Criteria for Factory Relocation

To encourage industrial decentralization, the Board will grant promotion status to existing activities in the Center area, whether being BOI-promoted or not, if they relocate to other regions.

The following criteria are used:

  • The operation must relocate from Zone 1 to Zone 2, or from Zone 1 or Zone 2 to Zone 3;
  • The operation must relocate to industrial estates or promoted industrial zones;
  • The type of activity must be one that is included in the List of Activities Eligible for promotion and the size of the investment must be in accordance with that specified by the Board;
  • The existing operation must be closed down and the operation at the relocated operation must start within two years from the dated of receiving the promotion certificate;
  • The relocated project is granted tax and non-tax privileges as follows:
    • Projects relocated to industrial estates or promoted industrial zones in Zone 2, except in Laem Chabang Industrial Estate or industrial estates or promoted industrial zones in Rayong Province, will be granted corporate income tax exemption for a period of seven years, provided that projects with a capital investment of 10 million bath or more (excluding cost of land and working capital) obtain ISO 9000, ISO 14000 or similar international certification within two years from the start-up date of the new plant, otherwise corporate tax exemption will be reduced by one year;
    • Projects relocated to industrial estates or promoted industrial zones in Zone 3, including Laem Chabang Industrial Estate and industrial estates or promoted industrial zones in Rayong Province, will be granted the following:
      • Corporate income tax exemption for a period of eight years, provided that projects with a capital investment of 10 million baht or more (excluding cost of land and working capital) obtain ISO 9000, ISO 14000 or similar international standard certification within two years from its start-up date, otherwise corporate income tax exemption will be reduced by one year;
      • Fifty percent reduction of corporate income tax of net profit derived from the investment for five years after the exemption period;
      • Double deduction for transportation, electricity and water costs for 10 years from the date of first revenue derived from the promoted activity;
      • Deduction from the net profit of 25 percent of the project’s infrastructure installation or construction costs in addition to normal depreciation, and such deduction can be made from the net profit for any one year or several years within 10 years from the date of first revenue derived from the promoted activity.
    • Activities included in the List of Activities Eligible for Promotion, but which are not eligible for corporate income tax exemption, will not be granted such exemption when operations are relocated.
  • The corporate income tax exemption will be granted from the day the first revenue is derived from the relocated activities.
  • In the event of a change of the incentives given under cluster promotion or the expiration of the promotion application by December 31, 2014, the Board might consider protection for projects within industrial estates or industrial zones and for projects that expand their promoted activities in the same location on granting the incentives, and this not less than the existing incentives.

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