We have a client from England who wants to know if they should apply for Thailand BOI before or after having a company. Here are their questions and our answers:
Q: The company has existing operations, office and employees. Also, we are in the process of sponsoring additional foreign workers. What would happen to the current company’s operations and employees once the BOI certification is obtained?
A: You must understand that BOI promotion is for new projects only. If you have an existing company, you will need to hire new employees, buy new computers/fixed assets for the new project even though it is under the same company. Also you will have to separate all expenses and incomes to be BOI and non-BOI operations. The BOI will not allow you to use your existing employees or computers and fixed assets that are there when you apply for BOI promotion.
Q: Do you advise on applying for the BOI certification with the current company or shall we set up another company for the BOI application? What are the advantages/disadvantaged of both the options?
A: You should set up a new company for the BOI operation due to the answer of the previous question. If you use the existing company, it will be very difficult for your accounting department to differentiate the incomes, expenses, assets, employees for the BOI and non-BOI operations. Also, the BOI will require that you increase the capital of the company for usre.
However, if the separation of those to be BOI and non-BOI is not an issue for your accountants, then applying for the BOI promotion with the existing company is fine.
Q: According to the BOI requirements, is there a minimum number of Thai employees that we will have to hire?
A: There is no minimum number of Thai employees that you will have to hire. However, if you plan to hire a lot of expats, you will need to hire experienced team like us to get Thailand work permit for all your expats. You need to be creative with the positions of the foreign employees. If the positions are ones that you can hire Thais for, then the BOI wants you to hire Thais. They may approve fewer work permits if you have too few Thai employees.
Q: What about the minimum amount of assets that we will be required to purchase? Will we require to do so before the BOI application is submitted or do we have a certain amount of time to do so following the obtainment of the BOI certification?
A: Depending on the business activities you are applying for BOI promotion, the BOI may require the company to have an investment (excluding land and working capital) of not less than One Million Baht. This investment means fixed assets and/or the value of lease of more than 36 months. You can start buying them after the BOI accepts your application and you have 3 years from the date of receiving the BOI certificate to complete the 1M investment.