and replacement machinery previously imported under the BOI scheme

2. Projects not subject to a corporate income tax exemption cap

Companies can use option 1 above or the following scheme.

 

Remaining Corporate Income Tax Exemption Period Additional Years of Corporate Income Tax Exemption to be Granted
≤ 5 years +3 more years
> 5-6 years +2 more years & 2-year 50% tax reduction
> 6-7 years +1 more year & 4-year 50% reduction
> 7-8 years +5-year 50% tax reduction

II. Tax incentives for flood-affected industrial estates

Conditions:

  • All industrial estates/zones
  • Invest in flood-prevention infrastructure and system

Incentives:

  • 8-year corporate income tax exemption with cap of 200% of investment excluding costs of land and working capital.

Contact MSNA for Thailand BOI questions and information.

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Thailand BOI Flood Relief Measures

Thailand BOI Flood Relief Measures

Updated as of January 2012

Here is the summary of the updated flood relief measures implemented by the Board of Investment of Thailand.

Measures to Minimize Business Interruption

  1. Factories can be allowed to temporarily relocate elsewhere to continue their production for the period of 6 months from the application submission date. This temporary relocation period can be extended if necessary.
  2. Manufacturing process can be allowed to be outsourced partially or wholly on a temporary basis.
  3. The BOI, the Ministry of Labor and the Immigration Bureau help facilitate companies to bring in foreign experts and technicians to rehabilitate the factories.

Measures to Reduce Tax Burdens

  1. The importation of machinery for replacement is entitled to duty-free. (submission deadline is by the end of June 2012)
  2. Raw materials imported damaged by the flooding can be counted as part of the waste allowance without any tax burden.
  3. Additional years of corporate income tax exemption are offered to BOI-promoted companies directly affected by the recent flooding that are still during their tax holidays.
  4. Industrial estates that invest in flood prevention systems are also offered 8-year tax holidays with the corporate income tax exemption ceiling of 200% of their investment excluding land cost and working capital.

Contact MSNA for your Thailand BOI, accounting and tax questions.

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Relief Measures for the Flood Affected BOI-Promoted Companies

The Board of Investment (BOI) of Thailand has been actively supportive to all of BOI promoted companies in the country particularly to those affected by the flooding. Here is the summary of the recently approved flood relief measures by the BOI of Thailand.

The Thailand BOI approved the following relief measures for flood affected
BOI-promoted companies:

  1. Raw materials imported for export production that were completely damaged by the floods can be recognized as losses and are not dutiable.
  2. BOI-promoted companies are allowed to subcontract all production by providing imported raw materials for subcontractors to process, on a temporary basis.
  3. The measure exempting import duty on machinery acquired to replace machinery
    damaged by flooding (The Board of Investment Announcement No 4/2554, dated 17 January 2011) will be extended for another six months, and so applications to
    import replacement machinery should be submitted to the BOI by 30 June 2012.

These relief measures are subject to conditions and regulations to be announced by
the BOI.

The above mentioned flood relief measures are in addition to the previously
approved relief measures as listed below:

  1. Machinery or raw materials are allowed to be relocated from factories in emergency cases.
  2. Raw materials imported for export production that were damaged by flooding can be treated as losses, adjusted in the raw materials account and are not dutiable. BOI-promoted companies may use raw materials that are still in good condition in other projects and still be entitled to the import duty exemption.
  3. BOI-promoted companies can outsource certain production processes, on a temporary basis to maintain business continuity.
  4. The BOI has launched a measure to expedite the visa and work permit process for
    experts brought in to restore projects affected by flooding.

Meanwhile, BOI operators are invited to directly contact the Investment Promotion Bureau that looks after their projects for BOI-assistance, at the following telephone
numbers:

– Investment Promotion Bureau 1 (agricultural and light industries)

02 553 8298 (Khun Sithee Tanboonteck)

– Investment Promotion Bureau 2 (metal, machinery and automotive industries)

02 553 8366 (Khun Anin Meksuksai)

– Investment Promotion Bureau 3 (electronics and electrical appliances industries)

02 533 8167 (Khun Tanavadee Khuvasanont)

– Investment Promotion Bureau 4 (chemicals, papers, plastics, and high value added services)

02 553 8294 (Khun Wuttichai Pisatphen)

The BOI’s operations have been temporarily moved to the One-Start One-Stop
Investment Center (OSOS), 18th Floor, Chamachuri Square, from 4 November 2011
until further notice. Tel 02 553 8111, 02 209 1100.

Contact MSNA for any questions regarding BOI Thailand.

 

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