BOI Company Set-up in Thailand under Auto Sector: A Synopsis

Thailand had a well-established presence of almost all the leading automakers, component manufacturers, and assemblers, it offers a great investment potential. With shipments for 100 countries, this country is the 13th biggest automotive parts exporter and 6th largest commercial vehicle manufacturer across the world. Further to become one of the top performers globally, Thailand is focusing to manufacture over 3500000 units of vehicles.

Besides, investing in their auto sector will earn the investors some brownie points, including more incentives and tax deductions. Wondering how? Simply by getting your business registered under the Board of Investment. On doing that, you can expect below-mentioned incentives;

Tax Incentives

• ‘Corporate income tax exception’
• Reduction of import duties on machinery and raw material
• Tariff exemption
• Double exemptions on the costs of water supply, electricity and transportation
• 25% exemption on the cost of construction of facilities

Non-tax Incentives

• Exemption on ownership of companies by foreigners
• Exempted from Visa rules
• Permission to bring an expert from foreign to work
• Permit to own a land
• Permit to remit foreign currency abroad’’

For BOI business approval, you will need to meet certain criteria, including;

· Value added of the project should not be lesser than twenty percent of revenues, other than the projects related to agriculture, electronic products, and parts plus coil centers

· Production process must be modern

· New machinery must be put in use

· Projects with a minimum investment capital of 10 million baht must get ISO 9000 or ISO 14000 certification

· The Board is willing to grant special consideration to pollution treatment of a project, having a potential environmental impact.

· Projects that are required to submit an environmental impact assessment report must comply with related Cabinet resolutions and environmental laws.

· Projects that are situated in Rayong must abide by the Office of the BOI Announcement No. Por 1/2554 dated May 2, 2011

· The minimum capital investment requirement for every project is 1 million baht. This excludes land and working capital costs.

· The debt-to-equity ratio for new projects must not be more than 3:1.

· Project feasibility study must be submitted by the projects, having an investment value of more than 750 million baht.’’