Thailand has established the Board of Investment around the second half of the 90s in order to foster, promote and sustain business activities not only in Bangkok and its surrounding areas but more importantly in areas that received little investments from various industries in the past years.
If a company is going to pour in investment that is among the list of BOI-promoted activities, that company will receive certain incentives and privileges. However, the BOI also has a criteria in place and the company must meet these in order to gain promotion from the said office.
The Investment Promotion Act B.E. 2520 (1977) provides authority for the BOI to give qualified investments with incentives, guarantees and protection.
The BOI can grant the following incentives (but not limited to):
- Exemption or reduced rates of importation duties on machines needed by the promoted company.
- Reduced rates of import duties for the needed raw materials.
- Non-tax related incentives such as permission to own land and bringing in of skilled workers and experts to work on the promoted activity of the company.
The Thai government through the BOI also provides guarantees (but not limited to):
- That the government will not nationalized the business activity of a BOI promoted entity.
- That the government will not take into monopoly the products that are similar with the promoted business entity.
- That the government will always allow for the promoted business entity to export its products.
In view of preserving the business activity of a promoted entity, the government protects this by charging additional importation fees of products that are similar to the goods produced by the promoted entity or even to bar the importation of these products if and when it is viewed that increasing the tariff is not enough to provide protection.
The application process and the Law Firm
The application process on gaining the approval of the Thai Board of Investment is rather very complicated that doing so is best done with the assistance of a law firm who has vast experience in Thai corporate law.