As discussed in an earlier blog, foreigners may be able to put in their investment into the Thai economy. However, it comes with restrictions. Thailand’s Board of Investment, the authority governing investments and businesses in the Kingdom, lays out rules in terms of the markets that a foreign business can put their money into in Thailand.
Moreover, the BOI promotes several markets as opportunities for foreigners to invest in. With this investment comes a few benefits, but this will be discussed later on in this article.
The Markets
In May 2013, the BOI published its intentions to change its policy regarding foreign investments. The purpose of this is to shift attention to different markets. Before the policy change, Thailand’s BOI had promoted foreign investment in the following areas:
* Agriculture, and the production of all products related to the field.
* Human resource development
* Technology R&D
* Metallurgic companies, including mining
* Light industrial markets
* Metal products
* Transport equipment
* Manufacture and development of electronics and electrical appliances.
* Chemical engineering
* Paper and plastic processing
* Software development
Under its new policy, the BOI sought to shift its promotion to new markets. These markets are:
* The hospitality industry
* R&D for advanced technologies
* Automotive industry
* Food production
* Medical and scientific equipment manufacturing
* Logistics
* Infrastructure development
* Electronics equipment manufacturing
* Industries that provide support to businesses, i.e. BPO companies
* Primary industries
What happens when a foreign investor starts a business in these markets?
Because these are special markets highlighted by the BOI for foreign investment, investors get to enjoy several benefits from their decision to establish a company operating in these markets.
These benefits include:
* Exemption from paying corporate tax for 8 years after incorporation
* No limits in the number of foreign employees that they can hire and bring into the Kingdom.
* 100% of the Board can be made up exclusively of foreign nationals.
* Exemption from paying duties in bringing in machinery for the business.
* Exemption from tax duties normally imposed in imported raw materials for use in manufacturing products intended for exporting out of Thailand.
* Costs incurred in utilities can be deducted from tax duties.
* Companies can send funds in foreign currency back to their home country.
These benefits are not available to investors who decide to put in their money in markets that are not being promoted by the Board of Investments. In addition, there are also other benefits accorded to certain foreign nationals because of the trade treaties their home countries may have with the Kingdom.
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