Thailand is truly a paradise. It has it all—beaches, sun, diving, shopping, colorful festivals, beautiful people, nightlife, and food! But you probably already knew all of that. If you’ve found this page you no doubt don’t need convincing that Thailand is a great place to live. But can it also be a good place to do business?
Yes, it can—especially when you take advantage of the special BOI company setup.
What’s a BOI Company Thailand?
Normally it can be difficult for foreigners to come in and set up a competitive business in the Kingdom of Thailand. This is due to many protections put in place to limit the ability of foreigners to compete with Thais for local jobs. However, the Thailand Board of Investment (BOI) has made special rules to promote companies in key sectors in order to compete on par with neighbors in Southeast Asia such as Singapore and Hong Kong.
With approval from the Thailand BOI, you can have a 100% foreign-owned company operating physically on Thai soil. This can give you significant advantages such as official tax-residency. In addition to this, your overhead costs will be much lower by operating out of Thailand. There are many benefits to setting up in Thailand as a BOI company.
What are the Benefits of a Thailand BOI Company?
- Permission to have up to %100 foreign ownership
- Possible to pay 0% tax for up to the first 8 years (depending on location and category)
- Get Work Permits to bring in skilled foreign workers
- Exemption of VAT for importing machinery
- Possible to get an additional 3 years of tax exemption if supporting a research and development institution
Comparing a Regular Company to a Thailand BOI Approved Company
|Regular Thai Company Setup||Thailand BOI Approved Company|
|Ratio of Thai to Foreign Employees||4 : 1||Negotiable based on requirements*|
|Effective Corporate Tax Rate||20%||0%**|
|Maximum Foreign Ownership||Restricted to 49%||100% is allowable|
|Import of Machinery||VAT Tax||No Tax|
|Ongoing Requirements||On-site inspections from Immigration||BOI update form submissions|
*Exact ratio will depend on the company. You can apply for the ratio you desire. **Possible depending on the industry.
Special Visa for Feasibility Study Period
There is a special visa that you can obtain to stay in the country to begin work on the project during the initial feasibility study and company set up period.
Normally, foreigners are required to obtain a Non-B Visa from one of the embassies or consulates of a neighboring country. This visa type is also required to receive a work permit. You can, however, acquire a special visa to conduct a feasibility study with the following steps:
- Incorporate the company and get BOI approval
- Write a cover letter in a specific manner that includes information specific to your application, as well as your current visa status.
- Provide detailed information to show the incorporation of the company and why you want this type of visa.
- Submit this information to the one – and only one – person who can write a letter for you that you’ll take to immigration.
- This visa type is so rare that the immigration officers may not even know about it. We’ll be prepared to show them the actual law that provides for this category.
- May take a full day or longer at Immigration for the visa to be processed. (The applicant doesn’t necessarily need to be there in person through this whole process).
This visa will cost 30,000 Baht, and there is also an option under the BOI to receive a multiple-year visa.
The actual paperwork for the application is about 8 pages long. You’ll need to provide basic information, financial projections, and estimated number of employees that you’ll hire among other information. You’ll need to take care to provide evidence and fill everything out in a specific manner. If you’re unfamiliar with the process it can be a daunting task to take on by yourself. The entire application process can be expected to take 3-6 months from start to finish.
Interview at BOI Headquarters
Once the paperwork is submitted there will be an interview at the BOI headquarters in Bangkok. The company founders will need to be present at this meeting. We’ll get you prepared for what to expect at this interview – we know 95% of what the BOI will ask you – for the other 5% you’ll just need to give honest answers about your company. You’ll want to be truthful in every regard to the BOI during this interview – they’ve seen plenty of applicants, so they know when someone is trying to be misleading. Just expect to present them with a normal business plan and your estimated turnover that you anticipate for the business.
In order to form a Thai company, there are some specific requirements in regards to the company promoters.
- Must have at least 3 promoters (20 years or older) for a private limited company – or 12 promoters for a public limited company
- Promoters must be registered and available for signing documents during the registration process
- Promoters must all be initial shareholders immediately after registration of the company, and they must hold a minimum of one share.
- Promoters may be generally free to transfer those shares to other parties afterwards.
This use of promoters is a particularity of Thai law that is not generally needed for setting up a company in other locations.
The company name will be applied for. The applicant is required to provide three possible names, and the registrar has some authority to reject any of the names if they don’t comply with requirements, are already in use, or are determined unsuitable for other reasons.
The Memorandum of Association MOA must include the following:
- Company name
- Province where the company is located
- Scope of the business of the compnay
- Capital to be registered
- Names of the promoters
- Capital information needs to include the number of shares and their par value
- Capital must all be issued, although only partly paid at this formation step
Following registration of the MOA and receiving BOI approval, the company should be registered. Along with the appropriate government fees, 25% of registered capital must be paid. Other requirements regarding registered capital may apply if the company is employing foreign workers.
Care should be made to observe that all registered shares have been subscribed for, the promoters have handed the business over to the directors, and the payment of at least 25% of total shares has been paid by the shareholders at a statutory meeting in the presence of all subscribers and promoters.
The company will be required to obtain a Foreign Business License (FBL) before beginning operations if it falls within the definition of a foreign company according to the Foreign Business Act. This is another time consuming step that we can help you with to make your BOI company setup go smoothly.
VAT and Tax Registration
The company will be required to apply for and obtain a tax ID and VAT certificate withing 60 days of incorporating or starting operations. If the company turnover is greater than 1.2 million Baht, registration for VAT with the Revenue Department must also be done within 30 days of crossing this annual revenue threshold.
Foreign Ownership Restrictions?
Will my business qualify? Fill in the form below and we’ll let you know. There are just a few business types that do not allow fully foreign ownership.
- Agriculture – plant propagation and development
- Mining – Mineral ore prospecting
- Mining – Mineral or ore dressing (exception for Australians under treaty)
- Mining – Marble or granite mining
- Manufacturing – Manufacturing 4-stroke motorcycles
- Service and Public Utilities – International trading companies
It should be noted that the BOI has the right to set the amount of shares for any promoted project that may be held by foreign investors. However, the BOI has been very reasonable in the past in regards to this point, and they are generally cooperative and great to work with.
Do I Need a Lawyer to Set Up a Company?
There is no requirement for you to have a lawyer. We will provide our own lawyer to assist in the formation of the company. We have the right experience and connections to make approval by the BOI as smooth a process as can be.
Ready to Get Started?
Take a look at the infographic below that outlines all the steps in BOI company formation. As you can see, there are many individual steps to take, but don’t worry because we’ll walk you through it. If you’re ready to begin the journey and form your own Thai BOI company please fill in the form at the bottom of the page so we can start getting to work setting up your company.
Are You Interested in Setting Up a BOI Company in Thailand? We can Help!
The process might look confusing, but we have the experience to make it a smooth process. Hire us to assist your BOI company formation process so you can focus on your business. Please fill out the form below to inquire about company formation services.
Note: We are not and do not represent the Thailand Board of Investment. All the material provided above is given for informational purposes.
Photo credit: Mark Fischer / Foter / CC BY-SA