In recent years, Thailand has become a popular market for many overseas enterprises and investors. The Thai government, through the BOI (Board of Investment), has introduced various investment incentive policies, offering tax breaks, land ownership support, and employment facilitation for foreign personnel, aiming to attract foreign investment and stimulate economic development. Particularly with the rapid advancement of Industry 4.0 and the green economy, Thailand demonstrates strong appeal in technology, innovation, and sustainable development fields. However, effectively utilizing BOI incentives and navigating potential restrictions remain challenges for many enterprises. This article provides an in-depth analysis of the scope of BOI incentives, along with practical strategic advice, to help outbound enterprises seize the Thai market opportunities.

I.Overview of BOI Policies: Opportunities and Challenges in Thai Investment

1.1 Role and Mission of BOI

The Board of Investment (BOI) is a specialized agency established by the Thai government to design and implement investment incentive policies aimed at attracting foreign investment and promoting Thailand’s economic development. BOI’s primary goal is to enhance Thailand’s industrial competitiveness, foster local employment, and promote modernization of the domestic economy by providing a range of preferential policies and convenient services to encourage foreign enterprises to introduce advanced technologies and management expertise to Thailand. BOI plays a key role not only in the development of traditional industries but also in steering investment in emerging industries, particularly in the digital economy, green economy, and Industry 4.0. In recent years, with the promotion of Thailand’s “Eastern Economic Corridor” (EEC) policy, BOI has further strengthened its appeal to foreign investors, particularly in advanced manufacturing and technological innovation, driving Thailand’s economic transformation and industrial upgrading.

BOI’s core function is to provide facilitation support for foreign investments, optimizing the investment environment to eliminate obstacles foreign enterprises may face when investing in Thailand. BOI not only formulates policies but also provides comprehensive services for foreign investments in areas like visas, taxation, and legal matters, enabling enterprises to focus on business development without worrying about policy implementation and compliance. Furthermore, BOI actively participates in international economic cooperation and has signed investment protection agreements with multiple countries, enhancing Thailand’s appeal as an investment hub in Southeast Asia. Overall, BOI acts not only as a “policy-maker” but also as an “investment facilitator,” helping foreign enterprises smoothly enter the Thai market through one-stop services while ensuring Thailand’s economic growth and industrial upgrading goals.

1.2 Key Supported Industries

BOI has clear categorizations for supported industries, covering key sectors in Thailand’s economic transformation. First, high-tech industries are a major focus of BOI, especially in the digital economy, artificial intelligence, chip manufacturing, and 5G sectors. BOI provides comprehensive support to these enterprises, from tax exemptions to foreign talent recruitment, with the goal of rapidly elevating Thailand’s technological capabilities. Additionally, manufacturing remains a core focus of BOI support, especially in high value-added manufacturing areas such as automotive parts, electronics, and aerospace equipment. These industries contribute significantly to Thailand’s GDP and stimulate the development of related supply chains. To support these industries in the long run, BOI offers a series of incentives in areas like tax and import duty on raw materials, aiming to establish Thailand as a regional manufacturing hub.

Besides traditional manufacturing, BOI has also increasingly supported the service sector in recent years. Industries such as medical tourism, education and training, and logistics receive special BOI support policies, particularly in the Eastern Economic Corridor region, where customized support measures are provided to help these service industries transition and upgrade. Furthermore, as global attention to sustainable development grows, BOI actively guides investment in sustainable development projects, particularly in renewable energy, circular economy, and environmental technologies. BOI offers tax incentives, tariff exemptions, and has established a green fund dedicated to long-term support for environmental projects, making Thailand a leader in green economic development. Thus, BOI’s support for key industries extends beyond traditional manufacturing to high-tech, emerging services, and sustainable development, aiding in optimizing Thailand’s industrial structure and promoting sustainable economic growth.

1.3 Main Directions of Investment Policies

Thailand’s BOI investment policies continuously evolve, with the main directions being promoting innovation, achieving regional balanced development, and driving industrial modernization. Firstly, BOI prioritizes “promoting innovation” by supporting innovative enterprises through various measures, encouraging high-tech and high value-added industries to enter Thailand. BOI provides incentives in high-tech fields like information technology, artificial intelligence, automation, and digital healthcare to attract top global tech companies to establish R&D and production bases in Thailand. Additionally, to foster domestic innovation, BOI collaborates with local universities and research institutions to provide localization support for the R&D activities of foreign enterprises, enhancing Thailand’s competitiveness in technological research and development.

Regional balanced development is another key direction of BOI’s policy. Through the Eastern Economic Corridor (EEC) project, the Thai government has designated this area as a core region to guide foreign investment inflows, further promoting balanced regional development. BOI provides highly attractive incentives in the EEC area for foreign enterprises, including corporate income tax exemptions, land ownership policies, and talent recruitment facilitation, boosting the region’s economic vitality and establishing the eastern area as a top investment destination in Southeast Asia. Simultaneously, BOI encourages foreign investment in other less developed regions of Thailand through regional investment tax reduction policies, attracting enterprises to set up factories in these areas to address regional development disparities.

Driving industrial modernization is a long-term goal of BOI policy. With the global shift towards digital economies, BOI has increased support in areas like Industry 4.0, smart manufacturing, and automation to aid in upgrading Thailand’s manufacturing industry. BOI not only provides infrastructure support but also encourages enterprises to adopt advanced production technologies, supporting investment in equipment upgrades and smart production through an industrial upgrading fund. These policies not only bring new momentum to Thailand’s manufacturing industry but also enhance Thailand’s standing in the global supply chain. BOI’s policy directions promote innovation, contribute to regional economic balance, and modernize industries, providing a stable and reliable investment environment for outbound enterprises to achieve sustainable growth and long-term benefits in Thailand.

II. Tax Incentive Policies: Easing Burden to Boost Business Development

2.1 Corporate Income Tax Exemptions

Thailand’s BOI tax incentive policies aim to reduce the operating costs for enterprises, with preferential corporate income tax exemptions available for foreign enterprises in priority fields such as high technology, agriculture, and environmental protection. Currently, the standard corporate income tax rate in Thailand is 20%, which is relatively reasonable within Southeast Asia, but tax burdens remain a crucial consideration for large-scale investments. To address this, BOI has designed corporate income tax exemptions based on industry and regional attributes to promote qualified investments in specific industries and regions.

In high-tech fields, BOI provides a maximum of eight years of full corporate income tax exemptions to attract tech companies to establish R&D and production centers in Thailand. For example, enterprises involved in information technology, artificial intelligence, automation, and electronics typically receive an eight-year tax exemption, which may extend up to 13 years depending on the enterprise’s technological level and actual contribution to the Thai economy. Furthermore, for enterprises with large investment amounts, BOI may offer additional tax reduction periods, further alleviating tax burdens over a longer duration.

In agriculture and food processing, BOI offers special tax reduction policies to promote agricultural technology upgrades and productivity increases. Given Thailand’s status as an agricultural powerhouse, BOI aims to attract foreign enterprises to introduce advanced agricultural machinery, eco-friendly production technologies, and other innovative methods to boost Thailand’s agricultural competitiveness globally. Qualified enterprises may receive three to eight years of full corporate income tax exemption, with extensions up to ten years under specific circumstances. If an enterprise contributes to agricultural environmental technology and sustainable development, such as using green energy or reducing water resource waste, BOI may extend the tax exemption period based on specific contributions.

Environmental industries are also highly prioritized by BOI, especially investments related to renewable energy, waste treatment, and pollution control. For corporate income tax exemptions in environmental industries, BOI offers three to eight years of exemption to encourage the application of environmental technologies in Thailand. For sectors like environmental equipment manufacturing, renewable energy development, and energy-saving materials, BOI may extend the exemption period within the tax-free period. For policies aimed at reducing carbon emissions, Thailand seeks to attract environmental enterprises through these tax reduction measures, supporting its national environmental protection and sustainable development strategy.

2.2 Customs Duty Exemptions

BOI’s customs duty exemptions aim to help investment enterprises lower initial costs, particularly for industries requiring imported machinery, raw materials, and equipment. For qualified enterprises, BOI provides full exemptions on customs duties for imported machinery, which not only assists with early cost control but also alleviates cash flow pressures during the initial phase of operations. Currently, customs duties on imported machinery in Thailand range from 5% to 30%, depending on the type of machinery and industry attributes. BOI’s customs duty exemptions focus on promoting the introduction of high-tech equipment, such as automated production and environmental equipment, allowing these imports to benefit from a 100% duty exemption.

Additionally, BOI provides duty exemptions for raw materials, particularly in manufacturing, chemical, and electronics industries. If the raw materials required by an enterprise cannot be produced domestically in Thailand, BOI may offer full or partial duty exemptions. For example, customs duties on imported electronic components and high-performance materials usually reach 15% to 20%, but BOI-certified enterprises can enjoy full duty exemptions, significantly reducing manufacturing costs. If an enterprise establishes a production base in the Eastern Economic Corridor (EEC), BOI’s customs duty exemption policy extends to raw material imports, providing additional support for cost control.

BOI’s customs duty exemption policy is especially appealing for export-oriented enterprises. To strengthen Thailand’s position as a manufacturing hub in Southeast Asia, the Thai government allows export-oriented enterprises to enjoy duty exemptions on imported raw materials and semi-finished products, provided these products are intended for export. This policy reduces the import duty burden on enterprises and encourages export business development. The duty exemption period for these enterprises typically ranges from one to three years, determined by export volume and the enterprise’s contribution to the Thai economy.

2.3 VAT Refunds and Other Tax Incentives

VAT refunds are a crucial BOI policy, particularly attractive to high-tech and export-oriented enterprises. Thailand’s standard VAT rate is 7%, and BOI allows qualified enterprises to apply for VAT refunds or exemptions under specific conditions, particularly in the import of raw materials and equipment. If an enterprise’s production process is located in the EEC or other BOI-designated economic zones, the enterprise can enjoy a full VAT refund, significantly reducing initial costs and improving cash flow efficiency.

Additionally, BOI offers VAT exemption policies for some export-oriented enterprises. For qualified export companies, BOI permits VAT exemptions on export product sales, alleviating the tax burden on enterprises and providing substantial support for cash flow management. This policy benefits large-scale export manufacturing companies, enabling them to offer products at more competitive prices in the international market. Furthermore, the preferential tax policies on imported and exported materials and semi-finished products can indirectly reduce production costs.

To further attract foreign investment, BOI has established special tax incentives in human resource development. BOI provides tax reductions for enterprises that set up R&D centers and training institutions, including corporate income tax deductions and VAT refunds. This reduces operational costs for enterprises and aids in strengthening Thailand’s talent pool. In practice, BOI also encourages enterprises to offer vocational skills training for local Thai employees, and such investments in training expenses are eligible for tax incentives, supporting foreign enterprises’ contributions to the local labor market.

III. Land Ownership and Development Support: Reducing Operational Barriers

3.1 Land Use Rights for Foreign Enterprises

Thailand’s land ownership policies have always been a focal point for foreign investors, especially for manufacturing and technology-intensive enterprises that require production bases. The Thai government has strict restrictions on foreign ownership of land; typically, foreign enterprises cannot directly obtain land ownership and must instead use leased land. However, BOI investment promotion policies provide a relatively relaxed pathway for eligible foreign enterprises, granting them long-term and stable land use rights. Specifically, BOI-certified foreign enterprises that meet certain conditions can obtain land ownership, particularly for those established in key economic zones like the Eastern Economic Corridor (EEC). This area is a specially designated zone by the Thai government to attract foreign investment in high-tech and manufacturing sectors, offering special policies related to land use.

For land leases, BOI allows qualified enterprises to obtain lease terms of up to 50 years, with an additional 50-year extension option, providing effective land control and support for long-term business stability. Compared to regular lease restrictions, BOI’s land policies greatly reduce the risk of land use rights for foreign enterprises, helping them establish a stable business foundation in Thailand. Furthermore, for certain types of projects, such as high-tech or manufacturing enterprises that meet specific BOI industry requirements, companies can benefit from additional land lease fee reductions or special support for infrastructure setup. These policies create favorable conditions for companies to establish long-term production bases in Thailand.

BOI’s land use policy emphasizes the actual contribution of investment projects, particularly in economic impact and technology transfer. According to BOI’s specific requirements, companies granted land ownership or long-term leasing rights must contribute to technological innovation, job creation, and local economic growth. This policy ensures that foreign enterprises enjoying land incentives also contribute to Thailand’s long-term economic development and drive the development of the local industrial supply chain. Thus, BOI’s land policy not only opens land use to foreign investment but also protects Thailand’s economic interests by ensuring foreign enterprises play a role in fostering local economic growth.

3.2 Industrial Estates and Free Zones Policy

BOI provides various preferential policies within Thailand’s industrial estates and free zones to attract manufacturing and export-oriented enterprises to set up production bases in these areas. Most industrial estates in Thailand are managed by the Industrial Estate Authority of Thailand (IEAT) and are equipped with comprehensive infrastructure, allowing enterprises to quickly commence production. BOI allows eligible enterprises within these areas to enjoy land lease incentives, tax exemptions, and simplified customs procedures. For manufacturing enterprises, entering an industrial estate can significantly lower production costs. Moreover, enterprises in industrial estates usually benefit from customs duty exemptions and VAT refunds, which help manufacturing companies reduce equipment and raw material import costs in the initial stages, thus enhancing production efficiency and economic benefits.

The free zone policy is another important tool used by BOI to attract foreign investment. Free zones are special economic areas where customs duties and taxes are exempted to encourage production and export activities. Enterprises established in free zones can enjoy import duty exemptions and are not required to pay export taxes, making these zones particularly attractive for export-oriented enterprises. Free zones also offer enterprises convenient customs clearance procedures, simplifying the often-complex import and export processes, helping companies shorten logistics cycles, and reducing operational costs. To increase the appeal of free zones, the Thai government provides modern infrastructure and logistical support in these areas, including roads, storage facilities, and water and electricity systems, allowing companies in free zones to focus on production and export activities.

Additionally, Thailand’s industrial estates and free zone policies include specific incentives for high-tech and environmentally friendly enterprises. For example, companies engaged in environmental technology research or high-tech manufacturing within free zones may receive extended lease terms and more generous tax reductions. The Thai government views these areas as engines for national economic development, hoping to attract more technologically advanced foreign enterprises with attractive policies. BOI also continuously optimizes the free zone service system, establishing one-stop service centers that offer comprehensive support for enterprises, including tax, logistics, and permit application consultations. These policies greatly reduce the administrative burden on enterprises, improving their entry efficiency into the Thai market.

3.3 Infrastructure Support and Development Incentives

The Thai government’s infrastructure support policies provide strong backing for foreign enterprises establishing and operating in Thailand. Particularly in BOI-designated economic zones, such as the Eastern Economic Corridor (EEC), the Thai government has invested heavily in infrastructure development, including highways, railways, ports, and airports. The improvement of these facilities has made the EEC an essential part of Thailand’s economic landscape, providing foreign enterprises with excellent transportation conditions and efficient logistical support. BOI collaborates with other Thai government departments to ensure the construction of a top-notch road system within the economic zones, enabling fast and convenient goods transportation, thereby reducing logistics costs for manufacturing enterprises and enhancing production efficiency.

Reliable electricity and water supply are essential for smooth operations, and BOI allocates special funds to ensure reliable electricity and water services for enterprises within economic zones. For instance, industrial estates within the EEC are equipped with modern power grids to meet enterprises’ electricity needs during production. For electricity-intensive manufacturing companies, this support significantly enhances their production efficiency in Thailand, helping them avoid production disruptions caused by power outages or water shortages. Additionally, the Thai government prioritizes water supply services for key economic zones, ensuring a steady water supply for manufacturing enterprises through water storage facilities and efficient water recycling systems. This support is crucial for manufacturing and high-tech companies, allowing them to establish production facilities in Thailand with confidence and focus on business development.

BOI also provides special incentives for enterprises with long-term infrastructure development needs. For foreign enterprises, especially those requiring large production bases, BOI offers customized infrastructure support schemes. For companies with significant logistics and warehousing needs, BOI assists in establishing storage facilities in specific areas and provides convenient transportation network connections. Furthermore, the Thai government provides low-interest loans and financing support for foreign enterprises in infrastructure development, helping companies complete facility construction at lower financing costs. These policies not only reduce initial investment costs for enterprises but also attract more capital- and technology-intensive foreign companies to Thailand, fostering long-term local economic development.

IV. Employment of Foreign Personnel and Visa Policies: New Benefits for Talent Introduction

4.1 Work Permit Facilitation for Foreign Managers and Technicians

Thailand’s BOI has long been flexible in its policies regarding the introduction of foreign managers and technical talent, aiming to facilitate the recruitment of foreign professionals that meet the development needs of foreign enterprises. These policies focus particularly on streamlining the work permit and visa application processes for foreign managers and technicians, reducing bureaucratic procedures and approval times to provide convenience for enterprises introducing high-quality foreign talent. Generally, Thailand has strict work permit policies for foreign employees, requiring foreign personnel to obtain a valid work visa (Non-Immigrant B visa) and work permit before working in Thailand. However, BOI-certified foreign enterprises enjoy a simplified process. BOI not only offers fast-track services but also allows multiple extensions and flexible multiple-entry visas, providing convenience for long-term residence and employment of foreign personnel in Thailand.

In practice, BOI operates a One-Stop Service Center for Visas and Work Permits specifically to help foreign enterprises quickly complete visa and work permit applications. Through this center, eligible foreign enterprises can complete both visa and work permit processes at a single location, significantly reducing wait times. Typically, work permits for foreign managers and technicians can be processed within three to seven business days, greatly accelerating the process compared to traditional applications. This policy is particularly important for companies urgently needing skilled personnel or management, as it allows them to quickly fill crucial positions, thereby enhancing operational efficiency.

BOI also provides long-term extension services for work permits. For foreign managers and technicians in Thailand, BOI allows work permits to be valid for up to four years, with the possibility of multiple extensions based on company needs. This policy enables foreign enterprises to retain core talent in management and technical roles, reducing instability associated with frequent personnel changes. Additionally, for senior managers, BOI allows family members to obtain visas, enabling them to reside in Thailand long-term. These policies not only facilitate the work and life of foreign employees but also provide stability in human resources for companies, lowering management costs.

4.2 Incentive Policies for Professional Talent Introduction

Thailand’s BOI has implemented specific incentive policies for talent introduction, particularly targeting highly skilled and professional talent by offering favorable policies for high-tech, R&D, and engineering-intensive enterprises. In recent years, Thailand has gradually become a hub for technological innovation and high-value manufacturing in Southeast Asia, especially through the Eastern Economic Corridor (EEC) project, where the Thai government seeks to attract more highly skilled talent to enhance domestic technological capabilities. Therefore, BOI provides positive incentives for foreign talent recruitment, particularly in engineering, IT, and scientific research fields where demand for skilled talent is high. Qualified high-skilled talent can obtain work permits through BOI’s expedited visa channels and enjoy long-term visa benefits, significantly lowering the cost of talent acquisition for enterprises.

To further encourage enterprises to establish R&D centers and technological innovation institutions in Thailand, BOI also provides tax reductions for high-skilled foreign talent in these areas. Specifically, high-skilled foreign talent working in R&D centers can enjoy personal income tax benefits and have more flexible visa options, such as long-term visas and multiple-entry visas. This policy allows foreign enterprises to efficiently recruit R&D and technical talent in Thailand, facilitating technology transfer and innovation output. For high-skilled talent engaged in scientific research, AI, and big data, BOI has created a “Talent Priority Introduction Program,” allowing foreign professionals in these fields to reside and work in Thailand for over five years, with the option to apply directly for permanent residency upon visa expiration, making Thailand a regional high-tech talent hub.

Moreover, BOI’s incentive policies include funding support for companies’ talent training programs. The Thai government aims to support enterprises in developing localized high-skilled employees, thereby raising the overall technical level in Thailand. Companies can apply for special funds for training, which can cover training fees, equipment costs, and implementation costs of training programs. In some key technological fields, BOI even offers full funding for technical training to encourage foreign enterprises to establish local R&D centers and training facilities in Thailand. These incentives enhance Thailand’s competitiveness in attracting high-end talent and encourage foreign enterprises to invest more in local employee training, strengthening Thailand’s technological edge in the global market.

4.3 Human Resource Training Support

To improve the technical and managerial capabilities of local Thai employees, BOI offers significant support policies for human resource training in foreign enterprises, aiming to promote local talent development and the sustainable growth of enterprises. BOI understands that the professional and technical quality of local employees directly impacts the long-term success of foreign enterprises, and thus encourages companies to implement localized training programs with support for training costs. For instance, BOI provides a “Human Resource Development Fund” for foreign enterprises to use toward vocational skills and managerial capacity training for employees. Foreign enterprises can apply for subsidies from this fund, reducing training costs and helping develop local professionals aligned with their needs.

Under substantial support from the Thai government, many foreign enterprises have established dedicated employee training centers in Thailand, especially in the EEC area. To promote skill development among local employees, BOI provides eligible companies with facility construction subsidies, assisting them in setting up training centers and laboratories. Additionally, BOI permits companies to import internationally advanced training equipment and materials with customs duty exemptions, reducing investment in training infrastructure. This policy encourages companies to invest long-term in Thailand and indirectly raises Thailand’s overall technical standards, laying a foundation for the competitiveness of Thai manufacturing and service sectors in international markets.

In addition to basic skill training, BOI supports investments in management training for foreign enterprises. Through dedicated management training funds, BOI assists foreign enterprises in developing a localized management team, enhancing their roles within the company. This benefits the sustainable development of foreign enterprises in Thailand and cultivates a large pool of internationally-minded and high-quality management professionals for Thailand. To encourage the growth of these localized management talents, BOI has launched a rewards program offering further education and training opportunities for outstanding local employees, with many of these advanced courses conducted in collaboration with renowned international universities and research institutions, providing Thai employees with channels for learning and growth.

In conclusion, BOI’s policies on employment and visas for foreign personnel are practical and flexible, providing talent support for foreign enterprises in Thailand. Whether through the introduction of highly skilled foreign talent, visa facilitation, or local human resource training, BOI’s policies demonstrate strong support for Thailand’s long-term economic development. Foreign enterprises can leverage BOI’s favorable policies to quickly introduce necessary talent and, through human resource training policies, develop local talent, thereby establishing a stable and efficient team in the Thai market. These policies enhance the competitiveness of foreign enterprises in Thailand while contributing to the development of a highly qualified workforce for Thailand’s economy.

Conclusion

Thailand’s BOI investment incentive policies provide valuable support resources for outbound enterprises, encompassing tax exemptions, land use rights, and foreign talent introduction. Properly utilizing these incentives can help enterprises quickly establish themselves in the Thai market and significantly reduce operational costs. However, as Thailand’s market becomes more regulated and competitive, enterprises need to understand policy details and applicability to ensure compliance and benefit from relevant incentives. This not only lowers market entry barriers effectively but also aids enterprises in maintaining compliance during development, enabling long-term growth in Thailand.