In keeping up-to-date with the evolving investment climate, the Thai Board of Investment ("BOI") has amended the eligibility criteria and conditions for investment promotion in Thailand.
The amendments concern several aspects of investment promotion which are detailed in BOI's Announcement No. 10/2552. In this article, we will focus on important changes that affect hotel businesses seeking investment promotion.
Hotel Approval Criteria
Previously, the number of rooms was the determining factor if a hotel business was eligible for investment promotion privileges. The requirement was a minimum of 100 rooms. The current amendment dictates a hotel project will qualify for special privileges if it satisfies one of two conditions, namely it must have at least 100 rooms or a minimum investment capital of THB 500 million (excluding the cost of land and working capital).
The location of the project will determine the nature of the benefits which will be granted. Hotels businesses may be granted both tax and non-tax privileges. The tax privileges include exemption from corporate income tax on profit subject to certain conditions, and exemption from import duty on equipment and machinery used in the project. The non-tax privileges include the right to own land on which the promoted project is located, permission to bring in skilled foreign workers and their families, and permission to bring in and repatriate foreign currencies into and out of Thailand. Both types of privileges are generally granted subject to certain conditions.
Below we have highlighted how the various locations around Thailand popular with investors are affected by the amendments.
The complete list of provinces under each zoning category as well as a list of privileges under the BOI's Announcement No. 1/2543, can be found on the BOI website or provided upon request.
Applying for Promotion Privileges
Changes introduced in the Announcement are applicable to all companies applying for investment promotion privileges after 14 September 2009. However, companies that have been granted promotion privileges before this date but have not yet made use of their tax privileges may take advantage of the new regulations by submitting an application to the BOI for project alteration. Interested parties must submit such application not later than 30 December 2009; otherwise, the applicants will be required to go through the entire investment promotion application process.
The above amendments are significant and designed to boost the tourism industry and the economy in general by attracting foreign investment to Thailand. The information contained herein is intended as an update on current amendments to existing relevant regulations. The details are by no means comprehensive and we welcome further inquiries.
For inquiries related to this Client Alert, please contact:
Anurag Ramanat ( )
Piyasak Bhumichitra ( )
Swangchit Tricharoenwiwat ( )
Visit us at http://www.mayerbrownjsm.com
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