Thailand Industrial Zone Policy Explained: A Must-Read for Foreign Companies Setting Up Factories
Overview of Thailand's Industrial Zones
Thailand is the second-largest economy in Southeast Asia, with a well-developed industrial infrastructure and favorable investment policies.
Major Industrial Zones
1. Eastern Economic Corridor (EEC)
- Rayong Province: Automotive, Petrochemical, and Electronics Industries
- Chonburi Province: Machinery, Electronics, Food Processing
- Nakhon Sawan: Logistics and Aviation Industries
2. Central Industrial Zone
- Ayutthaya: Auto Parts, Electronics
- Pathum Thani: Electronics, Machinery
- Phra Nakhon Si Ayutthaya: Food, Textiles
3. North Industrial Zone
- Chiang Mai Province: Electronics, Handicrafts
- Nan Province: Electronics, Textiles
Foreign Investment Policy
1. Foreign shareholding ratio
- BOI-Incentivized Industries: Hold **100%** equity
- Non-incentivized Industries: generally no more than49%
- Specific Industry: Seeking Thai Partners
2. Tax incentive policies
BOI Class 1 Offer (8 Year Tax Exemption)
- high-tech industry
- R&D Center
- Software Industry
BOI Tier 2 Incentive (5 years tax-free)
- Automotive Manufacturing
- Electronics & Electrical
- Mechanical Manufacturing
BOI Three Incentives (3 years tax exemption)
- Food Processing
- Textiles and Apparel
- Building Materials Manufacturing
3. Other discounts
- Import Duty Exemption for Imported Equipment
- Exemption from import tariffs on raw materials
- Freely remit foreign exchange
- Convenience for Work Permits of Foreign Employees
BOI approval process
1. Preparation Phase (1-2 Weeks)
- Confirm Investment Project
- Prepare feasibility study report
- Prepare company registration documents
- Select Industrial Park Location
2. BOI Application (4-8 weeks)
- Submit application online
- BOI Initial Review
- Supplementary Materials (Optional)
- BOI Committee Approval
- Obtain Investment Promotion Certificate
3. Company Formation (2-4 weeks)
- Register a PT PMA Company
- Open an account
- Register for Tax
- Register for Social Security
4. Factory establishment approval (4-8 weeks)
- Factory License Application
- Building Permit Application
- Environmental Impact Assessment (EIA)
- Fire Safety Approval
Land and Lease Considerations
1. Land Ownership
⚠️ Foreign investment restrictionsForeign companies cannot directly own land.
Solutions：
- Long-term lease (up to 30 years + 30 year)
- Joint venture with a Thai partner (Thai share: 51%)
- BOI companies can apply for land ownership
2. Industrial Land Prices
| Region | Price (THB/sq wa) | RMB (CNY/sqm) |
|---|---|---|
| Rayong Province | 3,000-6,000 | 60-120 |
| Chonburi Province | 3,500-6,500 | 70-130 |
| Bueng Kan | 2,500-5,000 | 50-100 |
| Ayutthaya | 2,000-4,500 | 40-90 |
Table Summary
✅ Rayong ProvinceandChonburi ProvinceA popular investment area with moderate land prices and well-developed infrastructure.
3. Factory Rental Price
| Type | Price (THB/sq.m./month) | RMB (CNY/sq.m/month) |
|---|---|---|
| Standard Factory Building | 100-180 | 20-36 |
| High-Standard Industrial Warehouse | 150-250 | 30-50 |
| Custom Factory | 200-350 | 40-70 |
4. Important Notes
- Verify Land Title Deed (Chanote)
- Confirm land use (industrial)
- Check infrastructure (water, electricity, roads)
- Understand lease terms (lease duration, rent adjustments)
Factory Site Selection Recommendations
1. Select an appropriate industrial zone
- Select by industry type
- Consider supply chain integration
- Evaluate logistics costs
- Learn local policies
2. Plan ahead
- Room for expansion
- Consider environmental requirements
- Plan Employee Housing
- Assess infrastructure
3. Seek Professional Support
- Hire a local attorney
- Consult a tax advisor
- Select a Reliable EPC Contractor
- Understand cultural differences
4. Take advantage of preferential policies
- Apply for BOI Investment Promotion
- Leverage Free Trade Agreements
- Apply for R&D Subsidy
- Claim Training Subsidy
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