Quick Answer
BOI incentives in Thailand are tax and non tax benefits granted by the Thailand Board of Investment to encourage foreign and local investment in priority sectors. These incentives can include corporate income tax exemptions, import duty relief, and exemptions from foreign ownership restrictions. Herrera & Partners assists international companies in structuring BOI eligible projects, securing approval, and maintaining long term compliance to fully benefit from these incentives.
Why BOI incentives matter for foreign investors
For foreign companies entering Thailand, BOI promotion can materially change the legal and financial structure of a project.
Key strategic advantages include:
- Reduced tax exposure during the early years of operation
- Greater flexibility on foreign shareholding
- Easier access to visas and work permits for foreign staff
- Improved project credibility with banks and authorities
Early assessment is critical to determine whether BOI promotion aligns with a company’s business model, timeline, and long term objectives.
Main BOI tax incentives
Tax incentives remain the most sought after BOI benefits and vary depending on the activity category and project location.
Common BOI tax incentives include:
- Corporate income tax exemption for 3 to 8 years
- Reduction or exemption of import duties on machinery
- Exemption of import duties on raw materials for export production
- Additional deductions for R&D, innovation, and employee training
These incentives can significantly lower effective tax rates if the project is correctly structured from the outset and aligned with BOI conditions.
Key BOI non tax incentives
Non tax incentives often address structural constraints faced by foreign investors in Thailand.
Typical non tax BOI incentives include:
- Permission for majority or full foreign ownership
- Rights for foreigners to own land used for promoted activities
- Streamlined visa and work permit processes
- Permission to bring in foreign experts and executives
These incentives can materially simplify operational setup and long term planning.
Summary table of BOI incentives
|
Incentive Type |
Description |
Strategic Impact |
|
Corporate income tax |
Temporary exemption or reduction |
Improves early stage profitability |
|
Import duties |
Exemption on machinery and materials |
Lowers capital expenditure |
|
Foreign ownership |
Relaxation of shareholding rules |
Enables foreign control |
|
Visas and work permits |
Simplified procedures |
Faster operational setup |
|
Land ownership |
Limited rights for promoted projects |
Secures operational assets |
How to qualify for BOI incentives
Not all businesses automatically qualify for BOI promotion. Eligibility depends on sector, technology, and economic contribution.
Typical qualification factors include:
- Activity listed under BOI promoted categories
- Use of technology, innovation, or advanced processes
- Contribution to exports, employment, or regional development
- Compliance with minimum capital and operational thresholds
Pre qualification analysis helps reduce rejection risk and avoids costly restructuring later.
BOI application process explained
The BOI application process involves multiple legal and administrative steps.
A standard BOI application process includes:
- Project feasibility and eligibility assessment
- Preparation of BOI application and supporting documents
- Submission and clarification with BOI officers
- BOI approval and issuance of promotion certificate
- Post approval compliance and milestone reporting
Failure to meet post approval conditions can result in suspension or cancellation of incentives.
Common mistakes to avoid with BOI incentives
Many investors underestimate the compliance obligations attached to BOI incentives.
Frequent mistakes include:
- Applying after company incorporation without prior structuring
- Overstating project scope or investment figures
- Missing post approval reporting deadlines
- Mixing BOI and non BOI activities improperly
- Failing to maintain eligibility conditions
These issues often lead to delays, audits, or loss of benefits.
What happens after BOI approval?
Obtaining BOI approval is not the final step. Approved projects must meet ongoing legal and operational obligations to retain incentives.
After approval, companies are typically required to:
- Incorporate or amend the Thai entity in line with BOI conditions
- Inject registered capital within BOI defined timelines
- Apply for tax and customs privileges with relevant authorities
- File periodic progress and compliance reports with the BOI
- Maintain separation between BOI and non BOI activities
Non compliance can lead to suspension or withdrawal of incentives.
Herrera & Partners’ approach to BOI structuring
Herrera & Partners provides end to end legal support for BOI promoted projects, from initial eligibility assessment to post approval compliance.
Their approach typically includes:
- Strategic project structuring before application
- Alignment of corporate, tax, and regulatory considerations
- BOI application management and authority coordination
- Ongoing compliance monitoring and reporting support
This ensures that BOI incentives remain protected throughout the lifecycle of the investment.
Conclusion
BOI incentives in Thailand offer powerful tax and non tax advantages for foreign investors, but they require careful legal structuring and ongoing compliance. With the right preparation, BOI promotion can significantly improve project viability and long term operational stability.
Need help securing or managing BOI incentives in Thailand? Reach out to Herrera & Partners for expert guidance tailored to your investment strategy.
FAQ
What types of companies can apply for BOI incentives in Thailand?
Companies operating in BOI promoted sectors such as manufacturing, technology, services, and innovation driven industries may qualify, subject to activity specific conditions.
Do BOI incentives apply automatically once a company is incorporated?
No. BOI incentives are granted only after approval of a specific project and are subject to ongoing compliance requirements.
Can foreign companies own 100 percent of a BOI promoted business?
In many cases, yes. BOI promotion can allow majority or full foreign ownership depending on the activity category.
How long do BOI tax incentives last?
Tax incentives typically last between three and eight years, depending on the promoted activity and strategic value of the project.
Does Herrera & Partners assist after BOI approval?
Yes. Herrera & Partners supports clients with post approval compliance, reporting obligations, and long term regulatory strategy.
