Setting Up a Company under the Thailand Board of Investment can provide many benefits for foreign and local entrepreneurs. However, it is important to understand the requirements and procedures before applying for BOI privilege.
Companies promoted by the BOI are eligible for tax incentives such as exemption or reduction of corporate income tax for a certain period, import duty reduction on machinery and raw materials, and lower costs of electricity, transportation, water, and project infrastructure installation.
Requirements for BOI Promotion
In order to become a BOI-promoted company, your business must meet certain requirements. The first requirement is that your business must have at least one million baht in capital investment. This can be in cash or in physical assets like land, machinery, and equipment. The company must also be involved in activities that benefit Thailand. These activities can include developing software that helps the country and transferring knowledge to Thai employees.
Once your company is BOI-promoted, it will enjoy a variety of tax benefits. These benefits include tax exemptions and reduced corporate taxes. It will also be able to import raw materials and machinery for less money. Additionally, it will be able to negotiate lower costs for electricity, transportation, and water supply. BOI-promoted companies are also exempt from paying taxes on dividends. This will save you a lot of money in the long run. This will make your company more competitive in the market.
Tax Incentives
If you register your company with the Thailand Board of Investment, there are a number of tax and non-tax incentives that you can benefit from. For example, BOI-certified companies are exempt from corporate income taxes for up to eight years and can be eligible for a reduction in import duties for raw materials. In addition, a BOI-certified company may also be eligible for deductions on transportation, electricity, and water costs.
The BOI has several offices around the world, and you can contact a specialist online to find out more about the benefits you are entitled to. They can also help you with the registration process. However, registering with the BOI is not without its disadvantages. The application process can be complicated, and you will have to submit multiple documents. Also, the process can take up to six months or more due to bureaucracy and back-and-forth trips to the BOI headquarters. Therefore, it is important to make sure that your documents are complete.
Employment Requirements
If your company gets a BOI promotion you will need to employ at least 3 people (including promoters). You also need to have a ratio of Thai to foreign employees that isn’t less than 4:1. You must also show the BOI how you will transfer technology from your foreign employees to your Thai employees.
If you register your company as a limited partnership the minimum amount of registered capital is 1 million THB. This can be increased to 10 million THB for a private limited company or 20 million THB for a public limited company.
If you register your company as a BOI company, you can hire and employ foreign employees, get tax breaks, and enjoy a host of other benefits. However, you should know that a BOI company is not a good option for every business. It can be difficult to set up and run and requires extensive documentation and regular inspections. It can also be expensive to hire a law firm to apply for BOI promotion and help you meet the requirements.
Legal Requirements for BOI Application
If you want to set up a business in Thailand, a BOI promotion can be an excellent option. These companies are 100% foreign owned and have access to a wide range of benefits including tax exemptions and relaxed rules for work permits and visas.
Before starting the process of applying for a BOI promotion, it is important to determine whether or not your company qualifies for privileges under this scheme. In order to qualify, the company must be incorporated in Thailand and must have a registered office. The company must also have a memorandum of association and statutory meeting minutes.
The company promoters must be the initial shareholders immediately after registration and must hold a minimum of one share. However, the promoters are free to transfer their shares to other shareholders or third parties after registration. The company must also register for value-added tax and corporate income tax. The BOI will then issue the investment promotion certificate to the company.