When establishing a manufacturing base or launching a new business in Thailand, one key system to pay attention to is the BOI (Thailand Board of Investment) scheme.
The BOI is Thailand’s governmental investment promotion agency, offering a wide range of support for foreign companies in terms of tax, finance, and procedures. Companies may be eligible for corporate tax exemptions, customs‐duty privileges, permission for 100% foreign ownership, land acquisition, support for obtaining foreigner visas, and many other benefits.
Furthermore, the industries eligible extend beyond manufacturing to include medical, digital, and circular economy sectors, among others, helping to promote sustainable growth.
In this article, we carefully explain—from how the BOI system works, the application process, the eligible industries, to the cautions and risks involved—what companies considering expansion into Thailand should know.
What is the Thailand BOI System?
The Thailand BOI (Board of Investment) is a government agency under the Office of the Prime Minister. It plays a central role in promoting and facilitating private investment, including from foreign companies. The BOI’s roles can be broadly divided into four:
- Promoter: Actively attracting investment that aligns with national development strategies in light of global economic changes; supporting entry of new business into Thailand.
- Integrator: Offering support tools such as corporate tax exemptions and import duty preferences as a unified “package.” Companies can consolidate procedures and simplify formalities by using one application point.
- Facilitator: Acting as a bridge to coordinate with various ministries and related agencies to smoothen complex procedures like visa issuance, work permits, and land acquisition.
- Connector: Introducing potential partners both inside and outside Thailand, for corporations big and small. By linking different industries or regions, new business opportunities are created.
Thus, the BOI system in Thailand is not simply a “window for incentives,” but a comprehensive investment‐promotion service organization that supports everything from policy design to introducing local partners and handling procedures. For Japanese firms and others establishing operations in Thailand—particularly in manufacturing—correct understanding of BOI features and utilization is key to cost optimization and rapid market entry.
What Incentives Can You Get Under BOI?
Below we explain the preferential measures available under BOI.
Tax Incentives
Projects certified by the BOI are eligible for tax incentives such as:
- Corporate income tax exemption / reduction: Depending on the category (A1 to A4), exemptions or reductions can be granted for up to 50–100% of invested capital, for a period of up to 8–13 years.
- Import duty exemption on machinery & raw materials: Duties on production equipment or research & development raw materials can be fully exempted.
- Exemption of import duties on raw materials for export products: Raw materials used for finished goods intended for export may also be exempt from import duties, strengthening global competitiveness.
With these incentives, costs associated with modernizing production lines or establishing mass production systems can be significantly reduced.
Non‐Tax Incentives
Outside of tax incentives, there is abundant support to facilitate smooth business operations:
- 100% foreign ownership and land ownership rights: Japanese companies (or other foreign companies) can establish Thai entities with 100% foreign ownership, and acquire land appropriate to the intended use.
- Support for obtaining foreigner visas and work permits: Relaxed requirements for issuing work permits and one‐stop support for visa procedures make staffing much easier.
- No restrictions on foreign currency remittance: There are no regulations restricting the remittance of profits or dividends to the home country, improving flexibility in raising capital or returning dividends.
- Relaxation of local content / export conditions: In principle, there are no strict requirements for percentage of local procurement or export obligations, allowing flexibility in business planning.
By combining these non‐tax incentives, the entire process from establishing a manufacturing base, operations start‐up to staffing can proceed smoothly.
Industries Targeted by BOI and the Noteworthy IBC System
The BOI system encourages investment in “target industries” that the Thai government considers growth drivers. Since 2023, ten additional industries have been added, covering fields centered on manufacturing as well as medical, digital, and circular economy sectors.
Which Industries Are Eligible?
The main target industries defined by the BOI are:
- Agriculture, Food, Biotechnology
- Medical Industry
- Machinery & Automotive Industries (including automobiles)
- Electrical & Electronics
- Metals & Materials Industry
- Chemical & Petrochemical
- Public Utilities & Service Industries
- Digital & Creative Industries
- High‐Value Services
- Industries that support the Circular Economy (e.g. waste‐derived fuels)
Even outside these “target industries,” research & development by “specialists with advanced skills,” or applications in AI & robotics may also be eligible.
If your business falls into one of these categories, depending on its classification (A1 through B), you can receive benefits such as corporate tax exemptions and import duty exemptions.
Relationship with the IBC (International Business Center) System
The IBC system is a mechanism allowing businesses to utilize BOI incentives while receiving “one-stop” support across various services. Specific features include:
- Requirements: Minimum investment of THB 1 million, paid‐in capital of at least THB 10 million, and employment of at least 10 employees with specialized skills.
- Tax incentives: Possible to apply jointly for import duty exemptions on machinery used for research & training, and corporate income tax exemptions.
- Non-tax support: Fast issuance of foreigner visas, work permits; permission to own land; relaxation of foreign exchange remittance rules, etc.
In practice, many multinational companies—including Japanese firms—are increasingly using IBCs, contributing to smooth operations after establishment and cost optimization.
BOI Utilization in Collaboration with Local Society & Environmental Support in Thailand
The Thai government places emphasis on social and environmental considerations along with manufacturing investment, and has built systems for BOI to be linked with local development and environmental conservation measures. Particularly in the following three areas, structures are in place to allow both investment incentives and sustainability to coexist:
1. Coexistence of Support for Agriculture & Water Resources with Industrial Investment
Manufacturing businesses certified by BOI that invest in water resource management or in adopting smart agriculture technologies may receive additional tax incentives. For example, when expanding a factory while installing irrigation systems or soil sensors, the corporate tax exemption period may be extended in proportion to investment in agricultural‐related facilities.
2. Linkage with PM2.5 Reduction Projects
To address PM2.5 air pollution, investments in factory exhaust gas treatment equipment or afforestation projects are included among BOI incentive‐eligible measures. For example, installing high‐efficiency filter devices on production lines or expanding green space around the premises may help meet “environmental conservation requirements,” enabling receipt of additional incentives.
3. Strengthening Local Education Support & Human Resource Development
By collaborating with local public educational institutions or vocational schools to establish training facilities for manufacturing, BOI’s non‐tax incentives can be expanded. For instance, costs for repairing school buildings or introducing equipment may partially qualify for tax exemption, thus achieving both contribution to local communities and securing human resources.
Flow of Utilizing BOI in Thailand
To make use of the BOI system, one must follow several stages from pre‐application preparation to post‐approval operation. Below is the basic process.
STEP 1: Preliminary consultation & confirmation of the business scheme
First, apply for a preliminary consultation with a BOI regional office (Japanese windows in Tokyo or Osaka can also be used).
- Check whether your business plan fits BOI’s target industries (categories A1 to B).
- Refine the scale of investment, facility investment, employment plan, and ensure alignment with BOI incentive requirements.
In preliminary consultation you can get detailed advice from examiners—such as how to build a “requirement matrix” and what documents are needed.
STEP 2: Application for investment incentives & review
Submit the BOI application documents to the BOI headquarters based on the preliminary consultation.
- Complete set of application documents: business plan, equipment specifications, employment plan, proof of capital paid in, etc.
- Hearing: A meeting will be set 1–2 weeks after submission, to coordinate details with the examiners.
- Review period: Usually 2–3 months before approval or rejection is decided.
The accuracy of the documents in this phase is directly linked to smooth application of the incentives thereafter.
STEP 3: Obtaining the Incentive Certificate (BOI Certificate)
Once you pass the review, the Promotional Certificate is issued.
- Role of the certificate: Without this, you cannot receive corporate tax, import duty exemptions, etc.
- Start of incentives after certificate issued: From the date the certificate is obtained, tax exemption periods and import duty exemptions become valid.
After issuance, be sure to promptly receive the original certificate and submit it to the relevant authorities.
STEP 4: Business commencement & reporting obligation
After equipment installation and startup of operations, regular reporting is mandatory.
- Annual report: Submit investment outcomes, number of personnel, sales, etc. to the BOI.
- Revenue report: Include the status of application of corporate tax exemptions.
- Monitoring compliance: Keep supporting documents (operation logs, photos, quotes) in order to respond to on-site inspections or additional hearings.
If reporting and operations proceed as planned, incentive benefits can continue. Having a good operational management system is a key to success in using BOI in Thailand.
Points to Be Careful about and Risks When Using the BOI System
The BOI scheme is extremely attractive, but misunderstandings or mismanagement can lead to trouble. Below are some representative cautions.
Complexity of the system and misunderstandings
BOI incentives differ in detail depending on “industry,” “region,” “investment category,” and are revised frequently. For example, with the same manufacturing business, the exemption period or requirements differ between A1 and A2 categories. Therefore, always verify accurate information via official documents or the latest seminar materials, and reflect those in your application documents.
“BOI Certification = All Exemptions” is not always true
A common misunderstanding is believing that once BOI certification is obtained, all taxes and fees are exempted. However, value‐added tax (VAT) or some specific import duties may not be covered. Conditions regarding land acquisition or relaxation of foreign-ownership restrictions also depend on use and region. Be careful to fully understand the detailed requirements after certification.
Revocation of incentives due to failure to meet reporting obligations
After receiving BOI incentives, annual reports, personnel numbers, investment outcomes must be submitted. Failure to report these may lead to cancellation of incentives, and taxes may be retroactively assessed for past periods. Especially, properly maintain and store supporting documents like operation logs or spending proofs, and be ready for audits.
Japanese‐language understanding & application support are indispensable
Many BOI related official documents and guidelines are primarily in English or Thai, and Japanese translations are often insufficient. To prevent application errors or misinterpretation of requirements, precise explanation in Japanese and support in application is essential. TOMASTECH offers full support in Japanese through the BOI application process, minimizing misunderstandings or rework.
Frequently Asked Questions About BOI in Thailand
How much are the initial costs or fees needed for BOI application?
There are no official governmental fees for the BOI application itself, but if you engage a specialized consultant for document preparation or for preliminary consultation, consultant fees are typically in the range of 107,606 THB to 215,213 THB. If handled in‐house, expect costs around 43,042 THB to 64,564 THB for translation, company registration documents (articles of incorporation, certification fees), etc. Also account for actual expenses associated with setting up a local company and paid‐in capital.
What is the timeline from pre‐application to when incentives actually begin?
From submitting the preliminary consultation request to receiving reply: about 2 weeks. After formal application, document review and hearing typically takes 8–10 weeks. The date you receive the “Promotional Certificate” is when the incentives begin; from that point, corporate tax and import duty incentives take effect. Generally, total preparation including all steps is about 3–4 months.
How strict are the annual reports and audits after BOI certification? What should you prepare?
After certification, there is an obligation each year to submit an annual report to BOI summarizing investment outcomes, number of employees, output, etc. The report should include supporting evidence such as operation logs, photos, copies of accounting books. Be able to handle on-site inspection by BOI auditors. If reports are missing or contain false information, incentives may be revoked or penalized. It’s prudent to appoint a dedicated internal person to manage compliance.
Conclusion: BOI is Essential for Entering Thailand—Use It Properly
By using Thailand’s BOI system, you can significantly reduce upfront investment costs for manufacturing bases, gain wide‐ranging support from workforce acquisition to export promotion. However, to receive its benefits, the following points are essential:
- Accurately understand the system requirements
- Strictly follow the procedures from application through operation
- Thoroughly manage risks
- Cooperate with experts and execution partners
With these in mind, you can incorporate Thailand BOI not merely as an “incentive program,” but as part of your growth strategy in manufacturing—achieving competitiveness enhancement and sustainable entry.
