The Board of Investment has established criteria for approving projects applying for investment promotion in accordance with the new announcement of policies and criteria for investment promotion, effective 3 January 2023, to suit the current situation and future trends, as well as to be in line with the development direction of the country’s agricultural, industrial, and service sector development policies, in order to ensure long-term competitiveness and sustainable development.
The following are the criteria for approving projects that apply for investment promotion:
1. Developing the competitiveness of the agricultural, industrial, and service sectors must have an added value of at least 20% of the income, except for agriculture and food, electronics and parts businesses, and metal cutting businesses, which must have an added value of at least 10% of the income. The Board must approve modern production processes or service procedures. New equipment is required. In the case of used machinery, the period from the year of manufacture to the year of importation with a certificate from a reliable institution must not exceed 5 years in order to be counted as investment for corporate income tax exemption but not exempt from import duty;
2. Projects with an investment of 10 million baht or more (excluding land and working capital) must obtain a quality system certificate in accordance with ISO 9000, ISO 14000, or other equivalent international standards within two years of the start-up date. If the company is unable to proceed, the right to and benefits of corporate income tax exemption will be revoked for one year;
3. There must be adequate and effective guidelines and measures in place to prevent and reduce environmental quality impacts. The committee will give special consideration to the location and pollution management methods for projects that may have an impact on the quality of the environment;
4. Unless specifically noted in the Board’s list of activities eligible for investment promotion, the minimum investment in each project must be at least one million baht, excluding the cost of land and working capital. However, it will also consider the minimum investment from the personnel salary per year, which will be specified, for the type of business that uses the knowledge base as the main factor in running the business;
5. Initiatives must have a debt-to-equity ratio of no more than 3:1. Projects for expansion will be considered on a case-by-case basis;
6. Projects with an investment capital exceeding 2,000 million baht (excluding land costs and working capital) must submit a project feasibility study report as specified by the Board;
7. Concession projects for state enterprise investment projects under the State Enterprise Capital Act B.E. 2552 will not be promoted.
Concession projects run by the private sector must be transferred to the state (Build-Transfer-Operate or Build-Operate-Transfer). It is a private sector selection through a bidding process, an activity related to infrastructure and public services, and is included on the list of activities eligible for investment promotion.
The Board will consider granting promotion to government projects that allow private investment and ownership (Build-Own-Operate), including those leased or managed by the private sector, in exchange for a return to the state in the form of rent.
The Capital of State Enterprises Act B.E. 2552, provides for the privatization of state enterprises into limited companies. If they want to expand their work, they may apply for promotion of only a portion of the additional investment, with rights and benefits as per general rules;
8. Criteria for Foreign Shareholding: In the case of investment projects in companies listed in List One annexed to the Foreign Business Act B.E. 2552, Thai nationals must hold at least 51 percent of the registered capital. Foreigners are allowed to hold majority or total shares in projects to invest in businesses as shown in Lists Two and Three, unless otherwise specified by other laws.
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