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:

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:

Hiring employees in Thailand involves much more than issuing an employment contract and paying salaries each month. Employers must comply with the Labour Protection Act B.E. 2541 (1998), the Social Security Act, work permit requirements for foreign employees, and a range of regulations covering working hours, statutory leave, termination procedures, and severance pay. 

Whether you are establishing your first company in Thailand, expanding an existing operation, or growing a BOI-promoted business, understanding your responsibilities as an employer can help reduce legal risk and avoid costly employment disputes. Thai Labour Courts are well known for providing strong protections to employees, and employers who fail to follow the correct procedures may face significant financial liability, even where there appears to be a valid reason for dismissal.

This guide explains the key employment law requirements that foreign employers should understand, from employment contracts and working hours through to termination, severance pay, work permits, and Social Security. It also explains how Lex Nova Partners supports businesses by combining employment, immigration, corporate, and tax advice under one roof.

Key Points

• Thai labour law applies to all employers, including foreign-owned businesses, and sets minimum standards for contracts, working hours, leave, and employee rights.
• Termination must follow the correct legal process, including proper notice, written reasons where required, and statutory severance pay to reduce the risk of Labour Court claims.
• Foreign employees need both a valid visa and work permit before starting work, and employers must meet the relevant corporate and immigration requirements.
• Remote employees working in Thailand remain protected by Thai labour law, with written remote working arrangements recommended to clarify each party’s responsibilities.
• Employment law often overlaps with immigration, corporate, and tax compliance, making integrated legal advice valuable for businesses operating in Thailand.

What are the basic employment law requirements for employers in Thailand?

The Labour Protection Act B.E. 2541 (1998) forms the foundation of employment law in Thailand. It establishes the minimum rights that employees are entitled to receive and the obligations employers must meet. While businesses are free to offer more generous terms, they cannot provide conditions that are less favourable than those required by law.

Employment Contracts

Thai law recognises both written and verbal employment agreements. However, written contracts are strongly recommended for every employee. A written agreement provides clear evidence of the terms that have been agreed and significantly reduces the risk of disputes relating to salary, benefits, working hours, duties, confidentiality, intellectual property, and termination.

Section 11 of the Labour Protection Act, states that contracts should specify job title and duties, working hours and location, salary and benefits, and any applicable probationary period. 

For ongoing positions, open-ended employment contracts are generally the most appropriate option. Fixed-term contracts are only permitted in limited circumstances, such as project-based work, seasonal employment, or temporary assignments. To qualify as a genuine fixed-term contract, the agreement must satisfy the requirements set out under Thai labour law. If it does not, the contract may instead be treated as permanent employment, together with the associated severance obligations.

Many employers also include a probation period. Although Thai law does not formally recognise probationary employment as a separate legal status, a period of up to 119 days is used in practice. Once an employee reaches 120 days of service, statutory severance rights may begin to apply.

Importantly, an employee cannot simply be dismissed because they have “failed probation”. Employers must still follow the correct legal termination process.

Working Hours and Overtime

Standard working hours in Thailand are limited to eight hours per day and 48 hours per week for most occupations. Employees must receive a break of at least one hour after working for five consecutive hours.

Any work performed beyond the normal working hours is generally treated as overtime. Employers cannot require employees to work overtime without their consent except in limited emergency situations permitted by law.

Where overtime is worked, employees are entitled to statutory overtime pay. Depending on when the work is performed, overtime may be payable at one and a half, two, or three times the employee’s normal hourly wage.

Minimum Wage

Thailand operates a provincial minimum wage system, meaning the applicable daily wage depends on where the employee works. The rates are reviewed periodically by the Wage Committee and may change from time to time.

Thailand’s minimum wage currently ranges from THB 337 to THB 400 per day. Foreign employees are subject to a different rate and the actual minimum wage requirements differ based on nationality.

Minimum salary for foreign employees

Minimum salary for foreign employees hired by a BOI company

New BOI rules also introduce mandatory minimum monthly salary thresholds for foreign employees. The exact salary required depends on the job title, the candidate’s experience, and their educational background.

These salary requirements must be fully met in order to obtain or renew BOI visa and work permit privileges, and will be reviewed at both the application and renewal stages.

Employers in Thailand are legally required to pay wages at least once a month and issue detailed payslips for employees. The requirements for paying salaries are set out in Section 70 of the Labour Protection Act.

Foreign employees may also be subject to minimum salary requirements for work permit purposes depending on their nationality and visa category. These immigration requirements are separate from the provincial minimum wage and should not be confused with each other.

Statutory Leave

Employees in Thailand benefit from several statutory leave entitlements, including:

• At least 13 paid public holidays each year.
• A minimum of six days’ paid annual leave after completing one year of service.
• Up to 30 days of paid sick leave each year.
• Ninety-eight days of maternity leave.
• At least three days of paid personal business leave.

Employers are free to provide additional leave benefits, but they cannot reduce these statutory minimum entitlements.

Work Rules

Businesses employing ten or more employees are required to prepare written work rules covering matters such as working hours, leave, disciplinary procedures, complaints, and termination. These rules must be communicated clearly to employees and filed with the Department of Labour Protection and Welfare.

Well-drafted work rules not only satisfy a legal requirement but also provide an important foundation for handling disciplinary matters and reducing the risk of future disputes.

Social Security

Employers must register employees with the Social Security Office and make monthly contributions to the Social Security Fund. Both the employer and employee contribute five percent of the employee’s salary, subject to the applicable statutory cap.

These contributions provide employees with access to benefits including medical treatment, maternity benefits, disability support, unemployment assistance, retirement pensions, and survivor benefits.

Complying with these requirements from the beginning helps employers avoid penalties while providing employees with the protections required under Thai law.

How do I legally terminate an employee in Thailand?

The Labour Protection Act B.E. 2541 (1998) forms the foundation of employment law in Thailand. It establishes the minimum rights that employees are entitled to receive and the obligations employers must meet. While businesses are free to offer more generous terms, they cannot provide conditions that are less favourable than those required by law.

Employment Contracts

Thai law recognises both written and verbal employment agreements. However, written contracts are strongly recommended for every employee. A written agreement provides clear evidence of the terms that have been agreed and significantly reduces the risk of disputes relating to salary, benefits, working hours, duties, confidentiality, intellectual property, and termination.

Section 11 of the Labour Protection Act, states that contracts should specify job title and duties, working hours and location, salary and benefits, and any applicable probationary period. 

For ongoing positions, open-ended employment contracts are generally the most appropriate option. Fixed-term contracts are only permitted in limited circumstances, such as project-based work, seasonal employment, or temporary assignments. To qualify as a genuine fixed-term contract, the agreement must satisfy the requirements set out under Thai labour law. If it does not, the contract may instead be treated as permanent employment, together with the associated severance obligations.

Many employers also include a probation period. Although Thai law does not formally recognise probationary employment as a separate legal status, a period of up to 119 days is used in practice. Once an employee reaches 120 days of service, statutory severance rights may begin to apply.

Importantly, an employee cannot simply be dismissed because they have “failed probation”. Employers must still follow the correct legal termination process.

Working Hours and Overtime

Standard working hours in Thailand are limited to eight hours per day and 48 hours per week for most occupations. Employees must receive a break of at least one hour after working for five consecutive hours.

Any work performed beyond the normal working hours is generally treated as overtime. Employers cannot require employees to work overtime without their consent except in limited emergency situations permitted by law.

Where overtime is worked, employees are entitled to statutory overtime pay. Depending on when the work is performed, overtime may be payable at one and a half, two, or three times the employee’s normal hourly wage.

Minimum Wage

Thailand operates a provincial minimum wage system, meaning the applicable daily wage depends on where the employee works. The rates are reviewed periodically by the Wage Committee and may change from time to time.

Thailand’s minimum wage currently ranges from THB 337 to THB 400 per day. Foreign employees are subject to a different rate and the actual minimum wage requirements differ based on nationality.

Minimum salary for foreign employees

Minimum salary for foreign employees hired by a BOI company

New BOI rules also introduce mandatory minimum monthly salary thresholds for foreign employees. The exact salary required depends on the job title, the candidate’s experience, and their educational background.

These salary requirements must be fully met in order to obtain or renew BOI visa and work permit privileges, and will be reviewed at both the application and renewal stages.

Employers in Thailand are legally required to pay wages at least once a month and issue detailed payslips for employees. The requirements for paying salaries are set out in Section 70 of the Labour Protection Act.

Foreign employees may also be subject to minimum salary requirements for work permit purposes depending on their nationality and visa category. These immigration requirements are separate from the provincial minimum wage and should not be confused with each other.

Statutory Leave

Employees in Thailand benefit from several statutory leave entitlements, including:

• At least 13 paid public holidays each year.
• A minimum of six days’ paid annual leave after completing one year of service.
• Up to 30 days of paid sick leave each year.
• Ninety-eight days of maternity leave.
• At least three days of paid personal business leave.

Employers are free to provide additional leave benefits, but they cannot reduce these statutory minimum entitlements.

Work Rules

Businesses employing ten or more employees are required to prepare written work rules covering matters such as working hours, leave, disciplinary procedures, complaints, and termination. These rules must be communicated clearly to employees and filed with the Department of Labour Protection and Welfare.

Well-drafted work rules not only satisfy a legal requirement but also provide an important foundation for handling disciplinary matters and reducing the risk of future disputes.

Social Security

Employers must register employees with the Social Security Office and make monthly contributions to the Social Security Fund. Both the employer and employee contribute five percent of the employee’s salary, subject to the applicable statutory cap.

These contributions provide employees with access to benefits including medical treatment, maternity benefits, disability support, unemployment assistance, retirement pensions, and survivor benefits.

Complying with these requirements from the beginning helps employers avoid penalties while providing employees with the protections required under Thai law.

How do I legally terminate an employee in Thailand? 

Terminating an employee in Thailand is rarely as straightforward as many foreign employers expect. Even where there are legitimate concerns about an employee’s performance or conduct, dismissal must follow the procedures set out under the Labour Protection Act. Failing to do so can expose an employer to claims for wrongful dismissal, statutory severance, compensation for unfair termination, and legal costs.

Thai Labour Courts place significant emphasis on employee protection. While every case depends on its own facts, employers that overlook the correct process often find that a defensible dismissal becomes an expensive dispute.

Notice Requirements

Unless an employee is being dismissed for one of the serious offences listed under Section 119 of the Labour Protection Act, employers must provide advance notice of termination or make a payment in lieu of notice.

The notice must be given on or before a wage payment date and takes effect on the following wage payment date. In practice, this usually means giving one full pay period’s notice, although the required notice cannot exceed three months.

Many employers choose to make payment in lieu of notice, particularly where they want the employee to leave immediately or where allowing them to remain in the workplace could create operational or commercial risks.

The Reason for Termination Matters

One of the most common mistakes made by employers is failing to properly document the reason for dismissal.

Following the 2019 amendments to the Labour Protection Act, employers are required to state the reason for termination in writing at the time the employee is dismissed. This is an important procedural requirement. If no reason is given, the employer may lose the ability to rely on that reason later if the employee brings a claim before the Labour Court.

For that reason, the decision to terminate should always be supported by appropriate documentation. Performance reviews, written warnings, disciplinary records, attendance reports, investigation findings, or evidence of misconduct may all become important if the dismissal is later challenged.

Dismissal With and Without Cause

Thai labour law clearly defines termination with and without cause. Section 119 of the LPA established the grounds for termination without severance, which include dishonesty, gross negligence, or serious breaches of company rules. 

In the situation where an employer makes the decision to terminate a member of staff, they must provide advance notice that equals one full pay cycle or provide a payment in lieu of this notice.

Severance Pay Obligations

Severance pay is required under Section 118 of the Labour Protection Act and is calculated based on the length of time the employee had been working for the company. The standard severance pay rates are as follows:

Failure to provide proper notice or pay the required severance can lead to legal consequences, including court ordered reinstatement of the employee or compensation/ damages, depending on the Labour Court’s decision.

If an employee is fired using either statutory or nonstatutory causes, the employee is entitled to the following statutory payments:

When Can an Employee Be Dismissed Without Severance?

Thai law recognises a limited number of circumstances where severance is not payable. Section 119 of the Labour Protection Act includes situations such as:

• Dishonesty or fraud against the employer.
• Intentionally committing a criminal offence against the employer.
• Wilfully causing significant damage to the business.
• Gross negligence resulting in serious loss.
• Repeated breaches of lawful work rules after receiving a written warning.
• Abandoning work without a valid reason for the period prescribed by law.

These exceptions are interpreted narrowly. Employers should avoid assuming that poor performance, personality conflicts, or isolated mistakes amount to serious misconduct. Where there is any doubt, obtaining legal advice before proceeding with termination is often far less expensive than defending a Labour Court claim afterwards.

Redundancy

In cases of redundancy or business restructuring, employers must provide advance notice and be able to provide a valid reason for the redundancy. The employer must also notify the Labour Inspector. 

If ten or more employees are affected, additional consultation procedures are required. This includes informing employee representatives or labour unions in advance, engaging in good-faith discussions regarding the reasons for termination, and exploring alternatives to redundancy. 

If these procedures are not properly followed, it may result in claims of unfair dismissal.

Can a foreign company hire foreign employees in Thailand?

Yes, but employing foreign nationals in Thailand involves more than simply offering a job. Before a foreign employee can begin working, both the employer and the employee must satisfy a number of legal requirements relating to immigration, employment, and corporate compliance.

For many foreign businesses, this is where employment law begins to overlap with company law and immigration. The business must also ensure it is properly structured to support the work permit application and continues to meet its ongoing compliance obligations.

Work Permits and Non-Immigrant Visas

A foreign national must obtain both a valid Non-Immigrant “B” (Business) Visa (or other form of visa that permits work such as a Non-Immigrant O (marriage) visa or the Long Term Residency (LTR) visa and a work permit before commencing employment in Thailand. Working without the appropriate authorisation is illegal and may expose both the employee and the employer to criminal and administrative penalties.

Importantly, holding a visa alone does not grant permission to work. Likewise, obtaining a work permit does not remove the requirement to maintain valid immigration status. The two are required together and should be managed as part of a single application strategy.

Thai-to-Foreign Employee Ratio

To support a Work Permit, businesses are required to employ four Thai employees for every one foreign employee. This is commonly referred to as the 4:1 ratio. The company must also have 2 Million THB registered capital per foreign employee as well.

However, this is not an absolute rule. BOI-promoted companies are not subject to this quota. Depending on the promoted activity, the BOI may approve additional foreign positions that would not otherwise be available under the standard quota. Foreigners who are married to a Thai National and have a Non-Immigrant O visa are subject to reduced requirements of 2 Thai employees and 1 Million THB is capital.

Businesses should therefore assess their eligibility before assuming the standard ratio applies.

Restricted Occupations

Not every occupation is open to foreign workers. Thailand reserves certain professions and occupations exclusively for Thai nationals, and work permit applications must accurately reflect the duties the employee will perform.

Applying under an unsuitable occupation category can lead to delays or refusal of the application. Before recruiting overseas talent, employers should confirm that the proposed role is legally available to foreign workers and that the employee’s qualifications support the application.

Why Coordination Matters

Many businesses view employment contracts, visa applications, work permits, payroll, and tax registrations as separate administrative tasks. In practice, they are closely connected.

For example, the salary stated in the employment contract should align with the work permit application and payroll records. Changes to an employee’s position may require updates to both immigration records and employment documentation. Likewise, terminating a foreign employee often triggers obligations relating to work permit cancellation, visa status, Social Security, payroll, and, for BOI-promoted companies, ongoing promotion conditions.

Managing each of these requirements separately can create unnecessary delays and increase the risk of inconsistencies.

At Lex Nova Partners, our employment lawyers work alongside our immigration, corporate, and tax teams to provide a coordinated service for foreign employers. Rather than treating work permits, employment contracts, payroll compliance, and corporate obligations as separate matters, we help clients manage the entire employment lifecycle through a single point of contact.

Do Thai labour laws apply to remote workers?

Yes. Employees who work remotely from within Thailand remain protected by Thai labour law. Simply allowing an employee to work from home, or signing an employment contract that refers to another country’s laws, does not remove an employer’s obligations under the Labour Protection Act where Thai law applies.

As remote and hybrid working arrangements have become more common, Thailand introduced specific provisions governing work-from-home arrangements through the Labour Protection Act (No. 8) B.E. 2566 (2023). These amendments provide greater certainty for both employers and employees by recognising remote work as a legitimate form of employment while establishing minimum requirements for remote working agreements.

Remote Work Agreements

Where employees work remotely, employers should ensure the arrangement is documented in writing. A well-drafted remote work agreement should clearly address matters such as:

• The employee’s normal working hours.
• The location from which the employee will perform their duties.
• The equipment and technology provided by the employer.
• Data protection and confidentiality obligations.
• Performance expectations and reporting procedures.
• The circumstances in which the employer may contact the employee outside normal working hours.

Setting these expectations at the beginning helps avoid misunderstandings while giving both parties greater certainty about their respective responsibilities.

Employment Rights Remain the Same

Working remotely does not reduce an employee’s statutory rights. Employees working from home remain entitled to the same protections as office-based staff, including minimum wage, overtime pay where applicable, statutory leave, Social Security benefits, and protection against unfair dismissal.

Employers should also remember that occupational health and safety obligations do not disappear simply because an employee is working from another location. Businesses should still take reasonable steps to provide a safe working environment and ensure employees have the equipment necessary to perform their role safely.

Cross-Border Remote Working

Remote working can become more complex where employees perform their duties across multiple jurisdictions. Issues relating to tax residency, permanent establishment risk, immigration status, payroll, and employment law may arise depending on where the employee is physically located and which entity they are working for.

For international businesses, these arrangements should be reviewed before they are implemented. What appears to be a simple work-from-home arrangement can have wider implications for corporate compliance, taxation, and immigration.

Lex Nova Partners advises businesses on both domestic and cross-border employment arrangements, helping employers structure remote working policies that align with Thai labour law while taking into account the wider legal and regulatory considerations that may affect international operations.

Why foreign employers choose Lex Nova Partners for Thai labor law consultancy

Employment issues rarely involve labour law alone. Hiring foreign employees, restructuring a business, or terminating staff can also affect work permits, visas, payroll, tax, Social Security, and BOI compliance.

Lex Nova Partners brings these areas together under one roof. Our employment, immigration, corporate, and tax teams work closely to provide practical advice that helps businesses stay compliant while supporting their commercial objectives.

We regularly assist clients with:

• Employment contracts and HR policies.
• Disciplinary procedures and employee terminations.
• Severance and redundancy planning.
• Labour disputes and Labour Court representation.
• Work permits and Non-Immigrant “B” Visas.
• Payroll, Social Security, and employment tax compliance.

Whether you are hiring your first employee or managing an established workforce, we provide clear, commercially focused advice tailored to your business.

If you would like to review your employment practices or discuss a specific workplace issue, contact Lex Nova Partners to arrange a consultation with our employment law team.

Frequently Asked Questions

What are the basic employment law requirements for employers in Thailand?

Employers must comply with the Labour Protection Act B.E. 2541 (1998): provide written employment contracts, observe maximum working hours of 8 per day and 48 per week, pay at least the provincial minimum wage, grant statutory leave (13 public holidays, 6 days annual leave after 1 year, 98 days maternity leave, 3 days personal leave), post written work rules if employing 10 or more staff, and contribute to the Social Security Fund.

How much severance pay is required under Thai law?

Severance ranges from 30 days wages (120 days to under 1 year service) to 400 days wages (20 or more years service), calculated on the employee’s last rate of basic salary plus fixed regular payments. No severance is payable for employees with under 120 days service or those terminated for serious misconduct under Section 119 of the LPA.

How do I legally terminate an employee in Thailand?

Give advance written notice on or before a wage payment date (effective the following pay date). State the reason for termination in writing at the moment of dismissal, under Section 17/1, reasons not stated at dismissal cannot be raised in a later dispute. Pay severance at the applicable LPA rate unless the employee is dismissed for serious misconduct under Section 119.

Can a foreign company hire foreign employees in Thailand?

Yes, subject to work permit and visa requirements. Foreign employees must hold a valid non-immigrant business visa and a work permit before starting work. The standard quota is 4 Thai employees per foreign employee. Penalties for employing workers without valid permits reach THB 800,000 per worker under the current 2026 enforcement framework.

What is the minimum wage in Thailand in 2026?

Daily minimum wages vary by province, ranging from THB 337 to THB 400 as of 2025. The Wage Committee reviews rates periodically. Verify the current province-specific rate with the Ministry of Labour or contact Lex Nova Partners for the applicable rate for your location.

What happens if I dismiss an employee without following Thai labour law?

Wrongful dismissal exposes the employer to standard severance plus compensation for unfair termination. Total awards commonly reach 6 to 18 months of salary inclusive of severance, plus legal fees of THB 100,000 to THB 500,000 or more. Employees pay no court fees and do not require legal representation, making the Labour Court highly accessible to claimants.

Do Thai labour laws apply to remote workers?

Yes, if the employee is physically located in Thailand. The LPA (No. 8) B.E. 2566 (2023) introduced formal provisions for work-from-home arrangements. Remote work agreements must be in writing and specify contact conditions. Thai law also applies where the employment contract references Thailand or where the work directly benefits a Thai entity.

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

Introduction:

Thailand’s electric vehicle (EV) sector has grown rapidly and is now an important part of the national economy, attracting interest from major manufacturers worldwide. Investment commitments under the EV 3.0 and EV 3.5 schemes have surpassed THB 137 billion, reinforcing Thailand’s role as a regional hub for EV production. 

For foreign investors, the key issue is not market potential, but regulatory change. The Thailand EV policy changes introduced in late 2025 and implemented through 2026 have completely changed the operating environment. Under the EV 3.5 framework, manufacturers must now produce two vehicles locally for every one imported in 2026, rising to three-to-one in 2027. 

Key Points

• Thailand’s 2026 EV policy shifts focus from imports to local production and supply chain development, with stricter compliance requirements.
• Manufacturers must meet a 1:2 production-to-import ratio, rising to 1:3 in 2027, or risk losing incentives.
• Export credits (1.5x) and extended deadlines provide flexibility in meeting production targets.
• Battery localisation rules now limit imported battery components to 10%, pushing domestic manufacturing.
• The EEC and BOI incentives remain central, offering tax benefits, foreign ownership, and support for EV and battery projects.

What Changed in Thailand’s EV Policy for 2026?

The Thailand EV policy changes approved by the National EV Policy Board in late 2025 introduced a wide range of changes to how incentives are awarded and the introduction of new mandatory requirements. 

The four key developments that have been introduced for 2026 include:

1. Production-to-import ratio tightened

Manufacturers operating under the new EV 3.5 Thailand policy must now comply with a 1:2 production ratio in 2026. This means for every imported EV, two must be produced domestically. This requirement will be increased to 1:3 by 2027 .

2. Export credit introduced

To help manage supply pressures, certain EV export incentives for Thailand were introduced. Under this policy, each EV that is exported counts as 1.5 units toward a manufacturer’s local production targets. 

In practice, this means that for every vehicle exported, manufacturers receive additional credit when meeting their production obligations under the incentive scheme. This reduces the pressure to sell all vehicles domestically and gives more flexibility in balancing supply and demand. 

This makes exports more valuable and encourages companies to use Thailand as a base for producing EVs for international markets.

3. Registration deadlines extended

The government has also extended registration deadlines to give manufacturers more time to align production with compliance requirements.

In this context, “registration” refers to the process of formally recording a vehicle with the relevant Thai authorities, including completing compliance checks and issuing registration documents. This is the stage at which a vehicle is officially recognised and counted toward a manufacturer’s production obligations under the incentive scheme.

Under the updated timelines, EV 3.5 deadlines extend further, with registrations permitted until January 2028. In practical terms, this gives manufacturers additional time to meet production targets, manage inventory, and complete registrations without falling out of compliance.

These extensions provide greater operational flexibility, particularly for companies scaling up production or adjusting to changes in demand.

4. Battery localisation rule tightened

From 1 January 2026, imported battery cells can account for no more than 10% of an EV’s factory price if manufacturers want those vehicles to qualify for local incentives .

Updates to hybrid vehicle tax rules 

Thailand has also adjusted excise tax rates for hybrid vehicles. While Battery Electric Vehicles (BEVs) remain taxed at a preferential 2%, hybrid vehicles now fall within a structured tax range.

The framework distinguishes between Plug-in Hybrid Electric Vehicles (PHEVs), standard Hybrids (HEVs), and Mild Hybrids (MHEVs), with rates based on electric driving capacity and carbon emissions.

• Plug-in Hybrid Electric Vehicles (PHEV): Rates are tied to electric-only driving range, with a 5% duty applied to vehicles capable of 80 km or more per charge, and a 10% duty for those with a range under 80 km.
• Standard (HEV) and Mild (MHEV) Hybrids: Taxes are determined by emissions, as outlined in the table below.

These adjustments incentivize the production and adoption of vehicles with higher electric ranges and lower carbon footprints, helping align Thailand’s automotive industry with global sustainability targets.

Who is affected?

Manufacturers that imported vehicles under EV incentive schemes may now be required to either commence local production or exit the programme by repaying the tax benefits received, including applicable penalties. This reflects a shift from initial market entry support toward a stronger focus on local production and compliance.

BOI Incentives for EV Manufacturers and Battery Makers

The BOI EV incentives on offer have made Thailand one of the most competitive frameworks in ASEAN for electric vehicle manufacturing and battery production. The BOI has designed the incentives to attract long-term industrial investment, with a clear focus on high-value activities such as battery cell manufacturing, advanced component production, and supply chain localisation.

For foreign investors, these BOI EV incentives offer other significant advantages beyond standard tax reductions. The BOI offers 100% foreign ownership, land ownership rights and reduced requirements for supporting visa and work permit applications for foreign investors. 

For eligible projects, obtaining a BOI promotion allows foreign manufacturers to enter the Thai market with fewer limitations and greater operational control. 

As well as the general incentives offered by the BOI, there are additional or enhanced benefits available for projects who are involved in the EV industry, for example:

• Battery cell manufacturing: 8-year corporate income tax exemption
• Battery modules: up to 8 years (capped)
• Battery packs: up to 5 years
• Charging infrastructure: 5-year CIT exemption for qualifying projects

These incentives are designed to move the industry beyond basic assembly into advanced battery manufacturing in Thailand.

Additional investment incentives

In an effort to further accelerate the industrial modernisation and strengthen supply chain localisation within Thailand’s EV and battery sectors, the BOI offers the following additional incentives.

90% Import Duty Reduction on Raw Materials

Manufacturers who undertake battery cell or module production under BOI-promoted activities, including high-energy-density battery manufacturing, may benefit from a 90% reduction on import duties for essential raw materials that are not available domestically. This incentive is granted on an annual basis and can be renewed for up to five years.

Automation, Sustainability, and Productivity Upgrades

Under the “Smart and Sustainable Industry” measure, companies investing in automation, robotics, and digital infrastructure can access a 3-year corporate income tax exemption, capped at up to 100% of the investment value, excluding land and working capital. In addition, import duty exemptions on machinery used for these upgrades is also available.

Localisation Programmes and Joint Venture Incentives

Thailand has introduced targeted measures to strengthen domestic supply chains through collaboration between foreign investors and Thai partners. For automotive parts manufacturing projects, forming a joint venture with a Thai partner holding at least 20% equity can unlock an additional 3-year corporate income tax exemption. 

The Thai partner must be at least 60% Thai-owned and have a minimum of three years’ experience in the automotive or auto-parts sector. These measures are designed to integrate local suppliers into global EV supply chains while facilitating technology transfer alongside foreign investment.

Workforce requirements

The Thailand Board of Investment has updated its rules so that foreign investment better supports Thailand’s wider economic goals. For investors, this means setting up a business that helps create local jobs, develop skills, and share technology, while still benefiting from the full range of BOI EV incentives.

For a company to maintain its BOI-promoted status, large companies are now required to follow clear staffing requirements. These are designed to balance hiring local employees with bringing in foreign expertise where needed.

• 70% Local Workforce: Large firms (companies with 100+ employees) are required to maintain at least 70% of their total workforce as Thai nationals. Exemptions are available to such companies who are involved in the service sectors (IT, consulting), temp roles, high-tech projects.
• Foreign Employee Thresholds: While foreign specialists are permitted, they must meet minimum salary thresholds to qualify for non-immigrant visas and work permits under the BOI’s “smart visa” or investment-related channels.

• Highly Specialized Roles: Exceptions are granted for roles requiring specific technical expertise unavailable in the local labor market. Companies must provide documentation justifying these hires to the BOI to receive work permit approval.

Why the Eastern Economic Corridor Is Where EV Investment Lives

The Eastern Economic Corridor (EEC) is a key part of Thailand’s Thailand 4.0 strategy, covering Rayong, Chonburi, and Chachoengsao. The EEC has been designed to build upon the region’s long-standing role as an industrial hub and is now being developed into a centre for advanced industries and innovation.

With strong government support and a clear, well developed framework, the EEC offers an attractive environment for both local and foreign investors to set up and grow operations.

The EEC focuses on next-generation sectors such as electric vehicles, intelligent electronics, advanced agriculture and biotechnology, medical and high-value tourism, and digital industries. These areas have been specifically chosen as focus areas for future economic growth.

To attract investment, the Thailand Board of Investment (BOI) offers incentives for qualifying projects in the EEC, including 100% foreign ownership, corporate tax exemptions of up to 15 years, import duty exemptions, and a reduced personal income tax rate of 17%. Additional support is available for research and development through the Eastern Economic Corridor of Innovation (EECi).

The Eastern Economic corridor EV ecosystem is the centre of Thailand’s EV industry. Nearly all major investments are concentrated in Rayong and Chonburi.

Why the EEC matters

The Eastern Economic Corridor also offers the following significant advantages for EV related businesses:

• Direct access to Laem Chabang deep-sea port
• Established automotive supply chains
• Dedicated industrial estates under Industrial Estate Authority of Thailand
• Infrastructure built specifically for large-scale manufacturing

Illustrative scenario:

A European Tier-1 supplier considering EV manufacturing in Thailand could set up their base in Rayong, obtain a BOI promotion, secure land through IEAT, and supply nearby OEMs such as BYD or MG, particularly where manufacturers are sourcing more parts locally.

In practice, how the project is structured will directly affect how quickly it progresses. Our Bangkok-based team works closely with companies across the EEC, advising on EV manufacturing in Thailand projects to help keep timelines realistic and avoid delays that can significantly extend setup periods.

Real Opportunities For EV Businesses in 2026

The Thailand EV policy 2026 framework has moved beyond early incentives and is now focused more on actual production and local supply chains. This shift is starting to highlight clear gaps in the market, especially in areas where local capacity still cannot meet demand. For investors, this points to more defined opportunities in parts of the supply chain that support localisation, improve cost efficiency, and strengthen long-term growth.

1. Battery cell manufacturing

Thailand still lacks large-scale domestic battery cell production. BOI incentives offer an 8-year CIT exemption, making this the highest-value opportunity in the supply chain.

2. Charging infrastructure

Around 70% of EV charging stations are concentrated in Bangkok. Regional expansion remains underdeveloped, particularly along highways and secondary cities.

3. EV components and Tier-1 supply

Local content requirements under the EV 3.5 Thailand framework are pushing manufacturers to source more parts within the country rather than relying on imports. In simple terms, automakers need to use a higher percentage of locally produced components to qualify for incentives and remain competitive in the market.

This is creating strong demand for Tier-1 suppliers, which are companies that supply directly to vehicle manufacturers. These suppliers typically produce key components such as battery systems, power electronics, drivetrains, and other high-value parts used in EV production.

For investors, this opens up a clear opportunity. Component manufacturers that set up local operations can benefit from BOI incentives, while also securing long-term demand from OEMs looking to meet localisation requirements. In practice, this means more stable supply agreements, closer integration with production facilities, and a stronger position within Thailand’s growing EV manufacturing ecosystem.

4. Hybrid manufacturing

Recent changes to tax structures have made hybrid vehicles more commercially viable again in Thailand. This has reopened the door for manufacturers that are not yet ready to move fully into battery electric vehicle (BEV) production but still want to participate in the shift toward electrification.

In practical terms, hybrid manufacturing offers a transitional step. It allows companies to adapt existing production lines, manage costs more gradually, and build local supply chains without committing immediately to full EV platforms.

For investors, this creates a more flexible entry point into EV manufacturing in Thailand. Hybrid projects can still benefit from targeted incentives and strong market demand, while giving manufacturers time to scale up capabilities and align with longer-term EV strategies.

Each of these opportunities requires a different legal structure, potential BOI category, and application process. For a project-specific assessment, you can schedule a consultation with Lex Nova Partners to map your entry strategy.

Practical Legal Setup for an EV Project in Thailand

Setting up an EV operation involves five structured stages.

Stage 1: Eligibility Check (1 week)

A business feasibility study helps assess whether a project is suitable for BOI promotion and the likelihood of approval.

As part of this process, our BOI specialists liaise directly with the relevant BOI officer to confirm eligibility, verify that the activity is still eligible for promotion, and identify the key conditions and requirements for companies. This provides clear, practical guidance before any formal application is submitted.

Selecting the correct BOI category at the outset is highly important. It is not uncommon for applications to proceed to the interview stage before being rejected due to incorrect category choice, requiring the process to be restarted and causing avoidable delays.

A feasibility study reduces this risk and helps streamline the application process. Lex Nova’s BOI team can assist with a structured feasibility assessment and initial eligibility review.

Stage 2: BOI application preparation (3 weeks)

The BOI application process requires detailed and well-structured information aligned with the specific business activity being proposed.

Applicants must submit key information including project details, capital structure, hiring plans (both Thai and foreign staff), and a list of assets such as machinery, software, and equipment. Supporting evidence of existing clients or business prospects is also important to demonstrate commercial viability.

A three-year business plan is a central part of the application. This plan is used by the BOI to assess the project and determine minimum investment requirements, so it must be realistic and commercially valid. While the plan is not strictly binding, any significant deviation from the approved activity may raise issues during compliance reviews.

In practice, the application forms can be technical and sometimes unclear, particularly for non-industrial activities. Despite this, all sections must be completed accurately, as the information is interconnected and may affect other parts of the application.

Additional supporting documents typically include a detailed employee plan, asset breakdown, appendices with operational details, and a presentation explaining the business model and target clients.

A well-prepared application should present clear, consistent financials, a credible business model, and evidence of market demand. The BOI places significant weight on the applicant’s ability to operate successfully in Thailand, particularly where there is an established parent company or proven track record.

Given the level of detail involved, careful preparation is essential. Incomplete or inconsistent information can lead to multiple rounds of queries from the BOI and delay the process, which typically takes around one month for initial review, depending on the complexity of the project.

Stage 4: BOI application submission and interview (3–4 months)

After the BOI application is submitted and accepted, the applicant will be invited to present the project to the BOI officer. This meeting is held online via Zoom, lasts around one hour, and requires a structured presentation explaining the business, operations, target market, and the value the project will bring to Thailand.

The presentation is a highly important part of the process. It gives the BOI officer a clear understanding of the project, which is important as they will later present it to the BOI Committee. In most cases, the applicant presents for up to 30 minutes, followed by questions from the officer.

In practice, the interview often leads to adjustments. The BOI may request changes to the scope of activities, and having experienced advisors involved allows these updates to be handled quickly and aligned with BOI expectations.

A well-prepared presentation can significantly improve the approval process. If the project is clearly explained and supported by consistent information, approval can move forward with limited follow-up. If not, the application may face multiple rounds of questions and delays.

Following the interview, the BOI officer submits the project for approval. Timelines vary depending on the investment size, currently taking around 6 to 8 months, and may be longer if additional approvals are required.

Once approved, the applicant has 30 days to accept the BOI terms. After acceptance, there is a six-month period to establish the company and meet the investment requirements, with extensions available if needed.

Careful preparation at both the application and presentation stages helps avoid delays and supports a smoother approval process.

Stage 5: Corporate setup (8 weeks)

Once BOI approval has been granted, the applicant has six months to register the company and meet the minimum investment requirement. To achieve this, the following steps should be completed.

Company setup and structure

A Thai limited company needs to be registered with at least two individual shareholders, one or more directors, and registered capital aligned with BOI requirements. While companies are initially registered with individual shareholders, shares can later be transferred to a foreign parent company.

Bank account and capital transfer

A corporate bank account must be opened to receive the investment funds. If the project has foreign shareholders, their portion of the capital must be transferred to Thailand from abroad in foreign currency, clearly stating it is for investment purposes. Once the capital has arrived in Thailand a  Foreign Exchange Transaction (FET) form must be obtained from the bank. 

Any incorrectly labelled or unclear transfers may be rejected and delay the process.

BOI certificate application

Once the capital is in place, the company applies for the BOI promotion certificate by submitting corporate documents and proof of funds. This usually takes around one month.

Post-registration compliance

The company must register for VAT (in most cases) and with the Social Security Office before hiring employees. Hiring foreign staff under BOI benefits can only proceed after the BOI certificate is issued.

Foreign Business Certificate (FBC)

If the activity falls under restricted categories, a Foreign Business Certificate is required before operations can begin. Without it, the company cannot legally operate or issue invoices, even if BOI promotion has been granted.

Immigration and workforce

Even if a company has obtained a BOI promotion, every foreign employee in Thailand needs to obtain the correct Visa and Work Permit. It is important to note that 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 at the BOI Thailand Investment and Expat Services Center (TIESC).

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/

Frequently Asked Questions (FAQ)

What changed in Thailand’s EV policy for 2026?

The 2026 EV framework shifts from import incentives to local production and supply chain development. Manufacturers must now produce 2 EVs locally for every 1 imported (1:2 ratio), with exported vehicles counting at a 1.5x credit toward this requirement. Deadlines to meet production targets have been extended to give investors more flexibility, while new rules, including limits on imported battery components, are designed to promote more local sourcing.

What is the EV 3.5 scheme and who qualifies?

EV 3.5 is Thailand’s current incentive programme. It applies to manufacturers investing in local production and meeting localisation and compliance requirements.

What is the production-to-import ratio for EV manufacturers in Thailand in 2026?

1:2. Manufacturers must produce two vehicles locally for every imported unit, rising to 1:3 in 2027.

Can foreign EV manufacturers own land in the Eastern Economic Corridor?

Yes. Foreign ownership is permitted within IEAT industrial estates within the EEC area or through BOI promotion structures.

How long does BOI approval take for an EV manufacturing project?

Currently, around 8 months. Complex projects may take longer depending on technical scope and documentation.

Does Thailand still subsidise hybrid vehicles after 2026?

Yes, but differently. Hybrid vehicles now benefit from revised excise tax rates rather than direct subsidies.

What is the corporate income tax exemption for EV battery cell production?

8 years. This applies to projects that include full battery cell manufacturing processes.

Our Thoughts

The Thailand EV policy changes implemented in 2026 is expected to lead to a more structured and developed EV ecosystem. The framework is more restrictive to foreign investors due to localisation requirements, higher production obligations, and tighter compliance conditions, but still highly favourable for serious investors, particularly in battery manufacturing, supply chains, and EEC-based production.

At Lex Nova Partners, our Bangkok-based team handles corporate, tax, employment, immigration, and regulatory matters together under one coordinated workflow. We regularly support SME and foreign investors in Thailand, with bilingual English and French support available throughout the transaction process.

Before signing anything or paying a deposit, it is often advisable to obtain legal and tax structuring advice first. To discuss starting your business in Thailand, contact our team at +66 (0)6 5527 6323 or contact@lexnovapartners.com, or visit our office at Ocean Tower 2, 14th Floor, Sukhumvit 19, Bangkok. You can also schedule a 30-minute structuring call through the Lex Nova Partners contact page.

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:

Buying a business in Thailand is often faster than building a company from scratch, but the process is considerably more complex than many foreign investors initially expect. While an existing business may already have staff, licences, operations, and an established revenue stream in place, a Thailand business acquisition may become problematic if the legal structure and liabilities are not properly reviewed before signing. 

Two of the most common issues are restrictions under the Foreign Business Act (FBA), which limits foreign ownership in many sectors and undisclosed tax, accounting, labour, or social security liabilities inherited from the target company. For this reason, proper due diligence is one of the most important parts of buying a business in Thailand.

This guide explains the recommended requirements and processes for buying a business in Thailand, including deal structuring, due diligence Thailand procedures, transaction documents, completion processes, and what to expect after completing the transaction. 

A proper Thailand business acquisition does not only involve a simple share purchase agreement. In practice, most transactions involve tax, employment, and immigration compliance, particularly where foreign directors, Board of Investment (BOI) privileges, or foreign staff are involved. 

At Lex Nova Partners, our team regularly supports foreign investors through the full acquisition process, including legal due diligence, transaction structuring, BOI and FBA considerations, employment matters, and post-acquisition compliance in Thailand.

Key Points

• Buying an existing business in Thailand is often faster than starting from scratch because it provides immediate access to staff, licences, revenue, and supplier relationships, but it also means inheriting the company’s historical liabilities such as unpaid taxes, employment disputes, and compliance issues.
• The Foreign Business Act (FBA) restricts foreign ownership in around 50 categories of business across three lists, meaning foreigners often need a Foreign Business Licence, BOI promotion, or the US-Thai Treaty of Amity to legally own and operate in many sectors.
• Deals can be structured as a share purchase (buying the entire company and its liabilities) or an asset purchase (buying only selected assets to avoid inherited liabilities), and the right choice depends on the target’s compliance history, tax exposure, and operational needs.
• Thorough due diligence covering corporate, financial, legal, employment, and lease matters is essential, and the purchase agreement should include seller guarantees, indemnity provisions, and protections like in-out clauses that tie part of the payment to post-sale performance.
• Common costly mistakes include trusting seller documents without verification, ignoring employee severance liabilities, using illegal nominee shareholder structures, overlooking change-of-control clauses in contracts, and treating immigration and work permit planning as an afterthought.

Why Foreign Investors Are Buying Thai Businesses Instead of Starting From Scratch

For many foreign investors, buying a business in Thailand is faster and more practical than creating a new company from the start. One of the biggest advantages of purchasing an existing business is that an existing business may already hold the licences, registrations, operational approvals, and supplier relationships needed to operate. This can significantly reduce the time, administrative work, and operational setup typically involved when establishing a new company from scratch.

Another important advantage is that an existing business may already be structured to support a visa and work permit for a foreign employee immediately. For example, the company may already meet the required registered capital thresholds and Thai employee ratio requirements needed for work permit sponsorship.

A Thailand business acquisition can also provide immediate access to staff, revenue, customers, lease agreements, and an established market presence. This is particularly important in sectors where operational continuity and brand reputation matter, such as hospitality, hotels, restaurants, F&B, export manufacturing, e-commerce, software, and professional services. 

In many cases, buying a business in Thailand allows the investor to begin operating almost immediately rather than spending months dealing with incorporation, licensing, recruitment, and setup delays.

However, acquisitions also come with significant risks. When acquiring an existing company, the buyer does not only acquire the business itself. They may also inherit historical tax exposure, employment disputes, accounting irregularities, compliance failures, hidden debt, and operational liabilities that were not immediately visible during the initial stages of negotiations. This is one of the main reasons why conducting proper due diligence procedures in Thailand is critical before any transaction moves forward.

Can a Foreigner Buy a Business in Thailand? The Foreign Business Act Reality

Thailand allows foreign ownership of businesses and also permits buying a business in Thailand as a foreigner. However, not all business activities can be undertaken by a foreign owned business.

The Foreign Business Act, (Foreign Business Act B.E. 2542 (1999)), is the primary legislation governing foreign business ownership in Thailand. The Foreign Business Act Thailand was introduced to protect certain sectors for Thai nationals while continuing to welcome foreign investment into areas that support economic development.

The Foreign Business Act is used to determine whether a business activities are restricted to a foreign business, whether a licence may be granted, and whether a company structure complies with Thai law.

Who Is Considered a “Foreigner” Under the FBA?

Section 4 of the foreign business act Thailand has a wide definition of what is considered a  “foreigner” The definition extends beyond nationality and covers both individuals and juristic persons. A foreigner includes:

1. A natural person who is not of Thai nationality.
2. A juristic person not registered in Thailand.
3. A juristic person registered in Thailand where at least 50 percent of the capital shares are held by non-Thai individuals or foreign entities, or where foreign investment represents at least half of the total capital.
4. A Thai-registered juristic person in which at least half of the shares are held by persons falling within the above categories, directly or indirectly.
5. A limited partnership or registered ordinary partnership where the managing partner is a non-Thai national.

The Three Restricted Business Lists

The foreign business act Thailand restricts approximately 50 categories of business, divided into three schedules:

List 1 – Strictly Prohibited Activities

List 1 covers businesses considered essential for national interests, such as newspaper publishing, animal farming, land trading, and certain agricultural activities. Foreigners are prohibited from engaging in these activities for “special reasons.” No licence or approval mechanism is available.

List 2 – Activities Related to National Security and Infrastructure

List 2 includes businesses connected to national security, domestic transportation by land, water, or air, and certain activities involving arts, culture, and natural resources. Foreign participation may be permitted, but only with approval from the Minister of Commerce and the Cabinet. In practice, such approvals are rare and subject to strict scrutiny.

List 3 – Service Businesses Where Thai Nationals Are Deemed Not Ready to Compete

List 3 is the most commercially relevant category for foreign investors. It includes “other categories of service businesses” not otherwise exempted by ministerial regulations. Foreign companies may apply for a Foreign Business Licence, subject to approval by the Director-General of the DBD and the Foreign Business Committee. A Foreign Business Licence also requires a minimum capital of at least THB 3 million per restricted business activity. Many professional services, consulting, and trading structures fall within this list. For the lawful routes to majority or full foreign ownership, see our guide on 100% foreign business ownership in Thailand.

Business Activities that Allow 100% Foreign Ownership Without Special Permissions

The following business activities are not restricted under the Foreign Business Act in Thailand and can be undertaken by a 100% foreign owned business.

Export Companies

Thailand actively encourages exports, and companies who exclusively export products outside Thailand can be foreign owned. In order to maintain this status, export companies must ensure their operations and revenue are only international, and they can’t sell directly within the Thai domestic market.

Manufacturing Companies

Manufacturing companies in Thailand can be 100% foreign-owned as manufacturing is not on Thailand’s “restricted” list for foreign ownership under the Foreign Business Act (FBA). This allows foreign investors to own and operate manufacturing businesses without needing a Thai partner.

Another advantage for manufacturing companies is their eligibility for a BOI promotion. BOI promotions offer many advantages including different types of tax exemptions including Corporate Income Tax exemptions and Tax exemptions on the import of machinery. BOI promotions can also allow full foreign ownership and the ability to own land which can be used for their factory etc. For current incentives, see our update on the latest BOI incentives for foreign investors.

However, if the manufacturing business involves activities related to restricted sectors (e.g., agriculture, mining, certain types of food processing), it may still be subject to FBA limitations.

Common Misconceptions About Foreign Ownership

There is a common misunderstanding that incorporating a Thai company automatically allows majority foreign ownership. However, if the business activity falls within a restricted list, foreign majority ownership may require the foreign investor to apply for a Foreign Business licence or an alternative option such as a Board of Investment (BOI) promotion or the Treaty of Amity (for American companies). The Treaty of Amity grants US investors national treatment but still excludes several reserved sectors, including land ownership, communications, transport, banking involving depository functions, fiduciary functions, and the exploitation of land and natural resources. In practice, most of the business activities that foreign investors wish to undertake are likely to be restricted by the foreign business act.

If the business cannot obtain either a Foreign Business Licence or BOI promotion and wishes to engage in a restricted activity, the foreign investor will have to work with a Thai partner.

Another misconception is that nominee shareholding arrangements can be used as an easy way to bypass these restrictions. However, recently Thai authorities have increased scrutiny of structures designed to conceal effective foreign control. The DBD has strengthened investigations into shareholder legitimacy, capital flows, and voting rights arrangements, particularly during 2024 and 2025. 

Since 1 April 2026, DBD Order No. 1/2569 also requires a Confirmation of Investment letter in certain cases involving foreign shareholders or foreign authorised directors, certifying that all shareholders have genuinely invested and that no nominee arrangement exists. For more on how Thai authorities are policing these structures, see our note on Thailand’s tightening rules on nominee shareholders.

Enforcement Trends and Penalties

Thai authorities are now actively examining whether Thai shareholders are genuine investors or merely holding shares on behalf of foreigners to avoid the restrictions of the Foreign Business Act.

Non-compliance with the Foreign Business Act in Thailand can result in significant consequences, including fines, imprisonment, suspension of operations, and in severe cases, business closure. Under Section 36 of the Foreign Business Act, a breach can carry imprisonment of up to three years and/or a fine of THB 100,000 to THB 1,000,000, alongside additional criminal liability under the Penal Code for false statements. Directors may also face personal liability if they knowingly participate in unlawful structures.

For advice on 100 percent foreign ownership structures and the most appropriate approach for your proposed activities in Thailand, we invite you to contact our team of experts directly. We can assess your business model, review the applicable restrictions under the Foreign Business Act, and advise on the most suitable legal pathway for your specific circumstances.

Share Purchase vs Asset Purchase: How to Structure the Deal

When buying a business in Thailand, one of the most important decisions is whether the transaction should be structured as a share purchase or an asset purchase. The structure of the transaction affects tax exposure, liabilities, employment obligations, licences, contracts, and the overall level of risk assumed by the buyer.

In practice, the most appropriate structure depends on the nature of the business, the industry involved, the company’s compliance history, and whether the buyer wishes to acquire the existing legal entity itself or only selected business assets. Certain regulated sectors may also require additional approvals or restructuring considerations under the Foreign Business Act, for example if the company is Thai owned and engaged in a restricted activity to a foreign company.

The sections below explain the differences between a share purchase and an asset purchase in Thailand, including the advantages, disadvantages, and practical considerations foreign investors should understand before proceeding with a transaction.

Purchasing Only the Assets of a Company

When considering buying a business in Thailand, investors may choose to purchase only selected assets of a company rather than acquiring the entire legal entity. In practice, an asset purchase allows the buyer to take control of specific business assets, such as equipment, inventory, intellectual property, customer databases, or lease rights, without assuming ownership of the company itself.

This structure is often used where the target company has historical liabilities, unresolved compliance issues, or operational risks that the buyer does not wish to inherit. Unlike a transaction structured through a share purchase agreement Thailand transaction, the buyer can selectively acquire assets while leaving behind unwanted liabilities and obligations.

Advantages of Purchasing the Assets of a Company

One of the main advantages of an asset purchase is the ability to avoid inheriting the seller’s liabilities. Because the buyer is not acquiring the legal entity itself, obligations such as unpaid taxes, employment disputes, outstanding loans, litigation, or previous regulatory breaches generally remain with the seller. This can significantly reduce legal and financial exposure following completion of the transaction.

An asset purchase also gives buyers greater flexibility. Investors can select only the assets relevant to their commercial objectives while excluding underperforming assets or unnecessary liabilities. In certain situations, this may be considered lower risk than proceeding under a full share purchase agreement Thailand structure.

Disadvantages of Purchasing the Assets of a Company

Despite these advantages, asset purchases also create practical and operational challenges. Purchasing assets alone does not automatically transfer the seller’s goodwill, brand reputation, customer relationships, supplier contracts, or workforce. Existing employees usually need to be rehired under new employment arrangements, while commercial contracts often need to be renegotiated from the beginning.

Asset purchases may also result in higher transaction costs. Different asset classes can attract different taxes, transfer fees, and registration requirements in Thailand. In addition, certain licences and regulatory approvals may not be transferable, requiring the buyer to apply for entirely new operational licences before the business can continue operating.

Purchasing the Whole Business

For many foreign investors, buying a business in Thailand can provide a faster and more practical route into the market than starting a company from scratch. An existing business may already have staff, licences, operational systems, suppliers, customers, and revenue in place, allowing the buyer to begin operating more quickly after completion.

Faster Route to Revenue and Operations

One of the main advantages of acquiring an existing business is the ability to continue operations without major interruption. Rather than spending months building a customer base, developing operational systems, and establishing supplier relationships, the buyer acquires a business that is already generating revenue and operating within the market.

This can reduce the time required to achieve profitability and allow the investor to focus on growth and expansion rather than initial setup.

Existing Infrastructure and Operational Systems

An established business may already have offices, production facilities, IT systems, machinery, inventory, and operational processes in place. This reduces the need for major upfront investment and allows the buyer to continue operations immediately after completion.

In addition, existing businesses often already have established supplier relationships, service providers, logistics arrangements, and internal workflows that have been tested over time. This can reduce operational risk compared to launching an entirely new business model.

Trained Workforce and Management Continuity

Acquiring an existing business also allows the buyer to inherit an experienced workforce that already understands the company’s operations, systems, customers, and internal procedures. This can reduce recruitment and training costs while helping maintain operational continuity after the acquisition closes.

For service-based businesses in particular, retaining experienced staff can be critical to preserving customer relationships and maintaining revenue stability.

Existing Market Presence and Brand Recognition

An established business may already benefit from brand recognition, customer loyalty, supplier confidence, and market credibility built over many years of operation. Rather than entering the market as an unknown company, the buyer acquires an existing reputation and operating history within the industry.

The company’s historical operations may also provide valuable insights into customer behaviour, pricing, competitors, and future growth opportunities within the Thai market.

Existing Licences and Regulatory Approvals

In many cases, an established business may already hold the operational licences, registrations, and approvals required to legally conduct its activities in Thailand. Depending on the industry involved, obtaining these approvals independently can sometimes take significant time and administrative work.

This can be particularly valuable in regulated sectors where licensing and operational approvals form a major part of the company’s commercial value.

Existing Capital and Work Permit Structures

Another practical advantage is that the company may already satisfy requirements for supporting foreign employees and directors. For example, the business may already meet registered capital requirements and Thai employee ratio requirements necessary for work permit sponsorship.

This can simplify the process of obtaining visas and work permits for foreign owners or management after completion of the transaction.

Thailand’s Investment Environment

Thailand continues to attract foreign investors due to its strategic location, developed infrastructure, manufacturing base, and regional access to ASEAN markets. Government incentives through the Thailand Board of Investment (BOI) may also provide additional advantages for qualifying businesses, including foreign ownership exemptions, tax incentives, and work permit support for foreign staff.

For many investors, acquiring an existing business in Thailand provides a faster route into the market while reducing many of the operational challenges associated with starting a company entirely from scratch.

The Step-by-Step Acquisition Process in Thailand

When looking to buy a business in Thailand, the following steps should be considered.

1. Conducting Thorough Due Diligence

Due diligence is a key part of a successful acquisition of an existing company. Undertaking due diligence allows prospective buyers to evaluate the target business’s financial health, legal compliance, and performance while identifying any hidden liabilities or risks.

Due diligence protects your investment by providing a complete understanding of the business’s value and potential risks.

Key Areas of Focus

1. Corporate Documentation:
   • Company Registration: Verify that the business is properly registered with the Department of Business Development (DBD) and compliant with Thai laws, including the Foreign Business Act.
   • Shareholder and Director Details: Review the company’s Articles of Association, shareholder agreements, and board resolutions to ensure everything matches with the proposed sale.
2. Financial Health:
   • Financial Statements: Examine audited financial reports, tax returns, and bank statements to assess revenue trends, profitability, and solvency.
   • Outstanding Liabilities: Check for any unpaid debts, tax arrears, or pending legal disputes that could impact future operations.
3. Contracts and Agreements:
   • Lease Agreements: Ensure that property leases are registered with the Land Department if exceeding three years, and review renewal clauses and termination rights.
   • Supplier and Customer Contracts: Review and agreements to understand the business’s ongoing obligations and relationships.
4. Operational Factors:
   • Employee Records: Review employment contracts, benefits, and severance policies to ensure compliance with Thai labor laws.
   • Assets: Verify ownership and valuation of assets, including real estate, machinery, intellectual property, and inventory.
5. Legal and Regulatory Compliance:
   • Identify any ongoing or past legal disputes, unpaid taxes, or compliance issues with permits and licenses.
   • Confirm that the company holds all necessary approvals to operate in its industry.

2. Drafting and Negotiating the Purchase Agreement

Drafting a proper purchase agreement is required to protect your interests and ensure a smooth transaction. Depending on the acquisition structure, you’ll need either a Share Purchase Agreement (SPA) or an Asset Purchase Agreement (APA). A properly drafted purchase agreement reduces the risk of disputes and provides a clear framework for the transaction, protecting both parties’ interests

Key Components of the Agreement

1. Description of the Transaction: Clearly define whether the sale includes the company’s shares, assets, or both. Specify any exclusions.
2. Financial Terms:
   • Purchase price and payment schedule.
   • Earnout provisions or performance-based payments, if applicable.
3. Representations and Warranties: Assurances from the seller about the business’s condition, compliance, and not having any hidden liabilities.
4. Indemnity Provisions: Protect the buyer against claims or liabilities arising from pre-sale activities.
5. Closing Conditions: Outline requirements to finalize the transaction, such as regulatory approvals, tax clearance, or debt settlements.
6. Post-Sale Obligations: Include non-compete clauses, transitional support from the seller, or employee retention agreements.

Protections for the Buyer in a Share Purchase Agreement

To protect yourself as the buyer, it is recommended to include seller guarantees in the agreement. These guarantees will protect the buyer from any hidden liabilities or undisclosed issues arise within a certain period after the sale, the seller remains liable for them.

In some cases, the buyers of the company may require the previous owner’s involvement for a transitional period. This can help ensure a smooth transfer of knowledge and operational continuity. The former owner may stay on as a consultant or manager for a set period, allowing you to learn the key requirements for the business before fully taking over.

What is an In-Out Clause in Thailand?

Another effective form of buyer protection is to include an in-out clause into the purchase agreement. An In-out clause links part of the purchase price to the company’s actual performance over a defined period after the sale. Instead of paying the full price upfront, an agreed amount is withheld and only paid if the business meets the agreed revenue and income targets.

This clause offers strong protection against sellers fraudulently inflating the company’s financials or misleading buyers about the company’s performance. If the revenue does not meet the buyer’s expectations, the withheld amount can be adjusted or forfeited, reducing the buyer’s risk.

3. Completing the Transfer of Ownership

Once the purchase agreement is finalized, the legal transfer of ownership must be completed. This process includes:

Share Transfer

• Execute a share transfer instrument with signatures from the transferor and transferee, witnessed by at least one witness, as required under Section 1129 of the Civil and Commercial Code (failing which the transfer is void).
• Record the transfer in the company’s register of shareholders and issue an updated share certificate to the buyer, which serves as proof of ownership of the shares. Until the transfer is entered in the register of shareholders, it is not enforceable against the company or third parties. The filing of the updated List of Shareholders (Bor.Or.Jor. 5) with the Department of Business Development is declaratory only.
• Pay applicable stamp duty based on the share transfer value.

Director Changes

• Call a board meeting to appoint new directors and define their authority.
• Update the company affidavit with the Department of Business Development (DBD) to show the new management structure.

Asset Transfers

• If purchasing assets, register the transfer of ownership for items such as real estate, vehicles, and intellectual property, with the relevant authorities.
• Ensure all asset-related taxes and fees are paid during the transfer process.

4. Post-Acquisition Restructuring

After acquiring the business, restructuring may be necessary to make sure the company meets your needs.

Key Areas for Restructuring include:

Corporate Governance

When acquiring a business, updating corporate governance documents is essential to reflect the new ownership structure and ensure compliance with Thai company laws. This includes reviewing and amending key legal documents such as the Articles of Association and shareholder agreements to match your business goals and protect stakeholder interests.

Rebranding

When acquiring a business, rebranding or repositioning can be an option used to bring the company in line with your long-term vision, especially if you plan to target a new market segment. 

Potential options include refreshing the brand identity, adapting the business model, or adjusting the company’s messaging.

If rebranding is required, it should be approached carefully and not have a negative effect on existing customers. 

Employee Retention and Recruitment

When acquiring a business, maintaining a strong workforce can help achieve a smooth transition. Keeping key employees allows for continuity in operations, retains key company knowledge, and helps maintain relationships with customers and suppliers. 

While retaining key staff is important, recruitment allows you to expand your team, bring in fresh expertise, and align the team with your long-term business goals.

Accounting

When acquiring a business in Thailand, it is recommended to change the company’s accountant. While it may seem convenient to keep the existing accountant, choosing your own allows you to gain clear and unbiased insight into the company’s finances and ensure that bookkeeping and tax compliance are handled correctly.

This is increasingly more important due to Thailand’s digitalization of its tax system, businesses that previously operated with poor accounting practices may struggle to continue doing so. Having a new accountant from the start helps you avoid unexpected tax issues and ensures your business operates legally and efficiently.

Six Costly Mistakes Foreign Buyers Make in Thailand

Many foreign investors assume that buying a business in Thailand follows the same process as acquisitions in their home country. In practice, Thailand business acquisition transactions involve legal, tax, accounting, employment, immigration, and regulatory risks that are commonly underestimated during negotiations.

Below are six of the most common and costly mistakes foreign buyers make when acquiring a business in Thailand.

Mistake 1: Inheriting Hidden Liabilities in a Share Purchase

One of the most significant risks when purchasing a business outright is inheriting the company’s existing liabilities. In a share acquisition, the buyer acquires the legal entity itself, including many of its historical obligations, risks, and compliance exposure.

Common liabilities that may transfer to the buyer include:

Unpaid Taxes

Outstanding corporate income tax, VAT, withholding tax, or social security liabilities may remain attached to the company after completion. This can result in fines, penalties, surcharges, or Revenue Department investigations against the business under the new ownership.

Undisclosed Lawsuits

The target company may already be involved in ongoing or potential legal disputes that were not disclosed during negotiations. These may include commercial disputes, employment claims, or regulatory investigations that could result in financial losses or reputational damage.

Contractual Obligations

Existing supplier agreements, customer contracts, financing arrangements, leases, or distribution agreements may continue after the acquisition closes. Some of these agreements may contain unfavourable pricing terms, exclusivity obligations, penalties, or financial commitments that the buyer cannot easily renegotiate or terminate.

Liability for Past Misconduct

Even where the buyer had no involvement in the company’s previous operations, they may still inherit exposure arising from the seller’s prior conduct. This may include breaches of contract, regulatory non-compliance, fraudulent activity, misrepresentation, labour law violations, or accounting irregularities committed before the transaction took place.

For this reason, conducting proper legal, financial, tax, and operational due diligence is one of the most important parts of buying a business in Thailand. Where a target is financially distressed, see our guide on business rehabilitation in Thailand.

Mistake 2: Failing to Properly Review Lease Rights and Property Arrangements

Many foreign buyers focus heavily on the company itself without considering the importance of the target business’s lease arrangements. In Thailand, lease structures can create major operational risks if they are not carefully reviewed during due diligence.

It is common for commercial leases to be structured as three-year agreements to avoid Land Department registration requirements. However, unregistered leases exceeding three years are generally not enforceable beyond the initial three-year period. If the business depends heavily on its premises, such as restaurants, hotels, factories, retail stores, or hospitality operations, weak lease protection can create serious long-term problems after completion.

Buyers should also carefully review whether the lease is transferable, whether landlord consent is required for a change of ownership, and whether the landlord may renegotiate rent or renewal terms after the acquisition closes. Wherever possible, investors should negotiate stronger lease protections directly with the property owner during the transaction process, including longer registered lease terms where appropriate.

Another area often overlooked is “key money,” which is commonly used in Thailand for commercial property transactions. Key money may take the form of an upfront payment to a landlord or existing tenant in exchange for lease rights, reduced rent, or access to a commercially valuable location. However, these arrangements are not specifically regulated under Thai law and may not always provide the protections foreign buyers expect.

Without proper lease protection in place, the business may face relocation risks, unexpected rental increases, operational disruption, or significant additional costs shortly after the acquisition is completed. For more on structuring premises, see our guide on commercial lease agreements in Thailand.

Mistake 3: Ignoring Employment Liabilities

Employment liabilities can become one of the largest hidden costs in a share acquisition. Under Thai labour law, employee rights and severance obligations remain with the company after the acquisition closes. A business with long-serving employees may carry significant severance liabilities that are not always immediately visible during the early stages of negotiations.

Proper due diligence should include reviewing employment agreements, salary structures, social security compliance, historical disputes, and accrued severance obligations before finalising the purchase price.

Mistake 4: Using Nominee Structures to Circumvent the Foreign Business Act

Some foreign investors are incorrectly advised to use Thai nominee shareholders to bypass foreign ownership restrictions under the Foreign Business Act. This structure is illegal under Thai law and has become a major enforcement focus for Thai authorities. Violations may result in criminal penalties, fines, imprisonment, forced restructuring, or business closure. 

Where foreign ownership restrictions apply, the appropriate approach is to use a lawful structure such as a Foreign Business Licence, BOI promotion, or, where applicable, the US-Thai Treaty of Amity.

Mistake 5: Overlooking Change-of-Control Clauses

Many buyers may fail to review whether key commercial contracts contain change-of-control restrictions. In practice, leases, distribution agreements, financing arrangements, supplier contracts, and franchise agreements may allow termination or immediate repayment if company ownership changes. These clauses can seriously affect the value and operational continuity of the business after closing. Proper legal due diligence should identify these risks early so that waivers, approvals, or revised commercial terms can be negotiated before completion.

Mistake 6: Treating Immigration and Work Permits as an Afterthought

Many foreign buyers focus entirely on the acquisition itself without planning how they will legally manage the business after completion. In reality, foreign directors and managers usually require a valid visa and work permit before they can actively operate the company in Thailand. Delays in immigration planning can create serious operational problems immediately after closing.

At Lex Nova Partners, immigration, corporate, tax, and employment planning are handled together as part of the acquisition process. This allows visa and work permit applications to begin during due diligence rather than after completion, helping foreign buyers transition into management of the business without unnecessary delays. For the available options, see our guides on Thai work permits and the LTR visa.

Why a Full-Service Firm Matters for Thai Acquisitions

A Thailand business acquisition is rarely just a simple share purchase agreement. In practice, acquisitions involve multiple legal and operational considerations that must be coordinated carefully from the beginning of the transaction.

The corporate side of the transaction covers proper structuring, due diligence, negotiations, and drafting the share purchase agreement. At the same time, tax considerations such as capital gains tax, VAT exposure, withholding tax, and stamp duty can significantly affect the overall transaction cost if not addressed early. Employment issues must also be reviewed carefully, particularly where severance liabilities, transfer of undertaking risks, or long-serving staff are involved. Immigration planning is equally important, as foreign buyers often require visas and work permits before they can legally manage the business after completion.

One of the most common problems during acquisitions is that different advisors are handling different parts of the transaction separately. A corporate lawyer may identify a risk that affects employment liabilities, while the tax implications may only become visible later in the process. When separate firms handle different parts of the transaction, important issues can easily fall through the cracks.

At Lex Nova Partners, corporate, tax, employment, immigration, and regulatory matters are handled together under one coordinated team. This allows issues identified during due diligence to be reflected immediately across the transaction structure and legal documentation.

Our team regularly supports SME with acquisitions in Thailand, particularly for foreign investors and French-speaking clients entering the Thai market. For buyers considering an acquisition, obtaining legal and tax advice before signing the LOI can often prevent costly restructuring issues later in the transaction.

Frequently Asked Questions

Can a Foreigner Buy a Business in Thailand?

Yes. Foreigners can legally buy a business in Thailand, but foreign ownership restrictions under the Foreign Business Act may apply depending on the business activity involved. In many cases, foreigners can still own more than 49 percent, and frequently up to 100 percent, of the business by using one of the routes below. The four main routes for foreign ownership are obtaining a Foreign Business Licence (FBL), securing BOI promotion, or if the business or investor is American, the US-Thai Treaty of Amity, or operating within sectors that are already exempt from FBA restrictions, such as certain export or manufacturing activities.

How Much Does It Cost to Buy a Business in Thailand?

In addition to the purchase price itself, transaction costs for SME acquisitions in Thailand typically range between 4% and 8% of the deal value. These costs usually include legal fees, financial and tax due diligence, government filing fees, translations, and transaction structuring advice. More complex acquisitions involving BOI structures, cross-border elements, or licensing issues may increase overall costs. At Lex Nova Partners, we can provide fixed-fee scopes for many SME acquisition transactions. See also our overview of Thailand’s SME policy updates.

How Long Does It Take to Buy a Business in Thailand?

A standard SME acquisition in Thailand typically takes between 3 and 6 months from signing the LOI to completion. Transactions involving BOI promotion, Foreign Business Licences, or complex restructuring may take between 6 and 12 months. The process usually includes initial negotiations, due diligence, transaction structuring, drafting the share purchase agreement, regulatory approvals where required, and completion filings with the Department of Business Development.

Is Buying a Business in Thailand a Good Investment?

Buying a business in Thailand can be a strong investment opportunity when the transaction is properly structured and fully reviewed during due diligence. Investors benefit from acquiring an operating business with existing staff, licences, supplier relationships, and customers already in place. However, acquisitions also involve risks, including hidden liabilities, employment exposure, Foreign Business Act restrictions, tax issues, and post-acquisition integration challenges. Careful legal, financial, and operational due diligence is essential before proceeding.

What Is the Difference Between a Share Purchase and Asset Purchase in Thailand?

In a share purchase, the buyer acquires the company itself, including its assets, liabilities, contracts, employees, and historical obligations. In an asset purchase, the buyer acquires only selected business assets while leaving the legal entity and many liabilities with the seller. The most appropriate structure depends on factors such as licensing requirements, employment considerations, tax exposure, operational continuity, and the buyer’s overall risk profile.

Do I Need BOI Approval to Buy a Thai Company?

Not always. BOI approval is generally only required if the target company already holds BOI promotion and the acquisition involves a change of control requiring BOI consent. In other cases, investors may choose to apply for BOI promotion after the acquisition if they need foreign ownership exemptions, tax incentives, or work permit support for foreign staff under Thailand’s investment promotion framework.

Can I Get a Work Permit After Buying a Business in Thailand?

Yes, provided the company satisfies the standard requirements for sponsoring foreign employees. In most cases, this includes at least THB 2 million in registered capital per foreign employee and a ratio of four Thai employees per foreign work permit. BOI-promoted companies may qualify for exemptions from these requirements. Depending on the structure involved, the visa and work permit process usually takes approximately 4 to 8 weeks.

What Taxes Apply When Buying a Business in Thailand?

Several taxes may apply depending on how the acquisition is structured. Share transfers generally attract stamp duty at 0.1% of the transfer value. Thailand does not levy a separate capital gains tax; gains on the sale of shares are taxed as ordinary assessable income. A non-resident individual seller is generally subject to 15 percent withholding tax, subject to relief under any applicable double tax treaty, while a corporate seller is taxed at the standard corporate income tax rate. Asset purchases may also trigger 7% VAT unless the transaction qualifies for a transfer-of-going-concern exemption under Thai tax rules.

Getting Started

Buying a business in Thailand can provide a faster and more practical route into the Thai market than building a company from scratch. However, a successful acquisition requires more than simply negotiating a purchase price. Corporate structuring, tax planning, employment liabilities, regulatory compliance, and immigration planning all need to be managed together from the beginning of the transaction in order to reduce risk and avoid costly issues after completion.

At Lex Nova Partners, our Bangkok-based team handles corporate, tax, employment, immigration, and regulatory matters together under one coordinated workflow. We regularly support SME and foreign investors in Thailand, with bilingual English and French support available throughout the transaction process.

Before signing anything or paying a deposit, it is often advisable to obtain legal and tax structuring advice first. To discuss a proposed acquisition in Thailand, contact our team at +66 (0)6 5527 6323 or contact@lexnovapartners.com, or visit our office at Ocean Tower 2, 14th Floor, Sukhumvit 19, Bangkok. You can also schedule a 30-minute structuring call through the Lex Nova Partners contact page.

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

TL;DR Commercial lease agreements in Thailand are governed by strict registration rules, common three-year terms, and varied landlord practices. Registering leases longer than three years is recommended for tenant protection. Renewal clauses, key money, due diligence, and tax obligations all need careful review to avoid costly risks and safeguard long-term business operations.

Introduction:

As foreign and local businesses continue to expand in Thailand, securing the right commercial premises is a fundamental step. Whether for office space, retail, or industrial use, the terms of a commercial lease agreement will significantly influence operations, costs, and long-term stability.

In this article, we examine the legal framework, standard practices, and practical considerations surrounding commercial lease agreements in Thailand.

Key Points

• Leases exceeding three years must be registered with the Land Office to remain enforceable; unregistered leases are only valid for up to three years regardless of the written term.
• Three-year leases are common practice to avoid registration, but they carry risks such as uncertain renewals, sudden rent increases, or forced relocation.
• Key money is a customary but unregulated payment in commercial leases, often demanded upfront or at renewal, and should always be carefully negotiated.
• Long-term leases require land to be zoned for commercial or industrial use and tenants to meet strict investment thresholds, ensuring projects contribute to Thailand’s economic development.
• Tenants cannot transfer or sublease without landlord consent, but if the landlord sells, the new owner is bound by the existing lease, making registration important for tenant protection.
• Leases typically allow termination by landlords for default, with a negotiated cure period, while tenants are generally bound for the full term unless the landlord breaches the agreement.

The Legal Framework for Commercial Leases

Commercial leases in Thailand are primarily governed by the Civil and Commercial Code and, for certain cases, the Lease of Immovable Property for Commercial or Industrial Purposes Act 1999. These laws set out the rights and obligations of both landlords and tenants, providing a regulatory framework for transparency and enforceability.

Under Thai law, the maximum lease term for land or buildings is 30 years. However, certain special laws, such as the Eastern Economic Corridor Act or the 1999 Lease Act, allow for leases of up to 50 years if the property meets commercial or industrial requirements.

Leases of more than three years must be registered with the Land Office to be enforceable. Without registration, a lease will only be recognised for three years, even if a longer term is agreed in writing.

Due Diligence

Before signing a lease agreement, it is advisable to conduct proper due diligence to confirm that you are dealing with the legitimate owner and that the property can legally be rented. Tenants should check to confirm that the landlord is the rightful owner of the property or an authorized representative of the landlord or company who owns the property.

Proper due diligence involves reviewing documents such as the land title deed (Chanote), the house registration book, and, if applicable, the company registration documents of the property owner. These records confirm ownership and the landlord’s legal right to lease the premises.

It is also important to ensure that no other leases or rights have been previously registered over the property that could conflict with your intended use. A lawyer can undertake a due diligence review to check the property’s legal status, confirm that the title is free from encumbrances, and verify that no third-party claims or prior lease registrations exist.

Lease Terms and Renewal Options

A standard commercial lease in Thailand typically runs for three years, sometimes with an option to renew for a further three. While parties may agree to renewal terms for longer leases, enforcement can be difficult if the renewal clause is poorly drafted. Renewal options must therefore be carefully structured to avoid disputes.

Businesses often negotiate for a rent-free fit-out period of one to three months before the lease commences, giving tenants time to prepare the premises for operations.

It is also important to note that once a lease expires, tenants do not have an automatic right to remain. If they continue occupation with the landlord’s consent, the law considers the lease to have been extended for an indefinite period, subject to the landlord’s right to terminate at any time.

The Common Practice of Three-Year Leases

In Thailand, it is common practice for businesses to structure leases as a three year agreement rather than a longer-term lease. This is often done to avoid additional registration requirements, as leases exceeding three years must be officially registered with the Land Department to be enforceable after the third year. Some businesses also structure leases in such a way in order to avoid certain fees, even though the registration fee is not especially high at just 1.1% of the total lease value.

However, if the premises are important to the businesses operations, the business should negotiate lease terms upfront during the acquisition process. Whenever possible, consider trying to obtain extended lease rights directly from the property owner. A registered lease provides stronger legal protection, allowing for a longer lease term and ensuring that your lease rights remain intact even if the landlord sells the property or faces legal issues.

As part of the purchase agreement, it is advisable to include a clause that allows you to negotiate a direct lease with the property owner. 

Unprotected leases can lead to issues later, as there is no guarantee that the landlord will agree to renew the lease under the same terms, or at all. They may also choose to increase the rent or impose unfavorable conditions during renewal negotiations.

Without a long-term lease in place, the businesses ability to operate properly could be disrupted. Additionally, unexpected relocation expenses could be significant and have a big effect on the company’s profitability.

Renewal Risks

While many landlords or agents may offer renewal options for up to two or three additional terms, these arrangements can be misleading and unenforceable. Under Thai law, any lease that is longer than three years must be registered with the Land Department to be legally enforceable beyond that period.

Requiring leases longer than 3 years to be registered with the land office has a knock-on effect for renewal clauses. This is because a renewal clause is essentially extending the term of the lease beyond three years, which without registration, may be considered invalid or unenforceable.

It is also important to note that certain practices, such as pre-signing multiple three-year lease agreements with future dates, are illegal. Additionally, relying on multiple pre-signed leases can create significant risks for the lessee. For example, if the property changes ownership or the landlord refuses to honor the subsequent lease terms, the lessee would have no legal recourse and may be forced to vacate the premises.

If a long-term registered lease is not possible, tenants should at least negotiate a clearly defined option to enter into a new lease agreement upon expiry. This option should specify key terms such as duration, rental rate, and renewal procedure. Properly drafting this option agreement is highly important as it makes sure the option is a binding commitment rather than an invitation to renegotiate.

Finally, if a lessee has made a significant investment in the property, such as renovations or fit-outs, tenants are also recommended to negotiate protective clauses limiting potential rent increases upon renewal. For example, setting a cap on the new rental rate can help protect the business against unexpected rent increases.

What is Key Money in Thailand?

Key money is a common but not clearly defined concept in Thailand’s rental and lease agreements for commercial property deals. Key money can relate to different payments, including:

• A fee paid to an existing tenant for assigning a lease at a below-market rental price.
• A direct payment to a landlord, 
• A security deposit (usually non-refundable).

In many cases, key money is simply part of the overall lease price, often used as an upfront lump sum payment in exchange for a lower monthly rent. Since key money is usually not declared as part of the renting price, the actual declared rental value is often lower than the market price. Landlords may also require key money again when renewing a lease.

It’s important to note that key money is not a legal requirement under Thai law. It is a common practice used by tenants or landlords to assign lease rights or secure access to a property, but there is no official regulation. 

If you are asked to pay key money, it’s important to understand exactly what is included in the deal and whether it is actually necessary. Key money should always be negotiated carefully, ensuring that you are not paying for something you could otherwise obtain directly from the landlord or through a more favorable lease agreement.

Long-Term Commercial and Industrial Leases

In Thailand, long-term leases for commercial or industrial purposes are available however it is subject to strict regulatory conditions designed to balance investor interests with national economic development goals. 

Unlike standard leases, which are capped by the Civil and Commercial Code, long-term leases for eligible businesses may be eligible for lease terms of up to 50 years in certain cases. 

However, eligibility is not automatic. Both the land itself and the activities to be conducted must satisfy strict criteria set out in town planning regulations and relevant investment laws. To qualify for a long-term commercial or industrial lease, the land must be:

• Zoned for commercial or industrial use under town planning laws, or
• Located in an industrial estate zone managed by the Industrial Estate Authority of Thailand.

In addition, the tenant company must meet specific investment criteria. For example:

• Commercial activities with investment of at least THB 20 million;
• Industrial activities promoted under the Investment Promotion Act; or
• Projects deemed beneficial to Thailand and approved by the Cabinet.

Where the lease area exceeds 100 rai (160,000 sqm), the business must also demonstrate wider economic or social benefits, such as export promotion, advanced technology, or employment generation.

Language Requirements for Lease Agreements

Lease agreements can be drafted in English for private use. However, if the lease is to be registered at the Land Office, a Thai version will be required. Typically, a bilingual agreement is prepared, with the Thai text prevailing in case of discrepancies.

Land Officers may also review the agreement during registration and reserve the discretion to reject certain clauses. Parties should therefore ensure that the lease complies with local practice.

Rental Payments, Deposits, and Fees

Rental structures vary by property type. Office and industrial leases generally use fixed monthly rent, while retail leases may include turnover-based rent.

Security deposits are standard, typically between one to three months’ rent, provided either in cash or as a bank guarantee. Tenants are also usually responsible for ancillary charges, such as utilities, common area maintenance, and property taxes.

Where the lease exceeds three years, registration fees of 1% of the total rental plus 0.1% stamp duty apply.

Repair and Maintenance Requirements

In most cases, unless expressly stated otherwise, tenants will be responsible for minor repairs and maintenance, while landlords remain responsible for major structural repairs. In practice, however, especially in long-term or large premises leases, tenants may be expected to take on greater responsibility for major repairs.

When negotiating a rental agreement, it is recommended to clarify responsibility for specific items such as air conditioning systems. While air conditioning repairs are normally the landlord’s responsibility, it is a good idea to expressly state this in the lease to avoid any potential disputes.

Other important areas to address in the lease agreement include provisions for issues arising from broken equipment or machinery that is not in proper working order. For example, if a lessee encounters a malfunctioning or leaking air conditioner, or other major problems such as structural defects that result in the premises becoming unusable, these should be clearly addressed in the contract. Tenants should make sure that the lease includes a clause granting the right to terminate the agreement if such a situation occurs and is not quickly repaired, as this would make the premises unfit for use.

Consent for VAT and SSO Registration

When leasing a property to be used as an office or place of business, it is highly likely that the company will need to register with the Social Security Office and, potentially, for VAT.

As part of the application process, officers may request photos of the office showing the company name and, in some cases, even request an on-site inspection to confirm the business location.

It is recommended that before agreeing to leasing an office to make sure that your landlord agrees to let you use the premises for VAT registration. This is important because the Revenue Department requires an original letter of consent from the property owner and, if the office is located in a managed building, an additional letter from the building’s juristic person. 

As well as the written confirmation from the landlord/juristic office the Revenue Department required the following documents, a copy of the lease agreement, a business plan, and a map highlighting the location of the office. 

Please also note that if you operate multiple businesses and wish to register each of them at the same address, this should also be included in the lease agreement. Each business registration requires separate written consent from the property owner (and, if applicable, from the building’s juristic person), so it is advisable to ensure these consents are clearly documented from the start.

Tax Considerations

When leasing commercial property in Thailand, both landlords and tenants must be aware of the tax requirements in relation to rent. It is important to have a clear understanding of how the payment of these taxes will be split between the landlord and lessee.

The most important tax to be aware of is the 5% withholding tax on rent (commonly referred to as the “building tax”). When the property owner is a registered company, the tenant is required to withhold 5% of the total rent payment and submit this amount to the Revenue Department on the landlord’s behalf.

This withholding tax is a mandatory obligation and is typically deducted from the rental price rather than added on top. However, some landlords may try to reduce the WHT tax amount by arranging the arrangement as a service agreement rather than a rental agreement.

Under Thai tax law, service contracts are subject to only 3% withholding tax, rather than the 5% for rental agreements. However, this approach may not be suitable for all businesses. For example, companies that have received a BOI promotion must record office rental costs properly in their accounting books as “rental expenses” to comply with legal and tax reporting requirements. Booking the rental payment as a service expense could create problems during audits or BOI reviews.

One potential solution would be to structure the lease as a type of hybrid agreement, where one section of the contract covers the actual lease of the premises and another section relates to additional services, such as building maintenance, common area fees, or administrative support.

If this type of structure is chosen, both parties should clearly state the division of rent and service fees and the corresponding withholding tax rates (5% for rent, 3% for services).

To avoid potential disputes or issues with the booking of a lease, it is recommended to consult with our qualified accountants and experts. Properly structuring the agreement from the beginning can help prevent disputes and issues later down the line.

Transfer and Subleasing

Under Thai law, tenants are generally not permitted to transfer their lease rights or sublease the property without first obtaining the landlord’s prior written consent. This restriction is intended to give landlords control over who occupies or uses their property, ensuring that the premises are not handed over to a third party whose activities, financial standing, or 

On the other hand, landlords themselves may transfer their ownership of the leased property, either through sale, inheritance, or other legal means. In such cases, the law provides clear protection for tenants: the new owner automatically steps into the shoes of the former landlord and assumes all rights and obligations under the existing lease. 

To further protect a tenants’ interests, it is strongly recommended that leases are formally registered with the Land Office. Registration gives the lease legal enforceability against third parties, meaning that even if the property changes ownership, the tenant’s rights remain secure for the full term of the registered lease. Without registration, tenants risk losing enforceability against new owners and may face uncertainty in the event of a property transfer.

Terminating Commercial Leases

Leases usually allow landlords to terminate the agreement if tenants default on rent or breach key obligations. A remedy period of 30–90 days is often negotiated to give tenants time to cure the breach before eviction.

Tenants rarely have the right to unilaterally terminate early unless the landlord is in breach. Unless otherwise agreed in the lease, tenants are bound to the full contractual term.

Our Thoughts

Commercial lease agreements in Thailand are shaped by complex registration requirements, and market practice. While landlords often prefer short three-year leases, tenants benefit from registering longer terms to secure stability and enforceability.

Businesses entering into leases should carefully consider renewal clauses, language requirements, and the allocation of responsibilities for repairs and costs. Most importantly, proper registration ensures long-term protection, especially where significant investments are tied to the premises.

For foreign investors and businesses, navigating these requirements is critical to safeguarding commercial interests in Thailand’s competitive property market.

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