If an enterprise is located in an Investment Promotion Zone, it may qualify for the following additional discretionary benefits: 

1.	Reduction of up to 90% of applicable business taxes on product sales for up to five years.
2.	Reduction by 50% of company income tax for an additional five years after any period of total tax exemption.
3.	Company income tax deductions of:

Normal depreciation allowance may also be claimed.

Furthermore, the BOI may offer the following special tariff protections:

1.	Prohibition of imports into Thailand of similar products.
2.	Imposition of a surcharge of up to 50% on the value of competitive imports.

To encourage exports, the BOI may award the following additional incentives:

1.	Exemption from export duties and business taxes on exported products.
2.	Exemption from import duties and business taxes on raw materials, goods and other materials required for the production of export commodities.
3.	Income tax deduction of 5% of the increase in income from the previous year attributable to exports.
4.	Exemption from business taxes for the domestic supplier or producer of raw materials for the promoted enterprise.

It is important to note that the Prime Minister, in his capacity as Chairman of the Board of Investment, may issue reasonable orders he deems appropriate to protect and facilitate a promoted activity. Such possible orders include changes in the structure or application of the taxation laws.

No incentives are available concerning personal income taxes. After the Promotional Certificate is issued the company must meet the various stipulated time deadlines.

Criteria for Promotion: The BOI focuses on projects which meet the following criteria:

	Improve Thailand's balance of payments, especially through the export of products.
	Support resource development.
	Increase employment of Thai nationals.
	Location outside of Bangkok.
	Energy conservation or replacement of imported energy supplies.
	Industries which form a base for further stages of industrial development.
	Other areas considered important and necessary.

In determining the appropriateness of a project the BOI uses the following criteria: 

	Size of the market demand for products, commodities or services in relaiton to the proposed increased production capacity.
	The production cost must be low enough to compete with imports.
	The value added is at least 20% of the sales revenue (unless the production is mainly for export.)
	The ratio of debt to registered capital for a new company, or debt to equity or registered capital (whichever is lower) for an existing company, does not exceed 5:1.
	Modern machinery, equipment and production processes are used (except in cases where an older process is to be used and its efficiency is certified by a reliable institution, and the BOI approves the installation.)

Promotional privileges are not available in the following situations:

	If commercially viable firms already exist in Thailand that produce the products, commodities or services without promotional privileges.
	The BOI considers that the project, even though eligible for promotion, may be operated with a reasonable rate of return without promotional privileges granted.
	Existing production capacity is adequate to serve the domestic market demand for the following two years (except in the case of production for export)
	The project would use solely imported raw materials, the production would be mainly for domestic distribution and the import duty for the product already exceeds 40%.
	The BOI either suspends the promotion of the activity or considers the project inappropriate for promotional privileges.

Page 3