BOI-promoted companies may receive corporate income tax exemptions of three to eight years, although the benefit may be reduced for multinational groups covered by the global minimum tax. Companies must also file the half-year PND 51 return and annual PND 50 return on time, as underestimating profits, filing late or failing to prepare audited financial statements can result in significant penalties.

Introduction:

Corporate income tax in Thailand is generally charged at 20% of a company’s net taxable profits. However, the applicable rate depends on the business. Qualifying SMEs benefit from progressive rates of 0% on the first THB 300,000 of net profits, 15% on the next THB 2.7 million, and 20% on profits exceeding THB 3 million. Large multinational enterprise groups may also be subject to Thailand’s 15% global minimum tax under the OECD Pillar Two framework.

Tax treatment also varies according to a company’s tax residency, ownership structure, business activities and eligibility for investment incentives. For example, BOI-promoted companies may qualify for corporate income tax exemptions, while foreign companies without a permanent establishment in Thailand are generally taxed through withholding tax on certain Thai-sourced income.

With Thailand continuing to implement the global minimum tax and increasing international tax transparency, cross-border businesses should review their tax position early rather than waiting until year end.

Lex Nova Partners advises foreign investors on Thailand’s corporate tax rules through its tax services in Thailand, as part of an integrated legal, tax, investment and immigration service.

Key Points

• The standard corporate income tax rate is 20% of net taxable profit, with reduced progressive rates available to qualifying SMEs.
• Thailand’s 15% global minimum tax applies only to large multinational groups with consolidated revenue of at least EUR 750 million.
• BOI promotion may provide a three-to-eight-year tax exemption, but large multinational groups may still face top-up tax where their effective rate falls below 15%.
• Companies must file both PND 51 and PND 50 returns, with PND 50 generally due within 150 days of the accounting year-end.
• Late filing, underestimating profits or missing audited accounts can trigger substantial penalties, surcharges and additional tax assessments.

What Is the Corporate Income Tax Rate in Thailand?

The standard corporate income tax rate in Thailand is 20% of net taxable profit. This rate applies to companies incorporated under Thai law and foreign companies carrying on business in Thailand.

Corporate income tax is not calculated on gross revenue. It is calculated on taxable profit after allowable business expenses, deductions, depreciation and other permitted adjustments have been applied.

A company’s accounting profit may therefore differ from the amount of profit subject to corporate income tax. Certain expenses recorded in the financial statements may not be deductible for tax purposes, while other items may be treated differently under Thai tax law.

Foreign investors must also consider withholding tax, value added tax, transfer pricing, payroll obligations and whether a double tax treaty affects payments made across borders.

How much corporate income tax do SMEs pay in Thailand?

Eligible small and medium-sized enterprises may pay corporate income tax at reduced progressive rates rather than the standard 20% rate on all taxable profit.

To qualify, a company is required to have paid-up capital of no more than THB 5 million and annual revenue of no more than THB 30 million.

If the company satisfies both conditions, it is eligible for the following rates.

The first THB 300,000 of net taxable profit is exempt from corporate income tax. A CIT rate of 15% then applies to the net profit from THB 300,001 to THB 3,000,000 before the standard 20% rate applies to profit above THB 3,000,000.

The SME regime, based on Royal Decree No. 530 and subsequent amendments, does not automatically exclude Thai-incorporated companies with foreign ownership, provided they meet the relevant qualifying conditions.

What withholding tax applies to foreign companies not doing business in Thailand?

A foreign company that does not carry on business in Thailand may still be subject to withholding tax on income received from Thai sources.

The applicable rate depends on the type of income. Thai-sourced service fees, royalties, interest and certain other payments are generally subject to withholding tax at 15%, while dividends are generally subject to withholding tax at 10%.

A double tax treaty may reduce the rate or change how the income is taxed. The protections on offer depend on the treaty, the nature of the payment, the foreign company’s tax residence and whether the company has a permanent establishment in Thailand.

Foreign investors should therefore review both Thailand’s domestic rules and the relevant treaty before setting up payment arrangements. This is especially important when structuring management fees, technical service fees, royalties, financing arrangements or dividend payments.

The company’s wider structure should also be assessed alongside Thailand’s rules on foreign business ownership in Thailand, as tax and corporate law issues frequently overlap.

How Is Corporate Income Tax Calculated in Thailand?

Corporate income tax in Thailand is calculated on a company’s net taxable profit, rather than its total income or sales revenue. The calculation is based on the company’s accounting profit, which is then adjusted to reflect the deductions and restrictions imposed under Thai tax law.

The basic calculation is:

Total revenue − allowable business expenses + non-deductible expenses and other tax adjustments = net taxable profit

The applicable corporate income tax rate is then applied to the resulting taxable profit.

Step 1: Determine the Company’s Total Revenue

The company must first calculate all income earned during the relevant accounting period. Depending on its activities, this may include:

• Revenue from the sale of goods
• Income from providing services
• Rental income
• Interest income
• Commissions and management fees
• Other income connected with the business

The calculation should include all income that must be recognised during the accounting period, even where the timing of an invoice or payment differs from the date the income was earned.

Step 2: Deduct Allowable Business Expenses

The company can generally deduct expenses that are necessary for, and directly connected with, carrying on its business.

Common deductible expenses may include:

• Employee salaries, bonuses and benefits
• Office rent and utility costs
• Marketing and advertising expenses
• Legal, accounting and professional fees
• Business travel and transportation costs
• Interest paid on qualifying business loans
• Depreciation of equipment and other business assets
• Insurance and ordinary operating expenses

A business expense is not automatically deductible simply because it appears in the company’s accounts. The company should retain invoices, receipts, contracts and other supporting records showing that the expense was incurred for a genuine business purpose.

Step 3: Adjust for Non-Deductible Expenses

Some expenses recorded for accounting purposes cannot be deducted when calculating corporate income tax in Thailand. These amounts must be added back to the company’s accounting profit.

Examples may include:

• Personal expenses paid for shareholders or directors
• Corporate income tax payments
• Tax fines, penalties and surcharges
• Expenses unrelated to the company’s business
• Certain provisions or reserves
• Expenses that exceed statutory limits
• Payments without adequate supporting documents

These adjustments explain why a company’s taxable profit may be higher than the profit shown in its financial statements.

Step 4: Apply the Relevant Corporate Income Tax Rate

Once the required adjustments have been made, the remaining amount is the company’s net taxable profit.

A general company will normally apply the standard 20% corporate income tax rate. Qualifying small and medium-sized enterprises may instead apply the progressive SME rates to different portions of their taxable profit.

Any half-year corporate income tax already paid through Form PND 51 is then credited against the final annual liability calculated in Form PND 50.

How does withholding tax work and why do tax certificates matter?

Withholding tax is a prepayment of corporate income tax collected at source. When a Thai company pays another Thai company or an individual for services, rent, professional fees and certain other items, it must deduct tax from the payment and remit it to the Thai Revenue Department by the 7th of the following month (the 15th when filed online), using Form PND 3 for payments to individuals and Form PND 53 for payments to companies.

The common domestic rates are 1% on transport, 2% on advertising, 3% on services, professional fees and commissions, and 5% on rent. Payments to foreign companies that do not carry on business in Thailand are subject to the 15% rate described above (10% on dividends), subject to treaty relief.

For the company receiving the payment, the amount withheld is not a cost. It is tax paid in advance on its behalf, and it is deducted from the final corporate income tax liability in the annual PND 50 return, alongside the half-year PND 51 payment. Where the credits exceed the tax due, the excess can be claimed as a refund.

The credit is only available with the withholding tax certificate (Form 50 Tawi) issued by the payer. In practice, this is where companies lose money. A certificate that was never requested, or that arrives after the annual return has been filed, means tax has been paid twice. The accountant should therefore collect and reconcile withholding tax certificates every month, against the payments received, rather than chasing them at year end.

Worked Example: Calculating Corporate Income Tax at 20%

Consider a Thai company with the following results for its accounting year:

The company’s corporate income tax is calculated as follows:

THB 3,700,000 × 20% = THB 740,000

The company’s annual corporate income tax liability is therefore THB 740,000, before deducting any eligible tax credits or corporate income tax already paid through the PND 51 half-year return.

This example uses the standard corporate income tax rate. A qualifying SME would need to apply the relevant progressive rates to each band of taxable profit rather than applying 20% to the full amount.

What Is the 15% Global Minimum Tax in Thailand and Who Does It Affect?

Thailand’s global minimum tax applies to multinational enterprise (MNE) groups with consolidated annual revenue of at least EUR 750 million in at least two of the previous four fiscal years. Established under the Emergency Decree on Top-up Tax B.E. 2567, published on 26 December 2024, the regime applies to financial years starting on or after 1 January 2025.

These rules apply only to qualifying large multinational groups. Most Thai SMEs, standalone foreign-owned companies and smaller international groups will not be affected.

The purpose of the global minimum tax is to ensure that large multinational groups pay an effective tax rate of at least 15% in each jurisdiction where they operate. Where the effective tax rate falls below 15%, a top-up tax may become payable.

Thailand’s regime includes three main mechanisms.

The Qualified Domestic Minimum Top-up Tax (QDMTT) allows Thailand to collect additional tax when the effective tax rate of an in-scope group’s Thai operations falls below 15%.

The Income Inclusion Rule allows the jurisdiction of a parent company to impose top-up tax in relation to low-taxed subsidiaries.

The Undertaxed Profits Rule can allocate additional tax to other jurisdictions when the Income Inclusion Rule has not fully collected the required amount.

The effective tax rate (ETR) is not the same as Thailand’s 20% corporate income tax rate. Under the Global Anti-Base Erosion (GloBE) Rules, the ETR is calculated using adjusted income and covered taxes. This means a group may pay corporate income tax at 20% but still need to calculate its GloBE ETR to determine whether a top-up tax applies.

The rules are particularly relevant where a multinational group benefits from a corporate income tax exemption, preferential tax treatment or significant differences between accounting and taxable income.

When do Thailand’s top-up tax filings and OECD data sharing start?

The first Global Anti-Base Erosion, or GloBE, filings for fiscal year 2025 are expected to be due by 30 June 2027.

Top-up tax returns will follow a separate filing timeline from normal corporate income tax returns. The standard filing period is 15 months after the end of the relevant fiscal year, with an 18-month period for the first year.

Thailand has also approved the automatic exchange of tax information with foreign tax authorities from June 2027. This will allow tax authorities to compare information concerning multinational groups across different jurisdictions.

The Thai Revenue Department expects the global minimum tax to generate approximately THB 10 billion in additional annual revenue.

Groups at or above the EUR 750 million threshold should not wait until 2027 to prepare. They may need to identify the relevant entities, collect jurisdictional tax data, assess safe harbours and review whether existing incentives could create a top-up tax exposure.

Smaller companies do not need to comply with the global minimum tax simply because they are foreign-owned. However, they may still be asked to provide information to a parent company if they form part of an in-scope multinational group.

Do BOI Companies Still Pay Corporate Income Tax in Thailand?

Companies promoted by the Thailand Board of Investment may receive a corporate income tax exemption for between three and eight years in most categories, and up to 13 years for certain high-technology activities, depending on the promoted activity, location, technology and wider economic benefit.

A BOI tax exemption can allow qualifying income from a promoted activity to be exempt from corporate income tax during the approved period. Some projects may also receive reductions after the exemption expires or additional deductions for eligible investments.

Not all BOI-promoted businesses qualify for a Corporate Income Tax (CIT) exemption. For example, companies operating under a TISO promotion do not receive this incentive. Eligibility for a CIT exemption, and the length of any exemption granted, depends on the company’s promoted business activities.

For companies below the EUR 750 million global minimum tax threshold, BOI tax incentives remain highly valuable. These businesses can benefit from Corporate Income Tax (CIT) exemptions without becoming subject to the 15% global minimum top-up tax.

However, this may not be the case for large multinational enterprise groups.

Where a BOI tax exemption reduces the effective tax rate of the Thai operation below 15%, the group may become liable for top-up tax. The corporate income tax holiday may therefore reduce tax paid under Thailand’s normal system while creating an additional liability under the global minimum tax rules.

This does not mean BOI promotion has become irrelevant. Promoted companies may still receive important non-tax benefits, including permission for 100% foreign ownership, land ownership rights, simplified visa and work permit procedures and customs incentives.

Thailand is also considering and developing alternative support for large multinational groups, including tax credits and grants through the BOI’s Competitiveness Enhancement Fund. These mechanisms may preserve the commercial value of investment incentives without reducing the effective tax rate in the same way as a traditional tax holiday.

A BOI tax exemption should not be viewed in isolation. The company’s BOI application, tax position and corporate structure should be considered together from the beginning, as the incentive may have wider implications for the group as a whole. This is where coordinating the BOI file with corporate law and M&A services makes a practical difference.

When and How Do You File Corporate Income Tax in Thailand?

Companies in Thailand file two corporate income tax returns each year: a half-year return and an annual return.

What is the Half-Year Corporate Income Tax Return?

The Half-Year Corporate Income Tax Return (PND 51) is an advance payment of corporate income tax made during the financial year. It is not an additional tax. Instead, the tax paid is credited against the company’s final Corporate Income Tax liability when the Annual Corporate Income Tax Return (PND 50) is filed.

Most companies calculate the PND 51 based on their estimated annual net profit, although certain businesses may calculate it using their actual net profit for the first six months where permitted under the Revenue Code.

Who Must File PND 51?

Most companies and juristic partnerships subject to Corporate Income Tax on their net profits are required to file a PND 51 return. A company in its first accounting period, where that period is shorter than 12 months, is not required to file it.

For companies with a calendar accounting year ending on 31 December, the filing deadline is 31 August each year (or 8 days later when the return is filed and the tax paid online through the Thai Revenue Department’s e-filing system). Businesses with a different financial year must file within two months after the end of the first six months of their accounting period.

How Much Tax Must Be Paid?

The PND 51 requires companies to estimate their annual taxable profit and calculate Corporate Income Tax on that estimate. The company then pays approximately 50% of its estimated annual Corporate Income Tax liability as a mid-year tax payment.

This payment is treated as a tax credit and deducted from the final Corporate Income Tax payable when the Annual Corporate Income Tax Return is submitted.

What Happens if the Profit Estimate Is Too Low?

Many businesses mistakenly treat the PND 51 as a simple estimate. However, the Revenue Department expects companies to make a reasonable assessment based on the information available at the time.

If the estimated net profit is more than 25% lower than the company’s actual net profit at year-end without reasonable justification, the company may be liable for an additional 20% surcharge on the tax shortfall. Late filing or payment may also result in fines and a surcharge of 1.5% per month on the unpaid tax.

Rather than relying on rough projections, companies should prepare updated management accounts before submitting the return to help ensure their estimate is reasonable.

Annual Corporate Income Tax Return (PND 50)

The Annual Corporate Income Tax Return (PND 50) is the company’s final Corporate Income Tax return for the accounting year.

Unlike the PND 51, which is based on estimated profits, the PND 50 is prepared using the company’s final audited financial statements. It reconciles the company’s actual taxable profit, calculates the final Corporate Income Tax liability, and deducts any tax already paid through the Half-Year Corporate Income Tax Return.

When Must the Annual Return Be Filed?

The Annual Corporate Income Tax Return must be submitted within 150 days after the end of the company’s accounting period.

For companies with a financial year ending on 31 December, both the PND 50 and the Corporate Income Tax payment are generally due by 30 May of the following year (or 8 days later for returns filed and paid online).

The Annual Closing Process

Preparing the Annual Corporate Income Tax Return involves considerably more than completing a tax form.

Before the return can be filed, the company must complete its year-end accounting records, prepare its financial statements, undergo a statutory audit by a licensed Certified Public Accountant (CPA), obtain shareholder approval where required, and submit its audited financial statements to the relevant government authorities.

The Corporate Income Tax Return is prepared using these final audited figures, making the annual closing process one of the most important compliance exercises of the year.

What happens if you file late or underpay?

Failing to meet Thailand’s Corporate Income Tax and annual closing requirements can result in significant financial penalties for both the company and its directors.

If a company fails to hold its Annual General Meeting (AGM) and approve the audited financial statements within four months of the financial year-end, as required by Section 1197 of the Civil and Commercial Code, the company may be fined up to THB 20,000 and each responsible director up to THB 50,000 under the Act Prescribing Offences Relating to Registered Partnerships, Limited Partnerships, Limited Companies, Associations and Foundations B.E. 2499.

Companies that fail to submit their audited financial statements to the Department of Business Development may be fined up to THB 50,000 under Section 30 of the Accounting Act B.E. 2543, and the managing director is liable to the same fine under Section 40. Financial statements that have not been audited by a licensed auditor expose the company to a further fine of up to THB 20,000 under Section 32. In practice, the DBD applies a settlement scale of THB 1,000 to THB 6,000 each for the company and the director depending on the delay, but the statutory ceilings apply where the matter is not settled. Under the Revenue Code, filing the PND 50 without the financial statements attracts a fine of up to THB 2,000 under Section 35, in addition to the 1.5% monthly surcharge on unpaid tax under Section 27. In addition, the Revenue Department may conduct a tax audit or issue additional tax assessments.

Where a company fails to prepare audited financial statements to support its Half-Year (PND 51) or Annual (PND 50) Corporate Income Tax returns, the Revenue Department has the authority to assess Corporate Income Tax based on 5% of either the company’s total gross income or gross sales before expenses, whichever is higher, rather than its actual taxable profits.

For the Half-Year Corporate Income Tax Return (PND 51), companies are expected to make a reasonable estimate of their annual taxable profit. If the estimated profit is more than 25% lower than the final taxable profit without reasonable grounds, a 20% penalty may be imposed on the tax shortfall. Additional penalties of 100% for filing an incorrect return or 200% for failing to file the return may also apply, although these penalties may be reduced, in some cases substantially, where the taxpayer files voluntarily and cooperates with the Thai Revenue Department.

How Can Foreign Investors Reduce Corporate Income Tax in Thailand Legally?

Foreign investors can reduce corporate income tax in Thailand through proper planning, provided the arrangements have a genuine commercial purpose and comply with Thai law.

Obtaining a BOI promotion is one of the most valuable options. Qualifying projects may receive a corporate income tax exemption, reduced tax, import duty incentives and non-tax benefits.

Smaller companies may benefit from the SME progressive rates if they remain within the paid-up capital and revenue thresholds. Business owners should monitor these thresholds before increasing capital or expanding revenue.

Double tax treaties can reduce withholding tax and help prevent the same income from being taxed twice. Treaty eligibility should be reviewed before entering into cross-border service, royalty, financing or dividend arrangements.

Companies can also improve their tax position through proper deductible expense planning. Expenses should be connected to the business, supported by valid documentation and recorded in the correct accounting period.

The last quarter of the accounting year is the right time to review this. Before the year closes, management should check which deductible expenses can still be incurred in the current year, such as staff bonuses, training, maintenance or marketing, and whether planned investments in equipment or software should be brought forward so that depreciation starts in the current period. Thailand also grants enhanced deductions from time to time, for example for certain training, research or investment expenses, and these are only useful if the spending is made and documented before year end.

For groups with activities outside Thailand, structure matters as much as timing. Where services are genuinely performed outside Thailand and sold to clients outside Thailand, the group may locate that activity in a jurisdiction with a lower corporate tax rate, such as Hong Kong or Singapore. This is a legitimate choice, but only with substance. If the foreign entity is in reality managed from Thailand, with no staff, office or decision-making of its own, the Thai Revenue Department may treat it as carrying on business in Thailand through a permanent establishment under Section 76 bis of the Revenue Code and tax its profits here, and any charges between the entities fall under Thailand’s transfer pricing rules in Section 71 bis. Each structure should be assessed on its facts, with the commercial activity, the people and the paperwork in the same place.

Special economic zones and regional incentive programmes may provide additional benefits. Investors considering projects outside Bangkok should review available tax incentives in Thailand’s Southern Special Economic Zones as well as incentives in the Eastern Economic Corridor.

Tax planning should be based on substance rather than artificial arrangements. This is increasingly important as Thailand expands international information exchange and applies greater scrutiny to multinational structures.

Lex Nova Partners also provides bilingual English and French advice, allowing French-speaking investors to discuss treaty, structuring and compliance issues in their preferred language.

FAQ – Frequently Asked Questions About Corporate Income Tax in Thailand

What is the corporate income tax rate in Thailand in 2026?

The standard corporate income tax rate in Thailand is 20% of net taxable profit in 2026. Qualifying SMEs may benefit from reduced progressive rates, while large multinational groups may also be subject to the 15% global minimum top-up tax.

Do small companies pay less corporate income tax in Thailand?

Yes. Qualifying companies with paid-up capital of no more than THB 5 million and annual revenue of no more than THB 30 million may benefit from progressive SME rates, including a 0% rate on the first THB 300,000 of net profit. A rate of 15% then applies to the net profit from THB 300,001 to THB 3,000,000 before the standard 20% rate applies to profit above THB 3,000,000.

When is corporate income tax due in Thailand?

The annual PND 50 corporate income tax return is generally due within 150 days of the end of the accounting period. Companies must also file the half-year PND 51 return within two months after the first six months of the accounting period.

Do BOI-promoted companies pay corporate income tax in Thailand?

BOI-promoted companies may receive a corporate income tax exemption for three to eight years, depending on the promoted activity. Large multinational groups may still face top-up tax if the exemption reduces their effective tax rate below 15%.

What is the 15% global minimum tax in Thailand?

Thailand’s 15% global minimum tax is a top-up tax regime for multinational groups with consolidated annual revenue of at least EUR 750 million. It ensures that covered groups pay an effective tax rate of at least 15% in each jurisdiction.

Does a foreign company pay corporate income tax in Thailand?

A foreign company carrying on business in Thailand is generally subject to corporate income tax at 20% on profits connected with its Thai operations. A foreign company not carrying on business may instead be subject to withholding tax on certain Thai-sourced income.

What happens if I file my corporate income tax return late in Thailand?

Late filing can result in fines, monthly surcharges on unpaid tax and additional penalties for incorrect or incomplete returns. The Thai Revenue Department may also request supporting documents or investigate the company’s tax calculations.

Getting Corporate Income Tax Right in Thailand

Corporate income tax in Thailand requires more than simply applying the standard 20% rate. Companies must check whether they qualify for SME rates, meet annual and half-year filing deadlines and assess whether BOI promotion or the global minimum tax changes their effective position.

For large multinational groups, the interaction between BOI tax incentives and the 15% top-up tax requires particular attention. For smaller businesses, accurate accounting, proper deductions and timely filings remain the main priorities.

Lex Nova Partners coordinates tax, corporate, BOI, immigration and employment matters through one team. Advice is available in English, Thai and French.

To discuss your Thailand corporate income tax position, schedule a consultation with our Bangkok office.

This article is general information, current as of October 2026, and does not constitute tax or legal advice. Last updated: October 2026.

Please note that this article is for information purposes only and does not constitute legal advice

Introduction:

Thailand recognises two main legal forms for a registered non-profit organisation: a foundation (mulanithi) and an association (samakom). Although both exist to engage in non-commercial objectives, they are governed differently and with different types of organisations. Choosing the wrong structure can create unnecessary delays, increase compliance obligations, or even result in the application being refused.

Unlike incorporating a private limited company, registering a non-profit organisation is not an administrative process. The Ministry of Interior has broad discretion when reviewing applications and will examine whether the organisation genuinely serves the public interest, whether its governance is appropriate, and whether its objectives comply with Thai law.

This guide explains the differences between foundations and associations, how registration works, the tax position of non-profit organisations, and the ongoing compliance obligations after registration. It also explains how Lex Nova Partners manages the entire process through a single engagement, bringing together corporate, tax, and immigration specialists under one roof.

Key Points

• Thailand recognises foundations and associations as the main structures for registered non-profits. Foundations are asset-based and have no members, while associations are membership-based and require at least ten founding members.
• Applications begin with the relevant district registrar before being forwarded to the Ministry of Interior. Approval is discretionary, with the authorities reviewing the organisation’s objectives, governance, funding and genuine public-benefit purpose.
• The registration process generally takes six months to one year, depending on the proposed activities, quality of the initial application and whether the authorities request additional documents or clarification.
• Foundations and associations are generally treated as juristic persons for tax purposes. Organisations seeking public-charity recognition and applicable tax exemptions must make a separate application to the Revenue Department and satisfy the relevant requirements.
• Registered non-profits must maintain proper accounting and governance records, operate within their approved objectives and comply with ongoing reporting requirements. The Ministry of Interior retains supervisory powers over registered organisations.

How do I choose between a foundation and an association in Thailand?

Before preparing any application, the first decision is choosing the most appropriate legal structure between a foundation (mulanithi) and an association (samakom). While both are recognised as non-profit entities under the Thai Civil and Commercial Code, they operate in very different ways.

Foundation (Mulanithi)

A foundation is an asset-based juristic person established to pursue a recognised public benefit purpose. Examples include charitable, educational, scientific, religious, literary, artistic, or humanitarian objectives.

Unlike an association, a foundation has no members. Instead, it is administered by a board of directors responsible for ensuring that the assets are used exclusively to achieve the foundation’s stated objectives.

Foundations are governed under Sections 110-136 of the Civil and Commercial Code. These sections state that in order to establish a foundation, the founders must provide minimum assets valued at THB 500,000. Where part of those assets is contributed in kind, at least THB 250,000 must be contributed in cash. A foundation must also appoint at least three directors, including at least one Thai national.

For organisations funded through donations, endowments or corporate social responsibility programmes, the foundation structure is usually the most suitable choice.

Examples of suitable activities for a foundation include:

• International charitable organisations
• Corporate Social Responsibility (CSR) foundations
• Educational or research foundations
• Family philanthropic foundations
• Religious and cultural organisations

Association (Samakom)

An association is a membership-based organisation created by individuals who share a common lawful purpose. Any income it generates is used to support its activities rather than being distributed to members.

Unlike a foundation, an association is governed by its membership. Its constitution sets out admission procedures, voting rights, membership fees, governance arrangements, and how directors are elected or removed.

Associations require at least ten founding members, but there is no statutory minimum capital requirement.

This structure is often preferred by organisations that rely on active participation from members rather than permanent endowment assets.

Common examples include:

• Professional associations
• Trade organisations
• Alumni associations
• Community organisations
• Sporting and cultural societies

NGOs

Non-governmental organisations often engage in advocacy, research, and community development projects. NGOs can operate under various legal structures, including foundations or associations.

Non-governmental organisations (NGOs) often focus on advocacy, research, and community development, and in Thailand they are commonly established as either associations or foundations. These structures can work well for many organisations, but they also come with limitations, including restricted access to work permits, a more limited legal position when entering into contracts, and, for some donors, reduced institutional credibility.

Which structure is right?

The most suitable option depends on how the organisation will operate rather than simply what it intends to achieve.

If the organisation’s activities are centred around charitable giving, grant making or managing donated assets over the long term, a foundation will usually provide the most appropriate legal framework.

If the organisation is started for a group of individuals who wish to work together through a membership model, an association is normally the better option.

International NGOs sometimes consider operating in Thailand as a foreign private organisation rather than establishing a Thai entity. While this may appear simpler initially, it often creates practical difficulties. Foreign organisations may face limitations when entering contracts, opening bank accounts, employing staff, obtaining work permits, or demonstrating credibility to donors and government agencies. For organisations intending to build a long-term presence in Thailand, establishing a properly registered non-profit organisation is often the stronger option.

Selecting the appropriate structure from the beginning helps avoid unnecessary amendments later and provides a clearer foundation for registration.

How do I register a non-profit organization in Thailand?

Registering a non-profit organization in Thailand is much more complicated than simply submitting an application form. The process begins with the local district office but in order to be approved approval from the Ministry of Interior must be obtained. 

Approval is discretionary rather than automatic, and the authorities will review both the documentation and the organisation’s underlying objectives before deciding whether registration should be granted.

Step 1: Prepare founding documents

The first step is to properly prepare the supporting documents required as part of the application. The chances of success for the application are determined by these documents.

Any incomplete or missing supporting documentation can result in significant delays or the application being rejected.

Applicants should prepare:

• Bylaws drafted in Thai setting out the organisation’s objectives, governance, powers, and operational rules.
• Details of the proposed directors or founding members, including their names, addresses, and occupations.
• Documentation confirming the registered office address.
• For foundations, evidence of the required initial assets, including bank statements and supporting documentation where assets other than cash are contributed.

The objectives are particularly important and should be properly drafted and reviewed. Broad statements of charitable intent are rarely sufficient. The authorities expect objectives that are specific, lawful, and clearly demonstrate a genuine public benefit.

Step 2: Submit to the district registrar

Applications are filed with the district office responsible for the location where the organisation will be established.

The registrar reviews the proposed name, examines the documentation for completeness, and may request further information before forwarding the application for higher review.

It is common for applicants to receive requests for clarification or additional documents during this stage. Responding promptly helps avoid unnecessary delays.

Step 3: Ministry of Interior review and approval

Once the district registrar is satisfied, the application is forwarded to the Ministry of Interior. Depending on the organisation’s objectives, other government agencies may also become involved during the review.

It is important to understand that even if the district registrar is happy, full approval is not guaranteed. The Ministry of the Interior has full discretion of whether the application is approved or not.

When reviewing the application, the Ministry of the Interior will consider whether:

• the organisation genuinely exists for public benefit;
• its governance is appropriate;
• its funding appears legitimate;
• its activities comply with Thai law and public policy; and
• the proposed objectives are consistent with those expected of a registered non-profit organisation.

Applications that appear primarily motivated by commercial objectives or tax advantages are at greater risk of refusal.

Where registration is refused, an appeal may be submitted to the Minister of Interior, whose decision is final.

In practice, applicants should expect the overall registration process to take between six months and one year, although timing depends heavily on the quality of the initial submission and the complexity of the proposed activities.

Step 4: Post-registration — tax and work permit setup

Once approval has been received, a foundation or association can move onto the next steps, including:

• register with the Revenue Department for tax purposes;
• apply separately for tax-exempt recognition if eligible;
• establish appropriate accounting and financial reporting systems; and
• obtain work permits and visas for any foreign employees or secondees.

Managing these processes independently often means coordinating several different advisers.

Lex Nova Partners takes a different approach. Our corporate team manages the registration, our tax specialists handle Revenue Department matters, and our immigration lawyers assist with visas and work permits for foreign staff. 

Bringing these services together under one engagement reduces delays, improves communication, and helps ensure that each stage supports the next.

What legal obligations and restrictions apply to non-profit organizations in Thailand?

Foundations and associations are subject to ongoing legal obligations, and their activities must continue to comply with the objectives approved during registration. The Ministry of Interior retains supervisory powers and can take action where an organisation operates outside its stated purpose or fails to meet its legal obligations.

Political activities and prohibited objectives

Thailand permits non-profit organisations to carry out a broad range of charitable, educational, cultural, religious, and community activities. However, the law places clear limits on political involvement.

Organisations established primarily to influence government policy, engage in lobbying, or undertake political advocacy may be subject to additional scrutiny during the registration process and throughout their operation.

Similarly, the objectives of a foundation or association must not conflict with Thai law, public order, good morals, national security, the sovereignty of Thailand, or the sovereignty of other states. Where the authorities conclude that an organisation’s objectives or activities fall outside these boundaries, registration may be refused or further regulatory action may follow.

Foreign funding

Receiving financial support from overseas donors is permitted and is common for many international charities and NGOs operating in Thailand.

Organisations receiving foreign funding should expect greater transparency requirements. Depending on the nature of the organisation’s activities, particularly where they involve politically sensitive issues, additional reporting obligations or regulatory scrutiny may apply.

Maintaining clear financial records and documenting the source and use of foreign funds is therefore an important part of ongoing compliance.

Reporting and accountability

Registered non-profit organisations are expected to maintain accurate accounting records and demonstrate that their activities continue to align with their approved objectives. Foundations, in particular, may be required to undergo audits or other inspections depending on their activities and funding.

In practice, organisations should prepare the following each financial year:

• An operational report covering the previous financial year.
• Audited financial statements and balance sheet.
• Copies of the minutes from all board of directors’ meetings held during the year.

Maintaining complete and accurate records not only supports ongoing compliance but also helps demonstrate transparency to regulators, donors, and other stakeholders.

Are non-profit organizations tax-exempt in Thailand?

One of the most common misconceptions is that registering a non-profit organization in Thailand automatically means the organisation is exempt from tax, it is not.

Under Thai law, both foundations and associations are recognised as juristic persons for tax purposes. Unless they obtain separate approval from the Revenue Department, they remain subject to corporate income tax.

Tax-exempt status is a separate application

Registration with the Ministry of Interior and tax exemption are two separate processes.

After the organisation has been registered, it must apply to the Revenue Department if it wishes to obtain recognition as a public charity under Section 47(7) of the Revenue Code.

To qualify, the organisation must satisfy strict conditions, including:

• Its activities must genuinely benefit the public rather than a limited group of individuals.
• It must not derive income from ordinary commercial sales or service activities.
• Charitable expenditure must exceed 60% of its annual income.
• Charitable expenditure must also exceed 65% of its total annual expenses.

Meeting these requirements is essential, and the Revenue Department may review how the organisation operates in practice rather than relying solely on its stated objectives.

What income is taxable?

Non profit organisations in Thailand do not automatically receive tax-exempt status. However, they may apply for certain tax benefits if they meet specific criteria and serve public benefit purposes, such as charitable or educational activities. 

Where tax-exempt status has not been granted, foundations and associations remain liable for tax on certain types of income.

Depending on the nature of the income, this may include revenue generated from commercial activities, investments, or the provision of services. Certain categories of income may be taxed at reduced rates under the Revenue Code, while donations, membership fees, grants, and gifts may qualify for exemptions where the statutory conditions are satisfied.

The tax treatment ultimately depends on both the organisation’s activities and the source of its income.

The Ministry of Interior expects every foundation or association’s purpose to offer a genuine public benefit. If an organisation appears to have been established principally to obtain tax advantages rather than engage in charitable or public-interest objectives, the application may be refused. Likewise, organisations that no longer satisfy the conditions for tax-exempt status risk losing that recognition.

For this reason, tax considerations should follow the legal structure rather than determine it.

Lex Nova Partners assists clients with both stages of the process. Once registration has been completed, our tax team can advise on Revenue Department registration, assess whether the organisation is likely to qualify for tax-exempt status, and prepare the supporting documentation required for the application.

Tax Status for Foundations

Unlike a company, a foundation is not set up to generate profits for individuals. Its assets must be used to support its objectives. Once registered as a legal entity, it is classified as one of two categories: 

1. Tax-Exempt Foundations

Certain foundations may qualify for tax-exempt status under Ministerial Notification No. 531, which sets out the criteria for public charities, hospitals, educational institutions, and other public-benefit organisations recognised under the Revenue Code. This can include foundations involved in education, healthcare, religion, arts and culture, scientific research, environmental conservation, and community development. 

To qualify, the foundation must be recognised by the Ministry of Finance, operate solely for public benefit, reinvest all income into its objectives rather than distributing profits, and comply with the applicable accounting and reporting requirements.

2. Taxable Foundations

Foundations that do not qualify for tax exemptions remain subject to taxation, although usually at lower rates than Limited companies. However, not all income sources are taxable. 

The following types of income will be considered tax-exempt, for example, donations from individuals or organizations, whether given during the donor’s lifetime or through a will.

Foreign donations received from abroad.

If a foundation operates solely on donations, it remains tax-exempt. However, if donations are misused for personal uses, such as an individual donating to their own foundation and using the funds for unrelated purposes, this would be illegal.

Taxable Income for Foundations

Income generated from business, commercial, agricultural, industrial, or transport activities is considered taxable under Section 40(8) of the Revenue Code. Such activities will be subject to a tax rate of 2% of the total revenue.

Tax Status for Associations

Associations in Thailand are classified as nonprofit entities, but they are still subject to corporate income tax. However, the tax rates are lower than those applied to regular entities, depending on the type of income.

Taxable Income and Rates

1. Passive Income (Section 40(1)–(7) of the Revenue Code)
   
   • Includes: Interest, dividends, rental income, royalties, capital gains, service fees, and other similar earnings.
   • Tax Rate: 10% of gross income (before deductions).

2. Business-Related Income (Section 40(8) of the Revenue Code)
   
   • Includes: Revenue from commercial, agricultural, industrial, transportation, real estate activities, or any other business operations.
   • Tax Rate: 2% of gross income (before deductions).

Withholding Tax Exemption

Associations can apply for a withholding tax exemption from the Revenue Department. The required documents for the application include:

• Association Registration Certificate.
• Proof of Address (such as a lease agreement or a letter of consent with supporting documents like a land title deed, house registration, and landowner’s ID).
• Copy of the Thai ID card (or passport with an entry stamp) of the authorized signatory.
• A location map of the association’s premises.
• Photographs of the association’s office.
• Additional documents as requested by the Revenue Department.

Tax-Exempt Income

Certain types of income are exempt from taxation under Section 65(13) of the Revenue Code, including:

• Membership fees or maintenance fees collected from members.
• Donations, whether in the form of money or property.
• Money or property received as a gift, bequest, or other gratuitous transfer.

Why foreign founders choose Lex Nova Partners for non-profit registration in Thailand

Registering a foundation or association is only one part of the process. Depending on your objectives, you may also need Revenue Department recognition, tax registration, or work permits for foreign staff. Lex Nova Partners brings together corporate, tax, and immigration lawyers under one roof, providing a coordinated approach for the whole process.

Our team has experience preparing constitutions, bylaws, and governance structures that meet the Ministry of Interior’s requirements, helping reduce delays and avoid common issues during registration. We can also advise international charities, NGOs, family offices, and CSR programmes, explaining Thai legal and regulatory requirements in clear, practical English.

If you are considering establishing a foundation or association in Thailand, contact Lex Nova Partners to discuss your plans. Visit us at Ocean Tower 2, 14th Floor, Sukhumvit 19, Bangkok, email [email protected], or call +66 (0)6 5527 6323.

Frequently Asked Questions

How do I register a non-profit organization in Thailand?

Submit an application (in Thai) to the district registrar where the entity will be based, including bylaws, asset list, director details, and proof of office address. The registrar forwards it to the Ministry of Interior for final approval. The timeline is 6 months to 1 year. Legal counsel is strongly recommended,applications with poorly drafted objectives or incomplete documentation are commonly rejected.

What is the difference between a foundation and an association in Thailand?

A foundation is an asset-based entity with no members, established for public benefit purposes such as charity, education, or science. An association is member-based, created for groups pursuing a shared lawful purpose collectively. Foundations require minimum capital (THB 500,000); associations require at least ten founding members but no minimum capital.

How long does it take to register a foundation in Thailand?

Typically 6 months to 1 year from submission to the district registrar to receipt of the registration certificate from the Ministry of Interior. The timeline depends on the completeness of the application, whether supplemental documents are requested, and the internal processing workload of the Ministry.

Can a foreigner set up a non-profit in Thailand?

Yes. Foreign nationals can be founding directors of a foundation, though at least one board member must be a Thai national. There is no restriction on foreign founders, but the bylaws must demonstrate genuine public benefit objectives. Applications perceived as structured primarily for commercial or tax advantages are at risk of refusal.

What is the minimum capital required to register a foundation in Thailand?

THB 500,000, of which at least THB 250,000 must be in cash held in a bank account at the time of registration. The remainder may be contributed as assets. Associations have no minimum capital requirement.

Are non-profit organizations tax-exempt in Thailand?

Not automatically. Foundations and associations must apply separately to the Revenue Department for recognition as public charities under Section 47(7) of the Revenue Code. To qualify, charitable expenditure must exceed 60% of annual income and 65% of total expenses, and activities must benefit the general public. Without this recognition, income is subject to corporate income tax.

What are the ongoing compliance requirements for a foundation in Thailand?

Annual audited financial statements filed with the Revenue Department within 150 days of year-end. Board changes and bylaw amendments must be reported to or approved by the Registrar. The Ministry of Interior retains supervisory powers and may inspect activities. Entities receiving foreign funding should monitor current ministerial guidelines for any additional reporting requirements.

Please note that this article is for information purposes only and does not constitute legal advice

Introduction:

Thailand has a well-established manufacturing base supported by industrial estates, major ports, developed supply chains and investment incentives. For a foreign manufacturer considering production in Thailand, however, deciding where to locate a factory requires more than identifying an available plot of industrial land.

The location of a BOI zone factory can affect access to suppliers, electricity and water capacity, transport costs, availability of skilled workers and eligibility for additional investment incentives. A site that works well for an automotive supplier exporting through Laem Chabang may make considerably less sense for a food processor supplying customers in Bangkok.

Manufacturers therefore need to consider their business activity, production requirements and supply chain before committing to a particular industrial estate in Thailand.

This is particularly important for larger projects. Industrial land prices in the Eastern Economic Corridor (EEC) have risen substantially, while suitable large-scale factory space can be difficult to secure in some locations. Current market data also shows that new industrial land supply remains heavily concentrated in the EEC.

Lex Nova Partners assists foreign manufacturers with the legal and regulatory aspects of factory development in Thailand, including corporate structuring, BOI promotion, land transactions, regulatory compliance, employment and immigration. Considering these issues together at the site-selection stage can help identify potential problems before significant capital is committed.

Key Points

• The EEC is Thailand’s main manufacturing hub. Chonburi, Rayong and Chachoengsao provide access to established industrial clusters, major highways, Laem Chabang Port and extensive manufacturing supply chains.
• BOI and IEAT serve different purposes. BOI promotion provides investment incentives, while IEAT industrial estates provide developed industrial infrastructure and a regulated environment. A manufacturing project may benefit from both.
• Infrastructure should be checked at estate level. Electricity capacity, water supply, wastewater treatment, labour availability and transport links can differ considerably between industrial estates, even within the same province.
• Factory costs extend well beyond land and construction. Machinery, power systems, water and wastewater infrastructure, environmental compliance, professional fees and working capital should all be included when comparing potential locations.
• A realistic factory development timeline is around 18–36 months. Site selection, BOI promotion, land arrangements, environmental approvals, construction, machinery installation and operational setup need to be coordinated before production can begin.

Factory Development 101: BOI Zones vs IEAT vs Special Economic Zones

The terms BOI zone, industrial estate and special economic zone are sometimes used interchangeably, but they refer to different frameworks. 

BOI-Designated Industrial Zones

Thailand’s Board of Investment provides incentives according to the promoted activity and, in certain circumstances, the location of the project.

Projects located within a BOI-promoted industrial estate or industrial zone may qualify for an additional year of corporate income tax exemption, subject to the applicable activity and incentive conditions. These estates are located across Thailand, with major industrial areas in provinces such as Chonburi and Rayong in the Eastern Economic Corridor (EEC), as well as Ayutthaya, Chachoengsao and Samut Prakan.  

BOI incentives can also include exemptions from import duties on machinery and qualifying raw materials, permission to bring foreign skilled workers and experts into Thailand and, for qualifying promoted companies, permission to own land for the promoted activity.

However, simply locating a factory in a BOI industrial zone does not mean the project will automatically receive BOI benefits. The benefits available will depend on the business activity, technology, level of investment and the specific conditions of the BOI promotion.

Industrial Estates in Thailand by Region

Thailand has industrial estates and industrial parks across the country, although the largest concentration is in the Eastern Region, particularly Chonburi and Rayong. The following provides a regional overview of the main locations included in the industrial estate listings.

Eastern Region

Chachoengsao: 304 Industrial Park; Gateway City Industrial Estate; TFD Industrial Estate; TFD Industrial Estate 2; BlueTech City; Wellgrow Industrial Estate.

Chonburi: Amata City Chonburi Industrial Estate; Amata City Chonburi Industrial Estate Project 2; Asia Clean Chonburi Industrial Estate; Ban Bueng Industrial Estate; WHA Chonburi Industrial Estate 1 (WHA CIE 1); WHA Chonburi Industrial Estate 2 (WHA CIE 2); WHA Eastern Seaboard Industrial Estate 2 (WHA ESIE 2); WHA Industrial Estate Eastern Seaboard 3 (WHA ESIE 3); Laem Chabang Industrial Estate; Pinthong Industrial Estate PIP1, PIP2, PIP3, PIP4 and PIP5; Rojana Industrial Estate Laem Chabang; Saha Group Industrial Park Sriracha; Yamato Industries Industrial Estate.

Prachinburi: 304 Industrial Park; Bo Thong Industrial Estate; Hi-Tech Kabin Industrial Estate; Kabinburi Industrial Zone; Rojana Industrial Park (Prachinburi); Saha Group Industrial Park Kabinburi.

Rayong: Amata City Rayong Industrial Estate; Asia Industrial Estate; CPGC Industrial Estate; Eastern Seaboard Industrial Estate (Rayong); WHA Eastern Industrial Estate (Map Ta Phut); WHA Eastern Seaboard Industrial Estate 1; WHA Eastern Seaboard Industrial Estate 2; WHA Eastern Seaboard Industrial Estate 4; WHA Rayong Industrial Land; WHA Rayong 36 Industrial Estate; WHA Industrial Estate Rayong; IRPC Eco Industrial Zone; Luckchai Rubber City Industrial Estate; Map Ta Phut Industrial Estate; Padaeng Industrial Estate; Rayong Industrial Estate (Ban Khai); RIL Industrial Estate; Rojana Industrial Park Rayong (Ban Khai); Rojana Industrial Park Rayong (Pluak Daeng); Siam Eastern Industrial Park; Pinthong Project 6 Industrial Estate.

Sa Kaeo: Sa Kaeo Industrial Estate.

Bangkok and Vicinity

Bangkok: Bang Chan Industrial Estate; Gemopolis Industrial Estate; Lat Krabang Industrial Estate.

Pathum Thani: Bangkadi Industrial Park; Nava Nakorn Pathumthani.

Samut Sakhon: Maharaj Nakorn Industrial Estate; Samut Sakhon Industrial Estate; Sinsakhon Industrial Estate.

Samut Prakan: Asia Industrial Estate; Bangplee Industrial Estate; Bangpoo Industrial Estate; Bangpoo Nuea Industrial Estate; Bangkok Free Trade Zone (Bangna-Trad Km.23); Bhakasa Industrial Estate.

Central and Western Region

Ayutthaya: Bang Pa-In Industrial Estate; Ban-Wa (Hi-Tech) Industrial Estate; Rojana Industrial Park Ayutthaya; Nakhon Luang Industrial Estate.

Ang Thong: S Industrial Estate Angthong.

Ratchaburi: Ratchaburi Industrial Estate.

Sing Buri: Indra Industrial Park.

Saraburi: Nongkhae Industrial Estate; WHA Saraburi Industrial Land (WHA SIL); Kaeng Khoi Industrial Estate.

Northern Region

Lamphun: World Lamphun Industrial Estate; Northern Region Industrial Estate; Saha Group Industrial Park Lamphun.

Phichit: Phichit Industrial Estate.

Northeastern Region

Nakhon Ratchasima: Nava Nakorn Industrial Estate Nakhon Ratchasima.

Udon Thani: Udon Thani Industrial Estate.

Southern Region

Songkhla: Songkhla Industrial Estate; Southern Region Industrial Estate (Songkhla); Rubber City Industrial Estate Project in the Southern Region.

IEAT Industrial Estates

An industrial estate in Thailand operating under the Industrial Estate Authority of Thailand (IEAT) provides businesses with a purpose-built environment for manufacturing and other industrial activities.

IEAT currently reports 84 industrial estates across 18 provinces, including estates operated directly by IEAT and those developed jointly with private operators. These estates typically provide the infrastructure needed for industrial operations, including roads, electricity, water supply and wastewater treatment.

For manufacturers, one of the main advantages is having this infrastructure already in place. Rather than developing utilities and supporting systems independently, a company can establish its factory in an area designed specifically for industrial operations.

Companies operating within an IEAT industrial estate may also have access to additional benefits, depending on the zone and the nature of the project. These can include permission for qualifying foreign-owned companies (up to 100% foreign owned) to own land for their industrial operations, assistance with bringing foreign skilled workers and experts into Thailand, and access to IEAT’s One Stop Service for land use, factory and other relevant approvals.

Certain estates also contain IEAT Free Zones, which can provide customs and tax privileges for qualifying imported goods used in manufacturing or other approved activities.

These benefits are separate from BOI promotion. A company located in an IEAT industrial estate may also apply for BOI promotion if its activities qualify, allowing the project to potentially benefit from both frameworks.

Special Economic Zones (SEZ) & EEC

Thailand also offers additional investment incentives for projects established in certain designated areas.

The country’s 10 Special Economic Zones (SEZs) cover designated areas in Tak, Mukdahan, Sa Kaeo, Trat, Songkhla, Chiang Rai, Nong Khai, Nakhon Phanom, Kanchanaburi and Narathiwat. These zones are intended to encourage investment and economic activity in border areas, with qualifying projects potentially eligible for additional BOI incentives depending on their activity and location.

For larger manufacturing projects, the Eastern Economic Corridor (EEC) is particularly important. Covering Chonburi, Rayong and Chachoengsao, the EEC is one of Thailand’s main industrial and investment hubs and is home to major industrial estates, ports and supporting infrastructure.

The Eastern Economic Corridor (EEC) – Manufacturer’s First Choice

The Eastern Economic Corridor (EEC) covers Chonburi, Rayong and Chachoengsao and is home to some of Thailand’s most established automotive, electronics, petrochemical and advanced manufacturing clusters.

For manufacturers, its appeal extends beyond BOI incentives. The region combines established industrial estates, major road and rail connections, extensive supplier networks, skilled labour and access to deep-water ports. Laem Chabang Port currently has capacity of approximately 11 million TEUs, with its Phase 3 expansion expected to increase container capacity and improve rail connections.

This combination makes the EEC particularly relevant to export-oriented manufacturers and businesses that depend on imported components, established supply chains or efficient access to international markets.

Why the EEC Dominates Thai Manufacturing

One of the EEC’s main advantages is the concentration of infrastructure around existing manufacturing clusters. The region has access to Laem Chabang deep-water port, Map Ta Phut Industrial Port, major highways, rail infrastructure and established electricity and water networks.

These facilities support automotive and EV manufacturing, electronics, petrochemicals, food processing and other export-oriented industries. Manufacturers can also locate close to existing suppliers, logistics providers and industrial service companies rather than developing an isolated production base.

The region’s established industrial workforce is another advantage, particularly for companies requiring employees with previous manufacturing experience. However, competition for skilled technicians, engineers and other specialist personnel can be stronger in established industrial areas.

For manufacturers, the EEC is therefore particularly relevant where port access, supplier proximity, infrastructure capacity and access to an established industrial workforce are more important than securing the lowest-cost site.

EEC Incentive Structure

Locating a factory in the EEC does not automatically provide a fixed package of incentives. The benefits available depend on the promoted activity, technology, project location and applicable BOI measures.

Qualifying BOI-promoted manufacturing projects may receive:

• Corporate income tax exemptions: Certain advanced or strategically important activities can qualify for exemptions of up to 13 years, while other activities may receive shorter exemption periods or non-tax incentives.
• Import duty privileges: Exemptions or reductions may apply to qualifying machinery and raw materials used in production for export.
• Land ownership: A qualifying BOI-promoted company may receive permission to own land required for its promoted activity, subject to the conditions of its promotion.
• Foreign specialists: BOI privileges can facilitate the employment of qualifying foreign skilled workers and experts, including personnel required for machinery installation and technical operations.

The incentive package should therefore be assessed against the individual manufacturing project rather than assuming that every BOI zone factory established within the EEC receives the same benefits.

Rayong: Heavy Industry and Port Access

Rayong has a well-established industrial base covering petrochemicals, chemicals, automotive manufacturing and other capital-intensive industries.

Industrial areas around Map Ta Phut and the Eastern Seaboard provide access to port infrastructure and utilities capable of supporting large manufacturing operations. This can be particularly important for businesses with substantial electricity, industrial water or wastewater treatment requirements.

Rayong can therefore be suitable for petrochemicals, chemicals, automotive manufacturing, industrial equipment and other import- or export-intensive operations.

The main trade-off is cost. Industrial land in established locations can command a premium, particularly where it provides convenient access to ports, transport routes and developed industrial infrastructure. Manufacturers should weigh the higher initial site cost against potential long-term savings in logistics, utilities and supply-chain efficiency.

Chonburi: Automotive, Electronics and Supply Chains

Chonburi has one of Thailand’s most developed automotive and manufacturing ecosystems, making it particularly relevant to automotive component suppliers, EV supply-chain businesses, electronics manufacturers and assembly operations.

Major industrial locations include Amata City Chonburi, Laem Chabang Industrial Estate, WHA estates and the Pinthong industrial estates. Manufacturers also benefit from an extensive network of existing suppliers and supporting businesses.

Access to Laem Chabang Port is another important advantage for companies importing components or exporting finished products. However, strong demand for industrial sites and skilled workers can increase operating and property costs.

Manufacturers considering Chonburi should therefore balance the cost of establishing a factory against the operational benefits of being close to suppliers, customers, ports and major transport routes.

Chachoengsao: EEC Access and Manufacturing Expansion

Chachoengsao provides access to both the EEC and Bangkok and can offer an alternative for manufacturers that do not need to locate directly within the more established industrial areas of Chonburi or Rayong.

The province contains manufacturing locations including 304 Industrial Park, Gateway City Industrial Estate, TFD Industrial Estate, BlueTech City and Wellgrow Industrial Estate. Its industrial base includes automotive-related manufacturing, food and agro-industrial production, chemicals and other light and medium manufacturing.

The suitability of Chachoengsao should still be assessed at estate level. Electricity capacity, water supply, wastewater treatment, road connections and distance from suppliers can vary considerably between sites.

For manufacturers that want access to the EEC but do not require immediate proximity to Laem Chabang or Rayong’s heavy-industry infrastructure, Chachoengsao can therefore be worth considering.

Outside EEC: Alternative Manufacturing Zones

The EEC will not be the most suitable location for every BOI zone factory. The right location should reflect the manufacturer’s operations, supply chain, workforce requirements, target market and operating costs.

Northern provinces such as Chiang Mai and Lamphun may be suitable for food processing, agricultural products and certain types of light manufacturing, particularly where direct access to a deep-water port is not essential. Land and labour costs may also be lower than in some of Thailand’s major industrial areas, which can make these locations attractive for manufacturers that do not need to be close to the Eastern Seaboard.

Central locations, including Ayutthaya and surrounding provinces, may be more practical for manufacturers supplying Bangkok or the domestic market. These areas have established industrial clusters and good highway connections, although land prices, congestion and transportation costs should be considered when selecting a site.

Thailand’s border Special Economic Zones (SEZs) provide another option, particularly for businesses with supply chains or customers in neighbouring ASEAN markets. Land and labour costs may be more competitive in some of these areas, while qualifying projects may also benefit from additional BOI incentives. However, these advantages need to be considered alongside practical factors such as workforce availability, logistics and access to suppliers.

For factory development in Thailand, the location should ultimately be selected around the requirements of the project. BOI incentives and lower operating costs can make certain areas attractive, but they should support a commercially suitable location rather than determine it.

Factory Development Timeline & Process

Setting up a BOI zone factory project involves more than obtaining investment promotion. The BOI application, corporate structure, site selection, construction and regulatory approvals all need to be planned together, as decisions made at one stage can affect the rest of the project.

A typical project may involve:

1. Site selection and BOI feasibility: Confirm that the proposed manufacturing activity is eligible for promotion and assess the planned investment, production process, utility requirements and potential locations.
2. BOI application: Prepare the BOI application around the proposed project and investment plan.
3. Land acquisition or lease: Conduct due diligence on the proposed site and confirm that the land can legally and practically support the planned factory and promoted activities.
4. Environmental and factory approvals: Determine which factory licences, environmental assessments and other approvals are required before construction or operations can proceed.
5. Factory design and construction: Design and build the facility around the production process, machinery, utilities, fire safety and waste management requirements.
6. Machinery installation and testing: Import and install the required machinery, test the production line and complete the relevant requirements under the BOI promotion.
7. Operational setup: Put the necessary employment, work permit, immigration, tax, accounting and ongoing compliance arrangements in place before operations begin.

For a substantial greenfield manufacturing project, 18 to 36 months from initial site selection to production may be a more realistic planning timeframe than assuming the factory can become operational within a year. The actual timeline will depend on factors such as the size and complexity of the facility, environmental requirements, construction works and machinery procurement and installation.

Planning these stages together can help avoid a situation where a company secures BOI promotion or commits to a site before confirming that the wider project can be implemented as intended.

Infrastructure Reality Check: Utilities, Labor, Logistics

When selecting an industrial estate in Thailand, manufacturers should consider the infrastructure available, local labour market and ongoing operating costs. These can vary considerably between provinces and individual estates, making it important to assess each proposed site against the factory’s operational requirements.

The Thailand Board of Investment (BOI) publishes indicative costs for establishing and operating a business in Thailand. These figures provide a useful reference for initial budgeting, although manufacturers should obtain quotations based on their specific requirements before making an investment decision.

Electricity and Water

Electricity and water availability are particularly important for manufacturers operating energy-intensive production lines or requiring substantial water supplies.

According to the BOI’s published cost guidance, electricity costs approximately THB 5–6 per kilowatt-hour (kWh). However, this is a general reference rather than a fixed industrial electricity rate. Actual costs will depend on the applicable tariff, electricity consumption, peak demand and any additional charges.

Bank of Thailand

Manufacturers should also confirm whether an industrial estate has sufficient electricity capacity to support their operations, particularly where production requires heavy machinery or uninterrupted power.

Water supply requires similar consideration. Industrial water tariffs and available capacity differ between estates, while certain manufacturing activities may also require additional water treatment or wastewater management facilities.

For factories with substantial electricity or water requirements, even relatively small differences in utility costs can have a significant effect on annual operating expenses.

Labour

Labour costs and workforce availability should also be assessed when comparing manufacturing locations. Although land and operating costs may be lower outside Thailand’s main industrial centres, manufacturers must confirm that the local labour market can meet their staffing requirements.

Established industrial areas such as Chonburi and Rayong offer access to experienced manufacturing personnel, engineers and technicians. However, competition for skilled workers can increase recruitment costs. Manufacturers considering less developed industrial areas may benefit from lower operating expenses but face additional recruitment and training requirements.

Foreign manufacturers should also account for the costs of employing international personnel. The BOI’s published guidance lists government work permit fees of THB 3,000 for permits valid for more than six months and up to one year. Professional fees and other immigration expenses are additional.

BOI-promoted companies may qualify for immigration and work permit privileges for foreign skilled workers and experts, subject to the applicable promotion conditions.

Logistics

Transport costs should be assessed against the factory’s supply chain, production volumes and target markets rather than simply choosing the location closest to a major port.

The BOI publishes indicative shipping and rail freight costs that manufacturers can use when comparing potential locations. For example, its August 2026 data lists a rail container transport rate of THB 1,500 for the Lat Krabang–Laem Chabang route and THB 9,140 for Lamphun–Laem Chabang. These are published round-trip rates that exclude fuel surcharges.

These differences illustrate why manufacturers should calculate the full cost of transporting raw materials and finished products before selecting a location.

For export-oriented manufacturers, establishing a factory near Laem Chabang Port may reduce inland transportation costs and delivery times. However, businesses supplying customers in Bangkok or other domestic markets may find that a central location offers better access to their customers and suppliers.

The final assessment should consider land costs alongside transport expenses, delivery schedules, workforce availability and the infrastructure required to support production.

Environmental & Regulatory Compliance

Environmental requirements should be assessed before acquiring land, as they can affect the suitability of a site, factory design and overall investment costs.

Depending on the manufacturing activity, production capacity and location, a project may require environmental assessments, factory licences and specific measures for wastewater treatment, emissions and hazardous materials.

Manufacturers establishing operations within an industrial estate must also comply with their own environmental obligations. Even where an estate provides central wastewater treatment facilities, individual factories may still need to install pre-treatment systems and meet applicable discharge standards.

These requirements should be considered when comparing potential sites. A location with a lower purchase price may ultimately be more expensive if additional investment in wastewater treatment, drainage, storage or pollution-control systems is required.

For a BOI zone factory, legal and environmental due diligence should therefore form part of the initial site assessment. Identifying these requirements early can help manufacturers avoid unexpected costs, regulatory delays and restrictions that could affect their proposed operations.

Cost Breakdown & Financial Planning

The cost of building a factory in Thailand depends on the location, factory size, construction specifications, machinery and infrastructure required for the proposed manufacturing activity. Land prices and utility requirements can also vary considerably between industrial estates.

According to the Thailand Board of Investment’s (BOI) published cost guidance, updated in March 2026, construction costs for a standard low-rise factory are approximately THB 15,000–19,000 per square metre. The BOI also provides an indicative cost of THB 5,670 per square metre for general electrical power systems. This includes transformers and electrical distribution systems but excludes power installations for production machinery.

Indicative construction costs

Based on the BOI’s published reference figures, not project-specific quotations.

Source: BOI, March 2026 update. Construction estimates are based on September 2025 source data.

For example, applying the BOI’s indicative construction rates to a standard 10,000-square-metre factory produces an estimated building cost of THB 150–190 million. General electrical power systems could add approximately THB 56.7 million if the published rate applies across the full floor area.

For manufacturers comparing potential locations, the financial assessment should account for the following:

• Land acquisition or leasing: Purchase or rental costs, legal due diligence and any land preparation required before construction.
• Construction and infrastructure: Factory buildings, offices, electrical installations, water supply, drainage and wastewater treatment.
• Machinery and equipment: Production machinery, importation, installation, testing and any specialist power requirements.
• Regulatory compliance: Environmental assessments, factory licensing, safety systems and other approvals required for the proposed activity.
• Professional fees and working capital: Legal, engineering and project-management expenses, together with the funds required before production reaches full capacity.

Land costs can make a substantial difference to the overall investment, particularly when comparing established industrial estates in the Eastern Economic Corridor (EEC) with locations elsewhere in Thailand. However, a lower land price does not necessarily result in a cheaper project if additional investment in infrastructure, transportation or workforce development is required.

For a substantial factory development project in Thailand, manufacturers should prepare a detailed financial model for each shortlisted location before committing to land acquisition or construction.

Decision Framework: Where Should I Build a Factory in Thailand?

Choosing where to establish a factory in Thailand requires manufacturers to consider more than BOI incentives or the initial cost of land. The location must also support the proposed production process, workforce requirements, supply chain and long-term operating costs.

The following comparison outlines the main considerations for manufacturers assessing different industrial locations.

These locations are not mutually exclusive. An IEAT industrial estate may also be located within the EEC, for example, allowing qualifying manufacturers to access benefits under more than one framework.

The appropriate location will depend on the manufacturer’s business model. An export-oriented automotive manufacturer may prioritise access to Laem Chabang Port and established component suppliers. A food-processing business may benefit more from being close to agricultural production areas, while an electronics manufacturer may place greater importance on skilled technicians, reliable electricity and specialist infrastructure.

Manufacturers should therefore compare the total cost of establishing and operating a factory across several locations, taking into account both the initial investment and ongoing expenses.

For businesses seeking BOI promotion in Thailand, the proposed location should also be assessed against the applicable promotion criteria and location-based incentives. Selecting a site based on potential tax benefits alone may result in higher operating costs or practical restrictions that outweigh the incentives received.

The objective is to identify a location that meets the manufacturer’s operational requirements while providing an appropriate legal, regulatory and investment framework.

Frequently Asked Questions

How much does it cost to build a factory in Thailand by zone?

BOI currently publishes an indicative cost of THB 15,000–19,000 per sqm for a standard low-rise industrial building. Land, machinery, utilities and environmental systems are additional and can materially increase the total project cost.

What industrial zones in Thailand offer BOI incentives?

BOI incentives depend on both the promoted activity and applicable location-based measures. Promoted industrial estates, the EEC, border SEZs and certain other promoted areas can provide additional incentives subject to BOI conditions.

Which BOI zone is best for electronics manufacturing?

Chonburi, Rayong and other established EEC locations can be attractive because of their electronics, automotive and advanced manufacturing ecosystems. The final choice should also consider power requirements, suppliers, labour and logistics.

Can foreigners own land for a BOI factory?

A BOI-promoted company may be granted permission to own land required for its promoted activity. This is an investment-promotion privilege and should not be treated as a general exemption allowing unrestricted foreign ownership of Thai land.

How long does it take to develop a BOI factory in Thailand?

For significant greenfield manufacturing projects, approximately 18–36 months from planning to production is a practical planning range. Complex construction, environmental requirements or imported machinery can extend the timetable.

Is an IEAT estate the same as a BOI industrial zone?

No. IEAT industrial estates operate under the Industrial Estate Authority framework, while BOI promotion concerns investment incentives. A project can potentially involve both frameworks.

Is the EEC always the best location for manufacturing?

No. The EEC has major logistics and industrial-cluster advantages, but land costs can be higher and it may be unnecessary for manufacturers focused primarily on Thailand’s domestic market.

How should manufacturers compare electricity and water costs?

Request the current tariff, available capacity and connection requirements directly for each shortlisted estate. Water pricing and utility capacity can vary materially between locations.

Can a BOI company employ foreign engineers and technicians?

BOI promotion can provide privileges allowing qualifying foreign skilled workers and experts to work on promoted activities, subject to the relevant approval and immigration requirements.

What happens if a company loses its BOI promotion?

The consequences depend on the circumstances and the privileges being used. Issues can include tax incentives, machinery privileges, land rights and foreign personnel, so the company should assess the implications before any cancellation or withdrawal becomes effective.

Do all factories require an EIA?

No. Environmental requirements depend on the nature, scale, capacity and location of the project. This should be checked during site and regulatory due diligence rather than assumed.

Should I buy industrial land before applying for BOI promotion?

Not necessarily. The proposed site should first be assessed against the activity, BOI conditions, land-use restrictions, environmental requirements and infrastructure needs. Committing to unsuitable land can be considerably more expensive than conducting the feasibility work first.

Why Choose Lex Nova Partners for Factory Development

Starting a manufacturing operation in Thailand requires careful coordination of several legal and regulatory processes. Decisions concerning BOI promotion, corporate structure, land acquisition and factory development can affect one another, making it important to address these requirements as part of the overall investment plan.

Lex Nova Partners provides integrated legal support across corporate establishment, BOI promotion, real estate and regulatory compliance. Our team assists foreign manufacturers throughout the investment process, from assessing BOI eligibility and preparing applications to industrial land due diligence, corporate transactions, employment matters and work permits for foreign personnel.

With Thai, English and French-speaking professionals, Lex Nova Partners also supports Francophone investors establishing or expanding their manufacturing operations in Thailand.

For businesses planning a new BOI zone factory, our team can begin by assessing the proposed manufacturing activity, investment requirements and preferred locations. We then assist with structuring the investment, reviewing potential sites and coordinating the relevant BOI, corporate, property and regulatory processes in line with the project’s development timetable.

This approach allows manufacturers to identify potential legal and regulatory issues before committing to significant investments, while ensuring that the proposed corporate structure, BOI promotion and factory development plans are properly aligned.

Please note that this article is for information purposes only and does not constitute legal advice

Introduction:

Industries in Thailand continue to attract record levels of domestic and foreign investment. In the first nine months of 2025, the BOI received investment applications worth approximately 1.37 trillion baht, led by digital projects (746.2 billion baht), electronics (277.6 billion baht), automotive and parts (84.1 billion baht), agriculture and food processing (75.7 billion baht), petrochemicals and chemicals (58.4 billion baht), and renewable energy. 

This article explores the key industries in Thailand, the government’s priority S-Curve industries, and where the strongest Thailand investment opportunities are emerging for businesses planning to invest in Thailand in 2026 and beyond.

Key Points

• In the first nine months of 2025, the BOI received applications worth around 1.37 trillion baht, led by digital projects (746.2 billion baht), electronics, automotive, agriculture and food processing, petrochemicals, and renewable energy.
• Digital industries attracted roughly 626 billion baht in foreign investment (about 46% of total value), driven by hyperscale data centre projects and commitments from Google, AWS, and Microsoft, with momentum continuing into 2026.
• Priority sectors now include smart agriculture, electric vehicles, automation, AI-supporting data centres, and wellness and medical services, with new subcategories such as generative AI, advanced robotics, and quantum computing eligible for eight-year corporate income tax exemptions.
• The EEC (Chachoengsao, Chonburi, Rayong) attracted around 62% of approved foreign investment value in the first half of 2025 and offers enhanced incentives, including tax exemptions of up to 15 years and 100% foreign ownership for qualifying projects.
• The Foreign Business Act limits foreign ownership to 49.9% in many sectors, but BOI promotion offers a route to full ownership, land rights, and streamlined visas. With record application volumes slowing BOI processing times, investors targeting 2026-2027 should start planning early.

What Are the Main Industries in Thailand in 2026?

Thailand’s main industries have expanded to now include advanced manufacturing, electronics and electrical appliances, the digital economy and data centres, tourism and hospitality, healthcare and wellness, agriculture and food processing, and financial services. 

During the first nine months of 2025, digital industries attracted approximately 626 billion baht in foreign investment, accounting for around 46% of total foreign investment value, largely driven by data centre projects. Electronics and electrical appliances followed with around 271 billion baht (20%), while metals and materials secured approximately 145 billion baht. The figures highlight the continued importance of the Thailand manufacturing industry, while also reflecting the country’s growing role as a regional digital and technology hub.

Foreign investment continues to come from a wide range of markets. Singapore remained the largest source of investment, followed by Hong Kong, China, the United Kingdom and Japan.

To support this growth, the Board of Investment (BOI) continues to refine its investment promotion policies in line with Thailand’s long-term economic strategy. During its December meeting, the BOI announced a series of measures for 2026 and 2027, including the extension of incentives supporting business expansion, company relocations, automotive industry development, advanced manufacturing, joint ventures in automotive parts production, economic recovery initiatives, and community-based investment projects.

At Lex Nova, our team makes sure we stay up to date with all the BOI incentives news and the latest BOI policy changes, in order to be able to provide the most accurate and up to date advice for our clients.

Which Industries Does the Thai Government Target for Investment and the New S-Curve Industries 

Thailand’s S-Curve industries are a government economic development strategy focusing on a group of targeted sectors to transform the country from a middle-income to a high-income nation.

Through the support and development of the S-Curve Industries, the Government hopes to move Thailand up the value chain by promoting innovation, research and development, and advanced technology in these sectors. It’s part of the broader “Thailand 4.0” economic model launched around 2016 to reduce dependence on traditional manufacturing and low-skilled labor.

Read more:

Thailand’s S-Curve Industries: Driving Economic Growth & Innovation

In response to changing economic developments and technological advancements, the Thai government has expanded Thailand’s S-Curve industries. The “New S-Curve Industries” now include smart agriculture, electric vehicles, automation systems, data centers supporting artificial intelligence, and wellness and medical services. 

The government also introduced new AI and automation subcategories, including quantum computing, advanced robotics, and generative AI, increasing the scope of activities eligible under the BOI.

For businesses planning to invest in Thailand, the latest BOI measures create new opportunities across some of the country’s fastest-growing sectors. The expanded incentives for 2026 extend eligibility for the standard eight-year corporate income tax exemption to a broader range of AI and technology-related activities, giving early applicants access to support before competition for investment projects intensifies. Complementing these incentives, the government’s “Quick Big Win” initiative aims to strengthen the talent pipeline by developing 100,000 high-skilled workers through reskilling, upskilling, and graduate preparation programmes, ensuring Thailand’s key industries have access to the skilled workforce needed for long-term growth.

Why Are Data Centres and the Digital Economy Booming in Thailand?

The digital economy has become one of Thailand’s most attractive investment sectors, driven by growing global demand for cloud computing, artificial intelligence, cybersecurity, and data storage. It was the country’s largest recipient of foreign direct investment in 2025, supported by the approval of hyperscale data centre projects and major commitments from global technology companies, including Google, AWS, and Microsoft. This momentum has continued into 2026, with the BOI approving seven data centre and data hosting projects at its first board meeting of the year.

The BOI also continues to position Thailand as a regional digital hub by offering attractive incentives for qualifying digital businesses. Depending on the promoted activity, investors may be eligible for corporate income tax exemptions, import duty exemptions on machinery and equipment, and up to 100% foreign ownership, making Thailand an increasingly attractive destination for technology companies looking to invest in Thailand.

For businesses evaluating long-term growth opportunities, digital infrastructure, cloud platforms, AI services, fintech, and enterprise software are expected to remain among the fastest-growing sectors in Thailand’s economy. You can learn more in our guides to data centres in Thailand and fintech in Thailand.

What Is Happening in Thai Manufacturing, EVs and Electronics?

Despite the increased growth within the digital economy, Thailand’s manufacturing industry remains one of the country’s greatest economic strengths. As Southeast Asia’s leading automotive production hub, Thailand is now focusing extensively on electric vehicle (EV) manufacturing. This is highlighted through a series of policy reforms approved by the National EV Policy Board in late 2025. The updated measures place greater emphasis on local production and exports, encouraging manufacturers to expand their manufacturing footprint rather than relying on imported vehicles.

Alongside the automotive transition, Thailand is actively working to strengthen and improve its position in advanced manufacturing. The government introduced a long-term semiconductor strategy in December 2025 aimed at developing a more complete semiconductor value chain, while electronics, the country’s second-largest foreign direct investment sector, continues to support growth across the automotive, energy, data centre, and smart manufacturing industries.

For businesses evaluating the Thailand manufacturing industry and the key industries in Thailand, electric vehicles, semiconductors, smart electronics, robotics, and industrial automation remain among the country’s strongest long-term investment opportunities. Learn more in our guides to Thailand’s EV policy, robotics and automation in Thailand, and smart electronics in Thailand.

Read more:

Thailand EV Policy Changes 2026: BOI Incentives, EEC Opportunities and What Foreign Manufacturers Need to Know

How Big Are Tourism, Healthcare and Wellness in Thailand?

Tourism and hospitality remain among the key industries in Thailand, but investment is increasingly being driven by healthcare, medical tourism, and wellness. Thailand has long been considered as one of the world’s leading medical tourism destinations, supported by a network of internationally accredited hospitals, specialist clinics, wellness centres, hotels, and recovery facilities. In 2025, the country’s health tourism market was estimated at approximately THB 670 billion.

Government policy is also encouraging increased investment within these sectors. Hotels may qualify for BOI investment promotion under eligible projects, while healthcare, medical services, and wellness businesses form part of Thailand’s New S-Curve industries, highlighting their importance to the country’s long-term economic strategy. 

Combined with growing demand from international patients and Thailand’s aging population, these policies are creating new investment opportunities across healthcare, hospitality, and integrated wellness developments for foreign investors. 

Where Should Foreign Investors Locate? The Eastern Economic Corridor

The Eastern Economic Corridor (EEC), comprising Chachoengsao, Chonburi, and Rayong, has become Thailand’s flagship investment zone for advanced industry and export-oriented manufacturing. Developed as part of the Thailand 4.0 strategy, the EEC is designed to support next-generation industries through world-class infrastructure, including deep-sea ports, industrial estates, high-speed rail connections, an expanded airport network, and integrated logistics facilities. Reflecting its importance, the EEC attracted approximately 62% of Thailand’s approved foreign investment value during the first half of 2025.

Many of the fastest-growing industries in Thailand are located within the EEC, including next-generation automotive manufacturing, intelligent electronics, digital technology, biotechnology, advanced agriculture, and high-value medical tourism. 

To encourage further investment, the BOI offers enhanced incentives for qualifying projects located within the EEC, including corporate income tax exemptions of up to 15 years for eligible activities, import duty exemptions, permission for up to 100% foreign ownership, matching grants under selected programmes, and a preferential 17% personal income tax rate for qualifying foreign specialists.

For eligible foreign investors, the EEC provides an excellent entry point into the Thai market. Access to established supplier networks, modern infrastructure, and direct access to international shipping routes reduce both setup time and operating costs. 

Lex Nova Partners has extensive experience supporting businesses establishing operations in Rayong and Chonburi, assisting with company formation, BOI applications, regulatory compliance, and ongoing legal support. If your project involves relocating personnel or establishing operations in the EEC, our guide to the EEC Visa explains how investment promotion, work authorisation, and business setup work together.

How Can Foreign Investors Enter These Industries in Thailand?

Foreign investors looking to expand into these industries in Thailand have several investment structures and market entry options to consider. A typical investment may require corporate structuring, BOI investment promotion, tax planning, immigration, employment, and ongoing regulatory compliance. At Lex Nova Partners, these services are coordinated under one roof by English and French-speaking professionals, giving foreign investors a single point of contact throughout the investment process.

For most foreign businesses, the first and most important consideration is the Foreign Business Act (FBA). The FBA restricts foreign ownership in approximately 50 categories of business activities and limits foreign shareholding to 49.9% in restricted businesses unless an exemption applies. Many service businesses fall within List 3 of the FBA, while other activities require government approval or remain prohibited altogether.

For qualifying projects, however, BOI promotion provides a practical route to invest in Thailand with significantly fewer restrictions. Depending on the promoted activity, investors may be eligible for up to 100% foreign ownership, corporate income tax exemptions, import duty exemptions on machinery and raw materials, permission to own land for the promoted business, and reduced requirements for supporting visa and work permits for foreign executives and specialists. 

Following record investment applications in 2025, processing times have become longer than usual as the BOI manages a larger volume of project applications. Businesses planning operations in 2026 or 2027 should therefore begin their planning early to allow sufficient time for company incorporation, investment promotion, licensing, recruitment, and immigration procedures.

If you are considering Thailand investment opportunities, our Corporate and M&A team can advise on the most appropriate investment structure, while our Immigration specialists assist with visas and work permits for foreign directors, employees, and their families. To discuss your project, contact our team for an initial consultation.

Frequently Asked Questions (FAQ): Key Industries in Thailand

What are the main industries in Thailand?

Thailand’s main industries include automotive manufacturing, electronics and electrical appliances, digital technology, tourism and hospitality, healthcare and wellness, agriculture and food processing, financial services, and renewable energy.

Government policies, particularly through the Board of Investment (BOI), prioritise many of these industries by offering tax incentives and other investment benefits, making them key parts of Thailand’s long-term economic growth.

What is the biggest industry in Thailand?

Manufacturing is Thailand’s largest industry by economic contribution, while tourism remains one of the country’s most important service sectors. Measured by recent investment activity, however, digital industries have become the fastest-growing sector. During 2025, digital projects, led by data centres and cloud infrastructure, attracted approximately 626 billion baht in foreign direct investment, ahead of electronics and electrical appliances. The answer therefore depends on how “biggest” is measured, whether by economic output, employment, or investment value.

What are the best industries to invest in Thailand in 2026?

The best industries to invest in Thailand in 2026 are digital technology, data centres, electronics, electric vehicles, semiconductors, advanced manufacturing, healthcare, medical tourism, renewable energy, and high-value agriculture. These sectors align with the BOI’s investment priorities and Thailand’s S-Curve development strategy. Many also qualify for investment promotion, including corporate income tax exemptions, import duty relief, and other incentives designed to encourage long-term investment in strategically important industries.

Can foreigners own 100% of a company in Thailand?

Yes. Foreigners can own 100% of a company in Thailand through BOI promotion or other specific legal frameworks, depending on the business activity. Outside these exemptions, the Foreign Business Act generally restricts foreign ownership in many sectors and may require Thai majority ownership or a Foreign Business Licence. Choosing the right investment structure is therefore essential before entering the Thai market. Learn more about our Corporate and M&A services and how we assist foreign investors with compliant business structures.

Which industries does the BOI promote in 2026?

The BOI promotes a wide range of industries in 2026, focusing on activities that support Thailand’s long-term economic development. Priority sectors include digital technology, data centres, artificial intelligence, electric vehicles, smart electronics, semiconductors, biotechnology, renewable energy, advanced manufacturing, medical services, wellness, and research and development. Qualifying projects may be eligible for corporate income tax exemptions, import duty exemptions, land ownership rights, and streamlined visa and work permit procedures, depending on the promoted activity.

Our Thoughts

Thailand’s key industries in 2026 are made up of a combination of the country’s long-established manufacturing strengths with rapidly expanding digital infrastructure, electric vehicle production, healthcare, wellness, and advanced technology sectors. 

Supported by regularly updated BOI incentives and continued government investment in strategic industries, Thailand remains one of Southeast Asia’s most attractive destinations for foreign businesses seeking long-term growth.

Successfully entering Thailand, however, requires more than selecting the right industry. Corporate structuring, BOI investment promotion, taxation, immigration, employment, and ongoing regulatory compliance all need to be considered from the outset. Lex Nova Partners provides fully integrated legal and business advisory services, with English, Thai and French-speaking professionals supporting foreign investors at every stage of their investment.

If you are considering expanding into Thailand or would like to discuss the most suitable investment structure for your business, contact our team to arrange an initial consultation.

Please note that this article is for information purposes only and does not constitute legal advice

Introduction:

Thailand represents one of Southeast Asia’s most promising markets for artificial intelligence. Foreign AI businesses that have been keeping an eye on Thailand AI policy news will be aware that commercial demand for AI solutions is growing rapidly, but the regulatory framework governing AI is still developing. 

Due to the regular developments and updates in AI regulation, companies planning to do business in Thailand should understand the current regulatory framework and anticipated policy changes.

Thailand has been very active when it comes to AI policy planning. The National AI Strategy and Action Plan (2022–2027) sets the government’s direction, the Personal Data Protection Act B.E. 2562 (PDPA) has been fully enforced since June 2022, and the Electronic Transactions Development Agency (ETDA) held public hearings on draft AI legislation throughout 2025. 

This guide covers the essential Thailand AI policy news you should be aware of, including the current state of Thailand’s AI policy framework, the PDPA obligations of an AI company, the BOI incentives available to technology businesses, how to structure your company for market entry, and the upcoming regulation you should be preparing for now.

Key Points

• Thailand does not yet have a standalone AI law, but foreign businesses must already comply with the PDPA, the Foreign Business Act, and sector-specific regulations while a dedicated AI Act is being drafted.
• The PDPA applies to any company processing personal data of people in Thailand regardless of where the company is based.
• The BOI offers significant incentives to AI companies, including 100% foreign ownership, corporate income tax exemptions of up to eight years, and relaxed work permit requirements that bypass the standard four-to-one Thai-to-foreign employee ratio.
• The ETDA is consolidating earlier draft instruments into a single risk-based AI framework expected to introduce prohibited-risk and high-risk AI classifications, mandatory impact assessments, and expanded enforcement around automated decision-making.

What Is Thailand’s Current AI Policy Framework?

Thailand has not yet implemented a standalone AI law as of 2026. Instead, the framework governing AI is based upon the National AI Policy and Ethics Guidelines developed by NSTDA and NECTEC, the Personal Data Protection Act B.E. 2562 (PDPA), and sectoral regulations issued by bodies such as the Bank of Thailand, the FDA, and the SEC for fintech and health AI applications.

The Ministry of Digital Economy and Society (MDES) also plays an important role in AI governance, while the Digital Economy Promotion Agency (DEPA) focuses on industry promotion and skills development. Together, they coordinate Thailand’s approach to balancing innovation and oversight. 

The National AI Strategy 2022–2027 has worked towards setting targets for AI professionals, startup development, and sectoral adoption across healthcare, agriculture, and government services.

The Board of Investment Thailand (BOI) has also designated AI and digital services as a targeted S-curve industry. 

The absence of a dedicated AI law creates both opportunity and uncertainty for foreign businesses and investors. Foreign investors can currently operate AI services without AI-specific licensing, but must comply with the PDPA, the Foreign Business Act (FBA), and any sector-specific rules that apply. 

While Thailand does not yet have a dedicated AI law, the current framework already provides guidance through data protection rules, sector regulations, and national strategy initiatives. For businesses operating in the AI sector, this means that compliance still requires careful attention to existing laws such as the PDPA and the Foreign Business Act, alongside any industry-specific requirements. As Thailand continues developing its approach to AI governance, companies entering the market should stay informed about regulatory developments and structure their operations in a way that can adapt as new policies emerge. 

At Lex Nova, our team closely monitors Thailand AI policy news allowing us to keep our clients up to date and compliant with current obligations and ready for any new ones.

PDPA and AI: What Foreign Companies Must Comply With

The Personal Data Protection Act B.E. 2562 (PDPA) has been fully in force since June 2022. This is one of the most important areas of Thailand’s data protection law for AI companies, and a focus of Thailand AI policy news. 

The PDPA applies to any company processing personal data of individuals in Thailand, regardless of where that company is based. If your AI product collects, analyses, or stores data from Thai users, you are subject to the PDPA.

AI businesses typically trigger four key PDPA obligations. First, you must establish a lawful basis for processing personal data, consent is the most common basis, but legitimate interest and contractual necessity also apply in specific contexts. 

Second, you must respect data subject rights, including the right to access, correct, and delete personal data. 

Third, in the event of a breach, you are required to notify the Personal Data Protection Committee (PDPC) within 72 hours. 

Fourth, the PDPA restricts cross-border data transfers, meaning data sent outside Thailand must be suitably protected through mechanisms such as Binding Corporate Rules or Standard Contractual Clauses.

AI can create PDPA risks in several ways under Thailand data protection law. Training data may contain personal data that was not collected with appropriate consent for AI use. Profiling and automated decision-making create transparency obligations as individuals have the right to know when decisions affecting them are made by AI. Vendors and third-party processors require formal data processing agreements. Without these, your business is in breach of its PDPA requirements and may be subject to any penalties.

Penalties under the PDPA Thailand are significant. Administrative fines can be up to 5 million THB per violation. Criminal penalties include fines up to 1 million THB and imprisonment of up to one year for intentional misuse of sensitive data. The PDPC has also moved away from awareness-building to active enforcement. For example, in August 2025, the regulator issued over 21.5 million THB in administrative fines across multiple cases in both the public and private sectors.

The Personal Data Protection Commission (PDPC) is the enforcement authority introduced to make sure the PDPA is properly enforced. The PDPC has been increasingly active since 2024, when it issued its first major penalty of 7 million THB against an online retailer. 

The PDPC operates a “zero data breach” policy that suggests that enforcement under PDPA Thailand will continue to grow. Foreign AI businesses monitoring Thailand AI policy news should ensure that if they do enter the Thai market they are fully aware of their obligations under the PDPA.

BOI Incentives for AI and Technology Businesses

The BOI has identified AI as a priority sector and actively promotes AI, software, and digital services as an important industry under Thailand’s S-curve policy. For foreign companies, this means access to significant benefits that can really help operate a business as a foreign er in Thailand. 

Benefits include, 100% foreign ownership, substantial tax holidays and operational incentives such as reduced work permit requirements offer a significant advantage in the BOI Thailand technology landscape.

Eligible Activities for AI Companies in Thailand

The main BOI promotion categories relevant to AI businesses include Activity 8.1.1 for software development, digital platforms, and digital content. Related activities in automation and robotics and smart electronics may also apply depending on your specific operations. Eligibility depends on the nature of your AI activities, and proper classification at the application stage is important.

If you are an AI company considering entering the Thai market and applying for a BOI promotion, why not talk to one of our experts. We recommend undertaking an eligibility assessment to confirm whether your business activities are eligible for a promotion and under which category you can apply.

What Benefits and Incentives are Available to AI Companies with a BOI Promotion

The key BOI incentives for eligible projects include 100% foreign ownership, corporate income tax (CIT) exemption for typically five to eight years, import duty exemptions on machinery and essential equipment, and permission to hire foreign skilled workers with reduced requirements. 

The 100% foreign ownership benefit is the most important benefit for BOI Thailand technology projects. BOI-promoted companies can be wholly foreign-owned in activity categories that would otherwise require a Foreign Business License under the Foreign Business Act. This removes the need for Thai majority shareholders and gives you full control over corporate structure, IP, and management.

For AI companies, the reduced requirements for work permit facilitation are particularly important, BOI-promoted companies are not bound by the standard four-to-one Thai-to-foreign employee ratio. 

The Eastern Economic Corridor (EEC) offers additional incentives for tech businesses, including extended CIT exemptions and land ownership options in designated zones. Digital and AI investments were among the BOI’s top priority sectors for 2025, with over 500 billion THB in new and planned tech investments attracted through high-level government engagement. For businesses following Thailand ai policy news, the EEC represents one of the most attractive investment zones in Southeast Asia.

It is important to note that your BOI application in Thailand for AI-related activities requires demonstrating technology transfer or capability development in Thailand. This includes workforce training plans, collaboration with Thai institutions, and commitments to developing local talent. The application must be positioned correctly from the outset, misclassification or weak positioning can result in rejection or reduced incentives. Our experts have experience in assisting with BOI applications and can provide assistance from determining eligibility, preparing your application and interview to post approval compliance.

Read more:

BOI INCENTIVES NEWS: Latest Updates For Foreign Investors (2026)

Upcoming AI Regulation: What Is Coming in 2026 and Beyond

Thailand is currently developing a dedicated AI Act, which is one of the most important areas of Thailand AI policy news for foreign businesses to follow. In May 2025, the Electronic Transactions Development Agency (ETDA) held public sessions on Draft Principles for AI Legislation and accepted public comments through June 2025. 

These draft principles consolidate two earlier instruments, the 2022 Draft Royal Decree on Business Operations Using AI Systems and the 2023 Draft Act on the Promotion and Support of AI Innovation, into a single framework.

Three further developments are also expected. First, a risk-based AI classification system similar to the EU AI Act. This system will be used to distinguish between prohibited-risk AI (systems whose harm cannot be mitigated) and high-risk AI (permitted subject to strict governance duties). 

Secondly, mandatory AI impact assessments will be required for high-risk applications in healthcare, financial services, and HR decision-making. 

Finally, expanded PDPC enforcement around automated decision-making and profiling, building on the PDPA’s existing framework.

In preparation of these developments, businesses working with AI in Thailand should begin preparing for a more structured regulatory environment. Establishing clear data governance policies, appointing data protection officers where appropriate, and documenting AI risk management processes can significantly reduce the burden when new requirements such as AI risk classifications and impact assessments are introduced. Taking these steps early is more convenient rather than attempting to adjust systems after new regulations take effect.

Thailand has also signed onto the ASEAN Guide on AI Governance and Ethics, ratified in 2024, and the ASEAN Responsible AI Roadmap (2025–2030) adopted in March 2025. These will establish regional harmonisation of AI governance principles, including transparency, fairness, and accountability. 

Thailand AI policy news shows that Thailand is actively shaping regional standards. Regulatory monitoring is ongoing work, to ensure companies stay on top of their obligations and reduce any potential risks. 

Common Legal Challenges for Foreign AI Companies in Thailand

While Thailand offers exciting opportunities for AI companies, foreign businesses entering the market should also be aware of several legal and regulatory challenges. These issues often arise at the intersection of data protection, foreign ownership rules, employment requirements, and tax compliance. As frequently highlighted in Thailand AI policy news, understanding these risks early can help AI companies structure their operations correctly and avoid costly adjustments later.

PDPA compliance for AI training data 

Many foreign companies are unaware that data scraped or licensed for AI model training may include personal data of Thai individuals. By using this data, AI businesses are subject to the full PDPA obligations. 

If training data was not collected with appropriate consent for AI use, you face significant risks from the beginning. Understanding the PDPA Thailand requirements regularly saves significant cost and legal exposure.

Work permit quotas for technical talent

AI companies usually rely on foreign engineers, data scientists, and developers, but the standard four-to-one Thai-to-foreign employee ratio can be a large obstacle for tech teams. Applying for a BOI promotion resolves this by providing more flexible foreign employee quotas and faster processing. 

Every foreign employee in Thailand needs to obtain the correct Visa and Work Permit. This requirement also applies to companies promoted by the BOI, however BOI companies are not subject to the same requirements as other company structures. For example, BOI promoted companies are not restricted by the same mandatory capital (2 million THB) and minimum Thai staff (4 Thai employees) requirement for each foreign employee.

In order for the company to be able to hire foreign staff, they must register their company into the Single Window for Visas & Work Permits system (formerly known as the E-Expert system). Registration on the Single Window system will allow the company to make future requests for foreign workers.

After a post has been submitted, opened, and accepted through the Single Window for Visas & Work Permits system, the applicant may apply for their visa and a work permit.

BOI companies benefit from streamlined immigration privileges. We coordinate work permits, long-term extensions and dependent visas through our Thailand immigration and visa services.

Two less significant challenges highlighted through Thailand’s AIpolicy news include, IP ownership in employee AI outputs. In such a situation, Thai intellectual property law applies to works created by employees in Thailand, and your employment contracts must clearly address AI-generated IP to avoid disputes. Our Thailand labor law and employment compliance team can assist and advise on these provisions. 

Secondly, VAT registration for digital services: foreign companies selling digital services to Thai customers must register for VAT, and doing business within the Thailand AI landscape requires careful attention to indirect tax obligations.

Why Foreign AI Companies Choose Lex Nova Partners

Lex Nova Partners is an international law firm based in Bangkok providing corporate, immigration, tax, and compliance services to foreign businesses entering Thailand. Our legal team in Bangkok works with technology companies, investors, and entrepreneurs who need practical, results-oriented legal support.

The main advantage for foreign AI businesses is our full-service approach. Our team can assist with corporate structuring, BOI applications, work permits, and PDPA compliance in a coordinated way. Working with multiple specialist firms creates gaps, delays, and conflicting advice. 

Lex Nova can handle everything from one office, ensuring that your corporate structure supports your tax position, your BOI promotion aligns with your immigration needs, and your data compliance programme is compliant from the beginning.

Lex Nova offers solutions based on our experience with technology sector clients and BOI applications for digital businesses. This means we understand the specific challenges AI companies face in Thailand. We help our clients stay ahead of Thailand AI policy news and translate regulatory developments so our clients know exactly where they stand.

Frequently Asked Questions About AI Policy and Regulation in Thailand

Does Thailand have an AI law?

No, Thailand does not have a standalone AI law as of early 2026. The country’s AI governance currently rests on the PDPA, the National AI Strategy and Action Plan (2022–2027), and sector-specific regulations from bodies such as the Bank of Thailand and the SEC. However, the ETDA held public hearings on Draft Principles for AI Legislation in mid-2025, and a dedicated AI Act is expected to be prepared in 2026. Foreign businesses should prepare for a risk-based classification system that will impose specific duties on high-risk AI applications.

What is Thailand’s AI policy for foreign companies?

Thailand’s AI policy for foreign companies is defined by the requirements of the PDPA and the Foreign Business Act. Foreign AI businesses must comply with data protection obligations, obtain the correct business licence or BOI promotion for their activities, and secure work permits for foreign employees. The government actively encourages foreign AI investment through BOI incentives, including tax holidays and 100% foreign ownership.

How does PDPA affect AI businesses in Thailand?

The PDPA imposes direct obligations on any AI business processing personal data of individuals in Thailand. AI businesses must have a lawful basis for data processing, respect data subject rights to access, correction, and deletion, notify the PDPC of data breaches within 72 hours, and comply with cross-border data transfer restrictions. 

AI-specific risks include training data containing personal data, profiling obligations, and the need for formal data processing agreements with vendors. Non-compliance carries administrative fines up to 5 million THB and potential criminal penalties.

Can a foreign company use AI services in Thailand?

Yes, a foreign company can use and provide AI services in Thailand, but it must comply with the Foreign Business Act and the PDPA. Most AI services fall under List 3 of the FBA, meaning majority foreign ownership requires either BOI promotion or a Foreign Business License. Companies providing AI services to Thai customers must also register for VAT on digital services and ensure PDPA compliance for any personal data they process. 

Obtaining a BOI promotion is the most common route for foreign AI companies because it provides tax incentives, full foreign ownership, and work permit facilitation.

What are the data privacy requirements for AI companies in Thailand?

AI companies in Thailand must comply with the PDPA’s full requirements: obtaining consent or establishing another lawful basis for data processing, providing clear privacy notices, respecting data subject rights, reporting breaches within 72 hours, appointing a Data Protection Officer where required, and ensuring adequate safeguards for cross-border data transfers. 

The PDPC has been actively enforcing the PDPA since 2024, with total fines exceeding 21.5 million THB as of August 2025. This enforcement trend is a key part of Thailand AI policy news that every foreign company should monitor. AI companies face particular scrutiny because training data, automated profiling, and algorithmic decision-making all create specific compliance obligations under the PDPA.

Does Thailand’s BOI support AI and technology businesses?

Yes, the BOI actively supports AI and technology businesses through investment promotion incentives. Software development, digital platforms, and digital content fall under Activity 8.1.1, which offers corporate income tax exemption for up to eight years, import duty exemptions, and flexible foreign employee quotas. 

The BOI has also designated digital and AI as a priority sector for 2025–2026, and total tech investment applications exceeded 500 billion THB in 2025. To get in touch about your BOI application, contact our team.

What licenses does an AI company need to operate in Thailand?

An AI company in Thailand typically needs either a BOI promotion certificate or a Foreign Business License to operate with majority foreign ownership.

If your AI application is active in regulated sectors such as financial services or healthcare, you may also need sector-specific licences from the relevant Thai regulator. The specific combination of licences depends on your company’s activities, ownership structure, and target market.

How do I set up an AI company in Thailand as a foreigner?

The most common route is to apply for BOI promotion under the software and digital services category, register a Thai limited company with 100% foreign ownership, obtain work permits for your foreign team. The process typically takes four to six months from BOI application to operational readiness. 

As Thailand AI Policy news continues to point towards tighter regulation, early movers benefit from establishing compliant structures before new rules take effect. Structure, tax, and immigration decisions must be coordinated from the start to avoid delays and restructuring costs. Professional legal support ensures the process runs efficiently and compliantly.

Please note that this article is for information purposes only and does not constitute legal advice

Introduction:

Thailand’s Board of Investment and the incentives it offers to eligible companies remains one of the most attractive options available to foreign investors entering or expanding in the Thai market. 

Recent BOI incentives news highlights why the BOI continues to attract international businesses, offering benefits that are not available to non-BOI companies. Approved projects may qualify for 100 percent foreign ownership, reduced work permit requirements, corporate income tax exemptions for up to thirteen years, import duty exemptions on machinery and raw materials, and permission to own land for business operations. 

These incentives are highly attractive to foreign investors as they remove many of the regulatory barriers faced by foreign-owned businesses in Thailand.

Key Points

• BOI promotions offer benefits not available to non-BOI companies, including 100% foreign ownership, reduced work permit requirements, corporate income tax exemptions, import duty exemptions, and land rights for approved activities.
• BOI eligibility is broader than many assume, covering a wide range of industries (manufacturing, agriculture, digital, machinery, logistics, utilities, etc.), while service-based businesses that do not qualify may still have an option through TISO (no tax incentives, but supports 100% foreign ownership).
• Application success depends on preparation and project positioning, including consistent documentation, a credible 3-year business plan, and a strong interview presentation explaining commercial viability and economic contribution.
• After the company has been awarded a BOI promotion and operations have begun, ongoing compliance becomes a real risk area, with mandatory BOI reporting at 6 months, 1 year, and 2 years, and a possible financial review after 3 years; non-compliance can result in warnings, suspension of benefits, or promotion withdrawal with tax clawbacks.

What Makes Thailand’s BOI Incentives Unique? (2026 Overview)

Thailand’s Board of Investment (BOI) is a government agency responsible for promoting and facilitating foreign investment under the Investment Promotion Act B.E. 2520 (1977). Established in 1966, the BOI operates under a unique legal framework that allows promoted businesses to benefit from incentives and ownership structures not available to standard Thai companies, specifically designed to attract and support foreign capital.

The key benefits of a BOI investment promotion include:

• Eligibility for 100 percent foreign ownership
• Corporate income tax holidays of up to 13 years
• Import duty exemptions on machinery and qualifying materials
• Possibility to own land
• Reduced requirements to support work permit and visa processing

Recent data released by the Ministry of Commerce Thailand highlights the impact of these incentives. Between January and November 2025, foreign investment into Thailand reached THB 311.16 billion, representing a 45 percent year-on-year increase. A total of 973 foreign companies were approved, creating 5,718 Thai jobs. BOI-promoted projects accounted for approximately 74.7 percent of total investment value, with strong inflows from Singapore, Japan, China, Hong Kong, and the United States. Notably, the Eastern Economic Corridor (EEC) alone attracted 33 percent of all foreign capital.

For foreign investors, BOI promotion provides advantages that are not available through standard company structures due to the restrictions imposed by the Foreign Business Act. Non-BOI structures are typically subject to foreign ownership limits and limited tax relief options, whereas obtaining a BOI promotion certificate can open access to enhanced ownership rights, tax incentives, and increased operational flexibility.

With new or updated BOI incentives and promotion rules expected to be introduced in 2026, staying up to date with BOI incentives news and BOI promotion news is highly recommended. Checking your eligibility for a BOI promotion is always recommended for foreign investors as a successful application will have a real impact on how successfully a foreign investment can operate in Thailand.

For more information about the BOI and whether your project will be eligible for a BOI, please feel free to contact our team of experts here.

BOI Incentive Plans for 2026

The Board of Investment regularly reviews and updates its promotion policies to reflect current economic conditions, industrial capacity, and Thailand’s long-term development objectives.

During the BOI’s December meeting, a series of targeted policy updates for the 2026 to 2027 period were announced. The Board also announced the extension of several investment promotion measures to support Thailand’s “Driving the Economy towards the New Economy” strategy. These include continued support for business retention and expansion, structured relocation incentives for full business transfers, and additional measures supporting economic recovery, automotive industry upgrading, joint ventures in automotive parts manufacturing, and community-focused development initiatives.

At Lex Nova, our team makes sure we stay up to date with all the BOI incentives news and the latest BOI policy changes, in order to be able to provide the most accurate and up to date advice for our clients.

1. New S-Curve Industry Expansions (January 2026) 

Thailand’s S-Curve industries are a government economic development strategy focusing on a group of targeted sectors to transform the country from a middle-income to a high-income nation.

Through the support and development of the S-Curve Industries, the Government hopes to move Thailand up the value chain by promoting innovation, research and development, and advanced technology in these sectors. It’s part of the broader “Thailand 4.0” economic model launched around 2016 to reduce dependence on traditional manufacturing and low-skilled labor.

Read more:

Thailand’s S-Curve Industries: Driving Economic Growth & Innovation

In response to changing economic developments and technological advancements, the Thai government has expanded Thailand’s S-Curve industries. The “New S-Curve Industries” now include smart agriculture, electric vehicles, automation systems, data centers supporting artificial intelligence, and wellness and medical services. 

The government also introduced new AI and automation subcategories, including quantum computing, advanced robotics, and generative AI, increasing the scope of activities eligible under the BOI.

For foreign investors, these new BOI incentives Thailand offers in 2026 create a clear first-mover advantage. Early applicants under the BOI incentives update for 2026 benefit from reduced competition and access to standard eight-year corporate income tax exemptions across a wider range of AI-related activities. Supporting this expansion, the government’s “Quick Big Win” policy prioritizes workforce development through initiatives targeting 100,000 high-skilled workers via reskilling, upskilling, and graduate preparation programs.

S-Curve Industries Take Center Stage in 2026 Election

As Thailand prepares for elections on February 8, 2026, the S-Curve industries have become an important focus of the major parties, highlighting just how important they have become to the Thai economy. 

Major political parties consider the New S-Curve sectors, particularly electric vehicles, AI-driven services, and data centers, as key sectors to support and grow the economy.

The Bhumjaithai Party (the previous ruling party) is promoting its “Economy 10 Plus” policy, targeting growth of at least 3% through New S-Curve industries including EVs, smart agriculture, automation systems, and AI-enabled data centers. 

Meanwhile, Pheu Thai proposes using artificial intelligence to strengthen Thailand’s existing developments in food production and healthcare, aiming to establish the country as a global AI hub in these specialized sectors. 

As Thailand expands its S-Curve strategy to include AI, automation, and advanced technologies, foreign investors have an opportunity to become first movers within these industries. 

Lex Nova is available to assist clients by assessing eligibility, identifying which BOI promotion categories may apply, and advising on the most suitable structure for the proposed business activities. We also support clients throughout the BOI application process, from preparing documentation to liaising with the relevant authorities.

Enhanced Eastern Economic Corridor (EEC) Benefits 

The Eastern Economic Corridor (EEC) forms an important part of Thailand’s 4.0 strategy and is a special economic zone covering the provinces of Rayong, Chonburi, and Chachoengsao on the Eastern Seaboard. 

The EEC focuses on developing and supporting advanced, future-focused industries, including next-generation automotive, intelligent electronics, advanced agriculture and biotechnology, medical and high-value tourism, and digital technologies.

To attract foreign investment, Thailand’s Board of Investment offers generous incentives for qualifying EEC projects. These include up to 100% foreign ownership, corporate income tax exemptions of up to 15 years, import duty exemptions, matching grants, and a reduced personal income tax rate of 17%.

Read more:

Thailand 4.0 and the Eastern Economic Corridor

Updates to the EEC

On November 3, 2025, Thailand’s EEC Policy Committee approved the Digital Infrastructure Development Plan (2024-2027). The Digital Infrastructure Development Plan (2024-2027) has been designed to help transform the Eastern Economic Corridor into ASEAN’s Digital Hub.

As part of the plan, there are two main strategies to support the transition: developing digital infrastructure for economic growth and improving the efficiency of digital technologies.

This will be achieved through upgrading telecommunications infrastructure for international internet networks, aligning digital infrastructure with transportation and utilities, updating digital activity regulations, and advancing smart city development with digital technology. 

How the EEC can Help Foreign Investors

From 2026 onward, the Digital Infrastructure Development Plan (2024 to 2027) is expected to strengthen the Eastern Economic Corridor (EEC) as a leading digital hub in ASEAN. For foreign investors, this creates an opportunity to start or relocate an existing business to a high-growth operating environment backed by significant government investment and enhanced Board of Investment incentives.

For businesses with regional or global operations that rely on stable digital infrastructure, recent updates to the Eastern Economic Corridor (EEC) place a strong emphasis on upgrading international internet gateways and telecommunications networks. These improvements are designed to support low-latency, high-capacity connectivity, which is needed for cross-border operations, cloud-based systems, data-intensive services, and real-time digital platforms.

Regulatory processes within the EEC have also been streamlined. The EEC One-Stop Service (EEC-OSS) now offers more than 50 digital services, allowing investors to apply for permits, construction approvals, and investment incentives through a single online platform. This reduces administrative friction and shortens approval timelines for new projects.

To support large-scale investments, Thailand has introduced the Fast Pass program within the EEC. This framework is designed to minimise bottlenecks for business activities operating in priority sectors such as data centres, clean energy, and advanced technology. The Fast Pass program should help investors move from approval to implementation more quickly.

Access to skilled talent is another benefit for foreign investors. Under the EEC’s demand-driven workforce model, the government aims to train up to 100,000 workers by 2027 in areas such as artificial intelligence, data engineering, and cybersecurity. This approach is intended to align workforce development directly with the needs of foreign-led and technology-driven industries.

Sustainability & Environmental Compliance Requirements 

From March 2026, the BOI will introduce stricter sustainability criteria aligned with Thailand’s BCG economy strategy and its 2050 carbon neutrality target. Promoted projects will need to demonstrate measurable carbon reduction targets, renewable energy usage, and circular economy principles. 

Projects that exceed these sustainability standards may qualify for an additional one-year corporate income tax exemption. In practice, applications will require an environmental assessment and a clear sustainability roadmap, which is likely to add two to four weeks to the preparation timeline. These changes signal a stronger policy shift toward sustainability and the promotion of green industries.

Which Industries Qualify for BOI Incentives in 2026?

There is a common misconception that BOI promotions are only available for technologically advanced or high-tech business activities. However, in reality, activities eligible for a BOI promotion cover a wide variety of areas such as manufacturing, agriculture, software, machinery, etc. 

Any potential business whose business activities are service based and don’t satisfy these criteria may be eligible for a TISO promotion instead.

The following business activities are the areas in which companies may be eligible to receive a promotion (please note each activity may be subject to certain conditions and requirements from the BOI):

What Benefits Do BOI-Promoted Companies Receive?

The BOI remains highly attractive to both Thai and foreign investors because of the incentives available to approved projects. These benefits are not available to ordinary companies in Thailand and play an important role in reducing many of the restrictions and barriers that foreign businesses face. 

In addition to tax incentives, BOI promotion can provide 100% foreign ownership rights, easier access to work permits and visas for foreign staff, and relief from certain regulatory limitations. As a result, BOI status not only improves financial efficiency but also makes it significantly easier for foreign investors to establish and operate a business in Thailand.

Tax Incentives (Corporate Income Tax) 

The BOI may grant a corporate income tax exemption, often referred to as a tax holiday, for up to 13 years, depending on the nature of the business activity and its location. Projects located in industrial estates or promoted industrial zones may receive an additional year of CIT exemption, while companies operating in designated Investment Promotion Zones can be eligible for a further three years of tax relief. 

These tax benefits from the BOI are designed to support strategic industries and regional development. However, not all BOI promotions include a tax holiday, and the duration of any CIT exemption ultimately depends on the specific activity and promotion category approved by the BOI.

The CIT exemption applies only to income generated from the activities for which the BOI promotion was awarded too. Any revenue derived from non-promoted activities remains subject to Thailand’s standard corporate income tax rate. 

Companies with BOI promotion must maintain clear and accurate separation between promoted and non-promoted income streams to support correct accounting and avoid potential issues in the future.

Import Duty Exemptions 

A BOI promotion can provide an import duty exemption for machinery import used in promoted production activities, reducing import duty to 0% compared with the standard Thai rates of 5 to 30 percent. 

This benefit applies to both initial project setup and approved expansion phases. Certain raw materials imported for research and development may also qualify for exemption, while production material relief is considered on a case by case basis and may carry re-export conditions. 

General Business Benefits

Alongside the tax incentives, the Board of Investment (BOI) offers a variety of general business benefits to attract foreign investors. These incentives are designed to improve the competitiveness of businesses in Thailand.

These benefits help companies overcome many of the barriers non BOI promoted companies are faced with. The most important general business benefits include:

1. 100% Foreign Ownership: The BOI allows foreign investors to hold up to 100% of the registered capital in most promoted activities.
2. Land Ownership Rights: BOI companies can own 1 Rai, certain BOI promotions for specific business activities are allowed to own larger plots of land. 
3. Work Permit and Visa Facilitation: BOI companies are able to hire foreign staff with significantly reduced requirements when compared to non-BOI promoted businesses. Unlike other structures, BOI-promoted companies face no quotas when hiring foreign skilled employees. For example, Thai Limited Companies typically need a 4:1 ratio of Thai to foreign employees, but this requirement doesn’t apply to BOI-promoted businesses.
4. Support for R&D: Projects may receive import duty exemptions on goods imported for research and development purposes.
5. Special Economic Zones: Additional incentives are available for investments in designated Special Economic Zones (SEZs) to promote regional development. Special economic zones can be found in the following areas in Thailand.

The combination of BOI benefits and BOI incentives available to a project depends on the specific activity, technology level, and location of the investment under Thailand’s investment promotion framework. 

Properly preparing and structuring the BOI application is highly important for maximizing both tax and non-tax advantages. Lex Nova’s team of BOI experts can help applicants calculate their projected benefit value across categories to help optimize BOI applications for stronger long-term returns. Consider speaking with our team for a tailored consultation.

How to Apply for BOI Promotion: 2026 Process

The BOI application process can be detailed and requires careful preparation at every stage. Proper planning, preparing accurate documentation, and a clear project structure help reduce the risk of delays or requests for additional clarification or information from the BOI. Our team supports investors throughout the process, from assessing eligibility and structuring the project to preparing the application and coordinating with the relevant authorities, helping the submission progress as efficiently and smoothly as possible.

Step 1: Pre-Application Assessment (Feasibility Study)

A business feasibility study helps companies evaluate the viability and likelihood of success of a BOI application before committing significant time and resources. As part of this eligibility assessment, Lex Nova’s BOI specialists liaise directly with BOI officers to confirm that the proposed business activity qualifies for promotion and that such activities remain supported in practice. 

By using our extensive experience handling BOI applications across a wide range of industries, Lex Nova also provides practical insight that goes beyond published BOI guidelines. In addition to reviewing formal eligibility criteria, our team includes real-world feedback based on how applications are assessed in practice.

This includes highlighting commonly asked questions, document expectations, operational clarifications, and other commonly asked questions that BOI officers ask about during the interview.

This knowledge is based upon the cases we have assisted with, and the direct observations gained through managing BOI applications. It reflects common patterns, officer expectations, and understanding the approaches that businesses typically only discover during the application process itself.

By integrating these practical insights with formal BOI requirements, we help applicants anticipate areas of common scrutiny, prepare stronger supporting documentation, and present their project in a way that satisfies how BOI officers evaluate proposals in practice.

This helps to reduce the risk of delays, following questions or information requests, or rejection due to avoidable issues. By combining regulatory knowledge with hands-on application experience, we help prepare each application in a way that aligns both with BOI policy and with how officers evaluate submissions.

We also clarify the key BOI requirements that may be required, giving clients clear, practical insight from the very beginning so they can make informed decisions.

Completing a feasibility check is highly recommended, as selecting the correct promotion category at the beginning is important. It is not uncommon for an application to proceed to the interview stage before the BOI decides it was submitted under the wrong category, requiring the process to restart and causing significant delays.

By performing a feasibility study, clients save time, reduce risk, and improve the overall chances of their BOI application. Our BOI experts are available to assist with a structured eligibility review.

Timeline: 3 business days

Step 2: Document Collection and BOI Application Preparation (2-4 weeks)

As part of the application process, companies must submit application forms and documents relating to the company’s specific business category and proposed activities.

A successful BOI submission depends heavily on meeting detailed BOI application requirements and preparing accurate, well-supported BOI documentation. Important information required includes the company’s registered capital structure and funding source, a clear project description, an employee chart outlining Thai and foreign hiring plans, a list of machinery, software, and equipment to be used, and examples of existing clients and business prospects to demonstrate commercial viability.

The 3-Year Business Plan

A three-year business plan is one of the most important parts of the BOI documentation. The BOI uses this plan to assess minimum investment levels and overall project feasibility. Careful structuring is important, as investment can be split between equity and shareholder loans, subject to BOI limits. While projections are not strictly binding, major changes from the approved project scope can create issues during audits, so keeping in a broad line with approved activities remains important.

Because the forms are dynamic, figures entered in one section may affect other parts of the submission. Proper coordination during the application process helps avoid inconsistencies that may trigger follow-up questions and subsequent delays.

Additional Submission Materials

Further BOI requirements for the application process include a detailed employee list with positions and salaries, asset acquisition details, and software information for digital projects. Appendices can be used to provide deeper technical and operational explanations. A presentation deck is also required, outlining the business model, client base, market strategy, and project rationale.

Strong applications clearly demonstrate commercial viability. Established parent company backing, existing clients, and realistic financial projections all help support the application and can significantly improve approval chances.

After submission, the BOI officer typically requests clarifications to verify that financial projections are commercially reasonable. Several rounds of review may occur before approval.

Step 4: BOI Review & Interview

After the BOI application is accepted, the applicant is invited to schedule a project presentation meeting with the BOI. Several time slots are typically offered, and the interview will be held via Zoom, lasting around one hour. 

The interview is a highly important part of the BOI evaluation criteria, as it allows officers to assess the project’s feasibility, business model, and overall contribution to Thailand.

Applicants must prepare a presentation deck explaining the company background, project scope, production or service process, existing and target clients, business development plans, reasons for choosing Thailand, and expected economic benefits. To support this, Lex Nova will provide clients with a structured template and guidance on BOI expectations. We also conduct a rehearsal interview to prepare clients for the actual discussion.

During the meeting, applicants generally present for 15 to 30 minutes, followed by questions from the BOI officer. Our experts attend to clarify technical points and address concerns in real time. In practice, the BOI may suggest adjustments to the project scope during the interview, and having professional support allows amendments to be made efficiently and resubmitted quickly.

The interview strongly influences the BOI approval timeline. The interviewing officer prepares the report presented to the BOI Committee, so a clear, well-structured presentation improves the chances of quickly moving onto the next steps. When the officer fully understands the project and is happy that the BOI evaluation criteria has been satisfied, approvals may proceed more quickly, often after only limited follow-up.

Following the meeting, the officer submits the case to the BOI Committee. Strong applications move forward to the stage quickly, while incomplete or inconsistent submissions may significantly extend the BOI approval timeline.

We are often asked, how long does BOI approval take. Well-prepared cases may move forward after one or two review rounds, while unclear applications can face delays of many months due to the back and forth between the applicant and the BOI.

The final time frame for approval will depend on the level of investment of the project. For example, if your project falls within these bands of investment, this is the expected approval times:

1) Less than 200 million THB – 40 working days

2) Less than 2,000 million THB – 60 working days

3) More than 2,000 million THB – 90 working days

Certificate Issuance & Conditions

Once BOI the application has been accepted and approved, the applicant receives an approval letter outlining the promotion conditions. The applicant has 30 days to accept these terms. Extensions may be granted at the BOI’s discretion. After acceptance, the investor has six months to register a company or align an existing company and complete the minimum investment required before applying for the BOI certificate, also known as the certificate of promotion.

Company Registration

A Thai limited company must be established or adjusted to match BOI conditions. Requirements include two individual shareholders at incorporation, at least one director, registered capital aligned with BOI investment conditions, and a Thai registered address.

After registration, shares may be transferred to foreign corporate shareholders, while maintaining the legal shareholder structure required under Thai law.

Corporate Bank Account Opening

The company must open a Thai bank account to receive the capital investment. This account is required to produce banking evidence confirming compliance with BOI funding conditions. 

Applicants should be aware that one of the authorised directors must be present during the bank account opening. In practice, Thailand makes it difficult for foreigners without long-term visas to open bank accounts. However, on a case-by-case basis, it is possible to explain that the company is fully foreign-owned, which is essential for depositing funds and operating within the necessary frameworks.

Capital Investment Transfer

Funds must be transferred from overseas in foreign currency according to foreign ownership proportions. Banks must issue a credit advice note, which the money came from abroad as a foreign currency. This is a mandatory requirement and will be required by the BOI.

Apply for the BOI Certificate

After completing all the above steps, the company submits documentation to obtain the BOI certificate. This includes corporate registration documents, shareholder lists, and proof of investment. Issuance of the certificate of promotion formally activates BOI privileges.

Foreign Business Certificate (if applicable)

If the projects approved business activities fall under the Foreign Business Act, a Foreign Business Certificate must be obtained before operations begin. This allows the foreign-owned BOI company to legally conduct restricted activities.

Post-Approval Compliance (Ongoing)

Companies who have been awarded a promotion must follow ongoing BOI compliance duties. BOI reporting requirements include annual progress reports (F-ONE form), investment updates, employment breakdowns between Thai and foreign staff, audited financial statements, and production or service volume reports. 

These BOI obligations confirm that the project remains within the approved scope. The BOI may conduct inspections to confirm that investment commitments and operational activities match what was approved. Minor issues may result in warnings or deadline extensions, while serious non-compliance can lead to benefit suspension or, in rare cases, revocation of the promotion certificate.

Lex Nova Partners: Your BOI Application Partner

BOI applications require more than simply filing in the application form, they require proper planning and preparation to make sure that the project meets the BOIs requirements and specifications.

A successful application often depends on understanding how policies are applied in practice, not only how they are written. Lex Nova’s team offers extensive experience and familiarity with BOI procedures, and actively monitors BOI incentives news so clients can benefit from new opportunities as soon as they arise.

Real-Time BOI Policy Monitoring

Our team keeps up to date with all the latest news and developments through continuous tracking of BOI policy updates and latest BOI regulations directly from Thai-language sources. 

Our team reviews official announcements as soon as they are released, coordinates with BOI officials and industry contacts, and translates complex regulatory changes into practical English guidance. 

Bilingual English-French Expertise

Lex Nova offers bilingual legal support in English,Thai and French, allowing clients to discuss complex legal and commercial matters in a language more familiar to them. This means clients receive documentation support reducing misunderstandings common when communication relies solely on translation.

Full-Service Integration

As a full service law firm in Bangkok, we can assist with your BOI promotion, company formation,visa and work permit requirements, tax structuring, and ongoing compliance under one strategy. 

This approach avoids the delays and inconsistencies that arise when using multiple advisors. Learn more about our services here: https://lexnovapartners.com/expertise/

Complementary Legal Services for BOI Investors in Thailand

Applying for and receiving the BOI promotion is only the first step foreign entrepreneurs and investors must follow. After approval, investors still complete several steps before their BOI business can be fully operational. 

Lex Nova’s integrated approach includes assistance with BOI strategy with corporate and tax, immigration. We manage the full legal framework of a Thailand investment, not only the BOI application.

Related Services

1. Thai Company Formation and Corporate Structuring

When applying for BOI promotion with the Thailand Board of Investment, the acceptance offer letter issued to successful applicants sets out specific conditions that must be completed before the full BOI promotion certificate can be granted.

The main requirement is the capital investment, with the approved amount specified in the acceptance letter. Although this may appear straightforward, it involves several technical conditions and documentation requirements that must be satisfied. For example, if the project involves foreign shareholders, capital investment sum must come from outside of Thailand. Importantly, the transaction must be properly labelled, for example, Investment for BOI Promotion. Once the transaction has been made a Foreign Exchange certificate will be required from the bank.

If the BOI application is submitted through an existing Thai company, a capital increase may be necessary, which involves completing a series of statutory corporate procedures.

Additional corporate structuring may also be required, particularly where shares are transferred from an individual shareholder to a corporate shareholder. This often involves revising the shareholding structure, updating the shareholder register, and reviewing director control and company objectives so they align with BOI conditions and Thai regulatory requirements.

In some cases, a Foreign Business Certificate application may be required if the company’s activities fall within restricted business categories under Thai law and are not fully exempted by the BOI promotion.

Our team advises on foreign ownership planning, director responsibilities, and corporate governance from day one. Explore our Corporate law and M&A services in Thailand for full structuring support.

2. Immigration Services Work Permits and Visas

While every company in Thailand needs to obtain the correct Visa and Work Permit for their foreign employees, companies promoted by the BOI are not subject to the same requirements as other company structures. For example, BOI promoted companies are not restricted by the same mandatory capital and minimum Thai staff requirements.

In order for the company to be able to hire foreign staff, they must register their company into the Single Window for Visas & Work Permits system (formerly known as the E-Expert system). Registration on the Single Window system will allow the company to make future requests for foreign workers.

After a post has been submitted, opened, and accepted through the Single Window for Visas & Work Permits system, the applicant may apply for their visa and a work permit.

BOI companies benefit from streamlined immigration privileges. We coordinate work permits, long-term extensions and dependent visas through our Thailand immigration and visa services.

3. Accounting Requirements

Companies that receive promotion from the Thailand Board of Investment are subject to more than standard Thai tax and accounting rules. BOI-promoted businesses are subject to ongoing reporting and monitoring duties designed to confirm that the project proceeds in line with the approved investment plan, timeline, and business scope. Maintaining BOI status depends on meeting these post-approval compliance obligations.

Promoted companies must provide periodic progress updates to the BOI. These monitoring reports track investment implementation, operational readiness, and adherence to the approved project details.

The current reporting timelines include:

• 6 months: Confirmation that the project has commenced and implementation is progressing
  
• 1 year and 2 years: Detailed updates on project development, investment deployment, and operational status
  
• After 3 years: The project may be subject to a BOI financial review, including examination of the company’s financial statements by an auditor recognized by the BOI

Failure to meet BOI conditions or reporting deadlines can trigger formal action. The BOI may issue a warning notice requiring corrective steps. If deficiencies are not resolved and no justifiable reason is provided, the matter can be escalated for consideration of promotion revocation.

If BOI promotion is withdrawn, previously granted tax incentives may be clawed back. The company could be required to repay exempted taxes as though the promotion had never been granted, which can create significant financial exposure.

Consistent reporting, accurate accounting records, and proactive compliance management are therefore essential to protecting BOI benefits and maintaining good standing.

4. Industrial Real Estate and Land Acquisition

While foreign ownership of land is generally restricted in Thailand, the Board of Investment offers incentives designed to attract foreign investment and support economic growth. Among these benefits, BOI-promoted companies may be permitted to own land for approved business activities.

BOI-promoted companies may own up to 1 rai of land for office and residential use. Some promoted activities qualify for larger land holdings, subject to specific conditions and approval. The permitted land area depends on the promotion category and the nature of the business.

The Board of Investment grants extended land ownership rights to selected sectors such as manufacturing, tourism, technology, and certain service industries. The land must be used strictly for the activities approved under the promotion. For example, a manufacturing company may use the land for production facilities, warehouses, and related operational infrastructure.

Purchasing land under the BOI requires following a different process to normal land transfers. 

To obtain land ownership approval as a BOI promoted company, the following process must be completed.

1. Submit a formal request

The company must prepare a written request explaining why land ownership is necessary. This should include:

• Location of the proposed land
• Size of the land
• Intended use, such as office, factory, or director residence
• Explanation of how the land supports the promoted activity

Supporting documents are required, typically including the company registration certificate, BOI promotion certificate, and investment plan.

2. BOI review and decision

The BOI reviews the request and supporting documents to confirm that the proposed land use aligns with the promotion conditions. If approved, the BOI issues an official authorization letter permitting land ownership.

3. Land registration

After receiving BOI approval, the company proceeds with registration at the local Land Office.

In some areas, Land Office officials may have limited experience with BOI-related land ownership. This can lead to additional questions or delays. Where this occurs, legal assistance is often helpful to clarify the regulations and support a smooth registration process, particularly in locations with limited BOI activity.

See our work inThailand real estate and property law. Lex Nova Partners delivers end-to-end legal support for BOI-promoted companies through coordinated Thailand legal services. View our full service overview or contact us to discuss your complete Thailand investment legal needs.

Frequently Asked Questions About BOI Incentives (2026)

What are the current BOI incentives in Thailand? 

The BOI offers a variety of incentives to attract foreign investors. These incentives are designed to improve the competitiveness of businesses in Thailand and are categorised into tax benefits and general business benefits to help make owning and running a business in Thailand easier and smoother for foreign investors.

General BOI Benefits 2026

1. Foreign Ownership: The BOI allows foreign investors to hold up to 100% of the registered capital in most promoted activities.
2. Land Ownership: BOI companies can own 1 Rai, certain BOI promotions for specific business activities are allowed to own larger plots of land. 
3. Work Permits: BOI companies are able to hire foreign staff with significantly reduced requirements when compared to non-BOI promoted businesses. Unlike other structures, BOI-promoted companies face no quotas when hiring foreign skilled employees. For example, Thai Limited Companies typically need a 4:1 ratio of Thai to foreign employees, but this requirement doesn’t apply to BOI-promoted businesses.
4. Support for R&D: Projects may receive import duty exemptions on goods imported for research and development purposes.

Tax Incentives

• Corporate Income Tax (CIT) Exemptions: The BOI grants corporate income tax exemptions for up to 13 years, depending on the nature of the business and its location. For businesses located in industrial estates or promoted industrial zones, an additional year of corporate income tax exemption is granted. Companies situated in “Investment Promotion Zones” receive three extra years of tax exemption.

Please note, not all BOI promotions are awarded CIT exemptions and the length of the corporate income tax exemption awarded to a BOI promotion depends on the activity of the business and the promotion awarded by the BOI. 

• Import Duty Exemptions: Exemption from import duties on machinery and raw materials necessary for manufacturing export products for one year, which can be extended.
• Additional Tax Benefits: 50% reduction in CIT for up to ten years after the expiration of any tax holiday.

What is the new promotion scheme of BOI? 

Thailand’s new BOI promotion scheme is designed to align investment incentives with the country’s 2026 to 2030 development priorities. The BOI has placed a clear focus on high-technology industries, digital transformation, and sustainable economic growth as part of the new S-Curve Industries. 

The BOI incentives update for 2026 hopes to encourage and promote innovation, environmental responsibility, and value-added sectors that strengthen Thailand’s long-term competitiveness. 

The Board of Investment is prioritising projects that contribute to advanced manufacturing, clean energy, smart technologies, and knowledge-based services, while gradually reducing support for low-value or environmentally intensive activities.

What are the BOI promoted industries in Thailand? 

BOI promoted industries covers a far wider range of sectors than many investors realise. The Board of Investment framework includes numerous BOI promoted industries, extending well beyond heavy industry or advanced manufacturing to cover agriculture, machinery, services, software, and digital businesses.

Where a proposed activity does not clearly fall within the standard categories of eligible industries BOI recognises, companies may still qualify under a TISO promotion. TISO is often viewed as a flexible route because it supports a wide mix of service and advisory activities.

Digital promotions are another area with wide scope. These cover software development, digital platforms, and digital content such as games, animation, AR, and VR technologies. 

A common misunderstanding is that BOI support is limited to highly technical or complex projects. In practice, many business models can qualify when structured correctly and aligned with the promotion criteria. Reviewing eligibility early often reveals opportunities that are not immediately obvious.

How to get a BOI promotion in Thailand? 

The BOI application process follows a series of structured steps that covers the following.

1. Pre-application assessment

Before applying, it is recommended for companies to undertake a feasibility and eligibility review. This helps confirm the correct promotion category, investment structure, and key BOI requirements. Early verification reduces the risk of delays or having to restart under a different category later.

2. Application preparation and submission

The formal submission includes properly preparing detailed application forms and supporting documents, such as the company structure, funding source, project description, hiring plans, machinery or software lists, and evidence of commercial viability.

A three-year business plan is a highly important document that must also be included. The 3 year plan is to be used to outline investment levels, operations, and financial projections. Consistency across all figures and descriptions is important, as discrepancies often lead to clarification requests and subsequent delays.

3. BOI review and interview

Once the application is accepted, the applicant attends an online project presentation (conducted via Zoom) with BOI officers. This interview is important as it is a chance for the BOI officers to learn about and clearly understand the application and project. 

During this interview the applicant must prepare a presentation that focuses on the business model, technical process, market position, and economic contribution to Thailand. Officers may ask questions or suggest adjustments before the case proceeds to the BOI Committee for consideration.

4. Approval timeline

Processing time depends largely on project size. Smaller projects may be reviewed in around 40 working days, while larger investments can take 60 to 90 working days, depending on capital levels and complexity.

5. BOI acceptance issuance

If approved, the investor receives an approval letter with promotion conditions. The applicant must accept the terms within 30 days, then register or adjust the company structure and complete the required investment before the BOI Promotion Certificate is issued.

6. Corporate structuring and applying for the BOI promotion certificate

After accepting the promotion conditions from the Board of Investment, the project has six months to register or restructure the company and complete the minimum investment stated in the approval letter before applying for the BOI Promotion Certificate.

Company setup or restructuring

If a company has not yet been formed, a Thai limited company must be registered. This requires at least two individual shareholders at incorporation, one or more individual directors, registered capital in line with BOI conditions, and a Thai business address. 

Where an existing company is used, its shareholding and registered capital are adjusted to match the BOI approval terms.

Corporate bank account

The company must open a Thai corporate bank account to receive the investment funds. Banks will require company registration documents, a board resolution, and the physical presence of an authorised director. This account is necessary to produce banking evidence that the capital has been injected correctly.

Capital transfer

The minimum investment must be transferred in accordance with BOI conditions. For foreign-owned projects, the foreign ownership portion generally needs to be remitted from overseas in foreign currency. Banks issue supporting documents, such as credit advice notes, confirming the source and purpose of funds. Incorrectly described transfers can lead to rejection and delays.

Application for the BOI certificate

Once the company is registered and the capital injection is complete, the investor applies for the BOI Promotion Certificate. Typical documents include the application form, company incorporation papers, shareholder list, company affidavit, and proof of the overseas capital transfer.

What is the minimum investment for BOI? 

As part of the requirements for obtaining a BOI promotion, the applicant must make a capital injection that meets the minimum investment BOI rules. This funding must reach the applicable BOI investment threshold set for the approved project category before the promotion certificate can be issued.

The minimum investment generally starts at THB 1 million, approximately USD 30,000, but the required amount can be higher depending on the BOI’s assessment of the project and business plan. Some promotion categories also have fixed minimum investment levels set in advance.

What are the BOI requirements in Thailand? 

Applying for and maintaining a BOI promotion involves meeting strict BOI requirements at every stage. This includes confirming that the project aligns with the relevant BOI eligibility criteria, preparing and submitting a complete and accurate application, and managing post-approval compliance obligations.

BOI eligibility criteria

One of the key elements of a successful BOI application is having a project or business activity that clearly falls within the scope of activities supported by the Board of Investment. While the Board of Investment supports a broad range of industries and sectors, BOI promotion is not available to every type of business.

Therefore, the requirement for meeting the BOI eligibility criteria means the project must fall within a promoted activity category and demonstrate clear economic value, feasibility, and alignment with Thailand’s investment policy objectives.

Post acceptance BOI requirements

After the application is approved, the applicant receives an official offer letter from the BOI outlining the conditions and requirements that must be fulfilled. Examples include, the minimum investment amount required

Other post-approval obligations typically include completing company registration or restructuring so that the shareholding structure, registered capital, and business objectives match the approved project. The company must then implement the project strictly in line with the approved scope. Any activities or work that is undertaken and falls outside of the scope of the promotion requires separate accounts for BOI-promoted and non-promoted activities, especially where tax incentives apply.

Depending on the promotion category, there may also be commitments relating to Thai employment levels, use of technology, or knowledge transfer. In addition, machinery, equipment, and systems listed in the application should be installed and operated as described in the approved project plan.

BOI requirements for operating

Promoted companies are required to submit progress and operational reports to demonstrate compliance with promotion conditions.

Mandatory reports must be submitted according to the following timelines:

• 6 months: Confirmation that the project has commenced and implementation is progressing
• 1 year and 2 years: Detailed updates on project development, investment deployment, and operational status
• After 3 years: The project may be subject to a BOI financial review, including examination of the company’s financial statements by an auditor recognized by the BOI

How long does BOI approval take? 

In most cases, BOI approval takes around 6 to 9 months, however, the overall timeline depends heavily on how well the application is prepared and the complexity of the project.

Before submission, obtaining a feasibility report (around 3 business days) is recommended to confirm eligibility and the correct promotion category. Once the most suitable promotion has been identified, the applicant must begin to prepare the application form and the supporting documents.

The application preparation stage generally takes around one month and includes drafting the three-year business plan, preparing the employee chart, and compiling all supporting documentation. Careful preparation at this stage is important as the project must fall within the relevant BOI promotion category and meet the eligibility criteria, otherwise the application will not proceed.

Once the company begins operations, the BOI understands that companies evolve and that actual performance may not match the original projections exactly. Provided the company satisfies the conditions set out in its BOI certificate, the BOI will not normally revisit the initial proposal in detail.

However, significant departures from the approved scope of activities can create complications. The BOI retains full records of each application, and significant differences between the approved project and the company’s actual operations may raise problems during audits or when dealing with other authorities. Any changes should therefore remain within the scope of what was originally approved.

Therefore, all financial figures, projections, and operational details included in the application should be viable and aligned with the company’s actual objectives and capacity. 

After submission, the BOI officer will review the application and usually request additional information. These follow ups can range from 2 rounds to more than 10 rounds for larger or more complex projects.

Once the application is accepted, the applicant will be invited to attend an interview with the BOI officer.

As part of the interview process, the applicant must prepare a presentation deck outlining the project. This presentation is a key stage of the application, as it allows the BOI officer to understand the company’s background, the proposed activities in Thailand, production or service processes, existing and target clients, business development plans, and the overall benefits the project will bring to Thailand.

This presentation is important because the interviewing officer will report the project to the BOI Committee. If the officer has a clear and complete understanding, the project is more likely to quickly move through the approval stage, often with only limited follow-up questions before approval at the next committee session.

However, if the presentation lacks detail, leaving key points unclear, or doesn’t provide the officer with a clear understanding of the project, they may not be able to address the Committee’s questions properly. This can lead to multiple rounds of follow-up queries and delays. 

After the presentation, the officer will present the project to the BOI Committee for approval. Well-prepared applications are often approved within one to two committee sessions.

After approval, the applicant has 30 days to accept the BOI terms, and then 6 months to register the company (if not already registered) and make the required minimum investment.

What is the Board of Investment BOI Thailand? 

The Thailand Board of Investment is a government agency established in 1966 under the Office of the Prime Minister. Its main role is to promote foreign investment and strengthen Thailand’s competitiveness by supporting strategic industries, innovation, and higher-value sectors.

The BOI’s main functions include:

• Investment Promotion: Attracting both foreign and local investments by offering tax incentives and other benefits. This includes 100% foreign ownership, exemptions from corporate income tax, reductions on import duties, and special permissions for foreign skilled workers including reduced requirements for obtaining a work permit (no 4:1 employment ratio or 2 million THB registered capital requirements).
• Support Services: Assisting investors in navigating the regulatory landscape, connecting them with local suppliers, and facilitating the establishment of businesses in Thailand.
• Sector Development: Focusing on industries that drive technological advancement and economic diversification, such as agriculture, manufacturing, electronics, digital and services.

What is a BOI certificate?

The BOI certificate, formally called the Certificate of Promotion, is an official legal document issued by the Thailand Board of Investment. The Certificate of Promotion sets out the approved project, the incentives granted, and the conditions the company must follow. 

Here is what the document typically contains:

Project identification

The BOI certificate identifies the approved project and the promoted company. This includes the certificate number used for dealings with authorities, the registered company name and tax ID, the specific promoted activity category, and the approved project location.

Benefits and incentives

The BOI certificate also lists the benefits and incentives awarded to the project under the Investment Promotion Act. These may include corporate income tax exemptions for a defined period, import duty exemptions for machinery and raw materials used in export production, and general business benefits such as permission for majority or full foreign ownership and land ownership.

Conditions and obligations

The certificate of promotion also sets out the conditions the company must meet to maintain its promoted status. These often cover the minimum investment level, capital structure limits, deadlines for importing machinery and starting operations, operational requirements such as value-added or staffing commitments, and ongoing reporting to the BOI through its prescribed system.

Together, these elements make the certificate the key document governing the scope of the project, the incentives available, and the compliance obligations that apply throughout the promotion period.

Please note that this article is for information purposes only and does not constitute legal advice

Introduction:

Thailand’s SME sector is becoming an increasingly important part of the economy. As government support continues to evolve, new policies are being introduced to strengthen small and medium-sized enterprises and improve Thailand’s competitiveness as a regional business hub.

In 2025, several important regulatory and policy developments were announced that directly affect how SMEs operate, qualify for incentives, and access funding from 2026 onward. For foreign investors and business owners, understanding these changes is essential when planning market entry, structuring operations, or expanding an existing presence in Thailand.

This guide provides a clear overview of the latest Thailand SME policy updates, with a particular focus on how they apply in practice to both local and foreign SME Thailand structures. It examines the updated Thailand SME definition, key SME criteria Thailand businesses must meet, and the practical implications for tax and compliance. The article also explains available SME tax benefits Thailand, current Thailand SME financing options, and the government-backed Thailand SME support programs designed to improve access to capital, promote fair competition, and support long-term growth.

Key Points

• The Thailand SME definition (2026) is based on both employee numbers and annual turnover, with separate thresholds for manufacturing and service, wholesale, and retail businesses
• SME status matters as it provides access to SME tax benefits, government incentives, and official SME support programs
• BOI and TISO promotions may allow eligible SMEs to operate with 100% foreign ownership, reduced regulatory requirements, and tax or import duty incentives
• Thailand SME financing options are expanding through low-interest loans, credit guarantees, faster tax refunds, and increased government procurement under the Quick Big Win policy
• New and proposed policies including digital transformation tax deductions and the Draft Start-up Promotion Act signal long-term government commitment to strengthening the SME Thailand ecosystem through Thailand SME support programs

What Qualifies as an SME in Thailand? 2026 Definitions

Under Thailand’s regulatory framework, the Thailand SME definition is based on clearly defined thresholds for employee numbers and annual turnover. To qualify under the applicable SME criteria Thailand, a business must meet both requirements, rather than relying on just one. This approach provides a more consistent basis for classifying SMEs and determining eligibility for government measures and incentives within the broader SME Thailand landscape.

These criteria are particularly relevant for businesses assessing access to SME tax benefits Thailand, participation in Thailand SME support programs, and eligibility for Thailand SME financing schemes. 

SMEs in Thailand fall into two main categories:

• Manufacturing businesses with up to 200 employees and annual turnover not exceeding THB 500 million (approximately USD 13.5 million).
• Service providers, wholesale, and retail businesses with up to 100 employees and annual turnover capped at THB 300 million (approximately USD 8.1 million).

In addition to the standard Thailand SME definition, further classifications are used by the Office of SMEs Promotion (OSMEP) to distinguish businesses by size and operating scale. 

Under OSMEP guidelines, businesses may be classified as follows:

Micro Enterprises

• Revenue: not exceeding THB 1.8 million per year (all sectors)
• Employees: no more than 5 employees (all sectors)

Small Enterprises (Manufacturing Sector)

• Revenue: more than THB 1.8 million and up to THB 100 million per year
• Employees: more than 5 and up to 50 employees

Small Enterprises (Trade and Service Sectors)

• Revenue: more than THB 1.8 million and up to THB 50 million per year
• Employees: more than 5 and up to 30 employees

This criteria is the basis of how SME Thailand status is assessed and is the main factor in determining which businesses can access government support and incentive programs.

Why SME Status Matters: Benefits and Incentives for SMEs

Qualifying as a small or medium-sized enterprise in Thailand can have a significant effect on the long-term financial performance of a business. SME classification could lead to eligibility in a range of government-backed incentives, including reduced corporate income tax rates, access to state-supported financing, and targeted support programs designed to strengthen business growth and liquidity.

SME Tax Rates

For foreign-owned companies in particular, SME status also comes with their own set of corporate income tax rates significantly below the standard 20%.

Companies whose paid up capital does not exceed THB 5 million at the end of an accounting period, and its income from the sale of goods or the provision of services remains below THB 30 million for that period, the following corporate income tax rates may apply:

How can the Board of Investment (BOI) Support SMEs in Thailand?

The Thailand Board of Investment (BOI) plays an important role in supporting foreign and local businesses, including SMEs in Thailand, by offering targeted incentives and support for companies establishing or expanding operations in the country.

By obtaining a BOI promotion, eligible businesses, including SMEs may benefit from advantages such as 100% foreign ownership, corporate income tax exemptions or reductions, import duty incentives, and more flexible rules for hiring foreign specialists. BOI promoted companies are not subject to standard requirements such as the four Thai employees per foreigner ratio or minimum registered capital thresholds.

BOI support is focused on priority industries aligned with Thailand’s long-term economic strategy, including technology, digital services, advanced manufacturing, clean energy, healthcare, and innovation-driven sectors. 

By directing investment into these areas, the BOI aims to strengthen Thailand’s competitiveness while creating a more sustainable and knowledge-based economy.

Read more:

A Guide to 100% Foreign Business Ownership in Thailand

Which Projects Actually Qualify for a BOI Promotion? 

BOI promotions are available across a wide range of business activities, including manufacturing, agriculture, machinery, software, and digital services. For SMEs in Thailand that do not qualify for standard BOI categories, the Trade and Investment Support Office (TISO) promotion offers a more flexible alternative. TISO is commonly used by service-based and support businesses due to its wide scope and lower entry barriers.

In practice, BOI eligibility extends far beyond the high-technology sectors it is often associated with. Many promotion categories allow for adaptable business models, and proposed activities can frequently be structured to meet BOI requirements. For foreign-owned SMEs in Thailand, early assessment of BOI or TISO eligibility can open access to incentives and regulatory advantages that are otherwise unavailable under standard company structures. Talk to our experts for more information.

Read more:

BOI Company (TISO): An Alternative BOI Opportunity for Investors

BOI Incentives That Makes Doing Business in Thailand Easier

The Thailand Board of Investment (BOI) offers a range of incentives to make investing in Thailand more attractive. These benefits are designed to increase your business’s competitiveness and are split into two main types: tax benefits and general business support.

These incentives are not available to every business in Thailand and have been designed  to make it easier for foreign investors to get started and ultimately succeed in Thailand.

The Biggest Advantage: 100% Foreign Ownership

Although Thailand actively encourages foreign investment, certain business activities remain restricted under the Foreign Business Act. Foreign-owned companies operating in these sectors are generally required to obtain a Foreign Business License or partner with Thai shareholders, both of which can create structural and compliance challenges, particularly for SMEs in Thailand.

One of the key advantages of BOI promotion is that BOI promoted companies may operate restricted activities by obtaining a Foreign Business Certificate, avoiding the more time-consuming and uncertain Foreign Business License process.

For foreign-owned SMEs in Thailand, this exemption can be important. BOI promotion reduces regulatory barriers, supports full foreign ownership in qualifying activities, and grants access to incentives that are not available under standard company structures, making market entry and long-term operations significantly more practical.

BOI Business Support That Makes a Real Difference

As well as the possibility of 100% foreign ownership, the BOI offers incentives designed to enhance the competitiveness of businesses in Thailand that are not available to regular business structures.

Land Ownership

BOI companies can own 1 Rai, certain BOI promotions for specific business activities are allowed to own larger plots of land. 

Reduced Requirements for Work Permits

BOI companies are able to hire foreign staff with reduced requirements as there are no quotas when hiring foreign skilled employees. For example, Thai Limited Companies typically need a 4:1 ratio of Thai to foreign employees, but this requirement doesn’t apply to BOI-promoted businesses.

Tax Incentives for BOI-Promoted Companies

Tax benefits are offered by the BOI to support long-term growth and reduce the financial restrictions of doing business in Thailand.

Corporate Income Tax (CIT) Exemptions

One of the most significant incentives available through BOI promotion is the exemption from corporate income tax. Depending on the approved business activity and location, BOI promoted companies may qualify for corporate income tax exemptions of up to 13 years. Additional exemption periods may apply where operations are located within designated industrial estates or investment promotion zones.

For SMEs in Thailand, it is important to understand that corporate income tax exemptions are not automatically granted under every BOI promotion. The availability and duration of tax relief depend on the specific activity approved by the BOI and the terms of the promotion granted. 

Careful review of eligibility and location planning is therefore essential when assessing the tax benefits of BOI support. To learn more about whether your business may be eligible for a BOI promotion, please feel free to book a consultation with one of our experts here.

Import Duty Exemptions

BOI companies can import machinery and raw materials used in production without being subject to import duties. 

This exemption from import duties on machinery and raw materials necessary for manufacturing export products is usually available for one year, which can be extended.

Additional Tax Benefits

50% reduction in CIT for up to ten years after the expiration of any tax exemption.

Government Policies to Support SMEs in Thailand

The Thai government has introduced a range of policies aimed at strengthening SMEs in Thailand. These initiatives focus on improving access to finance, reducing regulatory barriers, and encouraging innovation across key sectors. 

The Office of SMEs Promotion (OSMEP)

The Office of SMEs Promotion (OSMEP) is a government agency in Thailand responsible for creating policy, strategy, and development plans to support Small and Medium-sized Enterprises (SMEs). The OSMEP coordinates between various government ministries and the private sector to promote the growth of Thai SMEs.

Function of the OSMEP

OSMEP was established by the SMEs Promotion Act, B.E. 2543 (2000) and later amended by the Act (No. 2), B.E. 2561 (2018). OSMEP focuses on three areas:

• Policy Formulation: Drafting the National SME Promotion Master Plan (currently the 5th Master Plan).
• Coordination: Acting as the coordinator to align the budgets and projects of over 20+ different government agencies that work on SME support (e.g., Ministry of Industry, Ministry of Commerce).
• Monitoring & Data: Maintaining the national SME database and publishing the annual “White Paper on MSMEs,” which analyzes the economic situation of small businesses in Thailand.

The 5th Master Plan (2023–2027)

Thailand is currently operating under the 5th SME Promotion Master Plan. This roadmap shifts focus from general support to targeted growth. The key strategies implemented by the master plan include:

• Inclusive Growth: Ensuring local community enterprises and micro-businesses can access government procurement.
• Focus on High-Value Sectors: Supporting SMEs in the BCG (Bio-Circular-Green) economy, digital services, and deep-tech.
• Global Access: Helping SMEs meet international standards to export their products.

Key Projects & Services for SMEs

In order to help and support SMEs, the OSMEP operates the following services that can be used by eligible SMEs:

SME One ID:

This is a digital ID system. Registration allows a business to access services from various government agencies without re-submitting documents every time. It essentially functions as a “fast track” for government support.

BDS (Business Development Service) / “SME Pang Tung”:

A co-payment subsidy program where OSMEP pays for 50–80% of the cost for training, testing, lab analysis, or standard certification (e.g., ISO, FDA approval).

Thai SME-GP (Government Procurement):

A dedicated list aimed at allocating government purchasing budgets for SMEs. If you register here, you get preferential treatment (e.g., price preference) when bidding for government contracts.

SME Connext:

An online portal and application that aggregates news, knowledge, and workshop schedules for entrepreneurs.

SME owners should note that they must apply (free of charge) to join OSMEP in order to take advantage of these programs. 

Royal Decree to promote the digital transformation of small and medium-sized enterprises (SMEs)

On 24 June 2025, the Thai Cabinet approved a new income tax incentive designed to promote the digital transformation of small and medium-sized enterprises (SMEs). 

Under the proposed Royal Decree, eligible businesses can claim a 200% tax deduction on qualifying digital expenses, up to a cap of ฿300,000, incurred between 24 June 2025 and 31 December 2027.

Who is Eligible to This Tax Deduction?

The tax incentive is aimed at SMEs formally registered in Thailand. To qualify, businesses must meet all of the following financial criteria:

• Paid-up capital of not more than ฿5 million at the end of the accounting period
• Annual revenue from sales and services of not more than ฿30 million

This definition aligns with standard SME classifications under Thai tax regulations and ensures the incentive specifically targets businesses that may otherwise lack the capital to invest in digital upgrades. Both Thai-owned and foreign-owned SMEs that meet the criteria are eligible.

Qualifying expenses include the purchase, rental, or subscription of the following:

• Registered digital software (e.g. cloud-based ERP, accounting systems, CRM platforms)
• Smart devices and digital hardware, excluding general-purpose computers (e.g. barcode scanners, POS systems, IoT-enabled machinery)
• Digital services that directly enhance business processes (e.g. e-commerce platforms, AI-enabled analytics, cybersecurity services)
• Computer programs officially registered with DEPA

Key Benefits for Thai SMEs

For SMEs, the Royal Decree creates a valuable opportunity to reduce overall tax burdens. By allowing additional expenses to be treated as deductible costs, the government is providing direct support for business operations, workforce development, and broader economic activity.

The double deduction also makes digital adoption more accessible by reducing the effective cost of investing in new systems and tools. This helps smaller businesses keep pace in a fast-moving digital landscape where technology and operational needs continue to evolve.

Read more:

Thailand Approves 200% Tax Deduction for SME Digital Transformation

Quick Big Win Policy

In November 2025, the Ministry of Finance introduced a new set of measures aimed at strengthening and promoting Thailand’s SMEs. This initiative, developed under the government’s Quick Big Win policy, was approved by the Cabinet in early December.

Under the Quick Big Win policy, a support package worth 327 billion THB will be made available for Small and Medium-sized enterprises (SMEs). The purpose of these funds is to boost liquidity and credit access for SMEs in Thailand.

The 327 billion THB will be available to SMEs in the following forms

• Low interest business loans (217 billion THB)
• SME credit guarantees (50 billion THB)
• Expedited tax refunds (60 billion THB)

Financial Measures to Strengthen SME Liquidity

The Ministry of Finance plans to expand financing options for SMEs by introducing low-interest lending schemes designed to ease access to working capital and strengthen current credit guarantee mechanisms. 

A new guarantee facility, backed by the Financial Institutions Development Fund, will also be introduced with more flexible conditions to support a wider range of SME borrowers. 

The Bank of Thailand is currently preparing the operational framework so that financial institutions can effectively introduce these measures once approved.

Tax Measures to Promote Fair Competition

As part of the Quick Big Win campaign, two tax initiatives are being considered to strengthen the operating environment for SMEs.

Customs Policy

Beginning 1 January 2026, all goods ordered through online platforms will be subject to import duty from the first baht. The objective is to create fairer competition between domestic sellers and low-cost imports that previously entered the market without being subject to import duty requirements.

Revenue Department Measures

The Revenue Department will also speed up the processing of refund claims so that SMEs receive liquidity sooner. The aim of this policy is to help SMEs manage cash flow during periods of tighter operating conditions.

Expanding Government Procurement from Thai SMEs

Public sector agencies will be encouraged to source a greater share of goods and services from local SMEs. All government purchase orders will be logged in a central digital platform, allowing SMEs to present verified orders as part of their loan applications. 

This additional documentation strengthens their credit profile and provides lenders with clearer evidence of upcoming revenue, helping SMEs secure financing more easily.

Key Benefits for Thai SMEs

These proposed measures provide an excellent opportunity to strengthen Thailand’s small and medium-sized sector. By improving access to financing, creating a fairer competitive landscape, and increasing public-sector demand for locally produced goods, the Quick Big Win policy is designed to support SME resilience and promote long-term growth.

Stronger SME Sector and Improved Job Creation

Easier access to financing and improved credit support allow SMEs to scale their operations. As these businesses expand, they generate new employment opportunities and contribute to higher household income across local communities.

More Equal Market Conditions

The application of customs duties on low-value online imports helps reduce unfair pricing pressure on domestic producers. This creates a healthier competitive environment in which Thai SMEs can diversify their offerings and compete more effectively.

Greater Demand for Local Products 

Increasing government purchases from Thai SMEs provides steady sales channels and more predictable cash flow. This uplift in domestic demand helps strengthen SME resilience and supports overall economic growth.

Announced Policies Designed to Support SMEs in Thailand

The Thai government has announced a series of proposed policy measures aimed at strengthening the small and medium-sized enterprise sector, with a focus on improving access to finance, promoting fair competition, and supporting long-term business growth. 

These initiatives form part of a wider economic reform and reflect the government’s intention to promote SMEs.

The sections below outline the key announced initiatives, including the Quick Big Win policy measures and the Draft Start-up Promotion Act, and explain how they may affect Thai SMEs once formally adopted. 

Please note, these policies are still under consideration by the Thai Government so not all details have been released or announced at the time of writing. However, the proposals provide important insight into the policy direction Thailand is taking and highlight potential opportunities and compliance considerations for SMEs operating in the market.

Thailand’s Draft Start-up Promotion Act

The Thai government has announced a draft Start-up Promotion Act for public consultation, designed to support and promote innovation-driven businesses. 

Under this proposal, a coordinated institutional system would be created to guide national start-up policy, streamline fundraising options, and provide certified start-up companies with access to a range of regulatory, tax, immigration, procurement, and intellectual property incentives. 

The Start-up Promotion Act aims to improve access to capital and skilled talent to encourage and promote Thailand’s start-up competitiveness.

The Draft also proposes the creation of a Start-up Promotion Committee, composed of government representatives, private-sector leaders, and independent specialists. This Committee will be tasked with shaping national start-up policy, approving incentive measures, reviewing listings submitted by the National Innovation Agency, proposing legislative amendments, and handling appeals concerning company eligibility.

Under the framework, the National Innovation Agency would function as the central implementing authority and one-stop service hub. Its responsibilities would include coordinating between state agencies and the private sector, consolidating ecosystem data, offering advisory and technical support, monitoring programme performance, and administering financial assistance such as grants, conditional grants, loans, and co-investment mechanisms. 

With Cabinet approval, the Agency would also have the ability to create or co-establish investment vehicles and reinvest income generated through activities carried out under the Draft Act.

Who does the Start-up Promotion Act Apply to?

The Start-up Promotion Act is aimed at start-up businesses whose products or services show strong potential for rapid, scalable expansion and are built around innovation. Eligible businesses must offer at least one of the following; new technology, advanced expertise, or disruptive business models. 

A company will qualify as a “Start-up Company” once it is formally listed by the National Innovation Agency as eligible for the incentives and support introduced under the Act.

Who is Considered a Start-up?

To be recognised as a Start-up Company and be eligible for the incentives under the Draft Act, an applicant must meet the following criteria at the time of submission.

Corporate Form and Stage of Development

The business must be a Thai private limited company and generally no more than ten years old on the date of application. This requirement is intended to target early-stage firms with strong growth potential.

Business Scale

The company’s average annual revenue over the preceding three financial years must not exceed THB 300 million. The Start-up Promotion Committee will refine these thresholds and may adopt sector-specific benchmarks to reflect different growth rates across industries.

Control and Distribution History

Eligible companies must not have distributed dividends and cannot operate as a controlled subsidiary of another entity, except in specific circumstances, such as being owned by another qualifying start-up or by an innovation commercialisation entity established by a higher education institution.

Post Approval Requirements

Within two years of being listed on the National Innovation Agency’s sector-based register of Start-up Companies, the Company will need to employ a minimum number of Thai employees. 

These thresholds will be set by the Committee and each industry will have their own requirements. The thresholds will be designed to support technology transfer and capability development. 

Companies are also required to submit an annual self-certification confirming their continued compliance and eligibility. Failure to meet workforce requirements, failure to certify on time, or a change in eligibility status may lead to removal from the register. 

Serious breaches of the rules, including intentional misstatements, improper use of benefits, or significant environmental harm, may result in permanent delisting and recovery of incentives already granted.

Start-up Companies will receive benefits for a five-year period from the date of listing. Deep-technology start-ups operating in priority sectors, such as agriculture or other industries later designated by the Committee, may be eligible for an extension of up to ten years.

Corporate Flexibility for Start-up Financing

To align the Civil and Commercial Code with the requirements of startups in relation to venture financing, the Draft Act introduces a series of targeted exceptions for Start-up Companies listed by the National Innovation Agency. 

These exceptions are designed to give start-ups greater flexibility in raising capital, structuring investment deals, and offering equity-based incentives.

The following incentives will apply to start-ups that have been listed on the National Innovation Agency’s sector-based register of Start-up Companies.

Public Share and Debt Offerings

Listed Start-up Companies may offer shares to the public and issue debentures, subject to shareholder approval and compliance with rules issued by the Capital Market Supervisory Board. This provides start-ups with capital-raising routes traditionally available only to more mature companies.

Treasury Shares and Share Buy-backs

Start-up Companies may hold up to twenty percent of their own shares, whether acquired through buy-backs or created as treasury shares. These shares have no voting, quorum, or dividend rights. Buy-backs are allowed where the company’s articles of association provide for them and may be used for purposes such as liquidity management, fulfilling contractual investment arrangements, or safeguarding dissenting shareholders in defined circumstances.

Convertible Preference Shares 

The Draft Act will allow companies to convert preference shares into ordinary shares when permitted under the company’s articles of association.

Issuing New Shares to Non-shareholders

With a special shareholders’ resolution and where permitted by the articles of association, Start-up Companies may increase capital and issue shares directly to non-shareholders. 

Eligible recipients include:

 • directors and employees under an approved equity incentive plan
• investors participating under a shareholder-approved investment agreement

Issuances must begin within one year and be completed within the relevant project period, which may extend to five years for employee plans or two years for investor allocations. Any shares that remain unallocated at the end of the project must be cancelled through a paid-up capital reduction.

Equity Incentives for Talent and Investors

Treasury shares or newly issued shares may be used for equity awards or investment arrangements, provided they follow the approved timelines and conditions. This approach simplifies the use of equity as compensation or investment consideration, which is fundamental to modern start-up growth models.

Venture Investment Mechanics

The Draft Act expressly permits debt-to-equity conversion where the creditor’s rights arose before the special resolution approving the relevant investment agreement. Preferred shares may also be converted into ordinary shares where this is allowed by the company’s articles, with streamlined procedures for issuing new share certificates.

Taken together, these mechanisms support bridge financing, convertible notes, staged investments, and employee stock plans, bringing Thai start-up practice closer to international venture norms.

Additional Rights and Benefits Available to Start-up Companies

As well as the corporate and fundraising flexibility, the Draft Act provides Start-up Companies with access to a range of additional regulatory and economic benefits, subject to applicable laws and administrative procedures.

Talent Mobility

A streamlined application process for foreign specialists with advanced skills needed by start-ups, covering both entry permissions and work authorisation.

Tax Incentives

Potential eligibility for tax deductions or exemptions under the Revenue Code and other tax frameworks, subject to criteria that will be issued by relevant authorities.

Government Procurement Opportunities

Recognition of start-up products and services as priority categories for public procurement, helping new companies secure early reference customers and revenue.

Intellectual Property Support

Enhanced pathways for the protection, licensing, and commercialisation of intellectual property under existing IP and research-utilisation laws.

Investment Promotion Schemes

Access to related benefits under the Investment Promotion Act, other competitiveness-related statutes, and special regulations applicable within the Eastern Economic Corridor.

Integrated Financial Support

Start-ups may receive direct financial assistance from the National Innovation Agency, including grants, conditional grants, loans, co-investments, and coordinated access to public and private funding programmes.

The NIA must also maintain a publicly accessible database, updated at least once a month, consolidating all available benefits, support programmes, and funding opportunities for start-ups, providing clear visibility across the ecosystem.

Key Benefits for Thai SMEs

The Draft Startup Promotion and Act offers a more practical and supportive framework for Thai SMEs looking to grow, raise capital, and compete in a changing economy. By updating corporate rules to reflect the current venture practices, the Act will give smaller businesses access to tools that were previously difficult to use under the traditional Civil and Commercial Code.

One of the most significant advantages is greater flexibility in how SMEs can structure investment, manage share allocations, and design equity plans for employees or early contributors. These features help SMEs attract skilled talent and negotiate with investors on more balanced terms

What Does This Mean for Foreign Investors in Thailand?

For Foreign SME Thailand , the recent and proposed SME focused policies highlight a clear policy direction. Thailand is actively promoting SMEs and start-ups as a central part of its economic strategy, while also beginning to align Thailand’s regulatory, tax, and financing frameworks with international business practices.

Through these proposed initiatives, Thai SMEs may benefit directly from tax incentives, liquidity support measures, and improved access to financing, provided the relevant eligibility thresholds are met. Importantly, many of the announced measures apply equally to Thai-owned and foreign-owned companies.

The proposed tax incentives, such as enhanced deductions for digital transformation, lower the effective cost of technology investment and operational scaling. For SMEs, this allows faster market entry, improved efficiency, and stronger long-term competitiveness, particularly in sectors where digital infrastructure and compliance systems are used.

The Quick Big Win policy measures also have broader implications for SMEs. Changes to customs duties on low-value imports are likely to reduce price distortions created by untaxed cross-border e-commerce, improving competitive conditions for locally established businesses. Also, faster tax refund processing and expanded SME credit guarantees can significantly improve cash flow management for SMEs during early growth stages.

For investors with an innovation or venture focus, the Draft Start-up Promotion Act will provide a clearer legal option for investors, venture capital funds, and entrepreneurs to participate in Thai start-ups using familiar investment tools such as convertible instruments, preference shares, treasury shares, and equity incentive plans. These reforms reduce barriers when negotiating investment terms.

The Act’s proposed initiatives for hiring foreign employees are also very important for foreign investors. Streamlined immigration and work authorization processes for skilled foreign workers would support cross-border team deployment, regional headquarters strategies, and technology transfer into Thailand.

However, while these proposals introduce a lot of positives, they also introduce new compliance considerations. Eligibility thresholds, listing requirements with the National Innovation Agency, post-approval employment obligations, and ongoing self-certification requirements will require careful planning and monitoring. 

Foreign investors should assess early whether their Thai structures, revenue profiles, and growth plans align with the proposed frameworks.

Please note that this article is for information purposes only and does not constitute legal advice

Introduction:

Due to the ever growing economic challenges happening around the world, business rehabilitation has become an increasingly important option for companies facing financial problems. In 2024, the Thai economy was projected to grow by only 2.5%, significantly below the government’s 5% target. This poor growth was due to things such as factory closures around the country, rising energy costs, and competition from cheap imports. Notably, nearly 2,000 factories shut down between July 2023 and June 2024, resulting in over 51,500 job losses, a trend that appears to be continuing in 2025.

In Thailand, the number of business rehabilitation applications increased to 34 cases in 2023, up from 25 in 2022 . Approximately 50% of these cases involved companies from the hospitality, real estate, and manufacturing sectors. While data for 2024 and 2025 has not yet been officially published, early indications suggest that filings have remained increased as more companies seek to navigate economic uncertainty through legal restructuring.

The legal framework relating to business rehabilitation in Thailand is governed by two statutes: the Bankruptcy Act B.E. 2483 (1940) and the Act on the Establishment of and Procedure for Bankruptcy Court B.E. 2542 (1999). Under these laws, business rehabilitation proceedings are categorized as bankruptcy actions, placing jurisdiction with the country’s specialized bankruptcy courts.

Key Points

• Only specific entities are eligible for rehabilitation, including limited companies and public companies, with a minimum debt of 10 million Thai Baht and reasonable prospects for successful rehabilitation.
• A rehabilitation planner is appointed to develop a comprehensive plan within three months, which must outline strategies for debt restructuring, operational improvements, and financial recovery, subject to creditor and court approval.
• The process includes an automatic stay that protects the debtor by suspending legal actions, preventing new lawsuits, and restricting asset disposal, creating a stable environment for potential business recovery.
• Special provisions exist for small and medium-sized enterprises (SMEs), offering a more accessible rehabilitation process with lower debt thresholds, simplified petition requirements, and potentially more flexible management control during the rehabilitation period.

Business Rehabilitation Requirements in Thailand

The business rehabilitation process in Thailand begins with determining whether the company is actually eligible for business rehabilitation.

Not all businesses in Thailand are eligible to enter the rehabilitation process. The Bankruptcy Act B.E. 2483 specifies that only certain types of entities can file for rehabilitation:

• Limited companies
• Public companies
• Other juristic persons as specified by ministerial regulations

Eligibility for SMEs in Thailand

Amendments to Thailand’s Bankruptcy Act have introduced new provisions to make business rehabilitation easier for small and medium-sized enterprises (SMEs). 

Previously, only limited and public limited companies with debts of at least THB 10 million could access rehabilitation, which excluded most SMEs. However, under the new provisions the eligibility requirements are available to a wider range of entities, including natural persons, unregistered and registered partnerships, and private limited companies. 

The minimum debt thresholds have also been lowered to the following: 

• natural persons must have at least THB 2 million in debt, 
• private limited companies must have at least THB 3 million in debt, with the max limit for SMEs set at THB 10 million. 

SMEs are also no longer required to be registered with the Office of Small and Medium Enterprise Promotion (OSMEP) to qualify for rehabilitation. The rehabilitation process has also been made a lot easier for SMEs now as well.

For example, SMEs are not required to prepare a detailed rehabilitation plan before submitting a petition, and certain steps, such as appointing a plan preparer and holding creditor meetings have been made quicker and easier for SMEs. 

If creditors holding at least two-thirds of the debt approve a prepackaged plan, SMEs can request an accelerated rehabilitation process. Once a petition is accepted by the court, an automatic stay is imposed to protect the SME’s assets and allow continued operations, including the ability to apply for new loans. 

Additionally, the rehabilitation plan period may be extended from three to five years, giving SMEs more time to restructure and repay debts.

Starting the Rehabilitation Process

Before a company can begin the rehabilitation process, it must first meet specific legal conditions. Filing a rehabilitation petition is the first step and is used to make sure that only eligible businesses, i.e. those with a realistic potential for revival can enter the process. 

For a company to be considered eligible for the rehabilitation process, several conditions must be met:

Absence of Ongoing Bankruptcy Proceedings

The debtor must not be subject to an absolute receivership order, and if the debtor is a juristic person, it must not have been dissolved or had its registration revoked.

Insolvency

The debtor must be insolvent or unable to pay its debts as they become due. 

Minimum Debt Threshold

The debtor must satisfy the minimum debt requirements (natural persons must have at least THB 2 million in debt and SMEs must have at least 3 million and no more than 10 million THB of debt). 

Reasonable Prospects for Rehabilitation

There must be reasonable grounds to believe that the business can be successfully rehabilitated. 

How to File a Business Rehabilitation Petition in Thailand

The rehabilitation process in Thailand can be started by various parties, including the debtor, one or more creditors or, in certain cases involving regulated entities, relevant government authorities. 

To officially begin the rehabilitation proceedings, the initiating party must submit a petition to the Central Bankruptcy Court, which will then decide whether the legal conditions for rehabilitation are met.

A properly filed rehabilitation petition must include the following:

• Clear evidence of the debtor’s insolvency or inability to pay debts
• A list of all creditors, including their addresses and the amounts owed
• A detailed explanation of the reasonable grounds for rehabilitation
• The proposed rehabilitation planner’s name and qualifications
• A letter of consent from the proposed planner

The Role of the Central Bankruptcy Court

Upon receiving a rehabilitation petition, the Central Bankruptcy Court will determine whether to accept or dismiss the case. The court will schedule a hearing to consider the petition, during which both the petitioner and any opposing parties may present their arguments.

The court may dismiss the petition if:

• The filing conditions are not met
• There is evidence that the petition was filed in bad faith
• The proposed planner is deemed unsuitable

If the court accepts the petition, it will issue an order to commence the rehabilitation proceedings and appoint the proposed planner or another suitable individual or entity to prepare the rehabilitation plan.

Automatic Stay and its Implications

One of the most significant benefits of the court accepting a rehabilitation petition is the granting of an automatic stay. The automatic stay provides protection for the debtor by:

• Suspending ongoing legal actions against the debtor
• Preventing new lawsuits or enforcement actions
• Restricting the debtor’s ability to dispose of assets or incur new debts without court approval

The automatic stay remains in effect until the rehabilitation plan is completed, the proceedings are terminated, or the court orders otherwise. This period of protection allows the debtor to focus on developing and starting a rehabilitation plan without the immediate pressure of creditor actions.

Appointing a Rehabilitation Planner

Once the Central Bankruptcy Court accepts the rehabilitation petition, the next step is the appointment of a rehabilitation planner in Thailand. This individual or entity is responsible for developing and overseeing the implementation of the rehabilitation plan. 

The appointment must be approved by the court and plays a key role in supporting the company through its restructuring and recovery.

Selection and Appointment of the Rehabilitation Planner

Appointing a rehabilitation planner in Thailand involves several steps and considerations:

1. Initial Nomination: The rehabilitation petition will include a proposed planner. This could be an individual, a juristic person, a group of persons, the debtor itself, or executives of the debtor.
2. Court Consideration: Upon accepting the rehabilitation petition, the court evaluates the suitability of the proposed planner. The court may approve the nomination or, if it considers the proposed planner unsuitable, order the official receiver to convene a creditors’ meeting to select an alternative.
3. Creditors’ Meeting: If required, creditors vote on the planner selection. A planner is appointed with a vote of two-thirds of the total debt value of all creditors present and voting at the meeting.
4. Court Approval: The court must approve the planner selected by the creditors. If the court does not approve, another creditors’ meeting must be convened to select a new planner.
5. Interim Management: During the period between the court’s acceptance of the petition and the appointment of the planner, the court may appoint an interim executive to manage the debtor’s affairs.

Qualifications and Requirements for Rehabilitation Planners

While the Bankruptcy Act does not specify detailed requirements for who can act as rehabilitation planners, the following factors will usually be considered:

• Professional Experience: Planners should have relevant experience in business management, finance, or restructuring.
• Independence: The planner should be independent of the debtor and major creditors to ensure impartiality.
• Financial Stability: Planners must demonstrate their own financial soundness.
• Consent: The proposed planner must provide written consent to take on the role.

Responsibilities of the Rehabilitation Planner

Once appointed, the rehabilitation planner will be responsible for the following:

Reporting to the Court: The planner must provide regular updates to the court on the progress of plan preparation.

Assessing the Debtor’s Financial Situation: The planner must conduct a complete analysis of the debtor’s assets, liabilities, and challenges.

Drafting the Rehabilitation Plan: Within three months of appointment (extendable twice for one month at a time), the planner must submit a rehabilitation plan to the official receiver.

Considering with Creditors: The planner must review and consider the debt repayment applications submitted by creditors.

Managing the Debtor’s Business: During the plan preparation phase, the planner will take control of the debtor’s business operations.

The Rehabilitation Plan

After a rehabilitation planner is officially appointed, the development of the rehabilitation plan begins. The rehabilitation plan acts as a roadmap for restructuring the debtor’s business, fixing its financial obligations, and helping to make sure the company has long-term viability. 

The plan must outline clear strategies for debt repayment, operational improvements, and, where applicable, asset management or disposal. The plan must be approved by both the creditors and the court.

The rehabilitation plan should includes the following:

• Reasons for the rehabilitation
• Details of the debtor’s assets, liabilities, and other obligations
• Principles and methods for rehabilitation, including:
  • Steps for implementing the rehabilitation
  • Debt repayment strategies and creditor classification
  • Capital restructuring plans
  • Funding sources and conditions
  • Asset management strategies
• Time Frame for plan implementation (not exceeding 5 years, with possible extensions)
• Identity and qualifications of the plan administrator

After submitting the rehabilitation plan, the planner is responsible for presenting it at a creditors’ meeting. During this meeting, the planner must clearly explain the plan’s contents and objectives, while also answering any questions from the creditors or the court. 

If objections are made or if certain provisions require clarification or revision, the planner may need to negotiate and incorporate amendments to the plan in order to receive approval.

Creditor Participation and Rights in the Rehabilitation Process

Creditors play a major role in the business rehabilitation process in Thailand. Their participation and rights are carefully prepared to ensure fair treatment while at the same allowing for the debtor’s potential recovery.

Filing Debt Repayment Applications

The first step for creditors in the rehabilitation process is filing a debt repayment application. This must be done within one month from the date the appointment of the rehabilitation planner is published in the Government Gazette. 

Failure to submit the application within this period may result in the creditor forfeiting the right to receive repayment under the rehabilitation plan. 

The application should include all debts owed by the debtor, regardless of whether the debts are due, not yet due, or conditional, and must account for obligations incurred before the court’s rehabilitation order. 

Please note, this requirement applies to foreign creditors as well.

After the submission of debt repayment applications has been made, a verification and objection process will begin. Within 14 days after the application period ends, other creditors, the debtor, and the rehabilitation planner have the right to review and raise objections to any submitted claims. 

Creditor Classification 

For the purposes of voting on the rehabilitation plan, creditors are classified into groups:

Secured Creditors in Thailand

Secured creditors in Thailand are divided into 2 groups. The first group is made of creditors whose security equal to or exceeds 15% of total debts. The second group is made up of those whose security is below this threshold.

Unsecured Creditors in Thailand

Unsecured creditors in Thailand are those who do not hold any security interest or collateral over the debtor’s assets. Unlike secured creditors, they have no preferential rights to enforce claims against specific assets for their own benefit. 

The official receiver is responsible for investigating these objections and issuing a decision to either dismiss the application, approve it in full, or approve it in part. 

Creditors who disagree with the official receiver’s decision have the right to appeal by filing an objection with the court within 14 days of becoming aware of the order.

Subordinated Creditors

Those whose claims are legally below to other creditors.

Please note, creditors can object to their classification by filing a petition with the court within seven days of being notified of the classification.

Voting Rights and Plan Approval

Creditors play a significant role in the approval of the rehabilitation plan. To receive approval of the rehabilitation plan, the official receiver convenes a creditors’ meeting where the plan is presented and put to a vote. 

For the plan to be approved, it must meet specific voting thresholds: either it must be supported by creditors representing at least two-thirds of the total debt value present and voting, including a majority from each class of creditors, or by creditors holding at least three quarters of the total debt value present and voting, including at least one class of creditors whose claims would not be fully repaid in a liquidation scenario. 

In certain cases, where the plan contains specific provisions with significant implications, a special resolution may be required, which involves obtaining approval from creditors holding at least 90% of the total debt.

Rights of Dissenting Creditors

Once approved, the rehabilitation plan is binding on all creditors, however creditors who voted against the plan have certain rights:

• Court Objection: Creditors can file objections with the court during its consideration of the plan.
• Appeal: Dissenting creditors can appeal the court’s order approving the plan within one month.
• Fair Treatment Principle: The court must ensure that dissenting creditors receive treatment no less favorable than they would in a liquidation scenario.

Creditors’ Committee

Creditors can choose to create a creditors’ committee to represent their interests, monitor the implementation of the rehabilitation plan and can request information from the plan administrator. 

The committee consists of 3-7 members selected from among the creditors and may recommend the removal of the plan administrator or request the court to cancel the rehabilitation proceedings if the plan is not being properly implemented.

Set-off Rights

Creditors who are also debtors of the rehabilitating company have set-off rights. Set-off is a legal right that allows parties to reduce or discharge a debt by offsetting it against a claim they have against the other party. This can significantly reduce a creditor’s risk and simplify their position in the rehabilitation process.

Set-off can be exercised at any time before the rehabilitation plan is approved by the court.

New Funding Provisions

Creditors providing new funding to the debtor during the rehabilitation process receive certain protections including:

• Priority: Debts arising from new funding are given priority in repayment under the rehabilitation plan.
• Exemption: These creditors are not required to file debt repayment applications for the new funding provided.

International Creditors

For international creditors, Thailand’s bankruptcy laws do not automatically recognize foreign insolvency proceedings or orders. However, Foreign creditors can apply for separate enforcement of their rights in Thai courts.

Legal Protections and Restrictions During Rehabilitation

The business rehabilitation process in Thailand provides various legal protections for the debtor company while also imposing certain restrictions. These measures are designed to create a stable environment for the rehabilitation efforts to proceed while protecting the interests of creditors and other stakeholders.

Automatic Stay

One of the most significant protections provided to a debtor in rehabilitation is the automatic stay. The automatic stay takes effect as soon as the court accepts the rehabilitation petition and remains in effect until the rehabilitation plan is completed, the proceedings are terminated, or the court orders otherwise.

This protection includes the suspension of ongoing legal actions against the debtor and prevents the initiation of new lawsuits or enforcement proceedings during the rehabilitation period. 

Additionally, secured creditors are restricted from enforcing their security interests, and repossession of assets that are essential to the debtor’s business operations is prohibited. 

Restrictions on Debtor’s Actions

While the automatic stay provides protection to the debtor during rehabilitation, it also imposes important restrictions to also protect the interests of creditors. 

The debtor is prohibited from disposing of, distributing, or transferring assets without court approval, unless such actions fall within the ordinary course of business.  Additionally, the debtor cannot incur new debts or create new encumbrances over its assets without the court’s permission. Control over the company’s management is also affected, as authority to operate the business is transferred to the court-appointed rehabilitation planner or plan administrator.

Ongoing Contracts

The rehabilitation process affects the debtor’s ongoing contractual relationships. Generally, contracts remain in force during the rehabilitation process. However, the planner or plan administrator has the right to reject unfavorable or burdensome contracts. However, in order to do so they must receive court approval.

Claimants to rejected contracts can file claims for damages, which are treated as unsecured claims in the rehabilitation process.

Employee Protections

Thai law provides certain protections for employees of companies undergoing rehabilitation, for example, the rehabilitation process does not automatically terminate employment contracts and employee wages are given priority in the order of debt repayment.

Any significant changes to employment terms or large layoffs typically require court approval.

Clawback Provisions

The rehabilitation process includes provisions for reversing certain pre-rehabilitation transactions:

• Fraudulent Transfers: Transactions made with the intent to defraud creditors can be voided.
• Preferential Payments: Payments made to certain creditors shortly before the rehabilitation petition that give them an unfair advantage may be reversed.
• Look-back Period: These provisions typically apply to transactions made within a specified period before the rehabilitation petition.

Confidentiality and Public Disclosure

The rehabilitation process balances the need for transparency with business confidentiality. The fact that a company is undergoing rehabilitation is publicly recorded. However, certain sensitive business information in the rehabilitation plan may be kept confidential from the general public.

The debtor and planner must provide necessary information to the court and creditors, but may seek protective orders for highly sensitive data.

International Aspects of Business Rehabilitation in Thailand

Thailand does not automatically recognize or enforce foreign bankruptcy or rehabilitation orders. The recognition of foreign proceedings, if any, is determined on a case-by-case basis by Thai courts. Even when recognized, foreign proceedings generally do not directly affect assets located in Thailand.

Framework for Foreign Cooperation

Thailand has not adopted the UNCITRAL Model Law on Cross-Border Insolvency, and there are no specific bilateral agreements relating to cross-border rehabilitation. Therefore, foreign cooperation in insolvency cases largely depends on Thai domestic law and court discretion.

Jurisdiction over Thai Assets

The Thai legal system operates a territorial Approach and Thai courts claim jurisdiction over all assets of the debtor located in Thailand, regardless of the debtor’s domicile or the location of its main proceedings.

Participation of Foreign Creditors

Foreign creditors have rights to participate in Thai rehabilitation proceedings and foreign creditors are treated equally to domestic creditors.

Our Thoughts

With today’s increasing economic uncertainty, businesses in a range of industries are facing increasing financial challenges. Understanding the legal framework and practical steps involved in business rehabilitation is more important than ever for companies seeking stability and preserving long-term viability. 

Whether your business is already experiencing financial problems or you want to proactively assess potential risks, exploring rehabilitation options can be an important step toward recovery. Contact us today to review your business’s current financial health and receive feedback and guidance on the most appropriate restructuring solutions available under Thai law from our legal experts.

Please note that this article is for information purposes only and does not constitute legal advice

Introduction:

In response to growing global trade pressures, especially U.S. tariffs on Thai exports, Thailand is reshaping its investment strategy for 2025. Led by the Board of Investment (BOI), the new incentives aim to keep the country competitive while building a stronger, high-tech domestic supply chain. Electric vehicles (EVs) and advanced electronics have been identified as key focus areas.

Central to the plan is Thailand’s 30/30 EV policy. The 30/30 policy aims for zero-emission vehicles to make up 30% of all auto production by 2030. This would be equal to 725,000 electric cars and 675,000 electric motorcycles each year. The BOI’s 2025 incentives are designed to attract the investment, tech, and expertise needed to make that happen.

Key Points

• The country aims for zero-emission vehicles to comprise 30% of total auto production by 2030, targeting 725,000 electric cars and 675,000 electric motorcycles annually.
• Companies investing over THB 5 billion in battery electric vehicle manufacturing qualify for 8-year corporate income tax exemptions with no profit cap, while smaller projects receive 3-year exemptions.
• Manufacturers must use 40% local content for BEVs, 45% for PHEVs, and 15% for EV components to qualify for additional 2-year, 50% corporate income tax reductions.
• Companies must obtain certification from the Federation of Thai Industries (FTI) to access local content-related incentives.
• BOI-promoted EV projects allow complete foreign ownership of Thai companies, including land ownership rights and streamlined visa processes for foreign executives and employees.

What’s New in Thailand’s 2025 BOI EV Strategy?

Thailand’s Board of Investment (BOI) has introduced a new strategy for 2025 to promote the country’s role as a leading hub for electric vehicles (EVs) and smart electronics in the region. A key highlight of this plan is the introduction of a new incentive: an extra two-year, 50% corporate income tax reduction for manufacturers that meet updated local content requirements.

Thailand wants to move beyond being just an assembly base. By encouraging companies to source more materials and components locally, the BOI aims to strengthen domestic supply chains, support Thai suppliers, create skilled jobs, and boost the country’s long-term competitiveness in the EV and electronics industries.

BOI Local Content Requirements: What Investors Need to Know

The new local content requirements are a key feature of the BOI’s 2025 plans, and are designed to improve domestic value chains and promote Thailand’s industrial growth, particularly in the EV and electronics sectors.

What is local content?

Local content refers to the use of materials, components, or services that are sourced or produced within Thailand. To qualify, these locally sourced inputs must be directly used within the final production process of the promoted activity, such as vehicle assembly, battery production, or electronics manufacturing. 

For example, using Thai-made battery cells, sensors, circuit boards, or automotive components in the production of EVs would count toward meeting local content thresholds.

Minimum Local Content Thresholds

To qualify for the additional two-year, 50% corporate income tax reduction, manufacturers must use a specified percentage of locally sourced raw materials and components in their production. 

The thresholds, which are calculated based on the value of the materials, vary by product category:

40% for EVs and Electrical Appliances

Manufacturers of Battery Electric Vehicles (BEVs) and household electrical appliances must ensure that at least 40% of the total value of the raw materials used in their products is sourced from within Thailand.

45% for Plug-in Hybrid Vehicles (PHEVs)

The requirement for Plug-in Hybrid Electric Vehicles (PHEVs) is slightly higher, and has been set at a minimum of 45% local content. 

This may be due to the more complex mix of traditional and electric components in these vehicles, offering wider opportunities for local suppliers. For manufacturers of individual EV components, the threshold is set at 15% local content

What Qualifies as Local Content?

The BOI defines “local content” as the total value of raw materials, parts, and components that are sourced domestically and used in the production process. Importantly, the local content is calculated based on the value of the materials and components used in production, not the selling price or retail value of the finished product.

As such, companies must evaluate the full bill of materials for each product, such as a vehicle, appliance, or electronic device, to determine the proportion of local versus imported content. This requires a detailed breakdown of each component used, including its origin and corresponding cost.

To ensure consistency, the BOI has delegated local content verification to the Federation of Thai Industries (FTI), which reviews documentation and confirms whether companies meet the thresholds required to qualify for related incentives.

Local Content Requirements for BOI Incentives

BOI Certification for “Made in Thailand” Products

An important requirement for being eligible for the new local content-related incentives is obtaining the mandatory “Made in Thailand” (MiT) certification from the Federation of Thai Industries (FTI).

For investors, this is an important change in how BOI incentives are obtained. It’s no longer about submitting paperwork to the BOI, you now also need to work closely with the private sector, specifically the Federation of Thai Industries (FTI).

To qualify for local content incentives, businesses must plan early to meet the “Made in Thailand” (MiT) certification requirements. This means identifying reliable Thai suppliers, making sure their products meet the necessary quality standards, and working with the FTI to obtain the required approvals.

What Other EV Manufacturing Incentives in Thailand are Available from the BOI?

Announced in July 2025, the “Thai Enterprise Competitiveness Enhancement Measures for the New Global Era” is Thailand’s response to rising global trade pressures, most notably a 36% U.S. tariff on Thai imports starting August 1, 2025. 

The BOI’s five-pillar plan focuses on promoting local competitiveness, increasing local content, tightening oversight to prevent trade circumvention, regulating sensitive sectors, and updating rules on foreign labor. Together, these measures aim to future-proof Thailand’s industrial base, supporting both SMEs and multinationals and strengthen its position in a rapidly shifting global economy.

Read Also: Thailand’s S-Curve Industries: Driving Economic Growth & Innovation

Targeted Sectors: EVs, Electronics, and Clean Industry

Thailand’s 2025 investment strategy places an increased focus on high-growth, high-technology industries, particularly electric vehicles (EVs) and advanced electronics, and made these areas the foundation of its future economic development. 

To support this, the Thailand Board of Investment (BOI) has implemented targeted incentives aimed at encouraging integration between these sectors and establishing Thailand as a leading hub for next-generation industrial production.

Key promotion categories include:

• Category 3.8: EV Manufacturing – Covers BEVs, PHEVs, and HEVs. Offers top-tier (A1) incentives, including up to 8 years of corporate income tax (CIT) exemption with no cap on exempted profits.
• Category 4.1: Electronic Design – Supports upstream, IP-driven projects with A1-level incentives and 8-year CIT waivers for certified innovation or R&D.
• Category 4.2: Semiconductors & Sensors – Focuses on wafer, ICs, PCBs, and sensors. Large projects over THB 1.5 billion can qualify for up to 13 years of tax exemption under A1+ classification.

Summary of Key BOI Electronics & EV Manufacturing Incentives in Thailand (2025) 

The objective is not only aimed at attracting foreign investment; it is to develop a self-sustaining, high-tech industrial ecosystem. Due to the growing roles and demand for advanced electronics and semiconductors in electric vehicle (EV) production, the simultaneous development of both sectors is a logical step. 

Domestic demand from EV manufacturers promotes local electronics output, while a strong electronics industry improves Thailand’s competitiveness as a preferred manufacturing base for global automotive firms.

Timeline and Key Implementation Dates

For investors looking to take advantage of Thailand’s 2025 BOI strategy and the EV 3.5 package. The following timeline outlines the most dates for compliance and opportunity:

December 31, 2027 – Final deadline for companies seeking to invest in battery cell production to apply for BOI benefits and incentives. 

July 16, 2025 – The BOI formally announces its five-point policy framework to address global trade pressures and strengthen industrial competitiveness.

August 1, 2025 – A 36% reciprocal tariff on certain Thai imports by the United States comes into effect, serving as a primary catalyst for the new incentive measures.

2024–2027 – Operational period for the EV 3.5 promotion package, including market-stimulating tax reductions and consumer subsidies.

2024–2025 – Approved companies may import Completely Built-Up (CBU) EVs at a reduced import duty (up to 40%) provided they commit to establishing local production.

December 31, 2025 – Deadline for submitting applications for productivity-enhancing incentives, such as investments in automation and robotics.

By 2026 – Companies benefiting from CBU import privileges under EV 3.5 must begin local EV production, maintaining a 1:2 production-to-import offset ratio.

By 2027 – If local production begins in 2027, the offset ratio increases to 1:3.

BOI Opportunities for Foreign Investors in the EV Supply Chain

Thailand’s 2025 incentive package offers attractive benefits for foreign investors looking to establish a competitive, resilient manufacturing base in Southeast Asia. The new framework enables companies to take advantage of cost-efficient operations within one of the world’s fastest growing EV markets.

As well as the new incentives mentioned above, the BOI also offers the following incentives to companies involved within the EV supply chain.

The BOI’s general business benefits and financial/tax incentives are among the most competitive in Asia, and are aimed at lowering both initial investment costs and ongoing operational expenses for eligible projects.

General Business Benefits

The BOI offers highly attractive benefits that help foreign investors overcome key legal and operational challenges when entering the Thai market.

100% Foreign Ownership of a Thai Company

Companies who have received a BOI promotion, are permitted to be 100% foreign owned (subject to certain exceptions), even in sectors normally restricted under the Foreign Business Act. This allows foreign shareholders full control over operations without requiring a Thai partner, an important advantage in Thailand where foreign ownership is often capped at 49%.

A BOI promotion also exempts qualifying businesses from needing a Foreign Business License, significantly reducing setup time and regulatory complexity.

Land Ownership Rights for BOI Companies

One of the most valuable general business benefits available under BOI promotion is the right for a foreign owned company to own land in Thailand. While Thai law generally prohibits land ownership by foreign entities, BOI-promoted companies may be granted approval to acquire land specifically for use in their promoted activities. 

Additional General Business Benefits

BOI-promoted companies may also benefit from:

• Streamlined visa and work permit processes for foreign executives, employees, and technicians
  
• Permission to remit foreign currency abroad, including dividends, loan repayments, and royalties
  
• Streamlined import/export procedures, especially for machinery and R&D equipment
  
• Eligibility for government-sponsored training and R&D support programs

Tax Incentives

As well as the general business benefits, the BOI also offers companies significant tax incentives which can be highly beneficial for a company. Examples include:

• Corporate Income Tax (CIT) Exemptions: Offered on a tiered basis, depending on project type, technology level, and investment size, ranging from 3 to 13 years. 

For example, BEV projects under THB 5 billion receive a 3 year exemption (extendable), while those over THB 5 billion qualify for 8 years. Advanced semiconductor projects may receive up to 13 years of exemption.

Additional CIT Reductions: Companies in the EV and electronics sectors that meet local content requirements receive an extra 2-year, 50% CIT reduction, added on top of their existing incentives.

Import Duty Waivers: Full exemptions apply to machinery, R&D equipment, and raw materials used in the production of export goods, helping reduce upfront setup costs.

FAQs: Thailand BOI EV Incentives 2025

What is the 30/30 EV policy in Thailand?

The “30/30” (also known as the 30/30) policy is Thailand’s national target for the electric vehicle industry. It aims for Zero Emission Vehicles (ZEVs), which include Battery Electric Vehicles (BEVs) and Fuel Cell Electric Vehicles (FCEVs), to account for at least 30% of the country’s total automotive production by the year 2030. The specific production goals are to manufacture 725,000 electric cars and 675,000 electric motorcycles annually by that date.

What qualifies as “Made in Thailand” under BOI rules?

To qualify as “Made in Thailand” for the purpose of accessing specific BOI incentives, a product must be certified under the “Made in Thailand” (MiT) program, which is administered by the Federation of Thai Industries (FTI). This certification is granted to products that meet the specified local content thresholds, which are calculated based on the value of locally sourced raw materials and components used in their production.

How much local content is required for BOI tax incentives?

To be eligible for the additional 2-year, 50% corporate income tax reduction, manufacturers must meet the following minimum local content thresholds, based on the value of raw materials:

• Battery Electric Vehicles (BEVs): 40%
• Plug-in Hybrid Electric Vehicles (PHEVs): 45%
• EV Components: 15%
• Household Electrical Appliances: 40%

Can foreign companies access BOI incentives for EV projects?

Yes, absolutely. A key benefit of receiving BOI promotion is the right for a company to be 100% foreign-owned, a privilege not typically available under the Foreign Business Act. Foreign companies are the primary target for the large-scale EV manufacturing incentives, including tax incentives, import duty exemptions, and non-tax benefits like land ownership and facilitated work permits for foreign experts.

Do PHEVs qualify under the BOI’s new EV incentive scheme?

Yes, Plug-in Hybrid Electric Vehicles (PHEVs) are included in the new BOI incentive scheme. To qualify for the additional 2-year, 50% CIT reduction, PHEV manufacturers must meet a 45% local content requirement. 

Additionally, the government has revised the excise tax structure for PHEVs, which, effective January 1, 2026, will be determined solely based on the vehicle’s electric range, removing the previous condition related to fuel tank size.

Please note that this article is for information purposes only and does not constitute legal advice

Introduction:

After a two-year delay, Thailand has restarted its plans to regulate artificial intelligence (AI). On May 2, 2025, the Electronic Transactions Development Agency (ETDA) held a public meeting to provide more information about the proposed AI legislation.

Due to the rapid growth and fast-changing legal and technological developments in AI, ETDA’s original draft law closely followed the European Union’s model. However, as AI continues to evolve, the ETDA has decided to amend the original draft and adapt it to match more closely with Thailand’s specific needs.

The newly proposed framework is based on international research and an analysis of how other countries are regulating AI. It focuses on five main areas, to ensure that AI can be safely and effectively developed, deployed, and used in Thailand, while also protecting users and encouraging technological growth.

Key Points

• Thailand’s draft AI law uses a risk-based regulation approach, delegating responsibility to sector-specific regulators.
• High-risk AI providers must implement risk management frameworks, maintain human oversight, keep operational logs, and report serious incidents to authorities.
• The law supports innovation through controlled regulatory sandboxes for testing and allows use of public data for AI development (with commercial use requiring permission).
• Foreign AI companies must appoint legal representatives in Thailand and consider ownership structures as AI businesses fall under the Foreign Business Act restrictions.
• The AI Governance Center will oversee implementation, with regulators given powers to issue stop orders, request platform takedowns, seize AI products, or block internet access for non-compliant systems.

Main Areas of Focus in the Draft AI Law

The updated framework is based on international research and an analysis of how other nations are managing AI. It focuses on five main areas, each designed to balance innovation with responsible oversight:

Risk-Based AI Regulation

One of the main areas of focus for the proposed artificial intelligence law is to manage risk in a way that’s practical and adapted to be used across different industries.

Delegation of Authority to Enforcement Bodies and Sectoral Regulators

To achieve this the ETDA plans to delegate the responsibility for identifying and managing AI risks to industry-specific regulators. This is a different approach from originally planned, which was to create a fixed list of banned or high-risk AI systems.

This approach has been chosen because every sector faces different kinds of risks when using AI. Specific sector regulators are more familiar with the issues and risks in their fields, therefore, they can more accurately decide what should be considered as “high-risk” AI. 

These regulators will have the power to issue more detailed rules for their respective industry, but these rules must align with the overall artificial intelligence law.

There will also be the creation of a central enforcement agency that will oversee the process, helping to coordinate between sectors and address any gaps where no specific regulator is in charge.

Duties for AI providers considered high risk

Companies that use high-risk AI systems will be subject to an expected ‘duty of care’ which requires them to follow a set of responsibilities under the draft law to ensure accountability and protect the rights of individuals who may be affected by AI.

Under the draft AI law, organizations must:

• Maintain human oversight of high-risk AI systems to prevent harmful or unexpected outcomes.
• Keep detailed operational logs to track how the AI is functioning and being used.
• Ensure the accuracy and quality of input data, which directly impacts the AI system’s output.
• Notify individuals if an AI system could affect their rights or interests, such as decisions about credit, employment, or public services.
• Cooperate with investigations if something goes wrong, particularly if harm has been caused due to the AI.

AI systems classified as high-risk by regulators, must also implement the following:

Risk Management Systems

High-risk AI providers must set up formal risk management frameworks, for example, following international standards like ISO/IEC 42001:2023 or the NIST AI Risk Management Framework.

These systems will help to identify, assess, and reduce potential harm. If providers do not meet these standards, they may still be held liable if their failure to follow best practices leads to real harm. 

Local Legal Representation

AI providers who are based outside of Thailand must appoint a legal representative within the country. This ensures Thai authorities can properly enforce the law and hold providers accountable.

Serious Incident Reporting

If an AI system causes unexpected harm or poses a safety risk, providers will be required to report the incident to the relevant enforcement agency. This allows regulators to step in quickly and take appropriate action.

Support for Innovation

To encourage AI development, the draft law introduces some policies to encourage innovation. The two main areas are:

Data Access for AI Development

Developers will be allowed to use publicly available online data for tasks such as text and data mining, which are an important part of training AI systems. This method is similar to how the EU approaches similar issues. 

However, if the developer wishes to use that data for commercial purposes, they will still need to get permission from the data’s owner or rights holder.

Real World Testing Using Sandboxes

The draft also encourages the use of regulatory sandboxes i.e. controlled environments where companies can test AI systems in real life situations. These sandboxes will be set up through agreements between private companies and the relevant government agencies.

AI companies who operate within these sandboxes may be allowed to use personal data that was originally collected for other purposes, as long as the data is only used for serving the public interest.

To reduce the risk for innovators, the draft law includes a “safe harbor” rule. The safe harbor rule will protect companies from being punished for any unintended harm that occurs during testing.

In order to be covered by the safe harbour rule, the company must act in good faith and follow the sandbox rules. However, safe harbor does not protect the company from civil liability and they may still have to compensate individuals if any real harm is caused.

Read More: BOI Incentives for Renewable Energy in Thailand – Here’s What You Need to Know for 2025

General Legal Principles

The draft AI law is based upon key legal principles that aim to promote fairness, transparency, and accountability. These following principles have been designed to protect individuals and encourage responsible AI use:

Nondiscrimination

AI-generated decisions, such as automated contracts or administrative rulings will be treated as legally valid. People won’t be denied any rights or services simply because AI was used in the decision-making process.

AI is a Tool and not a separate entity

No matter how advanced an AI system is, its actions must always be traceable back to a human. Developers and users can’t deny responsibility because the AI acted in an unpredictable way. The ultimate responsibility will remain with the people who develop or use the technology.

Protection from Unexpected AI Actions

The draft law also contains safeguards against AI errors that couldn’t have been reasonably predicted. If an AI system does something no one could have expected, and if the person affected didn’t know and couldn’t have known about the risk, they may be protected from being legally bound by that action.

Right to Explanation and Appeal

People should have the right to understand and challenge decisions made by AI. Examples include:

• Being told when AI is involved in making a decision that affects them
• Receiving an explanation of how the AI reached that decision
• Having a way to appeal or challenge the outcome, possibly through a human review of the action.

AI Regulation and Regulatory Oversight

The draft artificial intelligence law assigns oversight responsibilities to the AI Governance Center (AIGC), which already operates under Thailand’s Electronic Transactions Development Agency (ETDA).

The AIGC will play a leading role in properly implementing the law. Its main responsibilities include:

• Research and development in AI governance to help shape future policies
• Advising organizations on how to adopt and use AI responsibly
• Supporting pilot programs and regulatory sandboxes that allow businesses to test AI in real conditions under controlled oversight
• Monitoring global AI trends and best practices to keep Thailand aligned with international standards
• Collecting data to assess Thailand’s readiness for AI 
• Creating partnerships both in Thailand and with international organizations to support consistent and collaborative AI governance

Enforcement Mechanisms

The draft AI law will grant power to regulators to take action when AI systems are used in illegal or unsafe ways.

In such situations, regulators will be able to:

Issue stop orders

If an AI provider or user is found using prohibited or high-risk AI, regulators can issue an official order requiring them to stop offering or using the service.

Platform takedowns

If the AI system is available through a digital platform, e.g. a website or app, regulators will be able to request the platform to block or remove access to the service.

Seizing physical AI products

If the AI is part of a physical product (like a robot or smart device), regulators will be able to seize the product.

Blocking internet access 

If the noncompliant AI is hosted outside a digital platform or the platform doesn’t follow the stop order, regulators can work with the Ministry of Digital Economy and Society to block access to the AI system through internet service providers (ISPs) in Thailand.

What This Means for Businesses in Thailand

For businesses that operate in the AI space, or use AI tools heavily for their business activities, this draft law could have significant effects on their business. If the draft legislation becomes law, it could significantly impact how AI is developed, used, and regulated in Thailand.

Businesses involved in AI should closely review the draft law and consider how its proposed rules might impact their operations. This is particularly important for companies who use complex AI systems.

Foreign Ownership Rules for AI Companies in Thailand

The Foreign Business Act may restrict foreign ownership in AI development and other AI businesses as it falls under the general restrictions of service activities. There are however several options available to AI companies in Thailand including:

• A Thai Limited Company with a Thai Partner
• 100% foreign ownership via a BOI promotion and a Foreign Business Certificate
• 100% foreign ownership via a Foreign Business Licence  

Limited Company with a Thai Partner

The Foreign Business Act restricts foreigners from undertaking about 50 types of business. AI businesses are considered service businesses which are restricted as per Clause 20 of list 3 of the Foreign Business Act .

However, a popular alternative for foreign investors who wish to operate an AI business is to create a Thai company (a company registered in Thailand with Thai shareholder(s) owning more than 50% of the share capital). 

Such a set up would mean the restrictions of the FBA would not apply as the company is not considered foreign. However, the Thai partners must not be nominees as Thailand forbids the use of nominee shareholders. 

BOI Promotions for AI 

While the BOI doesn’t offer any promotions directly relating to AI at the moment, they do offer promotions that include digital activities. Business activities that are covered under digital activities include developing software, which could be suitable for some AI business activities and AI development. 

BOI Incentives and Benefits for AI Projects

BOI-promoted companies in Thailand receive significant advantages compared to regular Thai limited companies. 

One of the most important benefits is the ability to have 100% foreign ownership, allowing the company to avoid the typical 49% limit imposed by the Foreign Business Act. In addition, BOI-promoted businesses are issued a Foreign Business Certificate, which exempts them from restrictions on over 50 business categories otherwise restricted to foreign-owned companies. 

Another important advantage is the flexibility in hiring foreign talent. Unlike standard companies, which must maintain a 4:1 ratio of Thai to foreign employees, BOI-promoted firms are not subject to these quotas when hiring skilled foreign professionals.

Read More: Thailand’s S-Curve Industries: Driving Economic Growth & Innovation

Tax Benefits

Successful applicants for a BOI promotion for software will also be eligible for a corporate income tax exemption cap of 100 percent of the actual expenditure for the incentive is as follows: 

Expenditure on the operation to acquire the standard quality system certificate ISO 29110 or CMMI from Level 2 or other equivalent international standards.

Expenditure on salaries for Thai information technology personnel additionally employed in comparison with Thai information technology personnel employed before the application submission date for investment promotion. 

Expenditure on the information technology development-related training course to develop Thai personnel’s skills. 

Our Thoughts

Thailand is putting a lot of effort into regulating artificial intelligence (AI) in a way that promotes innovation while ensuring responsible development. On May 2, 2025, the Electronic Transactions Development Agency (ETDA) introduced a revised draft of its AI legislation, which adopts a risk-based approach. The new framework encourages real-world testing through regulatory sandboxes, permits the use of public datasets for AI development, and outlines clear requirements for providers of high-risk AI systems. 

While AI is a restricted service under Thailand’s Foreign Business Act, foreign companies can still operate with full ownership by applying for a promotion from the Board of Investment (BOI). Although the BOI does not yet offer a specific category for AI, many AI-related businesses, such as software and digital platform developers, may qualify under existing digital activity categories.

Receiving a BOI promotion allows 100 percent foreign ownership, grants a Foreign Business Certificate which permits a foreign company to engage in restricted activities under the FBA, removes local hiring quotas for skilled foreign professionals, and provides access to tax exemptions.

If you are planning to start your AI business in Thailand, now is the ideal time to take advantage of this rapidly developing sector. Contact us to learn how we can support your success in Thailand’s growing AI ecosystem.

Please note that this article is for information purposes only and does not constitute legal advice

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