What is a TISO?
A Trade and Investment Support Office (TISO) is a category of business that is promoted by the Board of Investment of Thailand. The TISO is not actually a type of business activity per se nor is it an activity specific to any particular industry, but rather it forms a collection of various businesses which are deemed to be potentially supportive of trade and investment in the country in general. As a result, the TISO is a particularly versatile BOI promotion category due to the fact that business operators in many different fields may qualify. However, due to the rather broad and generic nature of the type of business activities that are included within the TISO category, the BOI has set a requirement that such businesses have annual expenditures of at least 10 million baht in order to ensure that only those potential applicants that may have the most impact on trade and investment are eligible for promotion.
As discussed TISO is a broad category that may include firms in a variety of different industries. However regardless of the type of firm or the specific industry, a TISO must engage in a certain activity as specified by the BOI in order to be eligible. Those activities are mostly service activities, but also include a few trade activities as indicated in the chart below (with their BOI category numbers written in bold). In line with the broad nature of the TISO category, the types of business activities that a TISO may engage in are themselves also rather broad and generic:
- Monitoring and/or services for associated enterprises including providing or leasing offices or factory buildings to the business’ associated enterprises. 2.1
- Advisory services regarding business operations (such as accounting advisors, legal advisors, etc.) except securities and foreign currency trading advisors. 2.2
- Information services on good sourcing. 2.3
- Engineering and technical services, except architecture and civil engineering services. 2.4
- Training services related to machinery, engines, tools, and equipment. 2.5(2)
- Installation, maintenance, and repair of machinery, engines, tools and equipment. 2.5(3)
- Calibration of machinery, engines, tools and equipment. 2.5(4)
- International business outsourcing where the services may be provided through telecommunication, such as administrative services, finance and accounting services, marketing, human resources, services, data processing, etc. 2.7
- Importing machinery, engines, tools, and equipment for wholesaling. 2.5(1)
- Wholesaling products manufactured in Thailand. 2.6
Investors who are interested in pursuing BOI promotion under the TISO category must meet certain requirements as follows:
- First of all, any TISO applicant who is a professional business, such as an accounting firm, law firm, engineering firm, etc. must be properly licensed before it may file its application with the BOI.
- The applicant must prepare an explanation of its scope of business and service process.
- Information required by the BOI application form, such as the applicant’s corporate profile, scope of business and/or services, service process, business plan, source of funds, manpower requirements, marketing information, catalogues, etc. must be prepared.
- The minimum capital required by the BOI is at least 1 million baht. However, as mentioned, there is a requirement that the applicant have annual expenditures of at least 10 million baht per year. The minimum capital requirement may also vary depending on demands placed by other sources of law or authority, for example, the Foreign Business Act requires majority foreign-owned businesses to have a minimum capital of at least 2 million or 3 million baht per business, depending on the type of business.
- The debt to equity ratio must not exceed 3:1.
- The time to complete the application with the BOI is 40 working days.
Benefits and Privileges
The TISO is considered a group of businesses that are “supporting industries that do not use high technology but are still important to the value chain” and thus are eligible for only benefits falling within the category of B2 as specified by the BOI. Accordingly, TISO businesses receive exemption on import duties for raw materials and non-tax incentives, such as foreign land ownership and the right to bring in foreign workers without being subject to normal immigration rules.
Issues After Promotion
Once an applicant has been promoted by the BOI, they must file operational reports as specified by the conditions of their BOI promotion.
Aside from the above, once a TISO has been promoted, it is eligible for majority foreign-ownership, whereas normally service businesses and wholesale below 100 million baht in registered capital is restricted from foreign investors. TISO businesses that have majority foreign ownership may apply for a Foreign Business certificate with the Department of Business Development (DBD), the application time normally takes 14 working days and entails a total government fee of 22,300 baht.