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What is a TISO promotion from the BOI?
09/11/2021
The Thai Board of Investment (BOI) should always be the first port of call for prospective companies looking to establish a presence in Thailand. The BOI should always be considered as it provides various financial promotions and benefits to companies who are eligible for its promotions. Businesses eligible for BOI promotions could receive a range of incentives which are dependent on the type of activity they are undertaking.
One of the promotions on offer comes from the Trade and Investment Support Office (TISO). While TISO promotions are slightly different to other BOI promotions in that they don’t offer tax incentives and breaks, they can be very useful for entities that do not qualify for any other BOI promotion.
What is the Trade and International Support Office (TISO)?
Though this promotion does not grant any tax benefits, it does allow 100% foreign ownership of a company in Thailand. Therefore, it is a potential option for companies who do not qualify for any of the other BOI promotions.
The following business activities are covered by the TISO promotion:
- Monitoring and/or servicing associated enterprises, including providing or renting out offices or factory buildings to associated enterprises;
- Advisory services on business operations, except those engaged in buying and selling securities and foreign currency exchange. For companies who operate in the following areas; accounting, legal, advertising, architectural and civil engineering businesses, a business license must be obtained from the Department of Business Development or related governmental agencies prior to application.
- Information services on goods sourcing;
- Engineering and technical services (excluding architecture and civil engineering);
- Business activities related to machinery, engines, tools and equipment. For example:
- importing the above for wholesale;
- training services;
- installation, maintenance and repair
- calibration
- Wholesaling products manufactured in Thailand;
- International business process outsourcing whose services are provided through telecommunication networks. This includes areas such as:
- administrative services
- finance and accounting services
- human resource services
- sales and marketing services
- customer services
- data processing
What are the benefits of a TISO promotion?
It is important to understand that a company who obtains a promotion under TISO will receive only non-tax benefits. However, there are still some very important benefits which should not be overlooked. These benefits are as follows:
- 100% foreign ownership of the promoted company
- There is potential for the company to have a right of land ownership. However, this right is limited to the following:
- Land for the establishment of offices for promoted projects must not exceed five (5) rai (1 Rai = 1,600 sqm);
- Land for the residences of executives or experts must not exceed one (1) rai; and Land for the residences of employees must not exceed two (2) rai.
- Employees of the TISO promoted company may apply for any required Visas and work permits at the One-Stop Service Centre. This right significantly quickens the Visa and Work Permit application process as lengthy trips to the Immigration Office and Department of Labour are not required.
Latest changes to TISOs scope
In October 2021, the Board of Investment (BOI) announced some revisions to the scope of the Trade and International Support Office (TISO). These revisions allow the BOI to provide lending to companies in order to allow more flexible operations by foreign multinationals providing services under a BOI/TISO promotion in Thailand.
The aim of these revisions is to promote flexible operations by foreign multinationals providing services and to strengthen Thailand’s position as an international business hub.
What are the application requirements?
The main criteria for an application for a TISO application is to prove that the company can satisfy the following criteria:
- Have an annual selling and administrative expenses of at least THB 10 million.
- Be in possession of a business plan and scope of business which has been approved by the BOI.
The applicant must also submit their annual selling and administrative expenses as part of the application. This usually takes the form of the company’s latest audited financial statements.
One important aspect prospective applicants should be aware of is that the company is required to have an annual selling and administrative expenses of at least THB 10 million. Additionally, any qualifying company must apply for an Operating License from the BOI within 3 years.
Conclusion
Applying for a BOI Promotion should always be the first option considered when opening a company in Thailand. BOI promoted companies are eligible for significant benefits which could play an important part in the development of a company.
Generally speaking, TISO has become a very popular option for foreign companies looking to establish a business in Thailand. Although TISO promotions do not offer any tax incentives they do offer some other very attractive benefits, with the right to own a company 100% outright being one of the most significant. Furthermore, TISO promotions enable foriegn owned companies to hire foreign staff with relative ease compared to other non-BOI promoted company structures.
TISO promotions are easier to obtain as the promotion covers a wider variety of activities and is less restrictive than other BOI promotions. However, the 10 Million THB annual selling and administrative expenses requirement restricts accessibility to smaller companies. As a result, only companies of a certain size can qualify.
To see how our team experts, who specialise in BOI applications can help your company obtain promotion, please follow this link.
Please note that this article is for information purposes only and does not constitute legal advice.
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