Q: HOW CAN A FOREIGNER INVEST IN THAILAND?
A: Foreigners will normally invest in following business entities:
- By Thai company limited with Thai majority own
- By foreign majority own with Foreign Business License (FBL)
- By foreign majority own with an exception of FBL i.e. BOI, U.S.-Thai Amity-Treaty
Q: WHAT IS THE CORPORATE TAX STRUCTURE FOR A COMPANY IN THAILAND?
A: A Thai company limited is subjected to Thailand Tax on its worldwide net profit at the end of each year. The tax rate will range between 15-30% depending on the types of taxpayers. However, if the company is promoted by BOI, the company might be exempted or reduced from the corporate income tax with the maximum of 8 years exemption.
Q: ARE THERE ANY PRIVILEGE DIFFERENCES BETWEEN THAI BOI APPLICANTS AND FOREIGN BOI APPLICANTS?
A: Not really, as long as they got promoted from the same business activities within the same investment zone, all of them will get the same tax incentives. However, the foreign applicant might further get permission to own land which Thai applicants have generally possessed that right.
Q: CAN FOREIGNERS HOLD THE MAJORITY SHARE OF A COMPANY OPERATING IN HOTEL INDUSTRY?
A: In general, Hotel is a business activity in the Annex 3 of Foreign Business Act 1999 (FBA). It restricts foreigner to hold the majority of the share. In the case that the company is promoted by BOI, the BOI may allow foreigner to hold over 50 percent of the share, regardless to the FBA regulations.
Q: CAN A REPRESENTATIVE OFFICE GAIN THE PRIVILEGES FROM THE BOI?
A: No, because the representative office does not fall in the BOI promoted activities. On the other hand, if foreigners wish to establish a Regional Operating Headquarters, foreign investors are eligible to apply for the BOI section 7: Service and Public Utilities under sub-categories 7.13.
Q: WHAT ARE THE REGULATIONS FOR THE FOREIGN OWNERSHIP OF LAND UNDER BOI?
A: BOI promoted companies may be granted the right of land ownership in Thailand which is normally very restricted. However, the amount of land that the foreign promoted companies may own is limited as follows:
- Land for the establishment of offices for promoted projects must not exceed 5 rai
- Land for the residence of executives must not exceed 1 rai
- Land for the residence of employee must not exceed 2 rai.
Q: ARE THERE ANY OTHER OPTIONS TO A FORM OF FOREIGN MAJORITY COMPANY?
A: Yes, the foreign majority company can be exercised without having to apply for foreign business license if an activity is promoted by the BOI or the company is qualified privileges from the U.S.-Thai Amity Treaty. So the BOI or the U.S.-Thai Amity Treaty promotion will override the FBA. Bear in mind that although such company is not required to have a Foreign Business license, besides from the BOI or U.S.-Thai Amity Treaty certificate itself, the company is necessary to further gain the Foreign majority own certificate from the Department of Business Development.
Q: DO THE FOREIGNERS NEED A FOREIGN BUSINESS LICENSE IN ALL BUSINESS ACTIVITIES?
A: No, according to the Foreign Business Act, a foreign business license is required for every kind of juristic person that is not registered in Thailand and every kind of juristic person, whereby over 50% of the shares are invested by foreigners which have the activity under list 2 or 3.