BOI INCENTIVES ACCORDING TO BUSINESS ACTIVITIES AND OTHER CRITERIA
The BOI classifies 2 main categories of incentive for business wishing to invest in Thailand:
- Activity based incentives
- Merit based incentives.
ACTIVITY BASED INCENTIVES FALL INTO TWO (2) GROUP TYPES
GROUP A
A1 – Knowledge-based activities focusing on R&D and design such as manufacture of unmanned military systems or drone aircraft for national defence.
A2 – High tech manufacturing such as vehicle parts including electronic fuel injection system, automotive transmission, or EV technology.
A3 – Highly automated manufacturing or production processes that range from motorcycle engines and components tour biological fertilizer.
A4 – Activities with lower degrees of automation or technology than A1-A3 but which add demonstrable value to domestic deployment of resources, or which strengthen the supply chain.
GROUP B
B1 – Supporting Industry which makes no use of high technology but is nonetheless important to value chain.
B2 – Supporting Industry which makes no use of high technology but is nonetheless important to value chain.
The focus on Technology and Innovation Development, which is listed as one of the eight eligible business categories is further sub-divided into targeted core technology (including Biotechnology, Nanotechnology and advanced material technologies), and digital technology.
Note that while these incentives are generally available to the respective businesses that achieve BOI promotion within the given criteria, these can be amended on a case-by-case basis, in line with the specific approval given to any business by the BOI.
Moreover, BOI also offers further incentives (known as ‘Merit-Based Incentives’) for business activities that enhance competitiveness.
MERIT BASED INCENTIVES
‘Merit’ based incentives are additional incentives granted to stimulate foreign investment and spending on activities that are intended to benefit Thailand’s economic, industrial, or technological development. These fall into 3 main sub-categories.
Enhancing Competitiveness
In the case of investing or having expenses as follows:
Incentives are granted in relation to the following areas of expenditure:
- Research, technology Development and Innovation
- Donations to technology and human resource development funds, education institutes, specialize training centers, R&D institutes, or governmental agencies in the S&T field in Thailand as approved by the BOI. IP acquisition/licensing fees commercializing technology developed in Thailand.
- Advanced technology training.
- Development of local suppliers with at least 51% Thai shareholding in advanced technology training and technical assistance.
- Product and packing design: In-house or outsourced in Thailand, as approved by the BOI.
Promoted Regions
Incentives are granted for businesses setting up in the following locations:
- The Eastern Economic Corridor Office of Thailand (EEC)
- Special Economic Zones (SEZ)
- Border provinces in Southern Thailand and City Models
- Industrial Estate Parks
- 20 provinces with lowest per capita income
- Science and Technology zones e.g., Science Park, Food Innovation City Etc.
Specific Factors
Incentives are granted to businesses that would satisfy certain specific aims, such as Small and Medium-sized Enterprises (SMEs) seeking to undergo a public listing on either the main board of the Stock Exchange of Thailand (SET) or the SET’s market for Alternative Investments (MAI). They can also apply to projects that are designed to enhance industrial processes such as heightened production efficiency.
Although MBMG Group has undertaken BOI consulting on behalf of Multi-National Corporations (MNCs), most of our work with the BOI has focused on incentives for SMEs, intended to develop their capabilities, achieve sustainable growth, and gain access to funding in order to compete in international markets.