New BOI Strategy and Investment Promotion Scheme

In January 2013, the Office of Board of Investment (“BOI”) introduced a new strategy and drafted the new investment promotion scheme which would have caused a significant impact to many investors.

Keywords: Mazars, Thailand, Legal, BOI, CIT

09 October 2014

The 2013 draft investment promotion scheme, as discussed by Mazars in January 2013, was aimed at moving Thailand into a higher level of development, focusing on competitiveness and value creation in the industrial sector. However, following consultations with stakeholders, the 2013 draft investment promotion scheme was put on hold.

On 19 September 2014, the BOI presented the revised draft new investment promotion scheme and announced the strategy for 2015 – 2019. The new scheme would be applicable from January 2015 onwards.

What’s has and hasn’t changed since the 2013 draft?

Draft BOI Strategy – 2013

BOI Strategy – 2015

Impact of the new BOI Investment Promotion Scheme

“Broad-based” to “Focus and prioritized”


No Change


Approximately 40 business activities (out of 240 activities) will no longer be promoted, .e.g. bread, green tea manufacturing.

40 activities which currently are eligible for tax incentives will be cut but will receive other incentives.

“Sector-based” to “Merit-based”

“Sector-based” to “Section and merit-based”


-Basic tax incentives will be reduced.

-Other incentives will be granted if projects‟ merits to encourage competitiveness enhancement activities, e.g. R&D, product and packaging design, advanced technological training and local supplier development or locate the projects in an industrial estate/zone.

“Zones” to “clusters”

No change


“Industrial clusters” will replace zones 1, 2 and 3.

“Tax incentives” to “Facilitation oriented” benefits


No change


Instead of granting generous tax incentives to investors, the BOI will focus on:

- non-tax incentives and one stop services;

- improving investment rules and regulations to reduce barriers and create a better investment environment;

- promoting and coordinating human resource development; and

- packaging the support of various government agencies.

Promoting inbound and outbound investment is still included in the strategy. Whereas the BOI has primarily been focusing on inbound investment, the BOI will now promote overseas investment more actively to increase the competitiveness of Thai business.

In addition the BOI will change the way it measures performance from the value of investment to the value of the project’s outcome (i.e. the value added created by the promoted project in Thailand). The BOI will set clear KPIs to measure benefits and cost-effectiveness of investment promotion.

The new activities eligible for promotion under the new strategy will be divided into 7 categories (similar to the existing scheme) but the BOI will have a stronger emphasis on industries with high technology, value add creation, incorporating R&D or design, as well as environmentally friendly.

Incentives will be (i) activity based incentives; and (ii) merit based incentives.

i. Activity based incentives

Group A

  •  Corporate income tax (“CIT”) exemptions (maximum of 8 years without cap)
  • Merit-based incentives apply to all activities
  • Import duty exemptions on machinery and raw materials (manufacturing for export)
  • Non-tax incentives, i.e. permission to own land, visa and work permit

Group B

  • No corporate income tax exemptions
  • Merit-based incentives apply to some specified activities
  • Import duty exemptions on machinery and raw materials (manufacturing for export)
  • Non-tax incentives, i.e. permission to own land, visa and work permit

ii. Merit based incentives

Merit competitiveness enhancement

The BOI will grant additional incentives which vary depending on the investment/expenditure ratio:

Qualified investment/expenditures as a percentage of combined revenue in the first 3 years

Additional corporate income tax exemption (subject to 60% cap on qualified investment/expenditures)


1 year


2 years


3 years

Merit on industrial area development decentralization


Enhanced incentives

Projects located in an industrial estate or promoted industrial zone.

1 additional year CIT exemption

Projects located in the specified 22 provinces and / or 4 specified districts in Songkhla province.

3 additional years CIT exemption

However, for those activities which already receive an 8 years CIT exemption, they will instead receive an additional 5 years of 50% reduced CIT.

Alert to investors

Please note that the new scheme will not affect existing promoted projects or projects that have applied for investment promotion prior to the effective date.

Therefore, if the investors intend to invest in a new project, we advise you to check with Mazars as whether your business activity will be eligible for BOI promotion under the new scheme and the nature and extent of the new promotion incentives to which it will be entitled.

On the other hand, if you have new projects that may be disadvantaged under the new scheme, you may wish to take the opportunity to file your application with the BOI within 2014.

Mazars’ professionals are ready to help you in planning your BOI strategy during this critical period of regulatory change.