Advantages of Setting Up a Medical Business Using Thai Government Investment

Introduction

This article focuses on the biotechnology and medical product sector1 which has been promoted by the Office of the Board of Investment (BOI), and is an area where foreigners can have full ownership of their businesses and are given many privileges such as, but not limited to, tax exemptions.

Medical Healthcare in Thailand

Medical healthcare is big business in Thailand, with Bangkok being a popular destination for medical tourism, accounting for 0.4%, or 3 billion US Dollars, of the country’s Gross Domestic Product. It is estimated that approximately 2 million patients come to Thailand every year2 from all over the world to use hospitals and medical centers which have English-speaking doctors and state-of-the-art facilities. As a result, Thailand has become a significant hub for medical excellence in South-East Asia and has attracted an estimated 53.3 million US Dollars in foreign investments into the medical project sector3.

Thai Government support for the sector

The Thailand 4.0 initiative aims to make Thailand an international center for pharmaceuticals, medical devices, and medical care.4 It is one of ten key sectors that the Thai government has given priority to in its efforts to make Thailand a regional powerhouse in ASEAN. Healthcare organizations are given the opportunity to demonstrate their excellence via an assessment by the Joint Commission International to obtain the Gold seal of approval.5

Currently, there are more hospitals in Thailand accredited by the Joint Commission International than many other countries in Asia including India, which only has 36 as opposed to Thailand’s 58. Recently, the National Science and Technology Department, Chulalongkorn Hospital, and Siriraj Hospital have collaborated to pioneer the use of 3D printing technology to manufacture medical implants and have also worked towards developing medical robotics.

What are the incentives for foreigners and expats to attract investment in the medical field?

The Thai government awards significant privileges to companies in the biotechnology field and medical product sector that apply for BOI company status. These include increased flexibility with regard to the proportion of Thai and foreign staff, getting rid of the need to comply with the usual 4:1 ratio most non-BOI companies have to adhere to. Depending on what the company is and their business activities, there are also tax incentives which can significantly mitigate the levies on their earnings, with many paying no taxes on their income. Taxes for the importation of machinery, which is crucial in the medical industry, are also waived under the BOI scheme.

Foreigners can also own 100% of their company instead of just the mandated 49% for companies operating in Thailand. They are likewise able to own land in the Kingdom, which is a privilege that is not normally given under regular circumstances.

How do I set up a medical company under the BOI in Thailand?

The process can be laborious and complex given that companies need to persuade BOI officials that they are eligible for BOI status, which is why it is important to consult a qualified law firm such as Silk Legal to process the application for you. The process towards attaining BOI status is illustrated below:

  1. Prepare and complete all application forms and supporting documents.
  2. Attend a scheduled interview with BOI officials after the documents have been approved.
  3. Await project evaluation following the interview. BOI officials will evaluate the project based on the documents provided, and waiting times vary depending on the value of the project. Projects with an estimated capital of over 2 billion Baht must wait 90 working days.
  4. Register and reserve the name of the business with the Department of Business Development.
  5. Once all requirements have been deemed sufficient by the BOI officials, they will certify the company as a BOI company.
  6. Companies with an ownership structure that consists of more than 50% foreigners must apply for a foreign business license.
  7. After the company receives its BOI certification, it can proceed to registering for social security and acquiring visas and work permits for foreign staff.

Time frame for BOI business creation

As previously mentioned, the BOI processing time is contingent on the project’s investment value. However, other steps in the process outlined above may take longer. You should therefore expect six months to a year in total before you can initiate business operations.

If you would like to learn more about starting a medical business in Thailand, please contact David Southern at David.s@silklegal.com.


 David Southern

  1. Thailand Board of Investment website – Types of Business Providing Investment Promotion – https://www.boi.go.th/un/eligible_activities
  2. Thailand Investment Review April 2017 vol. 27 no.4 https://www.boi.go.th/upload/content/TIR_Apr17_40465.pdf
  3. Thailand Investment Review April 2017 vol. 27 no.4 https://www.boi.go.th/upload/content/TIR_Apr17_40465.pdf
  4. “Here’s Thailand’s plan to transform into Asia’s next big medical hub’ By The Thailand Board of Investment- October 4, 2018 https://qz.com/1397519/heres-thailands-plan-to-transform-itself-into-asias-next-big-medical-hub/
  5. Joint Commission International https://www.jointcommissioninternational.org/about-jci/jci-accredited-organizations/