Introduction:
Thailand’s Foreign Business Act generally restricts foreign ownership for service business activities. These restrictions mean companies who want to be foreign owned must obtain a Foreign Business License (FBL), which in practice is very difficult to obtain. However, the Trade in Services Opportunities (TISO) promotion from the BOI provides an exception, enabling 100% foreign ownership in designated service sectors without an FBL requirement.
BOI Company TISO: Own your service business in Thailand. Skip the FBL hassle, invest freely in designated sectors with 100% foreign ownership.
Key Points
- Trade and Investment Support Office promotions allow for 100% foreign ownership
- Trade and Investment Support Office offers an alternative option for companies as it covers various activities not covered by traditional BOI promotions
- Minimum capital investment of 1 Million Baht
- Tax incentives ARE NOT available to Trade and Investment Support Office promoted companies
- Minimum annual selling and administrative expenses of 10 million Baht
Understanding the TISO Promotion
The Trade and Investment Support Office (TISO) is a special category of business promoted by the BOI. It is not limited to a specific industry or business activity but encompasses a range of businesses that can contribute to trade and investment in Thailand. This flexibility makes TISO an appealing option for companies in various fields not eligible for other BOI categories.
To qualify for a TISO promotion, businesses must satisfy the following conditions:
- Annual sales and administrative expenses of at least 10 million baht.
- The company must be able to provide business plans and scope of operations that fall within specific categories approved by the BOI.
- The minimum capital the BOI requires is at least 1 million baht; however, this amount could be increased depending on the business submitted and the BOIs requirements.
- As part of the Trade and Investment Support Office application process, applicants must submit their annual selling and administrative expenses, typically in the form of the company’s latest audited financial statements.
These criterias have been created to ensure that only businesses that are likely to impact trade and investment significantly are eligible for the Trade and Investment Support Office promotion.
What Business Activities are Eligible for a TISO Promotion
The eligible business activities covered by TISO include:
- Monitoring and/or servicing associated enterprises, please note, this includes providing or renting out offices or factory buildings to associated enterprises and lending to associated enterprises outside the scope of a treasury centre and can be implemented under the exchange control laws;
- Advisory services on business operations, except those buying and selling securities and foreign currency exchange. Please note for accounting, legal, advertising, architectural, and civil engineering businesses, the business licence must be obtained from the Department of Business Development or related governmental agencies before submitting the investment promotion application;
- Information services on goods sourcing;
- Engineering and technical services, except those related to architecture and civil engineering;
- Business activities related to machinery, engines, tools, and equipment, such as:
- importing for wholesaling;
- training services;
- installation,
- maintenance, and
- repair and calibration.
- Wholesaling products manufactured in Thailand and
- International business process outsourcing, whose services are provided through telecommunication networks, such as:
- administrative services,
- finance and accounting services,
- human resource services,
- sales and marketing services,
- customer services,
- data processing, etc.
What are the Benefits of a TISO Promotion?
While TISO promotions do not offer tax incentives like other BOI promotions, they still provide several important advantages for foreign investors:
100% foreign ownership of the promoted company: TISO allows foreign investors to have full ownership of their businesses in Thailand.
Land ownership: TISO promotions also provide the potential for land ownership, subject to certain limitations. For example, the maximum land area for offices is five rai (1 rai = 1,600 square meters), while executive and employee residences have their own specified limits.
Expedited visa and work permit processing: Companies promoted under TISO can benefit from faster processing of visas and work permits through the One-Stop Service Centre.
Application timeline: In practice, the application for the BOI Company TISO promotion takes between 3 to 6 months which is quicker than a traditional BOI promotion.
What are the Disadvantages of a BOI Company TISO Promotion?
While a TISO promotion may be an attractive option for certain companies, investors should understand and be aware of the following disadvantages:
Tax Incentives
TISO promotions offer no specific tax incentives or deductions available. Companies operating with a TISO promotion will be subject to the standard corporate tax rates and regulations.
Sales and Expenses Requirement
One of the key eligibility criteria for businesses in this category is that their annual sales and administrative expenses must exceed THB 10 million per fiscal year. This threshold is strictly enforced, and any company exceeding this limit will potentially face disqualification from the applicable incentive or promotion schemes.
An important consideration for prospective investors is what happens if the company cannot satisfy the 10 million THB expense requirement.
In practice the BOI is not really strict about companies meeting this target in the first or second year. In such a situation, if a company is not on course to satisfying this criteria, they should at least be close to doing so. By the third year though, companies should be able to satisfy the requirement.
The third year is important because the company is subject to an audit from the BOI. Failure to pass this will mean that the company does not receive their full operational startup certificate and will be at risk of losing their BOI privileges.
If the company is expected to fall short they can prepare an application to extend the timeline for one year. As part of this application to extend, the company must be able to explain and show that they will be able to achieve this target in a year. If the BOI approves this extension, they will be allowed to keep their BOI promotions.
Typically the BOI is open minded in such situations as they are business minded and they want the companies who have received a promotion to perform and succeed..
Limited Scope
A TISO promotion is designed to support a specific range of business services. However, due to the limited scope of services that BOI Company TISO can accommodate or provide, companies may find themselves in a situation where they need to offer additional business services that fall outside the purview of the TISO promotion.
In such cases, companies will be required to implement a dual accounting system to ensure proper separation and reporting of their financial operations. The first part of this dual accounting system will cover the business services that are eligible under the TISO scheme, while the second part will encompass the businesses or services that are not covered by the TISO promotion.
This separation of accounting records is important for maintaining compliance with the respective regulatory frameworks and accurately tracking the financial performance of the company’s various business segments.
How does a BOI Company TISO Promotion Differ from a Traditional BOI Promotion?
The main difference between TISO and traditional BOI promotions lies in the availability of tax benefits. While traditional BOI promotions provide tax incentives for specific business activities, TISO promotions do not offer these tax breaks. However, a BOI Company TISO is a less competitive category with more flexible eligibility criteria compared to traditional BOI promotions.
To summarise the key differences between BOI Company TISO and traditional BOI promotions please see the table below:
| Characteristic | BOI Promotion | BOI TISO Promotion |
| Tax benefits | Yes (depending on the business activity) | No |
| 100% foreign ownership | Yes | Yes |
| Ease of obtaining permits | Yes | Yes |
| Ability to own land | Yes | Yes |
| Eligibility criteria | Strict | Less strict and includes service activities |
| Timeline | 3 to 9 months | 3 to 6 months |
Our Thoughts
For foreign companies and investors who do not qualify for a traditional BOI promotion, the BOI Company TISO category offers an attractive alternative. While tax incentives may not be available, the benefits of 100% foreign ownership and potential land ownership can be significant for those looking to establish a business in Thailand. Additionally, the simplified visa and work permit requirements allow eligible companies to quickly onboard their staff and begin operations as soon as possible.
