Learning about investment promotion benefits from BOI, (Easy-to-Read Version)
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Investment is a very important mechanism for driving the economy of each country. Thailand has an agency called the Board of Investment or BOI that is responsible for promoting investment both domestically and internationally. Benefits are given to foreign investors who come to invest using Thailand as a production base for various industries in industrial estates or industrial parks throughout the country and export products abroad.Businesses granted with promotion from BOI
Businesses granted with promotion from BOI include businesses that are important to the country’ development, use domestic resources as raw materials, tend to have products in demand, require large amount of investment, and are innovative businesses such as digital technology, nano technology, for example.
In addition to import duties on machinery and raw materials, one of tax incentives that many businesses are interested in and want to receive promotion from BOI is the exemption and reduction of corporate income tax, which will greatly help alleviating corporate tax burden. This will allow businesses making investment to be able to reinvest profits and expand their businesses without having to pay or by paying less corporate taxes. This corporate income tax exemption could be granted for a term up to 13 years, depending on business categories. Moreover, if there is investment in an area entitled to special promotion, such as a project established in industrial estate, additional income tax exemption will be granted.Categories of businesses granted with promotion from BOI are listed below.
- Agriculture, food and biotechnology
- Healthcare, medical devices and parts
- Machines and automobiles
- Metal products and materials
- Electrical appliances and electronics industry
- Petrochemical, chemical supplies, plastics and paper
- Service and public utility businesses such as mass transportation, tourism
- Technology development and innovation
- Businesses focusing on creativity
- High-value service businesses
Types of benefits from BOI
There are two main types of benefits for businesses granted with promotion from BOI, i.e. tax incentives and non-tax incentives.
- Tax incentives
Businesses granted with promotion from BOI will receive tax incentives in many areas such as import duty exemption for imported machinery for use in manufacturing products for export purpose, import duty exemption for raw materials imported in manufacturing products for export purpose, and import duty exemption for finished goods imported for export purpose.
In addition to basic benefits for promoted businesses as mentioned above, BOI also provides additional benefits based on the project value as follows:
- For enhancement of competitiveness, additional corporate income tax exemption will be granted for a term up to 3 years, and an additional tax exemption amount of up to 300%.
- For distribution of regional prosperity, additional corporate income tax exemption will be granted for a term up to 3 years, and for certain businesses, an additional 50% corporate income tax reduction will be granted for a term of 5 years, or business expenses such as transportation, electricity, and water can be deducted 2 times for a term up to 10 years, for example.
- For development of industrial area in the country, additional corporate income tax exemption will be granted for a term of 1 year.
- Non-tax incentives
General businesses that are not granted with promotion from BOI will have restrictions on foreign ownership, but for businesses that are granted with promotion from BOI, foreigners are allowed to hold 100% of shares, own land, work in Thailand, and their spouse and children are also allowed to live in Thailand as we can see from the lifestyle of foreigners and employees in large industrial estates or industrial parks. In addition, there will be fewer restrictions on transferring money or sending money abroad for foreigners in businesses granted with promotion from BOI, i.e. such transaction can be done more easily than other businesses.
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