Thailand created the Board of Investment (“BOI”) to support foreign investment into the country. The Investment Promotion Act (“IPA”) regulates the promotions provided for certain businesses in Thailand, which consist of tax and non-tax incentives depending on the category of investment.
Non-tax incentives include:
- Permission for foreign nationals to enter Thailand for the purpose of studying investment opportunities;
- Permission to bring skilled workers and experts into Thailand to work in investment-promoted activities;
- Permission to own land; and
- Permission to send money out of Thailand in foreign currency.
Tax incentives include:
- Exemptions from, or reductions of, import duties on machinery;
- Reduction of import duties for raw or essential materials;
- Exemptions from corporate income tax and dividends;
- A fifty percent reduction of corporate income tax;
- Double deductions for transportation, electricity, and water supply expenses;
- An additional twenty-five percent deduction for installation or construction of facilities; and
- Exemptions from import duties on raw or essential materials used in the production of exports.
These incentives are also generally subject to certain conditions, such as minimum capitalization of the investor company, maintaining a 3:1 debt-to-equity ratio, and the investment activity providing meaningful training and knowledge transfer to Thai nationals.