BOI Privileges Attract Foreign Business Investment to Thailand
- By Gregory Smyth
- Published 08/22/2011
- National, State, Local
- Unrated
Gaining BOI privileges can give a foreign company making a business investment in Thailand a distinct advantage.
Western companies often turn to emerging markets to reduce their manufacturing costs and improve their competitiveness.
In return the host country enjoys improved economic growth, employment, services and production. At least that's the theory. Countries such as Thailand are using tax and Thai business law exemptions as incentives for foreign firms to make a business investment in Thailand.
This south-east Asian hub has identified alternative energy production including biofuels and solar as key industries for growth. It has also earmarked key regions and sites as prime locations.
Foreign companies prepared to meet certain criteria can win tax and Thai business law privileges from the Board of Investment, a department established by the Thai-Government to drive foreign and domestic business growth in key sectors and geographic locations.
These conditions can prove restrictive but incentives can also be considerable and worthwhile, according to experienced Thai law consulting firm BSA Law. The Thai law company has helped Thai and foreign-owned companies secure BOI privileges. It advises firms to weigh up the advantages and disadvantages carefully but believes the considerable tax and business concessions often win out. These include:
- Tax incentives including income tax 'holidays' or tariff exemptions;
- Business guarantees, protections, permissions and services.
Tax and import duty incentives
Tax-based incentives are conditional on the location and nature of the
industry and whether goods are being produced for export or domestic purposes.
Businesses deemed to be operating 'priority activities' could be eligible for corporate income tax exemption for up to eight years. They may also be exempt from import duty on machinery.
As part of the Thai Government's plan to spread economic growth industries located in poorer regions with less infrastructure are eligible for greater tax incentives (generally handled by a tax consulting firm in Thailand).
Thai law exemption
Foreign companies which have BOI privileges are often also eligible for different treatment under Thailand law. In particular they may not have to meet the condition of majority Thai ownership under Thailand business law's Foreign Business Act of 1999.
In target manufacturing sectors foreign investors may hold the majority of shares, a move designed to boost key foreign business investment in Thailand.
Projects included under List One of the Foreign Business Act, including agriculture, fishery and mining, can only be undertaken by companies with majority Thai shareholders. Thailand lawyers advise that the Board has been known to allow certain exemptions when deemed appropriate.
Targeting key foreign investment can provide significant economic return and improved employment and infrastructure for emerging nations. Incentives such as tax and import duty exemptions have allowed nations such as Thailand to actively spread its industrial base and attract investment in key manufacturing sectors.
Thai law consulting firms such as BSA Law advise foreign firms to carefully investigate lucrative incentives offered by the Board of Investment - they can give a distinct advantage when making a business investment in Thailand.
Western companies often turn to emerging markets to reduce their manufacturing costs and improve their competitiveness.
In return the host country enjoys improved economic growth, employment, services and production. At least that's the theory. Countries such as Thailand are using tax and Thai business law exemptions as incentives for foreign firms to make a business investment in Thailand.
This south-east Asian hub has identified alternative energy production including biofuels and solar as key industries for growth. It has also earmarked key regions and sites as prime locations.
Foreign companies prepared to meet certain criteria can win tax and Thai business law privileges from the Board of Investment, a department established by the Thai-Government to drive foreign and domestic business growth in key sectors and geographic locations.
These conditions can prove restrictive but incentives can also be considerable and worthwhile, according to experienced Thai law consulting firm BSA Law. The Thai law company has helped Thai and foreign-owned companies secure BOI privileges. It advises firms to weigh up the advantages and disadvantages carefully but believes the considerable tax and business concessions often win out. These include:
- Tax incentives including income tax 'holidays' or tariff exemptions;
- Business guarantees, protections, permissions and services.
Tax and import duty incentives
Tax-based incentives are conditional on the location and nature of the
Businesses deemed to be operating 'priority activities' could be eligible for corporate income tax exemption for up to eight years. They may also be exempt from import duty on machinery.
As part of the Thai Government's plan to spread economic growth industries located in poorer regions with less infrastructure are eligible for greater tax incentives (generally handled by a tax consulting firm in Thailand).
Thai law exemption
Foreign companies which have BOI privileges are often also eligible for different treatment under Thailand law. In particular they may not have to meet the condition of majority Thai ownership under Thailand business law's Foreign Business Act of 1999.
In target manufacturing sectors foreign investors may hold the majority of shares, a move designed to boost key foreign business investment in Thailand.
Projects included under List One of the Foreign Business Act, including agriculture, fishery and mining, can only be undertaken by companies with majority Thai shareholders. Thailand lawyers advise that the Board has been known to allow certain exemptions when deemed appropriate.
Targeting key foreign investment can provide significant economic return and improved employment and infrastructure for emerging nations. Incentives such as tax and import duty exemptions have allowed nations such as Thailand to actively spread its industrial base and attract investment in key manufacturing sectors.
Thai law consulting firms such as BSA Law advise foreign firms to carefully investigate lucrative incentives offered by the Board of Investment - they can give a distinct advantage when making a business investment in Thailand.
Gregory Smyth
BSA Law has focused on providing reliable thai Law consulting and services to the business community in Thailand for nearly 30 years.Click to find out more about Law firm in Thailand.
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