BOI Thailand Benefits for Commercial Fleet Owners in Thailand

 

What’s the Scheme?

Thailand's National Electric Vehicle Policy Committee has implemented tax incentives to facilitate the shift from commercial fleets of large trucks and buses to battery-powered electric vehicles (BEVs).

Key Takeaways

• To encourage the adoption of electric trucks and buses, Thailand's EV Board approved tax incentives that target reducing pollution and supporting companies' net-zero goals.
• By providing special tax deductions to companies purchasing electric trucks and buses and financial support to battery cell manufacturers, the nation is positioning itself as a hub for EV manufacturing.
• With over 78,000 registered EVs benefiting from tax discounts and subsidies, the EV3 program, which promotes EV passenger cars, has already demonstrated success. Participating companies are, however, required to manufacture locally.

The News in detail!

In a move to promote the adoption of electric vehicles (EVs), the Thailand National Electric Vehicle Policy Committee (EV Board) has implemented several incentives. Firstly, tax incentives have been approved to encourage companies to switch their large commercial trucks and buses to battery-electric vehicles (BEVs). Secondly, cash grants will be provided to manufacturers of EV battery cells. These policies aim to expand Thailand's support for the entire EV ecosystem and strengthen its position as a significant hub for EV manufacturing in the region.

To promote eco-friendly practices, reduce pollution, and position Thailand as a significant player in the EV manufacturing industry, a series of incentives have been introduced. These incentives provide special tax deductions for companies procuring electric trucks and buses to support their progress towards net-zero emissions targets. Additionally, cash grants are offered to manufacturers of EV battery cells, facilitating the development and production of these essential components.

Thailand plays a substantial role in the automotive industry, positioning itself among the top 10 countries worldwide regarding automotive production and total exports. Notably, Thailand stands out in Southeast Asia as the first country to provide special incentives for both the supply and demand sides of electric vehicles (EVs). Through the 30@30 policy, Thailand has established a clear goal: to have at least 30% of domestically-produced cars be EVs by the year 2030.

Eligible companies will receive a special tax deduction to encourage the purchase of electric-powered buses and trucks. For vehicles manufactured domestically, companies can deduct expenses up to twice the actual price, with no upper limit. Imported vehicles will qualify for a deduction of 1.5 times the actual price.

Eligibility to avail of the Benefits

The eligible large electric vehicles include container trucks, liquid trucks, hazardous substance trucks, special trucks, tow trucks, as well as both air-conditioned and non-air-conditioned electric buses.

Furthermore, the EV Board also approved a plan to promote local manufacturing of battery cells for EVs and energy storage systems (ESS). Financial support will be provided through Thailand’s Competitiveness Enhancement Fund, along with other benefits available under the Competitiveness Enhancement Act for companies meeting specific criteria.

To qualify for investment promotion under this scheme, a company must meet the following requirements:

• Being a leading and well-recognized battery manufacturer providing batteries to EV manufacturers;
• Having a clear plan to produce battery cells for batteries used in EV, and also if possible to produce battery cells for batteries used in ESS;
• The batteries must have a high energy density of not less than 150 Wh/kg;
• The battery must have a life cycle of not less than 1,000 cycles, counting from 70% of the nominal capacity at a depth of discharge of not less than 80% at a test temperature of 20-25 degrees Celsius.

These measures are expected to significantly increase the adoption of electric trucks and buses, reduce pollution from transportation and manufacturing sectors, and support companies’ efforts to achieve their net-zero targets.

EV Sector Update

The meeting also heard an updated report on the EV3 measures to promote the use of EV passenger cars.

Statistics as of 31 January 2024 show that, since the scheme started in 2022, a total of 14 manufacturers and importers of BEV cars and pickups have registered a total of 78,554 EV cars to enjoy the excise tax discounts and subsidies. According to the conditions of the EV3 scheme, these companies will have to produce in Thailand at least one vehicle for each vehicle imported.

What it has for you?

If you already own a fleet of commercial vehicles, now is the time to upgrade yourself. In addition to gaining tax incentives, you can enjoy special deductions in the prices. You must note that the scheme is open to both local and global investors in Thailand.

In addition to supporting the fleets, BOI also aims to promote the EV Industry as a whole starting from the manufacturing segments. Read our article on BOI Promotion for the EV Industry in Thailand.

Are these benefits applicable to all global investors and are you eligible to apply for BOI Thailand promotions?

1. What are the steps of getting a BOI Thailand Promotions Certificate?
2. What to do before and after registering your BOI Company in Thailand?

To get answers to such or more complicated questions, you must consult with a leading corporate law firm in Thailand with experience in BOI Company Registration.

For direct support, feel free to email us at officer@konradlegal.com.

How to hire a Business Law Firm in Thailand?

As Thailand solidifies itself as a Southeast Asian business and investment hub, entrepreneurs, and companies alike must navigate its intricate legal landscape. To ensure adherence to laws, mitigate potential risks, and facilitate seamless operations, choosing a trusted business law firm in Thailand is vital. In this article, we delve into the critical factors businesses should consider when selecting a legal partner in Thailand.

Before you move into searching for a trustworthy business law firm in Thailand, you must be ready with your homework. This means, that you must know what exactly you want to do in Thailand. As a leading corporate law firm in Thailand for more than a decade, we often meet clients who are confused about their pristine requirements. You must understand that the level of compliance necessary to do business in a foreign land is very different from that in your country.

Ask yourself whether you are looking for assistance with company formation in Thailand, contract drafting, intellectual property protection, or litigation. Clarifying your requirements will help narrow down your search and find a law firm with the expertise to meet your needs. 

Based on your requirements, you must consult with a law firm of the following categories:

Corporate law firms: These are law firms catering to corporations that provide expert counsel on legal matters. These firms assist businesses throughout their lifecycle, from the initial setup to contract negotiations and dispute resolution.

Intellectual property law firms: These firms specialize in providing counsel to businesses on intellectual property matters, encompassing trademarks, copyrights, and patents. They assist businesses in safeguarding their intellectual property and upholding their intellectual property rights.

Family law firms: Family law firms focus on offering legal advice and guidance to individuals in various aspects of family law. These matters may include divorce, child custody, child support, and other family-related legal issues. These law firms ensure the protection of client’s rights and assist them in reaching satisfactory resolutions within the framework of the law.

Litigation law firms: Firms specializing in litigation law represent clients in court proceedings. These firms assist clients in resolving various legal disputes, including business conflicts, personal injury cases, and criminal matters.

Fortunately, if you are reading this article, you may get all these services in one place. Contact the leading business law firm in Thailand that holds multiple specializations for local as well as global investors in Thailand.

If not us, while looking for a corporate or business law firm in Thailand, ensure that your selection process undergoes the following stages;

Expertise and Specialization Analysis

When evaluating law firms, consider their expertise and specialization in business law. Look for firms with a proven track record in corporate law, commercial transactions, regulatory compliance, and other relevant areas. A firm with specialized knowledge and experience in your industry can provide tailored legal solutions to address your unique challenges and opportunities.

Check Reputation and Experience

Research the reputation and experience of potential law firms in Thailand. Look for firms with a solid reputation for professionalism, integrity, and successful outcomes. Consider factors such as the firm’s tenure in the industry, client testimonials, case studies, and awards or recognitions received.

Ensure they have Local Knowledge and Connections

Choose a law firm with a deep understanding of the local legal system, regulations, and business practices in Thailand. A firm with local knowledge and connections can navigate complex legal issues more effectively and provide strategic advice tailored to the Thai market. Additionally, a firm with a network of contacts in government agencies, industry associations, and other key stakeholders can facilitate smoother business operations and transactions.

Ease of Communication and Accessibility

Effective communication is crucial when working with a law firm. Evaluate the firm’s communication channels, responsiveness, and accessibility. Choose a firm that values clear and timely communication, understands your business goals, and keeps you informed throughout the legal process. Accessibility to key personnel, such as partners or senior attorneys, is also essential for building a strong client-lawyer relationship.

Compare Fee Structure and Check Transparency

Discuss the fee structure and billing practices with potential law firms upfront. Transparency regarding fees, billing rates, and payment terms is essential to avoid surprises and ensure a clear understanding of costs. Consider whether the firm offers alternative fee arrangements, such as fixed fees or capped fees, that align with your budget and preferences.

Personal Chemistry and Fit

Lastly, consider the personal chemistry and fit between your team and the law firm. Building a strong working relationship based on trust, mutual respect, and open communication is crucial for a successful partnership. Schedule initial consultations or meetings with potential law firms to assess compatibility and ensure a good fit for your business needs.

Selecting a reliable business law firm in Thailand is a critical decision that can significantly impact your business’s success and longevity. By carefully evaluating factors such as expertise, reputation, local knowledge, communication, and fit, you can choose a legal partner who understands your business objectives and helps you navigate the complexities of the Thai legal landscape with confidence.

To get an all-round consultation on starting a business in Thailand, email us at officer@konradlegal.com for full support and assistance on the following:

• Drafting MOA, MOU, AOA, and Partnership Agreements
• Executing Power of Attorneys
• Translation and Notary Services
• Company Registration Process including Board of Investment Promotions
• Bookkeeping, Accounting, Tax, and Payroll support post your company incorporation

Sole Proprietorship Company Registration in Thailand for US Investors

 

Are you planning to register a sole proprietorship business in Thailand? If you are a Thai, you can do it anyway, but the same is not possible for foreign investors in Thailand. However, things are pretty different for US citizens. The US-Thai Amity Treaty holds certain provisions availing of which US Citizens can register a Sole Proprietorship Business in Thailand. Thai article will help you delve deep into the details.

US-Thai Amity Treaty Clauses for US Citizens to Register Sole Proprietorship Business in Thailand

The US-Thai Treaty of Amity and Economic Relations (AER) allows US citizens and businesses to operate in Thailand on the same basis as Thai nationals. The treaty also allows US citizens and businesses to establish a company or branch office in Thailand. The treaty also gives US citizens who want to form a limited company in Thailand certain rights and privileges that are often closed to other foreign nationals.

The 1966 amendment to the US-Thai Amity Treaty provides two major benefits: 

• American companies are permitted to maintain a majority shareholding or to wholly own their company, branch office, or representative office located in Thailand.
• US citizens who register with the Thai Department of Business Development under the U.S. – Thailand Amity Treaty are allowed to run a sole proprietorship in most industries.

Note that, this is the only way for a foreigner to operate as a sole proprietor in Thailand. Doesn’t that sound cool?

Process and Cost of Registering Sole Proprietorship Business for US Citizens

The Thailand Board of Investment (BOI) establishes the guidelines for beginning a business in Thailand. The following is the procedure to register a sole proprietorship in Thailand, according to the guidelines.

1. Registering the Name of the Business/Company

Registering the entity’s name with the Department of Business Development (DBD) in Thailand is the first step towards establishing a sole proprietorship in that country. The procedure may need a maximum of two working days.

Three distinct names must be provided, ranked according to how you like them. The names submitted must not correspond to the royal family or any governmental body. Furthermore, they shouldn’t violate Thai society’s morals.

2. Obtaining a Certificate of Incorporation

After getting the name approved, the next step is to obtain a Certificate of Incorporation in Thailand. The DBD has made the process easier by providing an e-registration facility since 2017.

You can successfully register by uploading all the required documents to the e-Registration portal. However, the portal is not available in English. So, if you are not a Thai speaker, you may need a translator to complete the registration process. Therefore, it will be a wise decision to take the support of a local corporate law firm in Thailand that specializes in Amity treaty business registration.

3. Getting a VAT Certificate

A sole proprietorship in Thailand must register for VAT if the business generates more than 1,800,000 Baht in annual income. Additionally, sole proprietorships in Thailand are not subject to corporate tax. Instead, the proprietor must pay income tax according to the tax bracket for natural persons. Income of less than 150,000 Baht is tax-exempt, and the highest tax rate is 35% for income above 5,000,000 Baht.

4. Other Licenses

In addition to VAT, a sole proprietorship in Thailand may also require other licenses, depending on the type of business. For example, a restaurant business must obtain liquor and music licenses. Similarly, a shipping company cannot operate without an import-export license. You may also need an FDA license to import foods and drugs for your business. Each of these licenses can cost between 600 and 2,000 Baht.

(Please note that the company/business and tax registration fees are subject to change and the figures mentioned are the latest ones as of the date of publication of this article.)

The Amity Treaty makes it convenient for US Citizens to register sole proprietorship businesses in Thailand. Furthermore, to add to the ease, you must seek support from a corporate law firm in Thailand. This will make the process easier and faster for you. Email us your requirements at officer@konradlegal.com and our team will get back to you with a complete solution to register your sole proprietorship business in Thailand. 

BOI Thailand Focus on New Industries to Promote Foreign Direct Investment

 

The Board of Investment (BOI) of Thailand is one of the pinnacle organizations that focuses greatly on easing out the process of business registration and operations for global investors in Thailand. If you have been researching the global business ecosystem of Thailand for a long, you must have known about this by now. However, if you have just started on this, let us tell you for sure that there is a great benefit that foreign investors can gain from BOI Thailand. The non-exhaustive list of the benefits is as follows:

• Investment Incentives with almost 100% deduction on corporate income tax of the investment value

• Tax Incentives in the form of corporate income tax exemption for a period of up to 13 years from the year of incorporation

• Land or property ownership permissions

• Provision of up to 100% foreign ownership of Thai business

• Higher level of freedom and authority to remit foreign currency and bring in foreign skilled workers in Thailand

Aren’t these privileges enough to encourage global investors to start a business in Thailand?

But you will be more pleased to know that there are various other additional incentives for foreign investors based on the industry in which they are planning to do business. For convenience, we have listed some of the primary industries that BOI Thailand prefers to promote (Click to get the details):

Firstly, you must know why BOI Thailand Promotions is Mandatory for Foreign Investors.

Henceforth, deciding upon the type of business you are planning to conduct, the following are the respective benefits associated with each:

• Privileges from BOI Thailand for Businesses in Bio-Circular-Green Economy

• BOI Thailand Benefits for Businesses in the Medical and Healthcare Industry

• BOI Incentives for Startup Businesses in the Digital Economy

Apart from these, there are vivid sets of tax and non-tax incentives relevant to other sectors like agriculture and poultry, the electrical and electronics industry, manufacturing businesses, and the tourism industry. Subscribe to our newsletter on BOI Thailand Benefits to get the recent BOI updates on the respective industries and businesses.

Now you must be wondering why BOI Thailand is so keen on facilitating business registration and operations for foreign investors in Thailand. The primary reason is to promote the growth of foreign direct investment and take the nation forward in its target group of industries.

To determine its target industries and set of business activities, BOI Thailand revises its policies frequently with an investor-friendly approach. This article intends to share with you the latest updates on the BOI Thailand policies to promote foreign businesses and facilitate the same for global investors.

5 Key Agendas of BOI Thailand Advancing Towards Transformation and Development

Agenda 1: Green Transformation

This agenda endorses policy targets of Carbon Neutrality by 2050 and Net Zero Emission by 2065. Additionally, it supports carbon credit management.

Agenda 2: Development of Technology

This agenda aims to support 1,000 Innovation Driven Enterprises (IDES) with an annual revenue of 1 billion baht providing the following benefits:

• Promote commercializing of research and innovations.

• Encourage the establishment of R&D centers in Thailand.

• Attract leading foreign incubators/VCs

Additionally, BOI Thailand supports startups involved in deep technology research in the target segment.

Agenda 3: Attract and Develop Talent

This agenda aims to make Thailand grow to be a regional talent hub. To facilitate the same, BOI Thailand plans to do the following:

• Attract highly skilled professionals in the targeted industries to work in Thailand.

• Support Human Resources Development in Thailand.

Agenda 4: Prioritize Cluster-based Investment

This agenda aims to decentralize investments and distribute growth based on local potentials across the country. To meet this target, BOI aims to develop industrial zones and stimulate employment in regions with high labor availability and low income per capita.

Agenda 5: Promote Ease of Investment

Through this agenda, BOI intends to position Thailand as the Trade & Investment Gateway for the ASEAN Group of Nations. To achieve this, BOI has all plans in place to streamline regulations and facilitate investors' services to attract more investment.

These 5 key agendas raise the need to identify the appropriate industries that can contribute strategically to the fulfillment of the goals.

5 Strategic Industries on BOI Radar to Drive Foreign Direct Investment in Thailand

Bio Circular Green or BCG Economy

Focus on this industry aims to place Thailand as ASEAN's "BCG Capital". To facilitate this business group, BOI Thailand plans to extend the following benefits to foreign investors:

• Promote investments in Biocomplex, the Economic Corridors in the four regions. 

• Expand the community and society development measures to cover the community forest management and PM 2.5 reduction.

Automotive Industry with a special focus on Electric Vehicles

Thailand aims to develop itself as a Premier Global Automotive Manufacturing Center. To achieve this goal, BOI Thailand is all set to extend the following supports:

• Promote a complete EV production ecosystem

• Support the established automakers in transitioning to EVs and advanced technologies to reduce CO2 emissions.

• Assist the traditional auto-part makers in transitioning to new technologies or industries.

• Promote the management of used EV batteries.

Electronics Industry for Upstream and Smart Electronics

Thailand is gradually evolving as a Smart Electronics Manufacturing Hub in the ASEAN region. To establish this presence throughout the APAC regions, BOI Thailand aims the development of the Upstream Electronics Industry in Thailand.

To achieve this result, BOI Thailand facilitates promotions for investment in the entire supply chain of the electronics industry, including upstream, midstream, and downstream.

Digital & Creative Economy

In this segment, BOI Thailand aims to achieve the following goals:

• Transforming into ASEAN's Digital and Creative Center.

• Attracting investment in hyper-scale data centers and cloud services

• Promote a fully integrated digital industry

• Focus on promoting Thailand's high-potential creative industry.

Regional Headquarters & International Business Center

As a gateway to Southeast Asia, now is the perfect time to position Thailand as an International Business Hub. Focusing on this, BOI Thailand extends business facilitations and foreign investment promotions targeting the following:

• Continuously attract more target companies to establish RHQs in Thailand.

• Collaborate with related agencies in establishing a one-stop service for advising and facilitating the establishment of RHQs and expatriates living in Thailand.

• Upgrade the HQ Biz Portal.

Now what should be our Step for BOI Thailand Promotions?

Now that you have the latest updates on the agenda and industries on which the Board of Investment of Thailand is focusing, the following things must have been clear:

1. Whether the business you are planning is eligible for BOI promotion or not.

2. Whether there is a need to modify your business pattern to fall in the promotion slab of BOI.

3. Whether the benefit BOI is committing to extend will be helpful for your business or not.

There may be many other “whethers” that might have changed or affirmed their perspectives in your mind. But, some more questions are still unanswered like the following:

 

1. Are these benefits applicable to all global investors and are you eligible to apply for BOI Thailand promotions?

2. What are the steps of getting a BOI Thailand Promotions Certificate?

3. What to do before and after registering your BOI Company in Thailand?

To get answers to such or more complicated questions, you must consult with a leading corporate law firm in Thailand with experience in BOI Company Registration. 

For direct support, feel free to email us at officer@konradlegal.com.