Always Start with BOI By Gregers Moller
L
eo Alexandersen is probably the most experienced Danish businessman in Thailand today when it comes to working with Board of Investment. Over the years he has been involved as an advisor to around fifteen different companies receiving BOI support. They have been active within a wide range of sectors, like food manufacturing, mechanical components, electronics, horticulture. “It is simply the first thing I do with any company who has come here to explore their opportunities in Thailand – I
Bureaucratic but Duty Free No import tax on the raw materials. A position in BOI zone number three gives Zoma Electronics economic advantages. But the price is a opaque bureaucracy and prolonged procedure from the authorities – especially for those who don’t speak Thai.
the homework. “When you have worked out a feasible businessplan and made a draft application, it is time to visit BOI again. They will go through your business plan and suggest changes and adjustments that would give you the maximum support of the BOI - if you can accept those changes.” Then you go home and work out the actual application. “Today, this application can actually be submitted on-line, so if the investor is not living here, there is no need need to fly out here to complete this step,” Leo Alexandersen explains. Having submitted the application, the time needed for the processing can vary from project
By Charlotte Lund Dideriksen
G
ood intentions is not necessarily a guaranty for god results when it comes to the BOI-system says Torben Z. Wendelboe, director of Zoma EMS Asia Productions Ltd. – a subsidiary of the Danish electronic prototype-producer Zoma Electronics A/S. Ironically enough it is in his opinion the aim to fulfil the good intentions which throw a spanner on the business-friendly intentions. “Despite the advantages of being exempted from certain taxations, the administration and monitoring of the investment-zones have entailed a considerable amount of bureaucracy. In their eager to make benefits for the investors the management of the BOI-system creates new obstacles” he explains. Torben Z. Wendelbo recommends newcomers to the business scene in Thailand to get professional help to crack the bureaucratic nuts. “The BOI regulations are quite confusing for a non-Thai speaker, I will therefore strongly recommend new investors to find an educated BOI-officer to take care of the BOIadministration and the contact with the authorities,” he says.
Step One in exploring your business opportunities in Thailand is a visit to BOI, says Leo Alexandersen. arrange a meeting for them with the Board of Investment,” says Leo Alexandersen. Sometimes, he is involved in his position as advisor of IFU – the The Industrialisation Fund for Developing Countries. Otherwise, he has been involved in his private capacity as a professional board member and business advisor. “The BOI staff speaks English so it is actually possible to just walk in and request a meeting to see what they suggest. This is simply step one for doing business in Thailand,” he says. Based on the advise of the BOI officer – and provided the project in question is eligible for BOI support - next step is doing 12
DTCC
to project. “I have seen everything from three weeks to two months. It is up to the nature of the project.” “If all goes well, next you will be informed that you can come and pick up a “Notification” paper stating that your project has been approved. You then have one month to inform the BOI if you want to accept the support they have offered.” The BOI will then issue your “Certificate” which is the overall most important BOI document. This is the one you need to show when importing machinery without paying import duties or present to the tax authorities to enjoy your tax benefits.
“You don’t have to use the Certificate immediately. It is valid for a two years, so there is plenty of time to get your project started in the right way. Maybe you need to find the right partners. Maybe you just need to wait for the best timing.” “What ever you decide to do, this is the point where it is crucial that the company selects the Thai legal advisors and auditing company, they feel comfortable working with,” Leo Alexandersen emphasizes. “That is because you are now entering the track where all paperwork is in Thai and it is the Thai system and regulations, you need to comply with. Without proper advisors, you
are extremely bad off and very vulnerable,” he warns. Another decision is whether the company prefers to continue working with the BOI headoffice or the local BOI office in the province. “The quality of the service you get locally is fully up to the standard you get in the headoffice, so I mostly suggest transferring to the local office in the province, where the company decides to etablish itself,” Leo Alexandersen says. After the company is set up, Leo Alexandersen also suggests employing a specific BOI officer in the company with the main task to coordinate and handle the paperwork and reports that
the company needs to comply with. “Among other things, BOI requests that the company needs to be ISO 9000 certified within the first 2 years. I personally find that very positive. It should be properly handled by a Quality Assurance Manager. The BOI officer should simply be your liason officer.” Leo Alexandersen is the representative of IFU in Thailand, and is willing to assist also other companies interested in exploring their opportunities in Thailand.
May/June 2009
13