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The
Board of Investment as a Business Partner
The
Board of Investment is the government agency responsible for
administering incentives and providing services with a view to
encouraging investment in priority areas. It comprises two
bodies: The Board itself and the Office of the Board of
Investment.
Chaired
by the Prime Minister, the Board is responsible for
administering the investment promotion law and establishing
overall policy guidelines. In response to the changing situation
in the economy, the BOI has designated a range of select
investment categories for promotional privileges and incentives
under the Investment Promotion Act.
The
general guidelines used by the BOI in granting approval are
derived directly from national development priorities.
Accordingly, the BOI gives special consideration to investment
projects which are export oriented, support resource development,
substantially increase employment, locate in the provinces,
establish of develop industries which form the base for further
stages of industrial and technological development. Projects
which carry out significant R & F activities, or establish
basic transportation, networks, public utilities and
environmental protection systems are considered priority
projects and are eligible for special incentives.
The
BOI aims to supplement and strengthen the domestic resources by
encouraging foreign businesses which allow technology transfer,
encourage Thai participation in ownership and management, help
upgrade the product quality of Thai suppliers and subcontractors.
For those companies and industries enjoying promoted status, the
basic incentives offered by the BOI include tax incentives such
as corporate income tax holidays, exemption or reduction of
import duties on imported items, and exclusion from taxable
income of dividends during the tax holiday, etc...
To
prevent unfair competition from imports, temporary tariff
surcharges or bans may be imposed on imports. To ensure security
of investment, the Investment Promotion Act also guarantees
against nationalization, state competition, and state
monopolization. Furthermore, the investor is granted permission
for foreign ownership of land and for entry, employment of
foreign nationals, and to remit foreign currency abroad.
In
recent years the BOI has been shifting its emphasis towards a
more services oriented role. The general activities time reduced
by 40 percent. In addition, they provide investment information,
investment opportunity surveys and identify potential joint
venture partners. The BOI also assists promoted companies in
obtaining the permits and licenses that are required for
starting up operation and also facilitates work permits and
visas for foreigners working on promoted projects or carrying
out feasibility studies.
In
order to support the governments decentralization policy, the
BOI began overhauling the criteria for granting privileges on
September 1, 1987, with the most recent revisions becoming
effective on April 1, 1993. The new provisions grant promoted
status to existing projects if they relocate to regional areas.
Promoted projects receive privileges according to the Zone they
are located in. Promoted projects which are located in Zone I
receive the least benefits while those in Zone III obtain the
maximum benefits.
These
promotional privileges, however, are non-compulsory requirements
for investment in Thailand. Investors may exercise the option of
developing their projects on a non-promoted basis. |
