This information is for reference only and is not legal advice. Consult a licensed lawyer before any transaction.
Investment Promotion Act (BOI)
Investment Promotion Act B.E. 2520 (1977)
The information is reviewed and updated monthly against official sources.
In short
The Investment Promotion Act B.E. 2520 lets the Board of Investment grant qualifying companies a package of privileges including the right to own land for the promoted project, corporate tax holidays, import-duty relief, foreign currency remittance, and visa and work permits for foreign experts.
Section 16: Activities eligible for promotion
Only activities the Board considers important for the country's economic, social, or security development qualify, especially export-oriented, capital-, labour-, or service-intensive ventures and those using local agricultural or natural-resource inputs. The Board publishes the eligible categories and may set, change, or cancel conditions at any time.
Section 17: Who may apply (eligible legal forms)
An applicant seeking promoted-person status files with the Office under the prescribed rules and forms, describing the planned investment project. To receive promotion the applicant must operate as a company, a foundation, or a cooperative duly formed under the relevant law; applications may also be filed before such an entity is incorporated.
Section 18: Project assessment criteria
A project must be economically and technologically sound. The Board weighs existing producers and capacity against demand, market and production growth prospects, the share of local capital, materials and labour used, foreign currency earned or saved, the suitability of the processes, and any other factors it deems relevant.
Section 25: Entry of foreign experts, staff and families
Notwithstanding ordinary immigration quotas, a promoted person may bring in foreign skilled workers and experts, together with their spouses and dependents, in the numbers and for the periods the Board approves, even beyond the limits or stay durations normally allowed under immigration law.
Section 26: Work permits for approved foreign personnel
Foreign experts and skilled workers admitted under the promotion (Sections 24 and 25) receive a work permit for the specific position approved by the Board, valid for their authorised period of stay, despite the usual constraints of the law governing the employment of foreigners.
Section 27: Land ownership by the promoted company
A promoted person may own land needed to run the promoted activity to the extent the Board approves, even above the limits other laws impose. If a foreign-controlled promoted person ends or transfers the activity, it must sell the land within one year, failing which the Director-General of the Land Department may dispose of it under the Land Code.
Section 28: Import duty exemption on machinery
A promoted person is exempt from import duties on machinery approved by the Board, provided machinery of comparable quality is not produced or assembled within Thailand in quantities sufficient to supply the promoted activity. The Board may instead grant a partial reduction where full exemption is unsuitable.
Section 30: Duty reduction on raw materials
Where justified, the Board may cut import duties by up to ninety percent on raw or essential materials brought in for production, mixing, or assembly in the promoted activity, granted for periods of up to one year at a time, provided comparable materials are not available locally in sufficient quantity.
Section 31: Corporate income tax holiday
A promoted person may be exempt from corporate income tax on net profit from the promoted activity for up to eight years from the date income is first earned, the term reflecting the ratio of investment to capital (excluding land and working capital). Losses incurred during the holiday may be carried forward up to five years afterward.
Section 34: Tax exemption on dividends
Dividends paid out of a promoted activity that enjoys the corporate income tax holiday are themselves excluded from the recipient's taxable income for the whole period during which the promoted person benefits from that tax exemption.
Section 35: Extra incentives in promotion zones
For investment in designated zones the Board may add benefits beyond the standard ones: a fifty percent cut in corporate income tax for up to five years after the holiday ends, a double deduction for transport, electricity and water costs, and a deduction of up to twenty-five percent of facility installation or construction costs.
Section 36: Export-oriented incentives
To encourage exports the Board may grant exemption from import duties on raw materials used to make goods for export, exemption on items imported for re-export, exemption from export duties on the company's products, and a deduction equal to five percent of the year-on-year increase in export earnings.
Section 37: Remittance of foreign currency abroad
A promoted person or a foreign-domiciled investor may remit abroad in foreign currency their imported investment capital and its dividends or returns, approved foreign loans plus interest, and approved payments for foreign rights and services. The Bank of Thailand may temporarily restrict this only during a serious balance-of-payments shortage, within set floors.
Section 43: State guarantee against nationalization
The State undertakes not to nationalize the business of a promoted person. Related guarantees bar the State from launching a competing activity, from monopolizing the sale of similar goods, and from imposing price controls except where genuinely required for development or national security.
Section 47: Guaranteed right to export
A promoted person is allowed to export the products of the promoted activity at all times, the only exception being where a restriction is genuinely necessary for the country's economic and social development or for national security.
Section 54: Withdrawal of rights and benefits
If a promoted person breaches or fails to meet the Board's conditions, the Board may withdraw the granted rights and benefits wholly or partly and set the duration. For unintentional breaches the Board first issues a written warning with a cure period before withdrawing privileges.