BOI Thailand Benefits for Regional Operating Headquarters in Thailand

Talking about Board of Investment privileges, it is known to most of us that almost all types of business structures, be it LLPs, LLCs, Sole Proprietorships (only Thai ownership), etc. can be eligible for the same provided their business deals with the BOI eligible activities. But what if you are planning to expand your business in Thailand - you can register your Regional Operating Headquarters in Thailand and enjoy seamless BOI privileges.

To boost business activity in Thailand, the Thai government has introduced the Regional Operating Headquarters (ROH) scheme. This instrument offers incentives to investors who set up a regional headquarters in the country and provide "qualifying services" to branches or affiliated companies both within and beyond Thailand's borders.

Regional Operating Headquarters (ROH)

In 2002, the Revenue Department introduced the first set of ROH incentives, which included both tax and non-tax incentives, with the primary goal of attracting more investment in Thailand. Some of the tax incentives offered by the Revenue Department include:

• Corporate income tax reduction from 30% to 10% is offered on net profit stemming from offshore branches and associated companies.
• Dividends received from both domestic and foreign subsidiaries of ROH are exempt from taxation.
• Withholding tax exemption is granted for dividends paid out from ROH to foreign companies that do not conduct business in Thailand.
• A reduced personal income tax rate of 15% applies to the salaries of expatriates working with ROH, instead of the progressive tax rate ranging from 5% to 37%.
• An initial allowance of 25% on buildings is provided upon acquisition.

Board of Investment Option

Investors who seek non-tax incentives should apply directly to the Board of Investment (BOI). Here are the incentives that applicants may receive from BOI:

• Permission for foreign investors to own land.
• Permission to bring in foreign specialists and technicians.
• Facilitation of work permits and visas

In 2010, the Thai government revisited strategies to enhance Thailand's competitiveness in the regional market. The government aimed to provide fresh incentives to attract foreign investment and create a more favorable environment for businesses

Incentives from the Board of Investment

For a Regional Operating Headquarters (ROH) to qualify for BOI incentives, it must meet the following criteria:

• The Thai Revenue Department must confirm the business entity as ROH.
• It must be a juristic company or partnership incorporated under Thai law.
• It must have a paid-up capitalization of not less than 10 million baht.
• It must provide services to its branches or companies in at least 3 countries.
• It must earn half of its income from qualifying services provided to its branches or associated companies outside Thailand.

Definition of Services

“Qualifying Services” are the services that must be in line with the business of the ROHs to be eligible for the BOI Incentives in Thailand. The list of such activities that make these ROH eligible under the Investment Promotion Act of BOI Thailand is as follows:

• Organizational administration and management business planning
• Sourcing of raw materials, parts, and finished products
• Research and development activities
• Technical support
• Marketing and sales promotion
• Regional human resources training and development
• Business advisory services ( financial management, marketing, accounting, etc.)
• Investment feasibility studies and economic and investment analysis
• Credit management and control
• Other services shall be approved by the BOI on a case-by-case basis.

For any inquiries you may have, don't hesitate to contact our dedicated corporate Thai lawyers. Our legal experts are always ready to assist you and provide valuable legal guidance. Email us at officer@konradlegal.com to book a session of free email consultation.