The Thai Board of Investment (BOI) provides various financial promotions and benefits to Thai and foreign companies under its BOI promotion scheme. Businesses eligible for BOI promotion receive incentives depending on the type of economic activity and merits of those activities to the Kingdom of Thailand.
TISO Promotion
The BOI classifies its promotion categories into two main groups for the purposes of determining investment incentives:
✓ Group A businesses are eligible for tax incentives, non-tax incentives, machinery and raw material import duty exemption, among others.
✓ Group B businesses do not enjoy tax incentives, yet they benefit from non-tax incentives, machinery and raw materials import duty exemption.
The Trade and Investment Support Office (TISO) is one of the BOI promotion categories falling into ‘Group B.’ It is a particularly interesting category as it allows a foreign party to own 100% of a corporate entity in Thailand, although it does not allow for merit-based incentives, such as any reduction or exemption on corporate income tax; however, the benefits of TISO can be very useful for entities that do not qualify for any other BOI promotion.
What businesses are eligible for TISO?
A business wanting to qualify for TISO promotion must have;
✓ Annual selling and administrative expenses of at least THB 10 million; and
✓ A business plan and scope of business as approved by the BOI.
The business activities that fall under TISO promotion are:
1. Monitoring and/or servicing associated enterprises, including providing or letting office or factory building to company’s related enterprises;
2. Advisory services on business operations, except those engaged in buying and selling securities and foreign currency exchange. As for accounting, legal, advertising, architectural and civil engineering businesses, business licenses must be obtained from the Department of Business Development or related government agencies before submitting the investment promotion application;
3. Information services on goods sourcing;
4. Engineering and technical services, except those related to architecture and civil engineering services;
5. Business activities related to machinery, engines, tools and equipment, such as:
5.1. Importing for wholesaling;
5.2. Training Services;
5.3. Installation, maintenance and repair; and
5.4. Calibration;
6. Wholesaling products manufactured in Thailand; and
7. International business process outsourcing provides services through telecommunication networks, such as administrative services, finance & accounting services, human resource services, sales, etc.
Benefits of TISO
The TISO category receives non-tax benefits of promotion. This includes the right to 100% ownership of the promoted company. TISO also carries the potential right of land ownership, subject to the following limitations:
✓ Land for the establishment of offices for promoted projects must not exceed five Rai (one Rai is 1,600 square meters);
✓ Land for the residences of executives or experts must not exceed ten Rai; and
✓ Land for the residences of employees must not exceed twenty Rai.
The limitations on the right to land ownership can be increased by the BOI if deemed appropriate.
The visa and work permit process for qualifying companies is expedited through the One-Stop Service Centre, which ensures substantially quicker processing times. Additionally, foreigners can remain in Thailand with very few limitations attached for feasibility studies, or as technicians or experts.
Concluding Remarks
The TISO promotion category is particularly useful for foreign companies and investors who are not eligible for other investment promotion categories. Although no tax benefits are granted, the possibility of land ownership and right to 100% foreign ownership of a corporation can be particularly attractive for those wishing to set up a business in Thailand. The approval process takes approximately 40 business days to complete. The most important restriction o approval is the annual selling and administrative expenses of more than THB 10 million per year, meaning that only certain sized companies are granted this promotion.
In summary, under a TISO promotion, the promoted company will receive the following incentives:
✓ Permission to own land;
✓ Permission to remit money overseas in a foreign currency;
✓ Permission to bring in skilled workers and experts to investment activities; and
✓ 100% foreign ownership of the promoted business.