AFG meets the BOI

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John Corey.
John Corey.

The very active Automotive Focus Group (AFG) held their monthly meeting at the Holiday Inn with the topic encompassing the thorny situation of the Board of Investment (BOI).

The discussion was led by John Corey, the Finance Director Borg Warner Turbo Systems, who had grasped the BOI nettle a couple of years back, assisted by AFG President Frank Holzer who was currently in discussion with them.

The BOI Vision, Incentives, Project Criteria, Incentive Criteria, Application Procedure, Application Forms and Project Utilization were explained in just how it all happens, as there are many detailed procedures to be carried through.

Exemptions of corporate income tax on net profits and dividends is enough of an incentive by itself, let alone the lowering of tax on imported machinery, but there are laid out ways to get to Nirvana!

Project Approval can be very exacting, such as the importation of machinery where modern production processes must be used, the machinery must be new, it must be on the master equipment list submitted with BOI application along with a performance certificate submitted at same time as BOI application.

A general case application has many steps, including:

Application Form (F PA PP 01)

Copy of certificate of business registration issued within the last 6 months

Copy of list of shareholders or shareholding distribution report

Copy of most recent financial statements

Feasibility study (Projects with an investment value of over 750 million THB)

Preliminary Environmental Impact Assessment Form (F PA PP 15)

Application for additional rights and privileges

Enhancing competitiveness (F PA PP 37)

Energy conservation-use of renewable energy-reduction of environmental impacts (F PA PP 28)

Adjustment and change of machinery to increase manufacturing efficiency (F PA PP 30)

Applications under 7.12 Biotechnology Supplementary form for applications for investment promotion under 7.2 Biotechnology (F PA PP 19)

Other BOI forms and documentation for special cases (see Website)

Other Documents: Foreign Business Certificate, Memorandum of Association, VAT Certificate, Incorporation Documents, Company Seal Registration

John Corey mentioned the BOI’s Investment Promotion Officer, who he had found to be very helpful.

IEAT – Land Utilization approval is required

Feasibility Study (Projects over 750M) – allow time to prepare; must align with application

Production process must be accurate

Volume of parts – excess quantity not eligible for CIT exemption

Sizing the investment

Optimize Incentive vs. Registered Capital

Can be changed later – will be audited

It was stressed that meticulous records have to be kept, and audits do happen, and the Revenue Department will become interested in you!

The consensus from the meeting was that the BOI does try to help, but the process can be very trying and putting a BOI specialist on staff can help, but it is not the total answer. Reference should be made via the Guide to the Board of Investment 2017 through their website www.boi.go.th