Thailand is one of the most popular destinations for foreign investors in Southeast Asia, with its geographical potential, human resources, and continuously developed infrastructure to attract foreign investment. One of the key measures the Thai government uses to promote investment is the establishment of the IBC (International Business Center) program. In this article, we will explore what IBC is, along with the tax benefits, conditions, and business opportunities for foreign investors in Thailand.

What is an IBC (International Business Center)?

IBC, or International Business Center, is an investment promotion model initiated by the Thai government, specifically the Board of Investment (BOI), to encourage multinational companies to establish their business hubs in Thailand. These centers provide services to both domestic and international subsidiaries, including management, financial, engineering, and other services. The IBC program was officially launched in 2018, replacing the previous programs such as ROH (Regional Operating Headquarters) and IHQ (International Headquarters).

The main purpose of IBC (International Business Center) 

• To encourage foreign companies to establish regional headquarters in Thailand, promoting investment and business operations both in Thailand and abroad. 
• To attract the transfer of technology and the implementation of effective management of new technologies in Thailand.
• To promote the employment of Thai people and the development of skilled Thai personnel with potential.
• To promote overall investment-driven economic improvement.

The tax benefits that foreign companies receive from IBC include: 

One of the key incentives that makes IBC attractive to foreign investors is the tax benefits, which can clearly reduce business operating costs as follows:

Corporate Income Tax (CIT)

The special corporate income tax rate depends on the company's domestic expenses, which are categorized as follows: 

2. Withholding Tax

• For dividends or service fees paid to foreign subsidiaries.

3. For the special personal income tax rate.

• For foreign experts working in an IBC company: 15% for a period of no more than 4 years.These benefits are designed to encourage foreign companies to invest in Thailand sustainably and systematically.

Reference: Revenue Department, BOI Office – "Measures to Support the Establishment of IBC" (2018)

The types of businesses that can establish an IBC are as follows: 

Businesses applying for promotion under the IBC format must operate at least one of the following types of activities: 

• Providing support services to subsidiaries, such as:
  • Management services
  • Strategic planning
  • Strategic planning
• Financial Management
  Financial planning and control services for subsidiaries.
• Research and Development (R\&D)
  Development of technology or new products.
• Training and development services
  Organizing internal training for subsidiaries.

To qualify for IBC benefits, companies must comply with the following conditions: 

• The company must be registered in Thailand.
• The company must have domestic expenses of no less than 60 million baht per year.
• The company must have at least 10 full-time employees (or 5 employees for companies providing financial services only).
• The company must provide services to at least one foreign subsidiary.
• The company must have a contract or documentation demonstrating the relationship with its subsidiaries.

In summary, the IBC program provides business opportunities for foreign investors.

The IBC program provides foreign companies the opportunity to expand their operations in the ASEAN region by using Thailand as a central hub, which is a great opportunity for investment in Thailand, whether in terms of...

• The favorable geography, as Thailand is located in the heart of Southeast Asia, connecting to CLMV and southern China.
• Quality human resources, skilled labor, and competitive wages.
• Developed infrastructure in logistics, telecommunications, and industrial parks.
• Tax incentives that significantly reduce operational costs.
• There is convenience in operations with high potential and readiness.

In summary, IBC (International Business Center) It is an important tool that helps foreign investors operate businesses in Thailand efficiently, while also benefiting from the tax incentives provided by the government. It is suitable for companies looking to establish a hub to provide services to regional or global subsidiaries.

Careful planning from the outset, especially in selecting service types and designing the tax structure, will help the business maximize the benefits of IBC and ensure long-term sustainability.

Consult with us now! We are ready to provide expert services in company registration and business license applications.

• We are ready to provide consultation for various businesses looking to register a company in Thailand, apply for BOI, FBL, FBC, and other necessary licenses, all in one comprehensive service. 
• We provide a recruitment system for staffing all positions within operations. 
• We offer accounting and corporate tax planning services.
• We provide visa and work permit services for foreign nationals.
• And we offer business consulting services to ensure smooth operations. 

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