cnx_vinyl/docs/boi.md

# BOI Investment Promotion

The project will apply for promotion by the Thailand Board of Investment.
Research snapshot from July 2026, based on the BOI Investment Promotion
Guide 2025/2026 and advisory sources; BOI revises its measures roughly
annually, so every scheme cited here must be reconfirmed at filing time.
The exact activity sub-code needs confirmation by a BOI-registered
consultant before the application.

## The strategic picture

Vinyl pressing is, in BOI terms, basic plastic consumer-goods manufacturing
(Category 6, chemicals/paper/plastics), which lands in **incentive Group B**:
no corporate income tax holiday on the core pressing activity, but the full
non-tax package and machinery duty exemption. The tax value is engineered on
top through the upgrade measures, where this project happens to be strong:

- **Solar: no longer promoted; the battery may be.** The alternative-energy
  measure (Announcement 2/2568, April 2025, under the Smart and Sustainable
  Industry framework) granted a CIT exemption on the solar investment,
  capped at THB 12M/30M/40M per MW. **Announcement 3/2568** (5 June 2025,
  in force 1 July 2025) ended promotion for installing solar power
  generation under that measure for applications from 1 July 2025; what
  remains is machinery modified to use other renewable energy, and battery
  storage (BESS) with its inverters, the eligible investment capped at
  THB 12M per MW
  ([B Global Law](https://bgloballaw.com/2026/01/18/boi-announcement-no-3-2568-amendment-to-renewable-energy-efficiency-enhancement-measures),
  [Smarter Energy Solution](https://smarterenergysolution.com/blog/boi-solar-thailand-2026),
  checked October 2026). So owning the ~520 kWp factory-roof array earns no BOI
  benefit; its case is the bill (see [sustainability](sustainability.md)).
  Whether the 271 kWh battery qualifies is for the BOI consultant. A PPA
  developer selling solar power (200 kW or more per distribution point)
  can still be promoted under activity 7.1.2 (8-year CIT exemption); that
  benefit is the developer's, and how much of it reaches the PPA price is
  a negotiation
  ([CapSolar](https://capsolar.co.th/en/knowledge/boi-solar-incentives-2026)).
- **Automation and metrology**: the Smart and Sustainable Industry upgrade
  measure (Announcement 15/2565, refreshed July 2025) rewards automation,
  smart machinery, and energy efficiency, typically 3 years of CIT
  exemption capped around 50% of the qualifying upgrade investment. The
  automated presses, inline optical inspection, and stamper metrology are
  the natural fit.
- **R&D merit**: investing at least 1% of revenue in Thai R&D adds 1 to 3
  CIT-exemption years and can lift the exemption cap. In-house mastering,
  galvanics process development, and recycled-PVC work could be framed as
  qualifying development.

So the application is pitched on automation and technology content (and
the battery, if it qualifies), not on "we press plastic discs."

## What Group B still delivers (the core value)

- **Machinery import duty exemption**: significant with the entire equipment
  list imported (Germany, Sweden, USA, Japan). **Import VAT goes with it:**
  machinery or raw material imported with the duty exemption is exempt
  from VAT at import as well (Revenue Department answer on the
  [BOI OSOS FAQ](https://osos.boi.go.th/One-Stop/faq-group/205/FAQ-about-VAT--BOI),
  checked October 2026); otherwise a BOI company is treated like any other
  for VAT. What it is worth: the capex blocks in
  [total investment](finance/total-investment.md) are vendor prices
  without duty or VAT, so they already assume promotion. Without it, the
  ~2.3M USD of imported machinery in the launch plant (presses, galvanics
  line, Sibert, cutting room, metrology; block midpoints, as
  [total investment](finance/total-investment.md#launch-plant-october-2026)
  states it) would carry import duty, roughly 5 % (Thailand's MFN averages
  4.1 % on HS 8477 plastics machinery, 0 to 10 % across HS 84; estimate
  until the HS codes are set), ~0.11M USD, and 7 % import VAT, ~0.17M USD
  paid at the border and only recovered later as input tax, mostly as a
  refund claim because exports are zero-rated. The
  [plant and business plan calculator](fleet-calculator.html) shows both
  cases; its BOI switch also counts the water treatment (ZLD/DI) as
  imported, ~2.5M USD at the midpoint (figures re-based October 2026; the
  earlier ~2.75M was the superseded start fleet).
- **100% foreign ownership** of the promoted manufacturing company,
  overriding Foreign Business Act restrictions for the promoted activity.
  The intended split: the main investor holds at least 60 %, at most
  40 % goes to co-investors (user, October 2026;
  [total investment](finance/total-investment.md#two-plans-a-at-180m-thb-and-b-at-215m-thb-october-2026))
- **Land ownership** for the promoted operation despite foreign
  shareholding, plus a small allowance for office/residential use; note the
  privilege is tied to the promotion, which matters for the buy-vs-lease
  decision
- **Visas and work permits** via the One Stop Service, without the usual
  four-Thai-employees-per-permit rule; relevant for foreign commissioning
  engineers and the technical consultant
- **Raw material duty relief**: exemption for export production (1 to 5
  years, renewable) and up to 90% reduction for domestic-sale production

## Requirements

- Minimum investment THB 1,000,000 excluding land and working capital
  (comfortably cleared by the first pressing line alone)
- Debt-to-equity ratio no higher than 3:1, maintained for the life of the
  privileges. Met with room to spare: the shareholders fund the whole
  plant as share capital and no bank loan is planned (user, October 2026;
  [total investment](finance/total-investment.md#two-plans-a-at-180m-thb-and-b-at-215m-thb-october-2026)),
  so any later loan keeps the same ceiling
- Modern machinery and process expected; ISO/environmental compliance for
  larger projects
- BOI promotion does not replace the factory license (Ror.Ngor. 4),
  hazardous substance registration, or wastewater permitting; the galvanics
  effluent is the most likely regulatory friction point regardless of BOI
  status

## Regional angle: Northern Thailand

Chiang Mai, Lamphun, and Lampang sit in the **Northern Economic Corridor**,
which BOI promotes as a creative-economy base; a vinyl/music manufacturing
story fits that narrative. Locating in the **Northern Region Industrial
Estate in Lamphun** simplifies factory licensing and land questions and
provides shared central effluent treatment, which helps the galvanics
permitting. Legacy "Zone 3" incentive tables still found online are
outdated; the current area-based add-ons for Lamphun/Lampang must be
confirmed with BOI directly.

## Process and timeline

1. File via the BOI e-Investment system, then present the project at an
   analyst meeting
2. Decision: about 40 working days for projects under THB 200M (60 to 90
   working days for larger tiers); roughly 4 to 6 months end to end to the
   promotion certificate in practice
3. Incorporate the company (if not yet done) and accept the certificate
4. Import machinery within the duty-exemption window, commonly 30 months
   from certificate issuance (extendable); the Newbilt/Pheenix delivery
   schedule must fit inside it
5. Reach full operation by the certificate deadline (typically about 36
   months), with progress reporting, annual reports, machinery lists, and
   the 3:1 debt-to-equity ratio maintained throughout

## Sequencing consequence

BOI approval comes **before** company incorporation is finalized and before
any machinery purchase orders: duty exemption does not apply retroactively
to equipment already imported, and the certificate defines the import
window. The BOI application is therefore a dependency at the top of the
project timeline, ahead of equipment contracts.

## Open items

- Confirm the exact activity sub-code and tier for vinyl/PVC consumer-goods
  pressing (Group B assumption is well supported but not code-verified)
- Confirm the live version of the smart-and-sustainable measures at
  filing time, and whether the battery qualifies under the BESS part of
  the alternative-energy measure (THB 12M per MW cap); solar itself is out
  since 1 July 2025 (Announcement 3/2568)
- Confirm current NEC/Lamphun area add-ons
- Engage a BOI-registered consultant to structure the application so the
  automation and R&D measures (and the battery) stack on the base promotion
- Check whether R&D contracted with Payap University and the joint student
  programmes ([Payap partnership](payap-partnership.md)) count toward the
  R&D merit or a skills-development measure
- Keep any future label/content/retail arm in a separate entity: media and
  service activities carry different (and sometimes Thai-ownership)
  conditions, and mixing them muddies a clean manufacturing application