BOI promotion of Thailand’s agribusinesses
Investment promotion for the “Kitchen of the World”
Thailand’s BOI promotes dedicated business activities, arranged in eight categories. Category #1 states “Agriculture and Agricultural Products” while the other seven sections are mining, ceramics and basic metals, light industry, metal products, machinery and transport equipment, electronic industry and electric appliances, chemicals, paper and plastics, services and public utilities, and technology and innovation development. Agriculture and agricultural products have 23 subcategories from the manufacture of fertilizers and bio-pesticides to the manufacturing of modern agricultural products or services related to modern agriculture.
On July 29, 2020, the Board of Investment (BOI) issued Notification No. Sor. 4/2563 that amends the activities eligible for investment promotion to strengthen the promotion of agriculture agro-industries, including the utility of agricultural waste under the Bio-Circular-Green Model. This BCG model covers the bio-economy, the circular economy, and the green economy, as well as the smart city system.
Seven categories of agribusiness BOI promotion
Under the new regulatory framework, mainly seven categories of BOI promotion are available for ventures involving agriculture and agribusiness. These are the following:
#1. Grading, packaging, and storage of plants, vegetables, fruits or flowers: Projects using advanced technology, e.g. fruit ripeness sensor, radio frequency pest control, nuclear magnetic resonance or modern technology, e.g. color sorter, vapor heat treatment to kill fruit fly eggs, seed coating. Also for rice grading, either with or without the use of advanced technology.
#2. Manufacture of products from agricultural by-products or agricultural waste, or products derived from agricultural by-products or agricultural waste (except for those with uncomplicated production processes, e.g. drying, dehydration)
#3. Cold storage, or cold storage and cold storage transportation: Must use a refrigerant with low environmental impact by taking account of related indicators, e.g., Global Warming Potential (GWP).
#4. Manufacture of animal feed production and animal food ingredients: The main case refers to the certification of food safety management systems especially under Thailand’s Global Food Safety Initiative (GFSI). Alternatively, Global Certifications, e.g. HACCP or GMP, are required if the juristic person never received any global standards for the manufacture of animal feed production and animal food ingredients
#5. Plant Factory: Growing plants in buildings designed only for a closed plant production system Providing the installation of a plant factory environmental control system for both physical environments, e.g., control of light, temperature, moisture, carbon dioxide concentrations, other minerals, and biological environments, such as contamination of pathogens and insect from water, air and worker.
#6. Smart city area development business: The promotion is applicable for infrastructures that facilitate smart systems, such as Fiber Optic and Public Wi-Fi, the six smart services (mobility, people, living, economy, governance, and energy), provide smart environment services, all fall under other specified categories. Additional benefits are granted if the project is located in the EEC area.
#7. Smart city system development business: The project must be developed, installed, and provide proper aspects of smart city system services. The BOI accepts for example smart mobility, smart people, smart living, smart economy, smart governance, smart energy, and smart environment. An explicit smart city development approval by the BOI or the smart city development agency is required. Additional benefits are granted if the project is located in the EEC area.
Professional services from Bangkok
PUGNATORIUS Ltd. advises and assists foreign companies to set-up Thai legal entities, to erect their agribusiness venture, and to successfully obtain a comprehensive investment promotion by Thailand’s Board of Investment. The Bangkok law firm guides foreign “agropreneurs” through Thailand’s regulatory framework including the protection of intellectual property, the tax-efficient cross-border structuring, domestic distribution and export, as well as connected legal issues.