www.boi.go.th A Guide to the Board of Investment 2016

1 A Guide tothe Board of Investment2016A Guide to the Board of Investment 2016 Thailand Board of Investment555 Vibhavadi-Rangsit Road, Chatuchak, Bangkok 10900, ThailandTel: +66 (0) 2553 8111 Fax: +66 (0) 2553 8315 Website: : Board of PDRViet NamMyanmarMalaysiaCambodiaSeaportDeep SeaportDomesticAirportInternationalAirpo rtIndustrialEstate / ZoneSpecial Economic Development ZonesThe 20 Lowest per Capita Income ProvincesASEAN Economic Community (AEC) Thailand Singapore Myanmar Indonesia Lao PDR Philippines Viet Nam Cambodia Malaysia BruneiSeptember 2016 RevisionA Guide to the Board of Investment 20162 PREFACEThis Guide to the Board of Investment was prepared by the Office of the Board of Investment to provide basic information on BOI Investment promotion for applications submitted from January 1, 2015, onward.

2 This guidebook comprises Investment promotion incentives and privileges, the list of activities eligible for Investment promotion and related announcements including essential rules and criteria for applying Investment the policies and criteria for granting privileges and the list of the eligible activities for Investment promotion are subject to change over time, investors can access updated information from the BOI s website at or send their enquiries to or contact the Investment Services Center Tel:+66(2) 553-8111 and 0-2553-8216 Office of the Board of Investment September 2016 Disclaimer: Contents of this publication are for informational purposes only and should not be seen as complete or legally binding. For clarification and/or confirmation of information, please contact appropriate BOI Guide to the Board of Investment 20163 TABLE OF CONTENTS PageCHAPTER 1 CRITERIA AND POLICIESA bout the Office of the Board of Investment 4 Incentives under the Investment Promotion Act 6 Seven-Year Investment Promotion Strategy (2015 - 2021)

3 7 Criteria for Granting Promotion Incentives 11 General list of activities eligible for Investment promotion 18 Other Policies and Special Measures Measure for Improvement of Production Efficiency 62 Investment Promotion Policy for Industrial Development in Border Provinces in Southern Thailand 68 Investment Promotion Policy for Investment in Special Economic Zones 70 List of Targeted Industries to Promote in the Special Economic Zones 74 CHAPTER 2 PROCEDURES OF APPLYING FOR BOI PROMOTIONP rocedures of utilization of promotional privileges 88 Procedures to apply for BOI Promotion 88 Investment Promotion Procedures and Timeframe 89 CHAPTER 3 FEASIBILITY STUDYF easibility Study for projects applying for Investment promotion 93A Guide to the Board of Investment 20164 CHAPTER 1 CRITERIA AND POLICIESABOUT THE OFFICE OF THE Board OF INVESTMENTThe Office of the Board of Investment is a government agency under the Office of the Prime Minister.

4 Its main roles and responsibilities are to promote Investment . The Board of Investment prescribes the Investment promotion policies under Investment Promotion Act 2520 and Amendment Acts No. 2 2534 and No. 3 2544. Organization Chart of Office of the Board of InvestmentOFFICE OF THE Board OF INVESTMENTBOARD OF INVESTMENTSUB-COMMITTEESUNDER THE Board OFINVESTMENTONE START ONE STOPINVESTMENT CENTER(OSOS)- ONE STOP SERVICE CENTER FOR VISA AND WORK PERMITS UNDER THE Board OF Investment - OFFICE OF THE Board OF Investment - IMMIGRATION BUREAU- DEPARTMENT OF EMPLOYMENTGENERALADMINISTRATION BUREAUINVESTMENT STRATEGY AND POLICYBUREAUINTERNATIONALAFFAIRSBUREAUMA NAGEMENTINFORMATION SYSTEM BUREAUINVESTMENTDEVELOPMENT ASSISTANT BUREAUINVESTMENT MARKETINGBUREAUTHAI OVERSEASINVESTMENTPROMOTIONDIVISIONINVES TMENTSERVICESCENTERINVESTMENT PROMOTION BUREAU 1 Investment PROMOTION BUREAU 2 Investment PROMOTION BUREAU 3 Investment PROMOTION BUREAU 4 THAILAND Board OF Investment , OVERSEAS OFFICES- SHANGHAI OFFICE, CHINA - OSAKA OFFICE, JAPAN - FRANKFURT OFFICE, GERMANY- BEIJING OFFICE, CHINA - SEOUL OFFICE, SOUTH KOREA - PARIS OFFICE, FRANCE- GUANGZHOU OFFICE.

5 CHINA - MUMBAI OFFICE, INDIA - STOCKHOLM OFFICE, SWEDEN- TAIPEI OFFICE, TAIWAN - NEW YORK OFFICE, USA - SYDNEY OFFICE, AUSTRALIA- TOKYO OFFICE, JAPAN - LOS ANGELES OFFICE, USA REGIONAL INVESTMENTAND ECONOMIC CENTER1. CHIANGMAI AND PHITSANULOK 3. KHONKAEN 5. SONGKHLA2. NAKORN RATCHASIMA 4. CHONBURI 6. SURAT THANIA Guide to the Board of Investment 20165 Bureau Supervising and Analyzing Investment Promotion Projects and Bureau/Division Providing Advisory ServicesBUREAU SUPERVISING AND ANALYZING Investment PROMOTION PROJECTSBUREAU/DIVISION PROVIDING ADVISORY SERVICESONE START ONE STOPINVESTMENT CENTER(OSOS)BOI UNIT FOR INDUSTRIALLINKAGE DEVELOPMENTBUILDINVESTMENTSERVICES CENTERINVESTMENT PROMOTIONBUREAU 1 Investment PROMOTIONBUREAU 2 Investment PROMOTIONBUREAU 3 Investment PROMOTIONBUREAU 4 Supervising and analyzing Investment promotion projectsSection 1 Agriculture and Agricultural productsSection 3 Light IndustryProvides advice on applying for Investment promotionProvides advice on business operation and obtaining licensesProvides support on industrial linkage and business missionsSupervising and analyzing Investment promotion projectsSection 2 Mining, Ceramics and Basis MetalsSection4 Metal Products.

6 Machinery and Transport EquipmentSupervising and analyzing Investment promotion 5 Electronic Industry and Electrical ApplianceSupervising and analyzing Investment promotion projectsSection 6 Chemicals, Paper and PlasticsSection 7 Service and Public UtilitiesA Guide to the Board of Investment 20166 INCENTIVES UNDER THE Investment PROMOTION ACTIn order to obtain Investment promotion, the BOI applicant must follow the conditions prescribed by the Board of Investment as specified in the BOI promotion certificate in which the following incentives will be granted:IncentivesTax IncentivesNon-Tax Incentives Exemption/reduction of import duties on machinery (Section28/29) Reduction of import duties for raw or essential materials (Section 30) Exemption of corporate income tax on the net profit and dividends derived from the promoted activity (Section 31 and 34) A 50 percent reduction of the corporate income tax (Section 35(1)) Double deduction from the costs of transportation, electricity and water supply (Section35(2)) Additional 25 percent deduction of the cost of installation or construction of facilities (Section35(3)) Exemption of import duty on raw or essential materials imported for use in production for export (Section 36)

7 Permit for foreign nationals to enter the Kingdom for the purpose of studying Investment opportunities. (Section 24) Permit to bring into the Kingdom skilled workers and experts to work in Investment promoted activities (Section 25 and 26) Permit to own land (Section 27) Permit to take out or remit money abroad in foreign currency (Section 37)A Guide to the Board of Investment 20167 SEVEN-YEAR Investment PROMOTION STRATEGY (2015 2021)According to the Announcement of the Board of Investment Policies and Criteria for Investment Promotion announced on December 3, 2014 which is enforced on BOI applications submitted from January 1, 2015, onward:VisionTo promote valuable Investment , both Investment in Thailand and Thai overseas Investment to enhance Thailand s competitiveness, to overcome the Middle Income Trap and to achieve sustainable growth in accordance with the sufficiency economy Promotion Policies 1.

8 Promote Investment that helps enhance national competitiveness by encouraging R&D, innovation, value creation in the agricultural, industrial and services sectors, SMEs, fair competition, and reduce social and economic Promote activities that are environment-friendly, save energy or use alternative energy to drive balanced and sustainable Promote clusters to create Investment concentration in accordance with regional potential and to strengthen value Promote Investment in border provinces in Southern Thailand to help develop the local economy, which will support efforts to enhance security in the Promote special economic zones, especially in border areas, both inside and outside industrial estates, to create economic connectivity with neighboring countries and to prepare for entry into the ASEAN Economic Community (AEC).

9 6. Promote Thai overseas Investment to enhance the competitiveness of Thai businesses and Thailand s role in the global for Project Approval 1. In order to develop competitiveness in the agricultural, industrial and service sectors, projects submitted for BOI promotion must have the following The value-added of the project must not be less than 20% of revenues, except for projects in agriculture and agricultural products, electronic products and parts, and coil centers, all of which must have value-added of at least 10% of revenues. Modern production processes must be used. New machinery must be used. In case of imported used machinery, the criteria for consideration will be classified into 3 cases, as follows: A Guide to the Board of Investment 201681) General CaseType of MachineryAllowed to be used in the projectCounted as Investment capital for calculation of CIT exemption cap(If Section 31 is granted)Import Duty ExemptionConditionsNew Machinery PPPUsed Machinery not exceeding 5 years.

10 (from manufacturing year to import year)PPOThe machinery performance certificate must be submitted on the same date in which the master list of machinery is submitted Used Machinery exceeding 5 years but not exceeding 10 ) Factory Relocation CaseType of MachineryAllowed to be used in the projectCounted as Investment capital for calculation of CIT exemption cap(If Section 31 is granted)Import Duty ExemptionConditionsNew Machinery PPPUsed Machinery not exceeding 5 years. PPOThe machinery performance certificate must be submitted on the same date in which the BOI application and master list of machinery are submittedUsed Machinery exceeding 5 years but not exceeding 10 ( Investment cap shall be based on 50% of the machinery value from the list of machinery)OUsed Machinery exceeding 10 yearsPOOA Guide to the Board of Investment 201693) Other Cases Type of MachineryAllowed to be used in the projectCounted as Investment capital for calculation of CIT exemption cap(If Section 31 is granted)