BOI Manufacturing Thailand: Factory License & Promotion Guide 2026

Why BOI and Factory Licensing Must Be Read Together

Foreign manufacturers regularly assume that a Board of Investment (BOI) certificate is the single permission they need to begin production. It is not. BOI promotion is an investment incentive package issued by the Office of the Board of Investment under the Investment Promotion Act B.E. 2520. A factory license, by contrast, is an operating permit issued by the Department of Industrial Works (DIW) under the Factory Act B.E. 2535 and its 2019 amendment.

The two regimes regulate different things. BOI says you may receive tax and ownership benefits for your project. The factory license says your physical premises, machinery, waste handling, and environmental controls meet Thai industrial standards. A BOI-promoted manufacturer must still apply for a Ror Ngor 4 license before any commercial production can lawfully begin, unless the operation falls below the statutory thresholds for a Type 3 factory.

Manufacturing Activities That Qualify for BOI Promotion

Thailand’s BOI organizes promoted activities into eight categories, of which four are particularly relevant for foreign manufacturers. The current list, refreshed under the 2023–2027 investment strategy, prioritizes industries that build technological capacity, support the bio-circular-green (BCG) economy, or anchor regional supply chains.

Category 4 — Metal Products, Machinery & Transport Equipment

This is the deepest pool of BOI-eligible manufacturing activities. It covers automotive parts, electric vehicles and EV batteries, industrial machinery, aerospace components, medical devices, and precision tooling. EV manufacturing in particular benefits from enhanced incentives under the BOI’s mobility roadmap, including additional corporate income tax exemption years for high-localization producers.

Category 5 — Electrical Appliances and Electronics

Smart electronics, semiconductor wafer fabrication, advanced printed circuit boards, IoT hardware, and high-value-added consumer electronics qualify here. Activities tied to the EEC (Eastern Economic Corridor) often receive additional location-based incentives layered on top of the standard package.

Category 6 — Chemicals, Paper and Plastics

Specialty chemicals, biodegradable plastics, advanced materials, and paper products with pollution-controlled processes are eligible. The BCG framework has tilted incentives toward biopolymers and circular plastics rather than commodity chemical production.

Category 1 and Category 8 — BCG and Digital Manufacturing

Agricultural processing, food technology, biotech, and digital-enabled smart factories now appear in updated BOI lists. Industry 4.0 upgrades to existing plants can also be promoted, which matters for foreign manufacturers acquiring legacy Thai facilities.

Tax Holidays: 3, 5, or 8 Years by Activity

BOI corporate income tax (CIT) exemptions are tiered by activity group, and the duration drives the financial model for any foreign manufacturer. The current bands work as follows:

• Group A1+ and A1 — up to 10–13 years: Targeted high-technology activities such as advanced biotech, integrated circuit design, and core EV battery cell manufacturing.
• Group A2 — 8 years CIT exemption: High-technology activities of strategic importance, often with no cap on the exempt amount when paired with merit-based incentives.
• Group A3 — 5 years CIT exemption: Mid-technology manufacturing activities that strengthen Thailand’s industrial base.
• Group A4 — 3 years CIT exemption: Activities that add value to local raw materials or operate in the supply chain of higher-tier promoted industries.
• Group B — non-tax incentives only: Activities receive machinery import privileges, work permit support, and land ownership rights but no corporate tax holiday.

Merit-based add-ons can extend the exemption period. Investing in research and development, training Thai personnel in advanced engineering, or partnering with local universities can add up to three additional CIT-exempt years. Locating in designated provinces or the EEC also unlocks supplementary benefits, including a 50% CIT reduction for five years after the holiday ends.

Machinery and Raw Material Import Duty Exemptions

Beyond income tax, BOI promotion delivers two non-tax benefits that are often more cash-positive than the CIT holiday itself:

Import duty exemption on machinery: Promoted manufacturers may import production machinery free of customs duty, provided the equipment is imported within the timeframe specified in the BOI certificate (typically 30 months from the certificate issue date, extendable). This applies to new and certified-refurbished machinery used directly in the promoted activity.

Import duty exemption or reduction on raw materials: Manufacturers exporting their output may import raw materials and components free of duty for the duration of their promotion. Domestic-sale manufacturers may receive a 75% duty reduction for up to two years on inputs not produced in Thailand. Both privileges require active inventory tracking through the BOI’s online Single Window system.

For a foreign EV component manufacturer importing CKD parts, these duty exemptions alone can outweigh the CIT savings in the early years of a project — particularly when capital expenditure is heavy and taxable profit is still low.

How BOI Interacts with the Ror Ngor 4 Factory License

BOI promotion does not replace the factory license. Section 5 of the Factory Act defines a “factory” as any premises housing machinery with combined power of 50 horsepower or more, or employing seven or more workers using machinery for an industrial process. Almost every BOI-promoted manufacturer crosses these thresholds on day one.

Factories are classified in three types under the 2019 amended Factory Act:

• Type 1: Small operations below the 50-HP / 50-worker threshold — no license needed but DIW notification still applies.
• Type 2: Medium operations between defined power and worker bands — DIW notification required, no full license.
• Type 3: Operations above the higher thresholds, or any factory in a regulated industrial activity, regardless of size — full Ror Ngor 4 license required before operating machinery.

BOI manufacturers almost always fall into Type 3. The Ror Ngor 4 application is reviewed by the DIW (or by industrial estate authorities if the factory sits inside an estate such as Amata, Hemaraj, or AMATA City Chonburi). Approval requires environmental review, building permits, fire safety clearance, machinery layout drawings, and proof of zoning compliance under the Town Planning Act.

Practically, this means that a BOI certificate handed to you in Bangkok cannot start a single conveyor belt in Rayong. The factory license is the gating permission for production, while BOI is the gating permission for tax and ownership benefits.

Correct Sequencing: BOI → Company → Factory License

The right order matters because each step depends on documents produced in the previous one. A common mistake we see at Lex Bangkok is foreign investors registering a Thai company first, leasing land, and then discovering that their planned activity does not match the company’s registered objectives or the BOI category they ultimately apply under. Re-doing this paperwork costs months.

Step 1 — Pre-Apply for BOI Promotion

Submit the BOI application before incorporating the operating company. The applicant on the BOI form can be the foreign parent or the local promoter. Once BOI issues the promotion certificate (typically within 40–60 working days for standard projects), you are bound by the activity description, capital structure, and project timeline that you submitted.

Step 2 — Incorporate the Thai Company

Register the Thai operating entity with the Department of Business Development (DBD) using objectives and shareholder ratios that match the BOI promotion. BOI-promoted companies enjoy 100% foreign ownership of the promoted activity, which is the most reliable route around the Foreign Business Act restrictions on manufacturing-adjacent services. Company registration capital must be paid up to a level matching BOI’s promoted investment requirement.

Step 3 — Sign Land Use and Apply for Building / Construction Permits

BOI-promoted manufacturers may own land for the promoted business. Lease or acquire the plot, then apply for a construction permit under the Building Control Act. This step is often run in parallel with company incorporation to save time.

Step 4 — Apply for the Ror Ngor 4 Factory License

Once you have a registered company, a BOI certificate, a building permit, and machinery specifications, file the Ror Ngor 4 application with DIW or the relevant industrial estate authority. Expect 60–90 working days for review, longer if environmental impact assessment (EIA) is triggered.

Step 5 — Import Machinery Under BOI Privileges

With BOI certificate and Ror Ngor 4 license in hand, request the BOI’s machinery list approval and import equipment duty-free under the certificate. Machinery cannot be commercially used until DIW has inspected and cleared the factory.

Step 6 — Commence Operations and Submit BOI Project Reports

Begin production after DIW final inspection. From this point, the manufacturer must file periodic BOI compliance reports, maintain raw material inventories, and renew the factory license every five years.

Common Pitfalls Foreign Manufacturers Should Avoid

Several recurring issues delay or invalidate BOI manufacturing projects. Work permit ratios are the most underestimated: BOI promoted companies do not escape the requirement to maintain four Thai employees per work permit unless the activity expressly waives it, and BOI-eligible roles are scrutinized closely.

Land use is another trap. A BOI certificate authorizes land ownership for the promoted activity only; warehousing, retail showrooms, or staff housing on the same parcel may require separate FBA-compliant structures. Industrial estate zoning and Town Planning Act color-zone rules can also disqualify otherwise suitable plots.

Finally, BOI conditions are binding. Failure to import machinery within the certificate’s machinery import window, missing capital injection deadlines, or producing outside the promoted scope can trigger partial or full revocation, with retroactive tax liability.

Frequently Asked Questions