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Updates on the BOI’s Investment Promotion Packages and Conditions during the 3rd and 4th Quarter of 2021(Thailand)

NO&T Thailand Legal Update

Yothin Intaraprasong, Poonyisa Sornchangwat, Chattong Sunthorn-opas, Sarita Srichan (Co-author)
Nagashima Ohno & Tsunematsu
Journal /
NO&T Thailand Legal Update No.15 (December,2021)
Practice Areas
*Please note that this newsletter is for informational purposes only and does not constitute legal advice. In addition, it is based on information as of its date of publication and does not reflect information after such date. In particular, please also note that preliminary reports in this newsletter may differ from current interpretations and practice depending on the nature of the report.


During the 3rd and 4th quarter of this year, the Board of Investment of Thailand (the “BOI”) committee approved several investment promotion packages and amended some of the existing conditions to encourage investment in various sectors in response to changing global trends. The key takeaways of these updates can be divided into three categories as follows:

1) New businesses eligible for the BOI promotions

The following activities have been added as businesses eligible for the BOI promotions.

Eligible activities Material conditions and incentives
Operation of a natural gas separation plant※1 The incentives vary based on the level of technology used in the plant.

  • a plant using standard technology is eligible for a five-year CIT※2 exemption; and
  • a plant using Carbon Capture Utilization and Storage (CCUS) technologies is eligible for an eight-year CIT exemption.
Manufacture of Electric Bicycles (individually, an “E-Bike”)※3
  • the project must be proposed within a package consisting of (a) the manufacturing of E-Bikes, (b) the manufacturing of electric batteries (either by the applicant or by others), and (c) a disposal plan for used batteries.
  • the manufacturing must commence within three years from the date of issuance of the BOI certificate.
  • the E-Bike structure must be manufactured from lightweight materials such as Aluminium Alloy, Chromium-Molybdenum Alloy Steel (Chrome moly), Titanium Alloy, and Carbon Fiber.
  • the E-Bike must conform to the EN15194 standard or an equivalent standard.
  • the battery of the E-Bike must contain environmentally-friendly technology.
  • the E-Bike is entitled to a three-year CIT exemption, but will be entitled to an additional one-year CIT exemption if (i) a traction motor or (ii) a lightweight material is also manufactured in the project within three years from the date of issuance of the BOI certificate.
  • it is possible to manufacture non-electric bicycles together with the E-Bikes, but the manufacture of such non-electric bikes will not entitle the manufacturer to the tax incentives.

2) Amendment of conditions relating to existing businesses eligible for the BOI promotions

2.1 Trade Investment Support Office (“TISO”) and International Business Center (“IBC”)※4

The scope of activities of TISO and IBC has been extended to cover the provision of loans to associated enterprises both in Thailand and overseas, which must be done in either one of the following manners:

  • loans in foreign currencies to overseas associated enterprises;
  • loans in THB currency to associated enterprises in Thailand; or
  • loans in THB currency to associated enterprises in Vietnam, Laos, Myanmar, Cambodia, and Malaysia for trading or investment purposes in Thailand or in such countries only.

With regard to the application under TISO or IBC, it must be noted that the lending activity under TISO or IBC must be paired with other eligible TISO or IBC activities (i.e., an application where the lending activity is a stand-alone activity will not be accepted), and the lending activity shall not fall under any of the treasury center’s activities. In addition, lending to foreign countries must comply with the exchange control regulations under Bank of Thailand’s supervision.

2.2 Manufacture of platforms for Battery Electric Vehicles※5

The manufacture of platforms for the following business categories will be eligible for BOI promotion:

  • category 4.24: manufacture of Battery Electric Vehicles (individually, a “BEV”);
  • category 4.26: manufacture of electric battery tricycles; and
  • category 4.27: manufacture of electric battery buses and trucks.

The manufacture of such platforms must comply with specific conditions as follows:

  • the platform must consist of (i) an energy storage system; (ii) a charging module; and (iii) a front & rear axle module;
  • production must start within three years from the date of issuance of the BOI certificate; and
  • at least one of the material components i.e., the traction motor, BMS, or DCU must be manufactured together with the platform within three years from the starting date of manufacture.

With regard to the tax incentives, the manufacturers of BEV platform will be entitled to the same privileges as those engaging in the manufacture of BEVs i.e., a three-year CIT exemption or up to an eight-year CIT exemption in the event that a BEV platform with an investment amount of THB 5,000,000,000 or more is manufactured.

3) Other noteworthy measures

3.1 Measures to encourage greenhouse gas reduction※6

In order to promote environmental sustainability, the BOI has added a new purpose below as one of the investment plans in relation to machinery replacement eligible for the Efficiency Enhancement Measure※7:

“The manufacturer shall invest in the upgrading of machinery to mitigate environmental impacts by reducing greenhouse gas emissions. The registration of the machinery shall be made with, and the certification of the gas emissions amount therefrom shall be obtained from Thailand Greenhouse Gas Management Organization.”

The incentives under this measure remain the same as other categories of the Efficiency Enhancement Measure, i.e., a 50% CIT exemption for three years and an exemption from import duties for machinery.

3.2 Measures to promote the “Thailand 4.0” industry transformation※8

To transform the economy into the “Thailand 4.0” model, the replacement of machines for specific purposes such as Automation and Network Technology, Smart Operation, and Digital Technology in Production & Enterprise Processes will entitle the manufacturer to a 100% CIT exemption for three years provided that:

  • the application is submitted within the last business day of 2022, and the investment plan is initially approved by the National Science and Technology Development Agency before submission to the BOI; and
  • the replacement of machines is fully implemented within three years from the date of issuance of the BOI certificate.

Further details regarding the replacement criteria will be prescribed in the BOI announcement in due course.

3.3 Extension of incentives to support Small and Medium Enterprises (“SMEs”)※9

To continue its policy to help strengthen local SMEs, the BOI also approved an extension of the existing special investment promotion measures for SMEs until the last business day of 2022. The incentives remain the same as previously approved in 2020, for example, a CIT exemption of up to 200% of the capital investment, an exemption from import duty on machinery, and eligibility for other merit-based incentives, as the case may be※10, have also been adopted.

Further details regarding the replacement criteria will be prescribed in the BOI announcement in due course.

Should you require further details of any measures or wish to receive further updates, please feel free to contact us.

BOI Announcement No. Sor. 7/2564 dated 17 November 2021

“CIT” means Corporate Income Tax.

BOI Announcement No. Sor. 8/2564 dated 17 November 2021

BOI Announcement No. Sor. 3/2564 dated 16 September 2021

BOI Announcement No. Sor. 8/2564 dated 17 November 2021

BOI Announcement No. 23/2564 dated 17 November 2021

The Efficiency Enhancement Measure was initiated to promote and upgrade technology and machinery for energy conservation, alternative energy utilization and the reduction of environmental impacts, as well as to encourage involvement in R&D and advanced engineering designs in order to improve production efficiency. An existing company promoted by BOI which applies for and meets the criteria thereunder shall be entitled to an additional incentive of a 50% CIT exemption for three years and an exemption from import duties for machinery.


BOI Announcement No. 4/2563 dated 11 March 2020

This newsletter is given as general information for reference purposes only and therefore does not constitute our firm’s legal advice. Any opinion stated in this newsletter is a personal view of the author(s) and not our firm’s official view. For any specific matter or legal issue, please do not rely on this newsletter but make sure to consult a legal adviser. We would be delighted to answer your questions, if any.

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