Thailand BOI Promotion

Information about Thailand BOI (Board of Investment)

Thailand BOI promotes investment in the country by offering two kinds of incentives to promoted projects, regardless of location: tax incentives (include exemption or reduction of import duties on machinery and raw materials, and corporate income tax exemptions) and non-tax incentives (include permission to bring in foreign workers, own land and take or remit foreign currency abroad.) Moreover, Thailand BOI offers privileges based on the location of the business in the three Investment Promotion Zones throughout Thailand.

Thailand BOI promotion - eligible activites (Information as of February 2011 from www.boi.go.th)

BOI section 1: Agriculture and Agricultural Products

BOI section 2: Mining, Ceramics and Basis Metals

BOI section 3: Light Industry

BOI section 4: Metal Products, Machinery and Transport Equipment

BOI section 5: Electronic Industry and Electrical Appliance

BOI section 6: Chemicals, Paper and Plastics

BOI section 7: Service and Public Utilities

The Three Investment Promotion Zones and the privileges granted to the projects in each zone are as follows:

Zone 1: includes Bangkok, Samut Prakan, Samut Sakhon, Nakhon Pathom, Nontaburi and Pathum Thani.

Zone 1’s privileges :

• 50 per cent reduction of import duty on machinery that is subject to import duty of not less than 10 percent. 
• Corporate income tax exemption for 3 years for projects located within industrial estates or promoted industrial zones, provided that such a project with capital investment of 10 million Baht or more (excluding cost of land and working capital) obtains ISO 9000 or similar international standard certification within 2 years from its start-up date, otherwise the corporate income tax exemption will be reduced by 1 year.
• Exemption of import duty on raw or essential materials used in the manufacturing of export products for 1 year.

Zone 2: includes Ang Thong, Ayutthaya, Chachoengsao, Chon Buri, Kanchanaburi, Nakhon Nayok, Phuket, Ratchaburi, Rayong, Samut Songkhram, Saraburi, and Suphanburi.

Zone 2’s privileges (excluding Laem Chabung Industrial Estate and industrial estates and promoted industrial zones in Rayong Province):

• 50 per cent reduction of import duties on machinery that is subject to import duty of not less than 10 percent and * exemption of import duty on machinery for projects located within industrial estates or promoted industrial zone.
• Corporate income tax exemption for 3 years, * increased to seven years for projects located within industrial estates or promoted industrial zones, provided that projects with capital investment of 10 million Baht or more (excluding cost of land and working capital) obtains ISO 9000 or similar international standard certification within two years of their start-up date, otherwise the corporate income tax exemption will be reduced by 1 year.
• Exemption of import duty on raw or essential materials used in the manufacturing of export products for 1 year.

Zone 3: includes all the remaining 58 provinces

Zone 3’s privileges (including Laem Chabang Industrial Estate and industrial estates and promoted industrial zones in Rayong Province):

• Exemption of import duties on machinery.
• Corporate income tax exemption for 8 years provided that projects with capital investment of 10 million Baht or more (excluding cost of land and working capital) obtains ISO 9000 or similar international standard certification within two years of their start-up date, otherwise the corporate income tax exemption will be reduced by 1 year.
• Exemption of import duty on raw or essential materials used in the manufacturing of export products for 5 year.
• Deduction from net profit of 25 percent of the project’s infrastructure installation or construction costs in addition to normal depreciation, and such deductions can be made from the net profit of one or several years within 10 years from the date of first revenue derived from the promoted activity.

In addition to the privileges for Zone 3 listed above, the projects located in industrial estates or promoted industrial zones in these 36 provinces: Chai Nat, Chanthaburi, Chiang Mai, Chiang Rai, Chumphon, Kamphaeng Phet, Khon Kaen, Krabi, Lamphang, Lamphun, Loei, Lop Buri, Mae Hong Son, Mukdahan, Nakhon Ratchasima, Nakhon Sawan, Nakhon Si Thammarat, Phangnga, Phattalung, Phetchabun, Phetchaburi, Phitsanulok, Pichit, Prachin Buri, Prachuab Khiri Khan, Ranong, Sa Kaew, Sing Buri, Songkhla, Sukhothai, Surat Thani, Tak, Trang, Trat, Uthai Thani, and Uttaradit as well as Laem Chabang Industrial Estate and industrial estates or promoted industrial zones in Rayong province are further granted the tax and duty privileges as follows:

1. 50 per cent reduction of corporate income tax for 5 years after the exemption period
2. Double deduction from taxable income of transportation, electricity and water costs for 10 years from the date of first revenue derived from promoted activity.
3. 75 percent import duty reduction on raw or essential materials used in manufacturing for domestic sales for 5 years, based on annual approval (This incentive is not available to projects in Laem Chabung Industrial Estate and industrial estates or promoted industrial zones in Rayong province.)

In addition to the privileges for Zone 3 listed above, the projects located in these 22 provinces: Amnat Charoen, Buri Ram,Chaiyaphum, Kalasin, Maha Sarakham, Nakhon Phanom, Nan, Narathiwat, Nong Bualamphu, Nong Khai, Pattani, Phayao, Phrae, Roi Et, Sakhon Nakhon, Sathun, Si Sa Ket, Surin, Udon Thani, Ubon Ratchathani, Yasothon, and Yala are further granted the tax and duty privileges as follows:

1. 50 per cent reduction of corporate income tax for 5 years after the exemption period
2. Double deduction from taxable income of transportation, electricity and water costs for 10 years from the date of first revenue derived from promoted activities
3. 75 percent import duty reduction on raw or essential materials used in manufacturing for domestic sales for 5 years, based on annual approval, for projects located in industrial estates or promoted industrial zones

Note: In each zone, the maximum value of a project’s corporate income tax exemption is 100 percent of its investment capital, unless otherwise specified.

Read the process to get Thailand BOI promotion with MSNA here.