One of the goals of the BOI and its investment plan is the decentralization of the industrial base in Thailand and the spread of economic growth to areas with low income and inadequate investment. Thus, the BOI offers greater tax incentives to those industries located in these less economically developed areas.
There are three Investment Zones and classification is based upon economic factors such as the level of income and the availability of infrastructure in each province.
Zone 1 inclues six Central provinces with high income and good infrastructure: Bangkok, Samut Prakan, Samut Sakhon, Pathum Thani, Nonthaburi and Nakhon Pathom.
Zone 2 includes the 12 provinces of Samut Songkhram, Ratchaburi, Kanchanaburi, Suphanburi, Ang Thong, Ayutthaya, Saraburi, Nakhon Nayok, Chachoengsao, Chon Buri, Rayong and Phuket.
Zone 3 includes the remaining 58 provinces with low income and less developed infrastructure. All areas in the Zone 3 provinces are designated as Investment Promotion Zones. To see the benefits accorded to projects in each of these zones click here.
Promotion of Foreign Investment
As part of the effort to encourage foreign investment, companies operating with BOI privileges are often exempted from the requirement of majority Thai ownership under the Thai Foreign Business Act of 1999. Foreign investors may hold a majority or all shares in a promoted manufacturing project, regardless of the zone where it is located. However, for projects in agriculture, animal husbandry, fishery, mineral exploration and mining and service businesses under List One of the Foreign Business Act of 1999, Thai nationals must hold shares totaling not less than 51 per cent of the registered capital. The Board may also specifically fix the shareholding of foreign investors on some promoted projects when it is deemed appropriate.
Application and Approval Procedure
The first step for any company seeking BOI promotions will be to contact the investment center or a regional or overseas office of the BOI to gather information on the BOI and the potential benefits for that particular company and to request an application. The company seeking promotion must submit the completed application to either the Secretary's office or one of the regional or overseas offices.
Within 15 days of receiving the completed application, the BOI will set up a meeting between representatives of the company and a member of the Office of the Board of Investment (OBOI). For projects with an initial investment of 40 million baht or less, the OBOI will make a decision within 60 days of receiving all of the necessary documents. For projects with an initial investment between 40 and 500 million baht, and also projects designed for the export of goods with an investment of more than 500 million baht, a sub-committee of the BOI will decide within 60 days of receiving all of the necessary documents. For those projects seeking to access the domestic market with an initial investment of over 500 million baht, the decision will be made by the BOI itself and notification will be given within 90 days of receiving all of the necessary documents
The OBOI will inform the applicant in writing within seven working days of the approval date, detailing the conditions, privileges and benefits granted. An acceptance form and an application for the promotion certificate will be attached to the notification of approval. Upon receipt of the notification, the applicant must reply by completing the acceptance form and sending it back to the OBOI within one month. If any changes or special conditions and privileges are sought, they should be requested at that time. If the applicant is unable to reply within the stated time limit, a letter of clarification should be sent to the OBOI, which will consider extending the deadline by not more than one month at a time, up to a maximum of three times. In order to receive the investment promotion certificate, the applicant must set up the company within six months of accepting the approval, and submit a number of supporting documents to the OBOI.
Services Offered by the BOI
In addition to offering tax-based incentives, the BOI also offers a number of services to facilitate the set-up, management and growth of companies receiving BOI promotion. These include: