Registering a company under the Thailand Board of Investment offers many benefits to foreign investors. These include tax and non-tax incentives, such as corporate income tax exemption and duty exemption on machinery and equipment. These companies are also protected against nationalization and have the ability to remit overseas funds and own land.
Application process
Foreign entrepreneurs seeking to register their companies with the Thailand Board of Investment should seek professional legal and business consultants to help ensure that they meet BOI requirements. The process of obtaining a BOI certificate can take up to six months and involves submitting a large number of business documents.
To start the application process, a foreign company should conduct a feasibility study and submit forms relating to its specific business category to the Department of Business Development, Ministry of Commerce. It should also register for value-added tax and corporate income tax with the Revenue Department. It should also open a bank account to handle its financial transactions.
Once the application has been submitted, a meeting with a BOI officer will be scheduled. Typically, the BOI officer will ask for complementary information and will make sure that the numbers input in the business plan are realistic and make economic sense. This back and forth can be lengthy.
Requirements
Those who wish to register their company under the BOI must meet certain requirements, including a minimum investment and compliance with Thai laws. The BOI also evaluates the company’s impact on the economy and industry. Companies that prioritize innovation, research and development, and exports are given preference.
The BOI offers both tax and non-tax incentives for foreign investors. These include tax exemptions and reductions on machinery imports, deductions for transportation costs, a faster procedure for work permits, and the ability to hire foreign experts.
BOI-certified companies are not subject to the restrictions of the Foreign Business Act and can be 100% foreign-owned. However, they must adhere to Thai regulations in regards to Social Security Fund contributions, withholding taxes, and yearly audits. They must also comply with environmental and labour laws. Additionally, they must maintain a minimum level of investment to remain eligible for the incentive program. If not, they may be withdrawn from the scheme.
Documents required
The BOI has a wide range of investment incentives, but it gives preference to high-tech and innovative industries. These include digital technology, “smart agriculture” and biotechnology, aviation and logistics, automation and robotics, and medical and wellness tourism. These sectors are expected to upgrade Thailand’s technological capacity.
Once you have received official approval from the BOI, you can proceed to register your company in Thailand. This process should take a week for private companies and 30 days for public companies. You will also need to pay registration fees and deposit the required capital into a bank account.
During the process, you will need to prepare the Memorandum of Association and Articles of Association. You will also need to prepare a company chop (stamp), which is used to certify all documents. You will also need to register your business for tax purposes and obtain a VAT number if applicable. In addition, you will need to register your employees with the Social Security Office and obtain any necessary licenses or permits.
Taxes
A company registered under BOI is taxed at a lower rate than a normal Thai company. Its corporate tax liability is 20%, and its profits are taxed at 10%. Moreover, companies that engage in promoted activities or establish regional operating headquarters enjoy additional tax benefits.
The BOI also offers a wide range of incentives and non-tax benefits for foreign investors. High technology investments, for example, may receive a five-year tax holiday, while low-technology investments that add value to local resources and strengthen the supply chain are eligible for three-year tax holidays.
Besides the registration fee and memorandum of association, the company must register for value-added tax and corporate income tax (CIT). It must also open a bank account and pay a deposit of 25,000 baht to its treasury department. In addition, the company must submit a memorandum of association and statutory meeting minutes to the BOI. Its shareholders have limited liability and may hold either common or preferred shares.
