Registering a company under the Thailand Board of Investment is a time consuming process that requires the assistance of experts. The first step is to develop a detailed business plan that meets the BOI requirements.
This is an important part of the application process as it will determine whether you qualify for the various benefits offered by the BOI. Our team of legal and business professionals can assist you with this process.
Obtaining a Foreign Business License (FBL)
If you’re a foreign business owner interested in operating in industries restricted to foreign participation, you must obtain a Foreign Business License (FBL). The FBL is a government permit that allows your company to operate in sectors such as agriculture, forestry and timber, education, financial services, and the media. The FBL process can be complex and time-consuming, but it’s essential if you want to operate in the Thai market.
The FBL process requires you to submit various documents, including your company’s articles of association, financial statements, shareholding structure, and a detailed business plan. It’s also important to understand the requirements for foreign ownership, as well as any minimum capital requirement. You should also work with a legal expert or consulting firm that has experience assisting foreign companies to navigate the FBL process in Thailand.
The benefit of a FBL is that it ensures your business adheres to all local regulations and protects you from penalties. Moreover, it allows you to access restricted industries and tap into the growing Thai market. In addition, it enhances your credibility with local partners and customers, as it shows that you’re committed to operating within the country’s legal framework. However, it’s important to note that the FBL is only valid for a certain period of time and must be renewed periodically. Failure to do so will result in fines and even revocation of the FBL.
Obtaining a Tax Identification Number (TIN)
The BOI offers promising incentives, but submitting an application requires meticulousness and attention to detail. The BOI may ask for additional information to verify its accuracy, but it should not impose undue burdens. Rather, any additional requests should serve to clarify details and help the BOI understand the nature of the business.
Obtaining a tax ID is crucial for companies that will operate in Thailand, as the country’s Withholding Tax system requires that withheld income be reported and remitted to the government. Without a TIN, businesses can face serious penalties for failing to report withholding taxes.
In order to qualify for a TIN, a foreign company must submit its business registration documents and an investment plan to the BOI. Depending on the industry, the BOI can offer various tax and non-tax incentives to support businesses’ operations in Thailand.
In addition to providing tax benefits, a BOI company can also benefit from the country’s strategic location in Asia and its well-established infrastructure. As a result, the country is becoming a prime location for both domestic and foreign investment, especially in high-growth industries. The BOI’s mission is to promote both local and foreign investment by offering incentives for activities that are beneficial to the Thai economy. The BOI’s guidelines are subject to change based on the country’s economic situation and business needs.
Obtaining a Value Added Tax (VAT) Certificate
Obtaining a VAT Certificate is another time consuming step in the process of setting up your company under the BOI. In order to qualify for a VAT certificate, your business must have an annual revenue of more than 1.2 million Baht and comply with the rules set by the Thailand tax department. Fortunately, we can help you navigate the process and ensure your BOI application is approved quickly.
The BOI offers tax incentives for investors in targeted industries. These incentives include corporate income tax (CIT) exemption for up to 15 years, import duty exemption on machinery/raw materials imported for manufacturing export products and other non-tax benefits. In addition, a BOI promoted company may have up to 20 percent foreign ownership.
In addition to a VAT certificate, you must also apply for and receive a work permit for any foreign employees working in your business in Thailand. The process can take up to three months, so it is important to start this early in your planning phase.
In addition, a VAT registrant is required to display its certificate of registration in a prominent place in the place of business where it is located. A VAT registrant is also required to file and pay its VAT return and report within the stipulated period. Moreover, a VAT registrant is required by law to make tax prepayment, which is creditable against its VAT liability.
Obtaining a Company Registration Certificate (CRC)
To register a company in Thailand, it is necessary to submit a complete set of documents as per the requirements. The documents that are required include the following:
Unlike other business registrations where e-signature is available, the BOI requires wet ink signatures on all initial promoters, shareholders subscribing for shares and directors. If these are not available in person, the document must be notarized and submitted.
Once the company has been registered, it will receive a 13-figure tax identification number from the DBD. It will also be granted a Corporate Bank Account which can be opened by any established commercial banks in Thailand. The company will also need to obtain a cadastral certificate and register its products with ANVISA, as applicable.
The company will be eligible to apply for the A1 tax incentive if it invests at least THB 1 million in a clinical research project with a minimum annual salary expense of at least THB 500,000. It must also meet the requirements of the list of activities that are eligible for investment promotion, such as a debt-to-equity ratio not exceeding 3 to 1, and modern production processes.
The BOI law provides many benefits to businesses looking to invest in the country. In addition to providing tax incentives, it guarantees not to nationalize foreign businesses or entities.