Thailand BOI has recently announced certain measures to promote improvement of production efficiency for manufacturing by upgrading technology and machinery for energy conservation, alternative energy utilization or reduction of environmental impacts, as well as to encourage research and development and advanced engineering design involvement.
Today, we list the Thailand BOI measures to promote energy conservation, alternative energy utilization or reduction of environmental impact as follows:-
1.1 This measure applies to existing projects only, whether BOI or Non-BOI promoted. In the case of non-BOI promoted projects, the activity must be eligible for investment promotion by the Board of Investment.
1.2 BOI-promoted projects can also apply for this measure when the corporate income tax exemption or reduction period expires or in case the respective project(s) does not receive the corporate income tax exemption.
1.3 The minimum capital investment requirement of each project must not be less than 1 million Baht (excluding cost of land and working capital). This requirement does not apply to Small and Medium Enterprises (SMEs) projects. The minimum capital investment requirement of each SME project must not be less than 500,000 Baht (excluding cost of land and working capital).
1.4 Small and Medium Enterprise (SMEs) project qualifications are:
1.4.1 The total capital investment (excluding cost of land and working capital) of all the applicant’s BOI and non-BOI promoted projects combined must not exceed 200 million Baht.
1.4.2 Thai Nationals must hold shares totaling not less than 51 percent of the registered capital.
1.5 The applicant must submit an investment plan for machinery change or upgrade to save energy, to introduce alternative energy into the project, or to reduce environment impacts by implementing one of the following:
1.5.1 Project must invest in upgrading machinery to modern technology that reduces energy consumption at the stipulated ratio.
1.5.2 Project must invest in upgrading machinery to use alternative energy at the stipulated ratio to the total energy consumption.
1.5.3 Project must invest in upgrading machinery to reduce environmental impacts; namely, reducing waste, waste water or exhaust air according to the stipulated criteria.
1.6 The following incentives can be granted:
1.6.1 Exemption of import duty for machinery regardless of zone.
1.6.2 Three –year corporate income tax exemption on the revenue of an existing project, accounting for 50 percent of the investment under this measure, excluding cost of land and working capital.
1.6.3 Corporate income tax exemption period will start from the date of revenue derivation after promotion certificate issuance.
1.7 Application should be submitted by December 31, 2017 and project must complete the implementation within three years from the date the promotion certificate is issued.
1.8 Application of existing projects of all investment sizes under this measure has to be considered by the Office of the Board of Investment.
The measures to promote improvement in production efficiency by upgrading technology and machinery for manufacturing will be outlined in the next article.
Contact ThaiLawyers for your Thailand BOI promotion questions.