Thailand BOI: Promoted Activities: Metal, Machinery,Transport
January 23 2012 Categories: Thailand BOI, Thailand Business No comments yet
What are the activities eligible for promotion under section 4 of the BOI list?
Reminder: As you already know the Board of Investment is the agency in charge of promoting certain sectors of Thai economy. As such the BOI role is among other to determine:
What are the activities which are eligible for promotion
What are the conditions attached to said promotion
What are the privileges attached to said business activity
The activities that are promoted are divided in seven sections as follows: Section 1: Agriculture and Agricultural Products; Section 2: Mining, Ceramics and Basic Metals; Section 3: Light Industry; Section 4: Metal Products, Machinery and Transport Equipment; Section 5: Electronic Industry and Electric Appliances; Section 6: Chemicals, Paper and Plastics; Section 7: Services and Public Utilities.
The table below is a list of the activities promoted by the BOI under Section 4:
Note that whenever there is a blank or a – in the condition section it relation to an activity it means that the activity does not have special conditions attached.
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List of activities eligible for promotion and their conditions |
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Section 4: Metal Products, Machinery and Transport Equipment |
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Activities |
Conditions and privileges |
| 4.1 Manufacture of hand tools and measuring tools |
- |
| 4.2 Manufacture of machinery and equipment | 1. Manufacture of the following is classified a priority activity:1.1 Molds and dies and parts
1.2 Jigs and fixtures 1.3 Industrial machinery, specifically: turning machines, drilling machines, boring machines, milling machines ,grinding machines, machining centers, gear cutting and finishing machines, die sinking EDMs, wire cut EDMs, laser beam machines, plasma arc cutting machines, electron beam machines, broaching machines 1.4 Parts and equipment for high precision machining processes, namely cutting, milling, turning, grooving, shaving, grinding, polishing and threading |
| 2. Farm machinery and food processing machinery(31) are classified as a priority activity of special importance and benefit to the country and will be granted privileges as follows:- Exempt from import duty on machinery, regardless of zone
- Corporate income tax exemption for eight years, regardless of zone without being subject to corporate income tax exemption cap - Other rights and benefits are granted according to BOI Announcement No. 1/2543. |
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| 4.3 Manufacture of metal products, including metal parts | Manufacture of sintered products is classified as apriority activity- Exempt from import duty on machinery, regardless of zone
- Corporate income tax exemption for eight years, regardless of zone |
| 4.4 Building or repair of steel ships of not less than 500 tons gross(32) | 1. Projects must be located in Zone 2 or 3.2. Classified as priority activity which has special importance and benefits to the country
- Exempt from import duty on machinery, regardless of zone - Corporate income tax exemption for eight years, regardless of zone without being subject to corporate income tax exemption cap - Other rights and benefits are granted according to BOI Announcement No. 1/2543. |
| 4.5 Building of ships of less than 500 tons gross (except wooden or steel ships) (33) | 1. Projects must be located in Zone 2 or 3.2. Classified as priority activity which has special importance and benefits to the country
- Exempt from import duty on machinery, regardless of zone - Corporate income tax exemption for eight years, regardless of zone without being subject to corporate income tax exemption cap. - Other rights and benefits are granted according to BOI Announcement No. 1/2543. |
| 4.6 Manufacture of trains or electric trains or parts(only with rail system) |
- |
| 4.7 Manufacture or repair of aircraft, including parts or onboard equipment (34) | Classified as priority activity which has specialimportance and benefits to the country
- Exempt from import duty on machinery, regardless of zone - Corporate income tax exemption for eight years, regardless of zone without being subject to corporate income tax exemption cap. |
| 4.8 Manufacture of vehicle parts | 1. Manufacture of the following is classified apriority activity:
1.1 ABS 1.2 Substrate for catalytic converters 1.3 Electronic fuel injection systems 2. Manufacture of vehicle tires (35) will receive privileges as follows: - Exempt from import duty on machinery, regardless of zone - Other rights and benefits are granted according to BOI Announcement No. 1/2543. |
| 4.9 Manufacture of 4-stroke motorcycles (36) | 1. Must be motorcycles with four-stroke engines2. Production capacity must be not less than 50,000 units per year.
3. Thai nationals must hold shares totaling not less than 60 percent of the registered capital. 4. Production processes must be complete from body frame welding and painting. 5. Plan for parts production and sourcing of parts must be approved by the BOI. 6. Must have plan to develop Thai parts manufacturers 7. No change of rights or additional periods of corporate income tax exemption will be allowed after project is promoted, regardless of whether the investments are made in accordance with the Skills, Technology and Innovation (STI) policy. 8. If located in Zone 1 or 2: 8.1 Exempt from import duty on machinery 8.2 Will receive no exemption of corporate income tax 9. If located in Zone 3: 9.1 Exempt from import duty on machinery 9.2 Exempt from corporate income tax for three years, under section 31, paragraph 1. 9.3 Exempt from corporate income tax for five years, under section 31, paragraph 1, in the following cases: 9.3.1 Thai nationals must hold not less than 70 percent of total shares. 9.3.2 Project must propose a plan for production and use of major parts, such as engines, transmission systems, fuel injection systems, vibration systems, and brake systems, and receive approval from the BOI. 10.Other rights and benefits are granted according to BOI Announcement No. 1/2543. |
| 4.10 Automobile assembly | No exemption on corporate income tax in any zone.Privileges will be granted according to Board of Investment Announcement No.1/2543. |
| 4.11 Metal surface treatment or anodized surfacetreatment | the Industrial Estate Authority of Thailand:- Exempt from import duty on machinery, regardless of zone
- Corporate income tax exemption for eight years, regardless of zone - Other rights and benefits are granted according to BOI Announcement No. 1/2543. |
| 4.12 Heat treatment | 1. Classified as a priority activity- Exempt from import duty on machinery, regardless of zone
- Corporate income tax exemption for eight years, regardless of zone 2. Projects that use cyanide must be located in industrial estates or promoted industrial zones. |
| 4.13 Manufacture of electric-powered vehicles or parts |
- |
| 4.14 Manufacture of 4-stroke motorcycle engines |
- |
| 4.15 Manufacture of automobile engines |
- |
| 4.16 Manufacture of multi-purpose engines |
- |
| 4.17 Repair of industrial machinery | Must be capable of repairing essential parts ofmachines |
| 4.18 Manufacture of metal containers |
- |
| 4.19 Fabrication of metal structural products ormetal industrial equipment |
- |
| 4.20 Manufacture of air or gas compressors |
- |
| 4.21 Manufacturing, repair, maintenance andrefurbishing of containers and materials
handling equipment (37) |
In cases located in a logistics park, the project will be granted an exemption of import duty on machinery and an eight-year corporate income tax exemption.In cases located outside a logistics park, the project will be granted privileges according to Board of Investment Announcement No. 1/2543. |
| 4.22 Repair of vehicle parts, electrical or electronicequipment | Projects must be located in export processing zones, bonded warehouses of free trade zones, or in bonded warehouse areas. |
| 4.23 Automobile Manufacturing (38) | 1. A “Package” (a plan for all production projects inclusive of Activity 4.10 Automotive Assembly, Activity 4.8 Manufacture of vehicle parts, and/ or 4.15 Manufacture of automobile engines, all of which support the automotive manufacturing operation) will be submitted.The minimum investment, excluding the cost of land and
working capital, will not be less than 10,000 million baht 2. The automotive manufacturing project will have a definite production and marketing plan. 3. Manufacture of vehicle parts and/or automobile engines will exclusively support the automotive manufacturing operation that is part of the Package 4. Rights and privileges will be granted as follows: 4.1 Automotive manufacturing: 4.1.1 The factory may be located in any zone 4.1.2 Exempt from import duty on machinery, regardless of zone 4.1.3 No exemption or deduction of corporate income tax 4.1.4 Other rights and privileges will be granted according to Board of Investment Announcement No. 1/2543. 4.2 Vehicle parts and/or automobile engine manufacturing 4.2.1 The factory can be established in any zone 4.2.2 Exempt from import duty on machinery, regardless of zone 4.2.3 Other rights and privileges will be granted according to Board of Investment Announcement No.1/2543. (except in the case of manufacture of ABS systems, manufacture of substrates for catalytic converters, manufacture of electronic fuel injection systems, all of which are considered as priority activities) |
| 4.24 Manufacture of energy-conservin | |
