Thailand BOI Criteria for Project Approval

Eligible applicants for Thailand BOI promotion can submit the application to the Board of Investment of Thailand. Hence, the Thailand BOI applies the following criteria in determining the suitability of a project for which investment promotion privileges are requested:

1. To determine approval for a project that requests promotion, the criteria are as follows:

1.1   Value added is not less than 20% of sales revenue, except projects that manufacture electronic products and parts, agricultural activities and products, and projects granted special approval by the Board.

1.2   The ratio of debt to equity should not exceed three to one for a newly established project. Expansion projects are considered on a case-by-case basis.

1.3   Modern production processes and new machinery are used, or the efficiency of old machinery is certified by reliable institutions and granted special approval by the Board.

1.4   Adequate environmental protection systems are installed. The Board will give special consideration to the location and pollution treatment of a project with a potential environmental effect.

1.5   For projects with investment capital exceeding 80 million Baht (excluding the cost of land and working capital), the project’s feasibility study must be submitted as a Board requirement.

2. For a concession project or the privatization of a state enterprise project, the Board’s criteria will be based on the cabinet’s decision dated 25 May 1998 and 30 November 2004 as follows:

2.1   An investment project of state enterprise according to the 1999 State Enterprise Corporatization Act will not be entitled to grant promotion for the concessions project operated by the private sector and the transfer of ownership to the government (Build Transfer Operate or Build Operate Transfer). The government agency, which owns the project and intends the concessionaire to obtain promotion privileges, will submit the project to the Board at the time of the project’s commencement and prior to any invitation to the private sector to join the bid. In the bid’s process, it must clearly state that the bidders will be informed of any incentives entitled to them. In principle, the Board will not grant promotion in the event the private sector has to pay compensation to the government for the concession, unless such payment is a reasonable amount on the investment that is consumed by the government.

2.2   For government projects under the Build Own Operate method, including those leased or managed by the private sector by paying an amount in terms of a rental payment to the state, the Board will apply the normal criteria.

2.3   For the privatization of state enterprises, if it requires governmental support, the appropriate budget should be determined after the privatization of the state enterprise as per the 1999 State Enterprise Corporatization Act. In the event of expansion after the privatization, it will apply for promotion for only the expanding investment by granting incentives according to the normal criteria.

Interested in obtaining BOI promotion, contact ThaiLawyers for company registration, BOI promotion, visa and work permit application.