The scope of activities in the business category of IBC has the following details.

1.1 General business management, business planning, and business cooperation

1.2 Procurement of raw materials and parts

1.3 Research and development of products

1.4 Technical support

1.5 Marketing and sale promotion

1.6 Human resources management and training

1.7 Financial advisory services

1.8 Economic and investment analysis and research

1.9 Credit management and control

1.10 Financial management services of the Treasury Center

1.11 International trade business

1.12 Lending to associated enterprises outside the scope of business in Item 1.10 which can be implemented under the exchange control laws, for example:

- Lending of foreign currency loans to associated enterprises in foreign countries

- Lending of Thai baht loans to associated enterprises in Thailand

- Lending of Thai baht loans to associated enterprises in Vietnam and countries bordering Thailand with a requirement of using them for trading and investment in Thailand or in aforementioned countries only

1.13 Other supporting services as approved by the Board

Examples or details of each scope of activity, click: International Business Center (IBC)

Activity 7.34 An International Business Center: IBC refers to the activity that mainly provides services for associated enterprises. The IBC acts in a similar manner as the headquarters or regional operating headquarters, and it can also conduct trading activities. However, in order to apply for promotion of the trading activities, it must initially conduct core business in providing services for the headquarters. Activity 7.37 International Procurement Office: IPO refers to the activity that procure raw materials, parts, and components from various sources for clients which are factories or dealers, both for domestic wholesale and/or exports. The IPO acts as a sourcing unit for factories or distributors. Activity 7.7 Trade and Investment Support Office: TISO refers to the activity that supports the investment of industries both in Thailand and abroad. Many scopes of business under this activity can apply for promotion e.g., engineering services; consulting services; machine installation, maintenance and repair. However, it must be noted that each activity has different conditions. (More information is available in the Investment Promotion Application Form Filling Guidelines.)

The BOI has repealed promotion of International Trading Center (ITC) and replaced with the IBC which incorporates the trading activities. However, as the company must conduct headquarters activities before being able to conduct trading activities, some companies which do not want to be the HQ cannot apply for promotion in the trading activities. In addition, as the Thai Government is determined to push Thailand forward to being the regional trading and investment center, it recognizes the importance of the IPO which is significant for the service sector in Thailand as it helps complete the supply chain. Therefore, the BOI reinstates the promotion of IPO in order to stimulate the country’s economy and investment. For the differences among the IPO, IBC, and TIISO, please refers to the answer in item 1.

At the moment, the BOI has no plan to reinstate the promotion of ITC (in categories) because it is currently being promoted as part of the IBC.

Incentives: 1. Exemption of import duties for raw materials selld to manufacturers for producing, mixing, assembling, and exporting. 2. Exemption of import duties for machinery used in the IPO activity. 3. Majority of foreign shareholders. 4. Land ownership. 5. Visa and work permit for aliens working in the IPO projects. Conditions: 1. Must have paid up registered capital of 10 million baht. 2. Minimum investment of not less than 1 million baht within 3 years for activities such as asset procurement, rental fees, office renovation, etc. (excluding cost of land and working capital). 3. Other specific conditions for projects according to the announcement regarding activity 7.37 e.g., projects must have or rent a warehouse, must have warehouse management system, must have an appropriate system for inventory inspection, must purchase from at least 1 supplier in Thailand.

A company can apply for promotion of both the TISO and IPO (separate application forms) because one company can apply for more than one activity as long as it follows the specific conditions of each activity.

Application can be submitted via e-Investment at the BOI’s website at https://boi-investment.boi.go.th/public/index_en.php. The application form can be downloaded in PDF format for study at https://www.boi.go.th/upload/content/F%20PA%20PP%2003(Th)%20e-Form_6008fa2cee5a7.pdf. After submitting the application, our staff will contact the applicant for interview on the project detail, then a report will be presented to the Board. The process duration is varied in line with the investment capital, for example, for an investment capital of less than 200 million baht (excluding cost of land and working capital) the process takes 40 working days as from the application submitting date; for an investment of 200 – 2,000 million baht, the process takes 60 working days, and for an investment of over 2,000 million baht, the process takes about 90 working days.

At the moment, the deadline has not been set.

At the moment, the deadline has not been set.

The ITC and IPO activities are similar services. As the IPO is part of the ITC, so the ITC license covers all IPO activities. The company can conduct all IPO activities using the ITC license without any specific conditions. It is not necessary to cancel the ITC license and apply for IPO license because the ITC conditions are more flexible. Therefore, the company that holds the ITC license does not need to apply for IPO license as they are the same services.

It is not necessary to apply for new IPO license because the activities are similar, and the conditions, rights and incentives are not different.

The company that holds the IBC license can apply for promotion in the IPO activities because one company can apply for more than one license or activity. In this regard, the company must follow the conditions of each type of activity. However, the IBC license cannot be changed into the IPO license because they are different activities and services.

The company can apply for promotion in the IPO activities if it provides services in procurement of raw materials, parts and, components for domestic wholesale and/or exports. And it must follow the conditions of this category.

A new registered company must be established in Thailand. The majority shareholders can be Thai or foreigners.

The IPO cannot conduct the ‘out-out’ activity (manufacturing and selling outside Thailand) because the condition stipulated that it must have domestic warehouse (own or rent) for inspection or repackaging before selling.

There are no specifications regarding the size or type of warehouse but it should have appropriate size and equipment for the quantity and type of goods. The company can either rent a warehouse, or build/renovate its own warehouse. As for the software program, it is recommended that it must be able to update stock inventory real time, with details such as number of goods in stock, shelf number, etc. The software must also link to all related departments. The Office does not specify type of the software. However, manual system using computer programs such as Microsoft Excel or Microsoft Word that cannot be updated real time is prohibited.

It is recommended that the software program must be able to update stock inventory real time, with details such as number of goods in stock, shelf number, etc. The software must also link to all related departments. The Office does not specify type of the software. However, manual system using computer programs such as Microsoft Excel or Microsoft Word that cannot be updated real time is prohibited.

There are no specifications regarding the size or type of warehouse. The warehouse should have appropriate size and equipment for the quantity and type of goods. The company can either rent a warehouse, or build/renovate its own warehouse. As for the software program, it is recommended that it must be able to update stock inventory real time, with details such as number of goods in stock, shelf number, etc. The software must also link to all related departments. The Office does not specify type of the software. However, manual system using computer programs such as Microsoft Excel or Microsoft Word that cannot be updated real time is prohibited.

There are no specifications regarding the size or type of warehouse. The warehouse should have appropriate size and equipment for the quantity and type of goods. The company can either rent a warehouse, or build/renovate its own warehouse. The company’s office can also be used as a warehouse but it must be ensured that the lessor or owner allows such building to be used as a warehouse, and that there is no legal prohibition for such use.

This condition still remains. It is recommended that the software program must be able to update stock inventory real time, with details such as number of goods in stock, shelf number, etc. The software must also link to all related departments. The Office does not specify type of the software. However, manual system using computer programs such as Microsoft Excel or Microsoft Word that cannot be updated real time is prohibited.

The company can rent a warehouse, and if so, it must notify the BOI upon applying for promotion. The warehouse must have the quality control and repackaging process.

The promotion for International Trading Center (ITC) has already been repealed. For IBC, it is like the promotion given to International Headquarters (IHQ) to become IBC. If IBC operates, the mandatory condition specifies that there must be an action plan to provide services for affiliated enterprises, then it can be promoted to operate international trade business.

If the company will expand the business to international trade by importing semi-finished goods for commercial distribution in Thailand, the company must apply for license from Foreign Business Administration Division, Department of Business Development, Ministry of Commerce, or increase fully paid-up registered capital of one hundred million baht to operate wholesale business. If the company wants to operate retail business, the company must apply for license from Foreign Business Administration Division or increase fully paid-up registered capital of one hundred million baht more.

The company must apply for permission from Bank of Thailand to operate TC (Treasury Center), and then submit the application for investment promotion under IBC for the scope of “TC (Treasury Center)”. If tax incentives are required, the company must submit for approval the request for being IBC to the Revenue Department.

"Affiliated enterprise" means the company or corporate partnership having relationship with the International Business Center in the following aspects.

(1) The company or corporate partnership which holds the shares of the International Business Center both directly and indirectly. The shares account for the shareholding proportion of not less than twenty-five percent of total capital.

(2) The company or corporate partnership which the International Business Center holds its shares or is its both direct and indirect partner. The shares account for the shareholding proportion of not less than twenty-five percent of total capital.

(3) The company or corporate partnership which the company or corporate partnership as described in Item (1) holds its shares or is its both direct and indirect partner. The shares account for the shareholding proportion of not less than twenty-five percent of total capital.

(4) The company or corporate partnership which has the power to control the business or supervise the operation and administration of the International Business Center.

(5) The company or corporate partnership which the International Business Center has the power to control its business or supervise its operation and administration.

(6) The company or corporate partnership which the company or corporate partnership as described in Item (4) has the power to control its business or supervise its operation and administration.

The international trade business under the business category 7.34 IBC currently has the conditions and incentives different from the former business category 7.6 ITC with specific conditions for the category as follows:

1. The paid-up registered capital must not be less than 10 million baht (as before).

2. Not less than 10 permanent staffs with necessary knowledge and skills for IBC must be employed. Except that IBC provides only financial management service of the treasury center for affiliated enterprises, not less than 5 permanent staffs with knowledge and skills must be employed.

3. In case of international trade business operation, not less than 1 scope of activities in 1.1 – 1.10 must be involved.

4. Not entitled to exemption from import duty of machinery (Section 28) and import duty of raw materials and essential materials used in the production for export (Section 36).

The conditions and incentives have been changed, including increased personnel employment, increased scope of services provided for affiliated enterprises, and repealed incentives for exemption from import duty of machinery (Section 28) and import duty of raw materials (Section 36).

BOI has guidelines on consideration that if the company wants to operate the international trade business under the category 7.34 IBC, the business operation must significantly involve the scope of activities in 1.1 – 1.10 under the category of IBC.

Under the category 7.34 IBC, the services under the scope of activities in 1.1 – 1.10 must be provided for affiliated enterprises at least in 1 foreign country, and can be provided to affiliated enterprises in the country as well.

The educational background, position and job description of the permanent staffs working in IBC project will be examined initially and every time when the incentives are exercised.

IBC is provided with the incentives for exemption from import duty of machinery that is used only for research, development and training, but not provided with the incentives for exemption from import duty of raw materials.

The company can submit the application to BOI on the link:  https://www.boi.go.th/index.php?page=form_app1

The company can change the business to IBC on condition that the company must comply with the conditions of IBC.

The company should submit additional application for IBC promotion because in case of the change of business category from ITC to IBC, the company will not be provided with the incentives for exemption from import duty of machinery (Section 28) and of raw materials for exportation (Section 36).

The company can submit the application for investment promotion for IBC to expand the aforementioned business without any need to establish a new company.

Source: The investment promotion for the business of International Headquarters (IHQ) and International Trading Center (ITC) has been repealed. IBC can be compared as the promotion given to International Headquarters (IHQ) to become IBC. Therefore, the condition is that there must be an action plan to provide services for affiliated enterprises and promote the international trade business operation if the business is mainly to provide services for affiliated companies (IHQ).

(1) Conditions:

- Not less than 10 permanent staffs with necessary knowledge and skills for IBC must be employed. Except that IBC provides only financial management service of the treasury center for affiliated enterprises, not less than 5 permanent staffs with knowledge and skills must be employed.

- In case of international trade business operation under the category 7.34 IBC, not less than 1 scope of activities in 1.1 – 1.10 of IBC must be involved.

(2) Incentives: The incentives of BOI for exemption from import duty of machinery and raw materials are not provided, but import tax refunds can be requested from the Customs Department.

If the promotion for the business category “IHQ” and “ITC” covers the project’s business operation, then there will be no need to apply for investment promotion for “IBC”. But if the company wants to change the business to IBC, the company must comply with the conditions of IBC.

The aforementioned out-out commercial distribution is in the scope of activities of ITC for which the company has been promoted. At present, after the Ministry of Finance adjusts the policy to give investment promotion for IBC and terminates the approval for IHQ or ITC, the company is not eligible for such income tax incentives from the Revenue Department, Ministry of Finance. As a result, the company has to pay for corporate income tax normally.

The Revenue Department has terminated the approval for IHQ or ITC, and announced the promotion for IBC with more strict conditions. If the company wants to apply for tax incentives to the Revenue Department, the company must change the investment promotion for IHQ to IBC instead.

It depends on the company’s policy. If the company remains operating IHQ business, the current rights and benefits of tax can be used further until the specified period (15 fiscal years).

It depends on the company’s policy. If the company wants to apply for tax incentives, the company must submit the application for IBC to the Revenue Department for approval, and must comply with the conditions of IBC.

There is no change.

The IPO can trade raw materials, parts and, components. This does not include final products (such as pen which does not need assembly before use). Therefore, the terms raw materials, parts and, components refer to materials that are not final products and need to be assembled into a product.

Machinery is a final product and not raw materials, parts and, components. Therefore, the IPO is not allowed to sell machinery.

Presently, it is stipulated that the IPO must procure materials from at least 1 domestic supplier. As there is no minimum percentage of purchase, the company can purchase less than 10 percent from local supplier. However, an appropriate quantity of raw materials purchased in Thailand is recommended and not just to get around the BOI’s condition.

Presently, it is stipulated that the IPO must procure materials from at least 1 local supplier. As there is no minimum percentage of purchase, the company can purchase less than 10 percent from local supplier. However, an appropriate quantity of raw materials purchased in Thailand is recommended and not just to get around the BOI’s condition. Moreover, there is no condition regarding the percentage of exports.

A capital increase of 10 million baht can be done and fully paid after submitting the application, but before the issuance of certificate. In the application form, it must be indicated that the company is increasing its capital.

The BOI has set the debt-to-equity ratio at 3/1. We will check from the company’s latest financial statement; if the ratio is less than the criteria of 3/1, the company does not need to increase its capital. The company can use its retained earnings or domestic or foreign loan for investment in the new project. However, if the D/E ratio is over 3/1, the company may need to consider increase its capital. This depends on the amount of investment in the IPO project. As for investment promotion of the IPO project, it can either be done through an existing company or a newly established company.

There is no employment condition in the IPO project.

The company’s activity must conform to the conditions of IPO which are limited to the procurement of raw materials, parts and, components. If the animal foods are final products ready for feeding animals, the company cannot apply for promotion as the IPO project.

The IPO is allowed only for trading of raw materials, parts and, components (not manufacturing, mixing or assembling). It does not include final products. The company must ensure that its goods are not final products. If the products are sold in the country, it must be wholesale only (not to end-users). For the prefabricated house, if the goods are parts or components, such as steel structures, and not a finished house ready to move in, it is in the IPO scope because the buyer (the contractor) have to assemble them into a house before selling to end users or house owners.

Initially, it must be identified if the prefabricated house business is the trading of house parts and components, or if it is the selling of prefabricated houses. If it is the trading of parts and components (both domestic wholesale and exports), it is the IPO activity and the relevant BOI conditions must be observed. For other types of business e.g., selling of finished houses, or assembling or building of houses, the business operators must contact the Department of Business Development (DBD), the Ministry of Commerce, to check if it is included in the list attached to the Foreign Business Act, and if so, a Foreign Business License must be obtained from the DBD instead.

Details of the purchased raw materials, name of supplier and customer, as well as the industry of the goods to be sold must be indicated in the application. Moreover, if the company exercises the right on exemption of import duty, the material list and quantity must be notified for permission prior to importing. Lubricant used in the machinery is a ready-to-use or final product, therefore, it is not included in the IPO scope.

IPO is not allowed to trade final products.

IPO is not eligible for the rights and incentives on corporate income tax and personal income tax from the Revenue Department.

The BOI grants non-tax incentives for IBC activities, which are, for example, foreign majority shareholders, land ownership, and visa and work permit for aliens working in the country. In addition, the exemption of import duties on machinery is also granted for machinery used in product research and development, and trainings. The Revenue Department shall grant the incentives on corporate income tax exemption and personal tax exemption for aliens. Details and conditions are shown in these links: https://www.rd.go.th/fileadmin/images/IBC/Presentation%20by%20Revenue%20Department%20%28EN%29.pdf (English), and https://www.rd.go.th/fileadmin/images/IBC/Presentation%20by%20Revenue%20Department%20%28JP%29.pdf (Japanese). The conditions or limitations for IBC are: minimum investment capital of 1 million baht during the course of 3 years (excluding cost of land and working capital). This amount can include cost of assets used for providing services to clients, office renovation, office rental for a period of over 36 months, as well as a minimum of 10 employees (both Thais and aliens).

A license to operate a treasury center must be obtained from the Bank of Thailand. The company has to fill in the treasury center request form and prepare documents as stipulated by the Bank e.g., certificate of business registration, etc. It takes about 60 days for license issuance. For details and conditions, please enter the website: https://www.bot.or.th/Thai/FinancialMarkets/ForeignExchangeRegulations/ForeignMeansOfPaymenBusinesses/Pages/TreasuryCenter.aspx. The English and Japanese translation of the treasury center details and scope of works can be downloaded from https://www.rd.go.th/fileadmin/images/IBC/Presentation%20by%20Bank%20of%20Thailand%20%28EN%29 (English) and https://www.rd.go.th/fileadmin/images/IBC/Presentation%20by%20Bank%20of%20Thailand%20%28JP%29.pdf (Japanese).

A company can conduct one of the following activities:
1. Controlling and/or providing services for associated enterprises, as well as services on provision or rent out offices or factory buildings to associated enterprises.
2. Providing consultation and advice on business operations, except for trading of assets and foreign exchange, accounting and legal services, advertising, architecture, and civil engineering. Operators of such businesses must apply for a Foreign Business License from the Department of Business Development, (in case of foreign majority shareholders or 100% foreign shareholders).
3. Providing information on product procurement.
4. Providing engineering and technical services, excluding architectural and civil engineering services.
5. Business operations related to machinery and equipment i.e., import for selling, training, installation, maintenance and repair, and calibration.
6. Wholesale of local manufactured products.
7. International Business Process Outsourcing, e.g., Administration Services, Finance & Accounting Services, Human Resource Services, Sales and Marketing Services, Customer Services, Data Processing, through various communication platforms.

Non-tax incentives, for example, foreign majority shareholders, land ownership, and visa and work permit for aliens working in the TISO project.

The TISO cannot rent out a land. However, the company can rent out part of the office space which is left unused by main TISO activities only to associated enterprises. The TISO cannot conduct building rental as core business according to item 1 of the scope of activities: controlling and/or providing services for associated enterprises, as well as services on provision or rent out offices or factory buildings to associated enterprises.

The BOI shall approve the land ownership as necessary for use in the promoted activities in accordance with its scope of services.

Trading business is a service activity according to List Three of the Foreign Business Act B.E.2542 (1999) of the Department of Business Development (DBD). The Act stated that in case the company has a majority of foreign shareholders, it must apply for Foreign Business License (FBL) from the DBD. If it is the activity eligible for promotion by the BOI, an application can be submitted in advance, and as soon as the promotion certificate is issued, the company can then apply for Foreign Business Certificate (FBC) from the DBD without a need to apply for FBL.