BOI investment promotion for cryptocurrency and digital asset businesses
How to get the ICO, exchange, mining, and crypto-trading promoted by Thailand’s Board of Investment
Under the new and attractive regulations, foreign companies in the exchange and trading business are keen to open an affiliate company in the land of smile to utilize the Thai benefits in the fintech sector. A 100% affiliate company is not possible, since the Thai Co., Ltd. requires at least three shareholders – even if two of the shareholders own a micro share only.
Apart from this, Thailand’s foreigner legislation might require a Thai 51% majority shareholder to avoid the application of Thailand’s Foreign Business Act. In such cases, a sophisticated corporate structure can be set-up to allow the foreign headquarters to own all the profits and nearly all of the voting rights while protecting the foreigner from the influence of the Thai partner. Details are explained at “Seven steps: Company formation in Thailand“.
Another option is to acquire a foreign business license, based on an investment promotion by Thailand’s Board of Investment. This government agency allows selected businesses to have a fully foreign circle of shareholders. Cryptocurrency ventures and digital asset businesses can under various aspects obtain the investment promotion by the Thailand Board of Investment.
Software development or e-commerce as the basis for a BOI promotion
Promoted software ventures are mainly embedded software, enterprise software and/or digital content, and high value-added software (HVAD). HVAD includes
- big data, data analytics, and predictive analytics software,
- cybersecurity software,
- system software for advanced-technology devices, including business process management systems, and
- industrial software used to support manufacturing.
An e-marketplace is one of the promoted e-commerce activities. The innovation incubation center as part of a software park is another portals to enter Thailand’s investment promotion.
Investment promotion of crypto businesses as digital services in Thailand
A pretty new type of promoted activities is “digital services”. These are mainly software platforms, managed services, and digital architecture design services. The investment regulations explicitly include FinTech, DigiTech, MedTech, and AgriTech.
The project must have expenses for salaries for IT-personnel of at least yearly THB 1.5 million. Also, it must include software development processes specified by Thailand’s Digital Economy Promotion Agency (DEPA) and, if the investment is above THB 10 million, specific quality standard certificates – at least two years after the full operation start-up date.
FinTech-Projects must gain approval from the Ministry of Digital Economy and Society before applying for investment promotion.
A BOI promoted venture can have 100% foreign sharehodlers and tax holidays for five years. Other benefits include an exemption on import duties and the permission to bring in crypto experts and skilled workers to the land of smile.
The BOI application process might take 90 days. The company might decide to apply for its SEC licenses as a Thai majority owned company and restructure into a foreign-owned venture after the BOI investment promotion has been granted.
Trade and Investment Support Office (TISO)
As a fall-back solution, a digital asset company might apply for BOI promotion as a TISO for who providing services in advisory, engineering and technical, international business process outsourcing, etc. For this, annual selling and administrative expenses must be at least THB 10 million during the lifetime of the BOI promotion. TISO promotion does not include any tax benefits.
Professional service offer
Digital asset ventures and BOI applications are two of the law firm’s areas of competence, long-standing experience, and unique market reputation. BOI related services are mainly these tasks:
- BOI promotion advice
- BOI application support
- Ongoing reporting and compliance requirements
- BOI promotion management
- Restructuring and exit advice
- BOI tax advice
A further description of BOI-related services is available at “Legal services on BOI investment promotions“.