BOI Frankfurt Monthly Enewsletter

When applying for BOI promotion, what is the difference between submitting the application directly to the office and online?
Will the consideration be processed differently between the two methods and which will be faster?

Answer: Submitting the application from whether directly to the Division in charge or online will consume the same amount of time (40-90 working days, depending on the size of the project).
Submitting online is for the convenience of the applicant by not having to travel to the office and submit the application form in person.
The required attachments can be submitted at the interview appointment.
As a foreign company, who should I use as applicant when I have neither established a company located in Thailand nor appointed a representative to Thailand?

Answer: You should use someone who could be contact within Thailand as that person will be responsible in signing all the documents after the project have been granted the promotion status i.e. a Reply Form accepting the promotion status, and initialing other documents that are required for the issuance of the BOI certificate.
However, it is not necessary that the person has to be the company's appointed representative to Thailand.
Will projects submitted to the BOI Regional Office, be considered by the BOI Regional Office directly? Or will the application be sent to the Central Office?

Answer: For projects with investment capital not exceeding 10 million Baht, the Regional Office will consider the application form directly.
For projects with investment capital exceeding 10 million Baht, BOI central will consider the projects.
However, decision-making is still in the authority of the Working Committee, the Sub-Committee and the Board members.
If the company has submitted the application, but was rejected for BOI promoted status, will the Office notify the reason in writing to the company?

Answer: The Office will notify the reason why the company has not been approved for the promoted status.
This will appear in the Informing Letter.
If I want to buy an old hotel, and renovate it. Can I apply for a BOI promotion?

Answer: Buying an old hotel and renovating it is not an activity that can be granted the promoted status, unless that hotel is already promoted by the BOI, then you can request for business ownership transfer and use the remaining incentives.
Can condominiums and appartments for rent apply for BOI promotion under the category "Residential for the Low-to-Middle Income"?

Answer: No.
Condominium and appartment for rent cannot be promoted under this category.
"Residential for the Low-to-Middle Income" are residential built for sale.
Can Free Zone apply for investment promotion?

Answer: Yes, under eligible activity no. 7.5.3 "Free Trade Zone and Free Zone" under the following conditions:
- The size of land must exceed 200 rai
- Bangkok area cannot be promoted
- In the case of Samut Prakan province, only the industrial areas permitted by the Ministry of Industry can be promoted
- All related government agencies must approved for the Free Zone prior to applying the promoted status
- Incentives will be the same as Industrial Estates or Industrial Zones that are promoted by the BOI
Can factories located in Free Zone sell their products to local customers that are located outside the Free Zone?
If the products are sold to the companies that are also located in the Free Zone, will that be regarded as selling domestically or export?

Answer: Yes, but you must pay for the import duty at the same amount as the finished products that are to be sold because factories located in the Free Zone are treated as being overseas.
Therefore, to sell a product locally would be the same as importing the goods.
As for producing and selling the products to customers in the Free Zone is regarded as export because the company regarded in there, is already treated as being located overseas.
Can Home Stay request for BOI promotion?

Answer: No.
Must category no. 7.11.2 "Retirement Home and Care Centre" receive prior approval from related government agencies or not?

Answer: The stated condition will be considered on a case by case basis.
For projects with medical clinic, prior approval from the Ministry of Public Health is requested.
If there is no medical clinic, then the application form for BOI promotion can be submitted directly to the BOI.
Can searching service for both domestic and international human resources be classified as Regional Operating Headquarter (ROH)?

Answer: No, because human resources searching is regarded as jobs provider.
In order to qualify for ROH, the BOI requires human resource search and training prior to sending the personnel to the affiliated companies.
What are the difference between category 5.8 "Software" and 5.9 "e-commerce"?

Answer: The difference will depend on the income structure.
For category 5.8 "Software" the income must derive from selling of software or applications, and software development procedures are required according to the BOI's criteria.
For "e-commerce", the income should derive from electronic transaction through the website i.e. advertising on the website or providing advertisement service or providing service through e-mail.
If a storage company is contracted by a BOI-Promoted company to store raw materials, do they have to notify the BOI?

Answer: The BOI-Promoted company must notify the office that it had contracted other companies to store their raw materials and the raw materials must be listed by items, by amount and with whom.
If a BOI-Promoted company imports raw materials which is contained in trays, can the trays be sold then be exempted from corporate income tax exemption once revenue has been derived from the sale?
Do we need permission from the BOI first or not?

Answer: Revenue derived from sales of trays cannot be accumulated as revenue that will be exempted from corporate income tax.
However, if the BOI-Promoted company uses their rights to exempt import duty for the raw materials, the company must first pay back import duty charges for the trays (counting from the date of importation), then the trays can be sold.
How long can foreigners pertained the rights to own land?
Can they sell part of the land?

Answer: a BOI-Promoted person can own land to operate the BOI-Promoted activities until the operation is terminated or transferred to others.
The BOI-Promoted person must sell the land, in which they have been permitted with the right of ownership, within the period of 1 year (counting from the date in which the operation is terminated or transferred).
The Promoted-person must obtain the BOI permission if they want to sell part of the land. (Fill in application form F LD LO 02).
Under right section 27 "permission to own land", if the land cannot be sold within the specified period of 1 year, counting from the date in which the operation had been terminated or transferred, will there be penalties or fines?

Answer: If the Promoted-company cannot meet the following requirement, they must notify the Office in person, providing evidence that they have attempted to sell the land, but it has not been sold yet.
Otherwise, the Director-General of the Department of Lands may take concession of the land and sell it according to the Land Law.
If the company cannot start-up its operation within the period specified by the Office, how should they proceed?

Answer: If the incident is due to incomplete importation of machinery sets, the company can request for machinery importation extension.
The Office will allow machinery import extension for a period of no more than 1 year at a time, counting from the date specified in the BOI Certificate.
The extension is only allowed 3 times.
The start-up of operation can be extended 6 months, from the deadline in which the machinery importation must be completed.
However, in the case the extension is only for the start-up operation, the extension is only once for not more than a year.
If a company wishes to change their shareholders, will the incentives be reduced?

Answer: The changes in shareholders whether Thai majority or foreign majority will not affect the tax incentives in anyway.
Is profit from foreign exchange currency deriving from BOI-promoted activities regarded as revenue from BOI-promoted activity?

Answer: Profits from currency exchange that occurred from using foreign loans to start the BOI-promoted activities can be regarded as revenue that can be exempted from corporate income tax.
If a BOI-promoted R&D company imports raw materials and re-export to the parent companies for research, will the following activity be regarded as R&D business in Thailand?
Will income derived from such activity be exempted from corporate income tax?

Answer: Income from R&D activity will only be income that occurred from R&D activity in Thailand.
If the BOI-Promoted project encounters financial loss, will the incentives be terminated?

Answer: No.
There is no such requirement under the BOI for the promoted company to gain profit or loss.
The incentives will not be terminated regardless of the loss or profit of operation.
Furthermore, the promoted company can bring their financial loss to claim for a loss carry forward for a period of not more than 5 years to deduct from the net profit after they have been exempted from corporate income tax.
They can choose from which ever year or numerous years in which they wish to deduct the loss from the net from profit.
For the condition attached with the Trade and Investment Support Services to have an annual operating expense for not less 10 million Baht, what would be included in the operating expenses?

Answer: Administrative and sales fee including monthly salary, wage, fare charges, traveling expenses, accommodation fee, freight, transportation fee, rental fee, reception fee, commission fee, advertisement fee, sales promotion fee, tax, interest, advisory and consultancy honorarium, damage and depreciation cost, and other expenses.