Affordable housing has become a central concern in Thailand’s social and economic policy, as rapid urbanization, rising property prices, and growing income inequality continue to price lower-income households out of the country’s high-demand housing markets. Recognizing this structural challenge, the Board of Investment (BOI) classified low-income housing projects as a promoted activity under No. Sor. 1/2567 Re: Promotion of Residential Activities for Low Income People 2567 (2024).
By treating affordable housing as part of the country’s core infrastructure, the BOI reframes it from a purely social initiative into an essential component of national development. This legal and policy shift creates a structured pathway for private and foreign investors to participate in addressing Thailand’s need for affordable housing while benefiting from defined tax incentives, regulatory exemptions, and streamlined administrative processes.
In doing so, Thailand aligns itself with global trends in socially responsible investment, where public policy and private capital intersect to advance long-term economic growth, social inclusion, and sustainable urban development.
Legal Framework: BOI Investment Promotion
The BOI grants tax and non-tax privileges to investors in activities deemed essential to national development. These privileges are guided by the BOI’s Announcement No. 2/2560, which categorizes promoted activities into groups based on their contribution to technology, innovation, and social welfare.
Housing for lower-income families fall under Activity 7.2.7, entitling qualified investors to receive A4 benefits, which include:
- A three-year corporate income tax (CIT) exemption for eligible infrastructure expenditures;
- Import duty exemptions on machinery; and
- Non-tax incentives, such as permission to bring in foreign experts, and streamlined visa and work permit facilitation under Section 25 of the Investment Promotion Act.
While the three-year exemption is relatively modest compared to high-tech sectors, the classification under Section 7 is strategically significant as it recognizes low-income housing as a public utility project, placing it alongside infrastructure categories such as roads, water systems, and power distribution.
Licensing and Regulatory Oversight
To qualify for promotion, developers must secure approval from the Government Housing Bank (GHB) prior to submitting a BOI application. This approval confirms that the project satisfies national standards for low-income housing, including location, construction quality, and affordability thresholds.
Following GHB approval, applicants must submit the BOI Form I.A.1 along with supporting documentation, including:
- Land ownership or lease rights (with title deeds or long-term lease agreements);
- Environmental compliance evidence, if applicable (e.g., EIA approval for larger developments);
- Project financing structure, showing adequate capitalization and sources of funds; and
- Engineering and architectural plans consistent with Ministry of Interior building codes.
BOI applications are reviewed by the Office of the Board of Investment, and final approval is subject to the BOI Subcommittee on Public Utilities. Once promoted, the investor must register with the Department of Business Development (DBD) and obtain all relevant construction, zoning, and land-use permits under the Building Control Act B.E. 2522 (1979) and City Planning Act B.E. 2518 (1975).
Condition for BOI Promotion for Affordable Housing
To qualify for promotion, projects must meet defined design, pricing, and compliance standards. Condominium units must have at least 24 sq.m. of usable area, and townhouses or detached homes at least 70 sq.m. Each unit must be sold only to natural persons at a price not exceeding THB 1.5 million per unit (inclusive of land cost), and at least 80% of all residential units in the project must satisfy these low-income specifications.
Projects must provide appropriate amenities, including parking, CCTV throughout the project, 24-hour security personnel, cleaning staff, and common areas. Building layouts and plans must be approved by the BOI Board, and developers must obtain a construction permit under the building control laws (or other applicable regulations). GHB approval is required before submitting the BOI application. Quality certifications such as ISO 9000/14000 are not required.
For CIT exemption (A4), only construction costs of roads, public utilities, or facilities in the common areas for public benefit are eligible; construction costs for residences, buildings, or commercial structures, whether for sale or rent, are excluded. Applications must be filed by the last working day of 2025.
Failure to comply may result in revocation of promotion and recovery of granted tax benefits under Section 36 of the Investment Promotion Act.
Other Regulatory Considerations
Foreign participation in Thailand’s housing sector is governed by overlapping laws on land ownership, business activity, and environmental compliance. Under the Thai Land Code, foreign entities are generally prohibited from owning land outright. However, BOI-promoted companies may acquire land under Notification No. 16/2567, provided they maintain at least THB 50 million in paid-up capital, use the land solely for the promoted activity, and dispose of it if the project ceases or promotion is withdrawn. Where ownership is not permitted, investors may still engage through long-term leases of up to 30 years or joint ventures with Thai majority partners.
Similarly, the Foreign Business Act B.E. 2542 (1999) restricts foreign participation in construction and real estate, generally requiring a Foreign Business License to pursue projects. However, BOI-promoted projects may be exempt, allowing fully or majority foreign-owned companies to operate within approved parameters.
Developers must also observe environmental and zoning regulations, which may trigger Environmental Impact Assessments (EIAs) for large-scale or sensitive projects, as well as comply with the Condominium Act B.E. 2522 (1979) and related consumer protection laws governing ownership disclosure, management, and maintenance.
Closing Notes
The BOI’s promotion of low-income housing highlights Thailand’s aim of aligning economic growth with social welfare. By classifying affordable housing as public infrastructure, the framework channels private capital toward essential community needs while supporting broader goals of sustainable development.
For foreign investors, this segment offers a long-term market opportunity. Within the BOI framework, projects benefit from both tax and non-tax incentives, and approval from the Thai government. From a CSR and ESG standpoint, participation in such projects allows companies to align with Thailand’s national development agenda while enhancing their reputation among regulators and the general public.With the 2025 application deadline approaching, early coordination with the BOI, the Government Housing Bank (GHB), and legal advisors is recommended.
Silk Legal handles matters related to BOI promotion, including application procedures, and regulatory compliance under the Investment Promotion Act. To learn more about BOI incentives for real estate and infrastructure investment in Thailand, contact Silk Legal using the contact form provided or email us at [email protected].
