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Board of Investment (BOI) Certification and Foreign Business Licensing

Transcript of the above video:

In this video, we're going to be discussing BOI yet again, we've done a fair number of videos with respect to the Board of Investment or BOI on this channel. But basically, we're going to be discussing foreign business licensing specifically with respect to the BOI. As noted in other videos, BOI can confer a number of different benefits pursuant to their mandate and they’re things like tax exemption, immigration work permit benefits. And then finally and probably not least, in fact maybe most importantly, foreign business licensure pursuant to the provisions of the Foreign Business Act.

Certain types of businesses are deemed restricted from full foreign ownership so basically you need to have a 51%-49% company whereby there's a Thai majority owner of the company pursuant to the Foreign Business Act depending on the type of business activity that the company is going to get involved in. In the corporate objectives are oftentimes a very unclear whether the Foreign Business Act is going to apply it or not. But that being stated, BOI has the ability to go ahead and confer BOI certification and as a part and parcel with that certification that can confer or assist in conferring foreign business licensure and if a foreign business license is issued, then foreign nationals of any nationality can own the company.

As we've discussed in other videos, the US Thai treaty of amity provides specific benefits to American citizens here in the Kingdom. But those who are going for BOI certification, they can seek foreign business license and not be Americans. This is a significant benefit. In theory, foreign business licenses can be issued without having to go ahead and apply for BOI. In my experience, in the course of the last few years and I think most of my Thai colleagues here in the office would agree with this, I haven't seen an FBL issued in a non-BOI context. In quite some time, I haven't heard of what happened in quite some time. That's not to say that's impossible but it does appear to me as though the powers that be would rather things go through the BOI channels with respect to the foreign business licensure as there's an element of this where they want to go ahead and review the type of business activity that's going to be undertaken here in the Kingdom as BOI is basically there to encourage foreign investment. But to provide benefits which sort of are reflective of the amount of benefit the country's getting as a result of that endeavor so a high technology high jobs creating type of business right now, that's probably going to be considered about the best type of company to come into the Kingdom and for that reason, things like tax benefits, visa benefits etc. are probably going to be more freely given.

Whereas something that is felt to be rather ho-hum or something that the Kingdom is already seen in abundance that you know already there's no real technological exchange going on or exchange of expertise and there's not a great many jobs that are going to be created as a result of that endeavor being undertaken here in the Kingdom BOI benefits may not quite be so great and may not be reflected in and therefore reflect the fact that it sort of felt that that activity is not, I won't say it's unwanted, but it's not considered as beneficial to the country.

So that being said, with respect to the FBL although that's one of the big, big reasons for really seriously thinking about BOI certification because okay, notwithstanding the fact that maybe immigration benefits conferred are not going to be so great and perhaps there's not going to be any tax exemption issue with respect to BOI certification, if nothing else having to foreign business license and being able to own one's operation outright here in the Kingdom, it's a substantial benefit that should not be overlooked and in and of itself is probably worth looking into just because even if taxes it isn't great and that was wanting to do business here in the Kingdom of Thailand, we'll find significant relative benefit by obtaining a foreign business license as opposed to trying to deal with things without said license.