Investment Thailand: The BOI Thailand Promotes Joint Ventures in the Automotive Industry with Tax Waiver

The regulation applies to both newly established Joint Ventures in Thailand as well as to existing companies that take on Thai partners. In addition, access to the Japanese automotive industry beckons with the addition of a Thai partner.

Joint Ventures with at least 30% Thai ownership will benefit from the additional tax relief under this BOI incentive.

More specifically, this concerns the BOI categories of manufacturing engines, equipment and parts (3.4.) and manufacturing of vehicle parts (3.5.). Anyone whose business plan falls into one of these programs is eligible for an additional two-year tax exemption.

These are the conditions for the additional incentive:

• The Joint Venture must be 30% owned by a company that is at least 60% owned by a Thai individual for the entire period in which both tax and non-tax incentives are granted.

• The Thai joint venture partner must have been active in the automotive and parts industry for at least 3 years prior to the application.

• The total investment amount must be at least 100 million Thai Baht (approx. EUR 2.7 million).

Thai and foreign entity can cooperate as a joint venture. Under the specific condition, those entities must be a newly registered as a business legal entity under the Thai law, or the foreign company promoted by the BOI.

The Thai Board of Investment aims to further strengthen the automotive industry, in which Thailand is a trailblazer in Southeast Asia. It also hopes to further attract new Foreign Direct Investments. Moreover, domestic production companies should benefit from the upswing in the technology sector.

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