What Are the Requirements for BOI Promotion?
Whether your business is eligible for BOI promotion depends on two key requirements:
- Your business activity must be included in the list of BOI-promoted activities, and the project must comply with the specific conditions of that activity.
- The project must involve a new investment of at least THB 1 million, excluding land costs and working capital.
Let’s take a closer look at each requirement.
What Types of Businesses Can Apply for BOI Promotion?
BOI promotes approximately 400 business activities across more than 20 industries, including:
- Agriculture and Food
- Biotechnology
- Medical and Healthcare
- Machinery and Automation
- Automotive
- Aerospace
- Electrical and Electronics
- Minerals and Materials
- Steel and Metal Products
- Chemicals, Petrochemicals, Plastics, and Paper
- Light Industry (Textiles, Garments, Leather Products, Furniture)
- Other Manufacturing Industries
- Utilities
- Industrial Estate and Infrastructure Development
- Digital Businesses
- Specialized Services
- Trade and Investment Support Services
- Tourism
- Logistics
- Other Services such as Recycling, Waste Management, Battery Management, Film Production, and Smart Cities
However, not every business within these industries is eligible. Investors must verify that their products or services fall within a specific BOI-promoted activity and comply with all applicable conditions. In addition to qualifying products or services, each promoted activity may impose specific requirements relating to production processes, service scope, technologies used, or other operational criteria.
For more information, please refer to BOI Investment Promotion Guide or contact us today by phone/whatsapp or LINE for a free consultation.
BOI promotion is granted on a project basis. A company may receive BOI promotion for multiple projects, provided that each project represents a new investment.
What Are the BOI Promotion Criteria?
BOI projects must generally satisfy the following criteria:
- Minimum Investment
The minimum investment (excluding the cost of land and working capital) must be at least THB 1 million, unless otherwise specified for certain business activities or BOI promotion measures.
The BOI promotes new investment projects only. The investment must be directly related to the manufacturing or service activities covered by the promoted business activity or promotion measure. - Debt-to-Equity Ratio
For new projects, the debt-to-equity (D/E) ratio must not exceed 3:1, based on either the registered capital or shareholders’ equity, unless otherwise specified under certain BOI measures.
For expansion projects, the BOI regulations state that the D/E ratio will be considered on a case-by-case basis. However, in practice, the BOI often applies the same benchmark used for new projects, with a D/E ratio of no more than 3:1 in many cases. - Value Added Requirement
Projects must generate value added of at least:- 20% of revenue for most activities; or
- 10% of revenue for agriculture, food, electronics, and electronic components activities.
- Machinery Requirements
As a general rule, used machinery located in Thailand is not permitted. Used machinery imported from overseas may be allowed if it is no more than 10 years old, subject to BOI approval.
The treatment of used machinery differs from new machinery:- No import duty exemption is granted for used machinery.
- Imported machinery up to 5 years old may be included in the investment amount used to calculate the corporate income tax exemption ceiling.
- Imported machinery between 5 and 10 years old may be used in the project but is not counted toward the tax exemption ceiling.
- Machinery older than 10 years is generally not permitted.
- Modern Manufacturing Processes or Service Operations
Project must employ modern manufacturing processes or service operations with sufficient substance, such as transforming raw materials into significantly different products or utilizing modern machinery and equipment in its manufacturing or service activities. - Environmental Protection Measures
Project must also implement adequate and effective environmental protection measures to prevent and mitigate environmental impacts.
For business activities with potential environmental impacts, such as chemical manufacturing or metal smelting and casting, an Environmental Management Report must be submitted as part of the BOI application.
BOI applications should be submitted before purchasing or importing machinery and equipment, or hiring employees for positions related to the promoted project.
Learn More on BOI Website
Additional Considerations
Beyond the published requirements, there are many practical factors that can affect project approval and the incentives ultimately granted. These considerations are often based on BOI practices and experience gained from handling promotion applications. For example, machinery purchases, equipment imports, or employment related to the promoted project made before the BOI application is submitted may not be eligible for BOI incentives. Because these issues can significantly impact both project approval and available benefits, careful planning before submitting an application is highly recommended.
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