Finance Ministry, BOI revamp investment rules, scrap tax incentives

The Organisation for Economic Co-operation and Development (OECD), in collaboration with the Group of Twenty (G20), has introduced a Global Minimum Corporate Tax Rate of 15% to ensure that large multinational enterprises (MNEs) pay at least 15% of their actual accounting profits in each country where they operate.

This measure aims to prevent profit shifting, the practice of transferring profits to low-tax or tax-haven jurisdictions, while promoting fair international taxation and restoring tax revenues lost due to generous corporate tax incentives or exemptions granted in the past. The 15% minimum tax rule will apply to fiscal years beginning on or after January 1, 2025, in most countries that have legislated in line with OECD guidelines.

BOI ready to adjust investment incentives

Narit Therdsteerasukdi, Secretary-General of the Board of Investment (BOI), said the BOI has already prepared partial measures to accommodate the new global tax regime under BOI Announcement No. 1/2023. The regulation allows qualifying multinational investment projects under the OECD framework to convert their corporate income tax exemption into a 50% corporate tax reduction for twice the normal period, but capped at 10 years in total. This remains a significant incentive for retaining investment while aligning companies’ effective tax rate more closely with the 15% minimum threshold.

At the same time, the BOI and the Finance Ministry are developing a mechanism for a Qualified Refundable Tax Credit (QRTC), an investment promotion tool recognised by the OECD as compliant with the minimum tax rule. Under this scheme, companies will receive tax credits that can be used to offset various tax liabilities; any unused credits within a specified period can be refunded in cash.

The tax credit system will be linked to activities that benefit the Thai economy, such as research and development, workforce training, and production efficiency improvements. Once finalised, the QRTC is expected to serve as a new instrument to enhance the quality and competitiveness of investment in Thailand, with further details to be announced after consultations are complete.

Finance Ministry confirms cancellation of tax privileges

Lavaron Sangsnit, Permanent Secretary of the Finance Ministry, confirmed that all tax privileges granted to companies under the Board of Investment (BOI) promotion schemes will be abolished to comply with the OECD’s Global Minimum Tax (GMT) framework, which requires multinational corporations to pay a minimum 15% corporate income tax.

For companies affected by the termination of these tax incentives, the BOI’s Competitiveness Enhancement Fund will be used to provide support instead. The draft amendment to the Competitiveness Enhancement Act has already passed review by the Council of State.

Under the amended law, the QRTC, an investment promotion measure recognised by the OECD as compatible with the global minimum tax, will operate in a tax credit card-like system. Businesses can use these credits to pay corporate or additional taxes, while the Revenue Department will later redeem the tax value directly from the BOI. This mechanism will allow the Revenue Department to collect full tax revenues from BOI-promoted projects without relying on tax exemptions.

“If any QRTC remains unused for tax payment, the taxpayer can request a refund from the BOI within four years. The BOI will therefore need to allocate a specific budget for this credit scheme, which has been a concern in terms of funding availability,” Lavaron explained.

The Revenue Department is currently drafting subordinate legislation to outline the calculation methods for the additional tax, which is being expedited to take effect within this year. The Additional Tax Act 2024 is scheduled to apply to the 2025 accounting year. If implementation is delayed, the start of the accounting cycle will be postponed to 2026, pushing the first year of tax collection from 2027 to 2028.

Investors diversify production bases amid global uncertainty

Narit said that in an era marked by geopolitical tensions and shifting global economic structures, investors worldwide are rethinking strategies and relocating production bases to diversify risks. According to the World Investment Report by UNCTAD, global foreign direct investment (FDI) has contracted for two consecutive years, falling 11% in 2024.

In contrast, ASEAN bucked the trend with 8% FDI growth, emerging as a global “bright spot” for investors. Thailand has stood out as one of the region’s top performers, particularly in high-tech industries.

BOI investment applications soar to 1.37 trillion baht

The BOI reported that during the first nine months of 2025, investment promotion applications reached 2,622 projects, up 23% from the same period last year, with total investment value surging 94% to 1.37 trillion baht, already 22% higher than the total for the entire year of 2024. This reflects strong investor confidence in Thailand’s economic potential and its role as a regional investment hub in ASEAN.

The top three industries attracting the largest investments were:

1. Digital industry: 612.8 billion baht (119 projects), led by data centre investments from Europe, Japan, China, Singapore, and Hong Kong, totalling over 600 billion baht.
2. Electronics and electrical appliances: 184.1 billion baht (382 projects), focused on cell battery manufacturing, printed circuit boards (PCB), and advanced chip systems.
3. Automotive and parts: 71 billion baht (229 projects), centred on EVs, hybrid vehicles, electric powertrains, and next-generation automotive components.

Additional investments included 74.2 billion baht in renewable energy and 47.2 billion baht in agriculture and food industries, further strengthening Thailand’s appeal as a diversified investment destination.

Thailand rises as regional technology hub

Foreign direct investment (FDI) has become a key growth engine this year, with inflows exceeding 800 billion baht, up 84% from the previous year. Joint ventures between Thai and foreign investors totalled 325.7 billion baht, a surge of over 150%, while domestic investment reached 240.9 billion baht, up 68%. The top five countries seeking BOI investment promotion were Singapore, Hong Kong, China, the United Kingdom, and Japan.

Currently, there are 2,413 projects awaiting BOI approval worth 1.11 trillion baht, and another 2,050 projects worth 947 billion baht pending investment promotion certificates. Historical data show that more than 80% of BOI-approved projects commence operations within two years of certification, while the remaining 20%—mainly large-scale projects requiring complex systems or imported machinery—take longer. Projects involving production base relocations due to trade conflicts, however, tend to start faster, often becoming operational within 12 to 18 months.

BOI predicts 2026 as Thailand’s “golden year of investment”

The BOI anticipates that 2026 will mark the “golden year of Thai investment”, driven by three major forces:

1. Global production relocation resulting from geopolitical conflicts.
2. Technological advancement in AI, data centres, and electric vehicles (EVs).
3. Thailand’s strong fundamentals — robust infrastructure, clean energy, skilled workforce, and consistent government policies.

Under the new administration’s “Quick Big Win” strategy, the BOI will fast-track three key measures:

1. Develop 100,000 high-skilled workers for new industries through the Competitiveness Enhancement Fund.
2. Support Thai entrepreneurs with grants covering 30–50% of investment and actual expenses, capped at 100 million baht per company, to improve productivity and competitiveness.
3. Launch the FastPass system to accelerate approval and licensing processes across seven key agencies, BOI, Department of Industrial Works, Industrial Estate Authority of Thailand, Office of Natural Resources and Environmental Policy and Planning, Immigration Bureau, Department of Employment, and EEC Office, cutting approval times by 20–50%.

Turning point for Thailand’s economy

“Thailand is approaching a turning point in its economic structure. If the country can fully capture opportunities from global production relocation, it will enter a new era, ‘Thailand 4.0 Prosperity Age’, where high-tech investment becomes the driving force of economic transformation,” Narit said.

However, he acknowledged that several investment bottlenecks remain, such as electricity transmission limitations in the EEC, rising industrial land prices, shortages of skilled labour, slow visa and work permit processes, and ease of doing business issues, all critical factors that must be resolved swiftly to maintain investor confidence.

With strong state support, ready infrastructure, and private-sector cooperation, Thailand is poised to become a magnet for global technology capital in 2026. The BOI sees this as a golden opportunity to accelerate economic restructuring, foster high value-added, innovation-driven industries, and position Thailand as a regional leader in advanced investment and technology.