Thailand’s automotive industry continues to play a crucial role in the country’s industrial and export sectors. To strengthen the competitiveness of the automotive supply chain and encourage technology transfer, the Thailand Board of Investment (BOI) has introduced new investment promotion measures encouraging joint ventures between Thai and foreign companies in automotive parts manufacturing.
The measure is designed to stimulate foreign investment while simultaneously creating new business opportunities for Thai enterprises. By promoting collaboration between international automotive manufacturers and local companies, the policy aims to enhance Thailand’s capability in producing advanced automotive components that align with the global transition toward modern vehicle technologies.
Objective of the BOI Joint Venture Promotion Measure
The BOI Announcement No. 5/2569 aims to encourage foreign automotive parts manufacturers to establish partnerships with Thai companies, thereby strengthening Thailand’s domestic automotive ecosystem.
Through such cooperation, the BOI expects to achieve several policy goals, including:
- Promoting technology transfer to Thai manufacturers
- Enhancing the competitiveness of Thailand’s automotive supply chain
- Supporting the development of next-generation automotive technologies
- Expanding business opportunities for Thai automotive parts companies
The measure reflects Thailand’s strategy to maintain its position as a regional hub for automotive manufacturing and automotive parts production in Southeast Asia.
Eligible Business Activities
The new promotion measure applies to investment projects in the following BOI activity categories:
Activity Category 3.4 – Manufacture of engines, equipment, or automotive components
Activity Category 3.5 – Manufacture of automotive parts
These activities are key components of Thailand’s automotive industry and play a critical role in supporting both domestic vehicle production and export-oriented manufacturing.
Importantly, the measure covers both new investment projects and existing BOI-promoted projects. This approach ensures that both new investors and companies already operating in Thailand can benefit from the policy.
Conditions for New Investment Projects
For newly established projects seeking promotion under this measure, several key conditions must be satisfied.
First, the project must involve the establishment of a new company after the issuance of the BOI announcement. The new company must be structured as a joint venture between a foreign company and a Thai company.
Second, the Thai company must meet the following criteria:
– hold at least 20 percent of the registered capital of the new company throughout the period during which corporate income tax incentives are granted;
– have operated in the automotive or automotive parts industry for at least three years prior to the date of application; and
– have Thai nationals holding at least 60 percent of its registered capital.
Third, the project must also involve a minimum investment of THB 100 million, excluding land costs and working capital.
Note: Applications for investment promotion under this measure must be submitted between the first working day of 2026 and the last working day of 2027.
Conditions for Existing BOI-Promoted Projects
The existing project must meet the following requirements:
– be promoted under Activity Category 3.4 or Activity Category 3.5
– have remaining corporate income tax exemption privileges at the time of the submission of application for additional incentives.
– have been fully foreign-owned at the time the promotion certificate was issued.
To qualify for the new measure, the existing company must subsequently amend its shareholding structure to become a joint venture between a foreign company and a Thai company. After the restructuring, the same conditions for Thai company in the new investment project apply.
Note: Applications for investment promotion under this measure must be submitted between the first working day of 2026 and the last working day of 2027.
Additional Tax Incentives
One of the most significant benefits of this measure is the additional corporate income tax exemption period granted to eligible projects.
Projects that meet the above requirements will receive an additional three-year corporate income tax exemption. However, the total corporate income tax exemption period granted under BOI promotion must not exceed eight years in total.
This additional tax benefit can significantly improve the financial viability of investment projects and encourage stronger collaboration between foreign and Thai automotive companies.
Strategic Importance for Thailand’s Automotive Industry
Thailand has long been known as the “Detroit of Asia,” serving as one of the region’s largest automotive manufacturing bases. The introduction of this joint venture promotion measure reflects Thailand’s intention to maintain its leadership in automotive manufacturing while adapting to the rapid evolution of vehicle technology.
By encouraging partnerships between global manufacturers and local companies, the BOI aims to:
- strengthen domestic supply chains
- support innovation in automotive parts manufacturing
- enhance the technological capabilities of Thai manufacturers
- prepare the industry for future developments such as electric vehicles and advanced mobility technologies
Such collaboration is expected to play a crucial role in ensuring that Thailand remains competitive in the global automotive industry.
How Sky International Legal Assists Investors
Establishing joint ventures and applying for BOI investment promotion requires careful legal and strategic planning. At Skyinterlegal, we provide comprehensive advisory services for investors seeking BOI promotion and investment opportunities in Thailand.
Our services include:
- BOI investment promotion advisory
- structuring joint ventures between Thai and foreign investors
- preparing and submitting BOI promotion applications
- legal compliance and post-promotion advisory
- strategic guidance for investment projects in Thailand
Our team regularly assists international investors in navigating Thailand’s regulatory framework and maximizing available investment incentives.
Official BOI Announcement
The details of this measure are provided in:
Investors are encouraged to review the official announcement for complete legal conditions and requirements.
Disclaimer
This article is provided for informational purposes only and does not constitute legal advice. Investors should seek professional legal advice before making investment decisions.