Thailand - Cancellation Of Investment Promotion Scheme For IHQ And ITC.
Legal News & Analysis - Asia Pacific - Thailand - FDI - Regulatory & Compliance
29 December, 2018
To be in line with the Revenue Department's policy to promote International Business Center (IBC), Thailand Board of Investment (BOI) has repealed its investment promotion policy to promote International Headquarters (IHQ) and International Trading Center (ITC) businesses and replaced them with a new investment promotion scheme for IBC.
The IBC under BOI is essentially the combination of IHQ and ITC schemes. The activities that an IBC can undertake for associated enterprise are as follows:
- General business management, business planning, and business coordination;
- Sourcing of raw materials and parts;
- Research and development of products;
- Technical support;
- Marketing and sales support;
- Human resources management and training;
- Advisory relating to finance;
- Economic and investment analysis and research;
- Credit control and management;
- Treasury center;
- International trading center; and
- Any other business as announced by the Revenue Department.
As per the previous IHQ and ITC schemes, the BOI will only provide non-tax incentives to investors, which include work permits for foreign experts and technicians and land ownership for operation of IBC businesses.
To qualify for investment promotion from the BOI as IBC, the IBC must meet the following criteria:
- A registered capital of at least THB 10 million; and
- At least ten employees working in the IBC or five employees if the IBC is only to provide services relating to financial management.
However, as the IBC is still a new scheme, no written guidelines exist and the BOI has yet to offer any official clarification on specific details of the scheme. Nevertheless, we expect it to be similar to that of IHQ and ITC.
For further information, please contact:
Peerapan Tungsuwan, Partner, Baker & McKenzie