Thailand has made significant progress in developing its infrastructure, technology, and business clusters over the years. The country has also advanced in attracting foreign investment in various sectors of the economy, including manufacturing, tourism, real estate, and finance.
Thanks to its strategic location, skilled workforce, and business-friendly environment, Thailand has become a leading destination for investors seeking opportunities in Asia.
Against this backdrop, the country has established government structures such as the Board of Investment of Thailand (BOI) and the Eastern Economic Corridor (EEC), whose activities are aimed at attracting and supporting foreign investment in the Kingdom.
While these institutions essentially share similar goals and objectives, there are certain differences between the two structures.
This article will highlight the main similarities and differences in the foreign business support programs offered by the BOI and the EEC, which will certainly help to formulate an optimal business model when planning investments in Thailand.
Board of Investment of Thailand (BOI)
The Board of Investment of Thailand (BOI) is a government body established in 1997 to encourage foreign investment in the country. The BOI operates under the Office of the Prime Minister and offers a range of incentives aimed at attracting foreign investment and promoting economic growth. The main responsibilities of the BOI are to facilitate significant investments, both local and foreign. Companies certified by the BOI in Thailand may receive various benefits, including tax breaks, land ownership rights, and simplified procedures for obtaining visas and work permits.
By obtaining BOI promotion, a business can gain a competitive advantage in the Thai market. The BOI has issued criteria for projects applying for its privileges and incentives, which depend on the location of the promoted activity and its significance.
A business must meet one of the following categories to be eligible for certification:
- Agriculture and agricultural products
- Mining, ceramics, and base metals
- Light industry
- Metal products, machinery, and transport equipment
- Electronics industry and electrical appliances
- Chemicals, paper, and plastics
- Services and utilities
- Development of technology and innovation
Benefits for Investors Provided by the BOI:
- Exemption or reduction of import duties on machinery
- Reduction of import duties on raw materials
- Exemption from corporate income tax on net profit and dividends received from the project
- Reduction of corporate income tax
- Double deductions on expenses for transport, electricity, and water supply
- Additional deductions on the cost of installation or construction of facilities
- Permission for foreign specialists to stay and work in Thailand
- Permission to own land
- Permission to transfer funds abroad in foreign currency
BOI Promotion Approval Criteria:
- Promotion is considered on a project-by-project basis; existing projects are not eligible to apply for promotion.
- The project must fall within the BOI’s eligible activities when applying for promotion.
- The minimum investment capital of each project (excluding land costs and working capital) must not be less than 1 million baht, and for some activities, not less than 1.5 million baht.
- The project must use modern manufacturing processes or maintenance procedures.
- The value added of each project should not be less than 20% of its income, except for projects related to agriculture and agricultural products, electronic products and parts, and call centers, which should have a value added of at least 10% of income.
- The debt-to-equity ratio should not exceed 3 to 1 for new projects.
- The project must include measures to prevent and reduce its negative environmental impact.
Eastern Economic Corridor (EEC)
In 2017, the Government of Thailand initiated the establishment of the Eastern Economic Corridor (EEC) as a territorial development initiative aimed at revitalizing Thailand’s famous East Coast. The EEC focuses on the development of three eastern provinces: Rayong, Chon Buri, and Chachoengsao.
The EEC aims to develop modern and green economic activities, provide integrated government services, create efficient infrastructure and public services, determine the proper use of land, and develop cities that are modern, suitable for living, and conducive to business.
Investments are encouraged in the following areas:
- Medicine and healthcare: medical and comprehensive healthcare
- Digital technologies: intelligent electronics, automation and robotics, defense
- Next-generation automotive: electric vehicles
- Bio-circular green economy
- Services: high-end and medical tourism, aerospace and logistics, education, and human resource development
Criteria for Approval of Investment Incentives by the EEC:
- Type of industry, whether specifically targeted or beneficial for development and promotion under the EEC Act
- Importance to the supply chain and value chains of the selected industry sector
- Contribution to innovation in Thai industry
- Use of high-level technology in the operation of the enterprise
- Investments in R&D
- Increasing local employment and hiring local skilled workers
- Sustainability of the enterprise
- Contribution to the reduction of greenhouse gas emissions and carbon neutrality
- Participation in the development and support of the local community in the eastern provinces of Thailand
It is also important to note that if a foreign investor has already received benefits from the BOI, they are eligible to apply for benefits from the EEC, but only for those not covered by the BOI Act. However, if EEC benefits have already been received, the investor will no longer be eligible to apply for BOI benefits. (Board of Investment Announcement No. 17/2565)
The table below provides a comparison of benefits provided by the EEC and BOI.
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