Setting Up a Regional HQ in Thailand: BOI Promotion and the IBC

An IBC is a Thai company that runs the management, treasury, and support work for a multinational group. It comes with reduced tax rates and up to 100% foreign ownership, split across two separate government approvals.

If you run a group of companies spread across a few countries, sooner or later someone suggests putting the hub in one place. Thailand has a structure built for exactly that: the International Business Center, or IBC. One Thai company handles the management, technical support, procurement, and treasury work for the rest of your group, wherever those offices sit.

What makes an IBC worth the trouble is a package an ordinary Thai company can’t offer: corporate income tax on your service income cut to as low as 3%, a flat 15% personal tax rate for your foreign staff, up to 100% foreign ownership, and the right to own land. The trade-off is scale. The thresholds are high, and they’re meant to be.

An IBC also isn’t one permit from one office. The tax rates come from the Revenue Department; the ownership, work-permit, and land perks come from the BOI. Two agencies, two applications, and neither one gives you the other’s benefits.

This guide walks through the whole thing: what an IBC does, which agency grants what, the reduced tax rates and the local spending that unlocks them, what it takes to qualify, how to apply, and who it actually suits. By the end you’ll know whether your group is big enough to make an IBC worth it, or whether a simpler BOI-promoted company would do the job.

What an IBC Actually Is

An IBC is a normal Thai limited company that holds a special job: it serves the other companies in your group. The law calls those other companies your “associated enterprises,” meaning companies linked to your IBC by ownership or control, generally a 25% shareholding in either direction, or a parent, subsidiary, or sister company under common control.

What the IBC provides them falls into four buckets:

• Management services: general administration, business planning, coordinating the group.
• Technical services: engineering, product development, technical support to your affiliates.
• Support services: procurement, marketing, HR and training, financial advisory, credit control, research.
• Financial management (treasury): running the group’s cash, lending and borrowing, and foreign-exchange management through a treasury center approved under the exchange-control rules.

An IBC can also do international trading (buying and selling goods across borders for the group), and it can earn royalties from your affiliates on research and development actually carried out in Thailand. The picture is one Thai entity acting as the brain and the bank for offices in Vietnam, Singapore, the UK, wherever your group operates.

Two Approvals, Two Agencies

An IBC isn’t one permit from one office. The benefits come from two different government bodies, and each has its own application:

• The Revenue Department (RD) grants the tax regime: reduced corporate tax on your service income, the flat 15% rate for foreign staff, and a set of dividend and treasury-tax exemptions. This is where the money is.
• The Board of Investment (BOI) grants the promotion privileges: majority or 100% foreign ownership, the right to bring in foreign experts without the usual staffing ratios, and permission to own land.

You can apply for both, and most groups do, but the applications go in separately: tax incentives to the RD, non-tax incentives to the BOI (Investment Promotion Division 4). Neither one gives you the other’s benefits. Keeping the two straight from day one saves a lot of confusion later.

The Revenue Department Side: The Tax

The headline benefit is a cut to your corporate income tax. Thailand’s normal rate is 20%. An approved IBC pays a reduced rate on its qualifying service income, and the rate you get depends on how much you actually spend inside Thailand each year:

Annual expenses paid to recipients in Thailand	Reduced corporate income tax rate on IBC income
At least THB60 million	8%
At least THB300 million	5%
At least THB600 million	3%

That reduced rate applies to income from providing the management, technical, support, and treasury services to your affiliates, plus qualifying R&D royalties. The benefit runs for 15 accounting periods, a long runway compared with most promotions.

The tax package includes more than the CIT cut:

• Flat 15% personal income tax for foreign staff. Expatriates working at your IBC pay 15% on their employment income instead of the progressive scale that climbs to 35%. For a well-paid regional executive, that is a serious difference in take-home pay.
• Dividends from your affiliates are exempt. Dividends the IBC receives from associated enterprises, in Thailand or overseas, are exempt from corporate tax.
• Withholding-tax relief flowing out. Dividends the IBC pays to foreign shareholders that don’t do business in Thailand, and interest it pays to foreign lenders on loans it re-lends to affiliates for treasury purposes, are exempt from withholding tax.
• Treasury income skips specific business tax. Gross receipts from providing financial-management services to affiliates are exempt from specific business tax.

The THB60 million local-spend figure is a yearly test, not a one-time hurdle. If your IBC falls short of the required expenditure in any accounting period, the tax benefits are suspended for that period. Fall short for two straight periods, or stop meeting the definition of an IBC, and the Revenue Department can revoke the regime back to your first year. Budget for the spend before you commit.

Income from pure international trading gets only the 15% personal-income-tax benefit, not the reduced corporate rate. The CIT cut is for the service and royalty income. If trading is your main activity, the numbers work very differently, so model it before you assume the 8% rate applies to everything.

The BOI Side: Ownership, People, and Land

The BOI promotes the IBC as a service activity, and its role is the non-tax side. This is where the ownership and staffing perks come from:

• Majority or 100% foreign ownership. Service and support activities normally sit under the Foreign Business Act, which limits foreign shareholding. BOI promotion is the standard route around that: the Foreign Business Act is set aside for the promoted activity, and the Board can approve full foreign ownership. We cover the mechanism in detail in our guide to 100% foreign ownership.
• Easier work permits. A normal Thai company has to keep four Thai employees for every foreigner it sponsors and hold THB2,000,000 in capital per work permit. A BOI-promoted company brings in foreign experts and executives through the Board’s own work-permit process instead, via the one-stop service, which skips that ratio. Newer BOI rules do set minimum salaries and, for large manufacturers, a Thai-staffing floor, but for a services outfit like an IBC the path is far smoother than the standard route.
• Land ownership. A promoted company can own land for its promoted activity, which foreigners otherwise can’t do.
• Machinery import duty. Import-duty exemption on machinery, though for an IBC this is narrow, limited to machinery used for R&D and training.

What the BOI side does not give an IBC is a corporate tax holiday. There is no CIT exemption here; the reduced 8/5/3% rate is entirely a Revenue Department benefit. That split is unusual. Most BOI promotions bundle the tax break in, but an IBC keeps them apart: ownership, people, and land from the BOI, the reduced tax rate from the Revenue Department alone. If you want the wider view of what BOI promotion is and how it fits together, start with our explainer on what BOI is and the incentives guide.

What It Takes to Qualify

Both agencies set the same core bar, so you can plan around one set of numbers. To win an IBC you’ll need to clear a short list of requirements:

• Paid-up capital of at least THB10 million, held on the last day of each accounting period.
• At least 10 knowledgeable, skilled, full-time employees. If your IBC only runs a treasury center, that drops to at least 5.
• At least THB60 million a year paid to recipients in Thailand to unlock the tax benefits. This is a Revenue Department condition, and it’s the threshold for the entry-level 8% rate.
• A business plan and a list of associated enterprises, in Thailand and overseas, filed with your application. The Revenue Department wants to see a genuine intention to act as a regional or global hub, not a paper company.

If your group is large enough to fall under Thailand’s global minimum tax rules for big multinationals, the reduced IBC rate may be topped up to the international floor. It doesn’t cancel the ownership, work-permit, or PIT benefits, but it can change the real value of the CIT cut. If your worldwide revenue is in that territory, model it with a tax advisor before you assume the headline rate.

How to Apply for an IBC

Because an IBC runs on two approvals, the application runs on two tracks that you line up together. Here’s the shape of it:

1. Get your numbers and your group straight. Confirm you can meet the THB10 million capital, the staff count, and the THB60 million annual local spend, and list your associated enterprises in Thailand and abroad. This is where most of the real work is.
2. File both applications. The BOI promotion goes in online through the BOI’s e-service to Investment Promotion Division 4 for the ownership, work-permit, and land privileges; the IBC tax application goes to the Revenue Department for the reduced rates. Most groups run the two tracks in parallel so the approvals land together, and a misstep on the sequencing can leave you holding one and waiting on the other. This is the kind of coordination we handle for clients.
3. Attend the BOI clarification meeting. A BOI officer walks through your plan with you, either at the BOI office or by video call. It runs about an hour. A service project up to THB200 million is reviewed in about 40 working days.
4. Accept the promotion. Once you’re approved, you accept the BOI offer within one month, then apply for the promotion certificate within six months.
5. Register the company and set up. With the certificate in hand you register your Thai company, remit your capital from abroad, and bring in work permits through the BOI’s one-stop service. Our step-by-step guide to registering a BOI company covers this stage.
6. Keep it running. You file a progress report each quarter, have to reach full operation within 36 months of the certificate, and have to clear the annual local spend in every accounting period to keep the reduced tax rate.

We cover the whole BOI process, timelines and documents included, in our guide on how to apply for BOI promotion.

Who Should Get an IBC

Be honest with yourself about scale. The IBC is built for groups with real multi-country operations and real substance in Thailand. THB10 million in capital, ten skilled staff, and THB60 million a year in local spend are not small commitments, and they exist to keep the regime for genuine regional hubs rather than shell arrangements.

It fits well if you can tick most of these:

• You have offices or subsidiaries in several countries and want to centralise management, technical support, procurement, or treasury in one place.
• You’re paying senior expatriates who would benefit from the flat 15% personal income tax.
• You already do enough business in Thailand to clear the THB60 million annual local spend.
• You can meet the THB10 million capital and ten-staff thresholds comfortably, not just on paper.

It’s the wrong tool if you’re a single-country business, or a lean startup without affiliates to serve. There, a regular BOI-promoted company, or one of the sector promotions in our list of promoted activities, will usually fit better and cost far less to run.