Thailand BOI Launches New SME Efficiency Enhancement Measures (Notification No. 5/2568)
The Thailand Board of Investment (“BOI”) has issued BOI Notification No. 5/2568 Re: Measures to Enhance the Efficiency of Small and Medium-Sized Enterprises (“SMEs”), introducing a comprehensive incentive framework aimed at strengthening the competitiveness of SMEs. The measures are designed to encourage SMEs to modernize their operations through technological upgrades, enhanced operational efficiency, digital transformation, improved energy efficiency, and diversification into new industries.
This notification took effect on 5 June 2025 and applies to all investment promotion applications submitted on or after that date.
Purpose of the Measure
This measure aims to strengthen the resilience and long-term competitiveness of SMEs by promoting investments that enhance operational efficiency, elevate business practices to internationally recognized sustainability standards, and facilitate the transition into emerging industries. These initiatives are intended to enable SMEs to better align with global production requirements and environmental expectations.
Eligibility Requirements
To be eligible for the incentives under this measure, an applicant must satisfy all of the following conditions:
- The company must have at least 51% Thai shareholding, and more than half of its authorized directors must be Thai nationals.
- The company’s total revenue, calculated on a consolidated basis and inclusive of both BOI-promoted and non-promoted activities, must not exceed THB 500 million in aggregate over the preceding three fiscal years.
- The company must be registered under the SME ONE ID system prior to the submission of the investment promotion application.
Conditions
The BOI permits existing SME projects to apply for incentives under this measure, subject to the following conditions:
- This measure applies to existing SME projects, irrespective of whether they currently receive BOI investment promotion, provided that the project falls within an activity category eligible for promotion at the time of application. Projects classified under the BOI’s excluded activities or policies shall not be eligible.
- Projects that have previously been granted BOI promotion may reapply under this measure upon the expiry of their existing corporate income tax (CIT) exemption or reduction period, or in cases where no CIT exemption was granted at the time of the original promotion.
Required Efficiency Improvement or Transition Activities
To be eligible under this measure, applicants must implement one or more of the following efficiency enhancement or business transition activities, subject to approval by the BOI:
- Upgrading or replacing machinery and automation systems to enhance operational efficiency;
- Adoption of digital technologies, including system integration software, artificial intelligence (AI), machine learning (ML), big data analytics, and electronic payment systems;
- Upgrading production processes or operational systems to align with Industry 4.0 standards;
- Improving energy efficiency or adopting renewable energy solutions within business operations;
- Obtaining internationally recognized sustainability or quality certifications (e.g., GAP, FSC, PEFC, ISO 22000, ISO 14064); and
- Transitioning business operations into new industries or activity categories eligible for BOI investment promotion.
1. Submission and Approval of the Investment Plan
- Applicants are required to submit a comprehensive investment plan detailing the proposed improvement measures or transition activities.
- Investment plans involving Industry 4.0 upgrades must be reviewed and approved by the National Science and Technology Development Agency (NSTDA).
2. Minimum Investment Requirement
- The investment in efficiency improvement must be no less than THB 500,000, excluding the cost of land and working capital.
Rights and Benefits
Eligible SME projects are entitled to the following incentives:
- Import duty exemption on machinery
- Corporate income tax (CIT) exemption for up to five (5) years, equivalent to 100% of the qualifying investment amount (excluding land and working capital)
- The CIT exemption period commences once the project generates revenue and must be utilized within three (3) years from the date of the promotion certificate.
Conclusion
BOI Notification No. 5/2568 represents a significant policy initiative to strengthen Thailand’s SME sector. By promoting modernization, digital transformation, energy efficiency, and sustainability, the measure supports SMEs in enhancing productivity and aligning with international standards.
Overall, the scheme is expected to accelerate the long-term competitiveness and resilience of SMEs while contributing to Thailand’s broader industrial transformation.
Author: Panisa Suwanmatajarn, Managing Partner.
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