BOI promotion lets a company running a targeted activity in Thailand receive incentives such as corporate income tax exemption for a set period, import duty relief on machinery and the right to hold foreign majority shares. In return the company must follow the conditions in its promotion certificate and report to the Board of Investment regularly.
The Board of Investment, usually called the BOI, is the Thai agency that implements the Investment Promotion Act. Its role is to attract investment in activities the government wants to develop, such as advanced manufacturing, digital services, research and development, and some agricultural and logistics activities. A promotion is granted to a specific project, not to the whole company.
That project focus has practical consequences. The promotion certificate lists the activity, the location, the investment amount and the conditions, so a company with one promoted line and one ordinary line must treat them as two separate businesses for tax purposes. Activities outside the certificate receive no benefit.
The BOI publishes a list of eligible activities and the incentive package that each attracts, and it revises the policy from time to time. Always read the current BOI announcement rather than relying on an old brochure, because the categories and the length of tax holidays have changed more than once.
The best-known incentive is exemption from corporate income tax on profit from the promoted activity for a number of years. How long depends on the activity category and on conditions such as where the project is located. The exemption is limited to income from the promoted project, and dividends paid out of exempt profit enjoy a related treatment during the exemption period.
Other tax incentives include reduction or exemption of import duty on machinery and, in some cases, on raw materials used for export production. Exemptions are tied to specific items listed in the approval, so importing equipment that was not named can lose the benefit. Check the item list with your customs broker before the shipment is booked.
Because tax relief is conditional, the company needs clean separation of promoted and non-promoted income and cost. A shared overhead has to be allocated by a documented method, and an auditor will want to see the method applied consistently year after year.
Beyond tax, BOI promotion can permit a foreign investor to hold a majority or all of the shares in an activity that would otherwise be limited by the Foreign Business Act. It can also allow a promoted company to own land needed for the project and to bring in foreign technicians and executives, with the BOI helping with visas and work permits.
These permissions are tied to the project, and they come with obligations. Land owned under the promotion generally has to be used for the approved activity, and visas for foreign staff are issued for roles the promotion recognises. A change of activity or site needs the BOI’s approval before you proceed.
If you plan to rely on foreign ownership, raise it with your adviser early. The ownership structure should be settled before the application, because it appears in the approval and is awkward to alter later.
An application is filed with the BOI with the project description, the investment plan, the financial projections and the company details. The BOI evaluates the project and, if it approves, issues a promotion certificate that states the conditions. The company then has deadlines, for example to begin operations and to claim the incentives.
After approval the company reports to the BOI periodically, covering progress, investment made, employment and production. It also files its own tax returns showing the promoted income separately. Missing a report, exceeding the permitted scope or failing to meet a condition can lead to the benefits being suspended or withdrawn.
Treat the certificate as a contract with obligations: keep a copy of the conditions, a calendar of reporting dates and a named person who owns each of them.
A financial ERP such as 4softerp can hold the company’s books, and your accountant can split promoted from non-promoted activities in the chart of accounts. 4notify can send an SMS or e-mail that you write to remind a colleague of a BOI deadline. 4invoices keeps PDF invoices in an archive, which supports the sales evidence behind exempt income.
None of the products applies to the BOI, files BOI reports, computes the tax exemption or connects to the Revenue Department. Those tasks are done with the BOI, your accountant and the tax authorities directly.
BOI promotion is not for every small business. The application, the conditions and the reporting are heavy, and the benefits are strongest for capital-intensive or export-oriented projects, or for those that need majority foreign ownership. A trading business with few assets rarely gains enough to justify the work.
A useful test is to estimate three numbers: the tax you would pay on the project profit without promotion, the duty you would pay on the machinery, and the annual cost of compliance. If the first two do not clearly exceed the third, ordinary company registration is simpler.
Also ask whether you could achieve the same ownership goal by another route, such as a Foreign Business Licence. That route has its own conditions, and a lawyer experienced with both can compare them for your case.
Ask which activity category your project falls under and what incentive package attaches to it today, not what the package was when a competitor applied. Ask whether the location of the project changes the length of the tax holiday, and whether the machinery you plan to buy is eligible for duty relief if bought locally rather than imported.
Ask about the timetable too: how long the review normally takes, what deadlines run from the approval date, and what happens if construction or hiring is delayed by circumstances outside your control. A realistic schedule agreed at the start avoids arguments about conditions later.
Promoted and non-promoted activities are mixed in the books, making the tax exemption hard to compute.
Keep income and costs of promoted activities apart from other activities in your books, using the method your accountant sets. Tax-exemption reports and reports to the BOI are prepared outside the system.
BOI condition documents are scattered across email and folders.
Keep BOI conditions and reporting deadlines in your own calendar or files, and send your own SMS or e-mail reminders through 4notify. There are no automatic reminders for reporting dates.
The finance team does not know which machines were approved for duty relief, so a wrong item is imported.
Keep a copy of the approved machinery list beside each purchase order and check each import against it before the shipment is booked. The system holds no BOI lists and does not validate imports.
No. A promotion certificate is granted for a specific project, listing the activity, the location, the investment and the conditions. Income from other activities is taxed normally, so a company with promoted and non-promoted lines must keep their income and costs apart and allocate shared overhead by a documented method that an auditor can follow.
In many cases yes. Promotion can allow majority or full foreign ownership in activities that the Foreign Business Act would otherwise restrict, subject to the terms in the certificate. Whether your activity qualifies depends on the current BOI policy and the project, so ask the BOI or a lawyer before you structure the shareholding.
The duration depends on the activity category and the conditions attached, and it has changed as BOI policy has been updated. It applies only to profit from the promoted project and only while the conditions are respected. Read the exemption period in your own certificate and the current BOI announcement rather than a general figure.
The BOI can issue a warning and, if the failure continues or serious conditions are broken, can suspend or revoke incentives. Late reports are therefore an operational risk, not just a formality. Give one person ownership of the reporting calendar and keep proof of each submission together with the certificate.
A financial ERP for your books. Reporting is done with the BOI.
