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User, October 2026: take the BOI duty-free import and VAT exemption into consideration. - boi.md: import VAT goes with the BOI duty exemption (Revenue Department answer on the BOI OSOS FAQ, checked October 2026); what it is worth: ~2.75M USD of imported machinery at the start fleet (block midpoints) would otherwise carry ~5 % duty (Thai MFN averages 4.1 % on HS 8477, 0 to 10 % across HS 84; estimate until the HS codes are set), ~0.14M USD, and 7 % import VAT, ~0.2M paid at the border and recovered later as input tax, mostly as a refund claim since exports are zero-rated. - total-investment.md: the blocks are vendor prices without duty or import VAT, so the headline already assumes promotion. - Fleet calculator: BOI promoted / not promoted switch and export share. Not promoted adds the machinery duty to capex and depreciation, shows the import VAT as cash at the border, and charges duty on imported PVC compound; promoted exempts both, with no compound duty on exported records and 90 % off for domestic sales (sections 36(1) and 30). A note under the KPIs shows what promotion saves either way. Defaults: payback 3.1 years with BOI, 3.2 without; adverse case operating result -31k with BOI, -68k without. CIT and BOI CIT exemptions still not modelled.
133 lines
7.0 KiB
Markdown
133 lines
7.0 KiB
Markdown
# BOI Investment Promotion
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The project will apply for promotion by the Thailand Board of Investment.
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Research snapshot from July 2026, based on the BOI Investment Promotion
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Guide 2025/2026 and advisory sources; BOI revises its measures roughly
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annually, so every scheme cited here must be reconfirmed at filing time.
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The exact activity sub-code needs confirmation by a BOI-registered
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consultant before the application.
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## The strategic picture
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Vinyl pressing is, in BOI terms, basic plastic consumer-goods manufacturing
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(Category 6, chemicals/paper/plastics), which lands in **incentive Group B**:
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no corporate income tax holiday on the core pressing activity, but the full
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non-tax package and machinery duty exemption. The tax value is engineered on
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top through the upgrade measures, where this project happens to be strong:
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- **Solar and battery**: the alternative-energy measure (Announcement
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2/2568, April 2025, under the Smart and Sustainable Industry framework)
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grants CIT exemption based on the solar investment. Eligible spend
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explicitly includes PV modules, inverters, BESS and BESS inverters, and
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mounting structures, capped at THB 12M/30M/40M of investment value per MW
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depending on investment type. The planned Deye + Gobel installation
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converts directly into CIT-exemption headroom.
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- **Automation and metrology**: the Smart and Sustainable Industry upgrade
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measure (Announcement 15/2565, refreshed July 2025) rewards automation,
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smart machinery, and energy efficiency, typically 3 years of CIT
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exemption capped around 50% of the qualifying upgrade investment. The
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automated presses, inline optical inspection, and stamper metrology are
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the natural fit.
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- **R&D merit**: investing at least 1% of revenue in Thai R&D adds 1 to 3
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CIT-exemption years and can lift the exemption cap. In-house mastering,
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galvanics process development, and recycled-PVC work could be framed as
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qualifying development.
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So the application is pitched on solar, automation, and technology content,
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not on "we press plastic discs."
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## What Group B still delivers (the core value)
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- **Machinery import duty exemption**: significant with the entire equipment
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list imported (Germany, Sweden, USA, Japan). **Import VAT goes with it:**
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machinery or raw material imported with the duty exemption is exempt
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from VAT at import as well (Revenue Department answer on the
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[BOI OSOS FAQ](https://osos.boi.go.th/One-Stop/faq-group/205/FAQ-about-VAT--BOI),
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checked October 2026); otherwise a BOI company is treated like any other
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for VAT. What it is worth: the capex blocks in
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[total investment](finance/total-investment.md) are vendor prices
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without duty or VAT, so they already assume promotion. Without it, the
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~2.75M USD of imported machinery at the start fleet (presses, galvanics,
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Sibert, lathe system, metrology; block midpoints) would carry import duty,
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roughly 5 % (Thailand's MFN averages 4.1 % on HS 8477 plastics
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machinery, 0 to 10 % across HS 84; estimate until the HS codes are set),
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~0.14M USD, and 7 % import VAT, ~0.2M USD paid at the border and only
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recovered later as input tax, mostly as a refund claim because exports
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are zero-rated. The [press fleet calculator](fleet-calculator.html)
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shows both cases.
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- **100% foreign ownership** of the promoted manufacturing company,
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overriding Foreign Business Act restrictions for the promoted activity
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- **Land ownership** for the promoted operation despite foreign
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shareholding, plus a small allowance for office/residential use; note the
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privilege is tied to the promotion, which matters for the buy-vs-lease
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decision
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- **Visas and work permits** via the One Stop Service, without the usual
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four-Thai-employees-per-permit rule; relevant for foreign commissioning
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engineers and the technical consultant
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- **Raw material duty relief**: exemption for export production (1 to 5
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years, renewable) and up to 90% reduction for domestic-sale production
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## Requirements
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- Minimum investment THB 1,000,000 excluding land and working capital
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(comfortably cleared by the first pressing line alone)
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- Debt-to-equity ratio no higher than 3:1, maintained for the life of the
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privileges; plan the equity/loan mix for the machinery and solar capex
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accordingly
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- Modern machinery and process expected; ISO/environmental compliance for
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larger projects
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- BOI promotion does not replace the factory license (Ror.Ngor. 4),
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hazardous substance registration, or wastewater permitting; the galvanics
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effluent is the most likely regulatory friction point regardless of BOI
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status
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## Regional angle: Northern Thailand
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Chiang Mai, Lamphun, and Lampang sit in the **Northern Economic Corridor**,
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which BOI promotes as a creative-economy base; a vinyl/music manufacturing
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story fits that narrative. Locating in the **Northern Region Industrial
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Estate in Lamphun** simplifies factory licensing and land questions and
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provides shared central effluent treatment, which helps the galvanics
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permitting. Legacy "Zone 3" incentive tables still found online are
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outdated; the current area-based add-ons for Lamphun/Lampang must be
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confirmed with BOI directly.
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## Process and timeline
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1. File via the BOI e-Investment system, then present the project at an
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analyst meeting
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2. Decision: about 40 working days for projects under THB 200M (60 to 90
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working days for larger tiers); roughly 4 to 6 months end to end to the
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promotion certificate in practice
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3. Incorporate the company (if not yet done) and accept the certificate
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4. Import machinery within the duty-exemption window, commonly 30 months
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from certificate issuance (extendable); the Newbilt/Pheenix delivery
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schedule must fit inside it
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5. Reach full operation by the certificate deadline (typically about 36
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months), with progress reporting, annual reports, machinery lists, and
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the 3:1 debt-to-equity ratio maintained throughout
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## Sequencing consequence
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BOI approval comes **before** company incorporation is finalized and before
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any machinery purchase orders: duty exemption does not apply retroactively
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to equipment already imported, and the certificate defines the import
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window. The BOI application is therefore a dependency at the top of the
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project timeline, ahead of equipment contracts.
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## Open items
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- Confirm the exact activity sub-code and tier for vinyl/PVC consumer-goods
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pressing (Group B assumption is well supported but not code-verified)
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- Confirm the live versions and per-MW caps of the solar and
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smart-and-sustainable measures at filing time
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- Confirm current NEC/Lamphun area add-ons
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- Engage a BOI-registered consultant to structure the application so the
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solar, automation, and R&D measures stack on the base promotion
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- Check whether R&D contracted with Payap University and the joint student
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programmes ([Payap partnership](payap-partnership.md)) count toward the
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R&D merit or a skills-development measure
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- Keep any future label/content/retail arm in a separate entity: media and
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service activities carry different (and sometimes Thai-ownership)
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conditions, and mixing them muddies a clean manufacturing application
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