Zero-Tariff Export from Thailand

A Practical Guide for Foreign Investors

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EP 4: BOI, FBL, or FTA? Choosing the Right Path for Tariff-Free Exports

One of the most common — and most costly — mistakes foreign investors make in Thailand is treating BOI, FBL, and FTA as interchangeable options.

They are not.

Each serves a different regulatory purpose, and choosing the wrong path can delay operations, eliminate tariff benefits, or force costly restructuring after investment.

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Three Tools. Three Different Questions.

Before deciding which path to take, investors should understand what each tool actually answers.

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1. BOI: Should Thailand Promote This Investment?

BOI (Board of Investment) promotion is a policy tool, not a trade tool.

It answers the question:

Does this project contribute to Thailand’s economic and industrial development?

BOI typically provides:

• Foreign ownership permissions (in promoted activities)
• Tax incentives (corporate income tax, import duty exemptions on machinery)
• Facilitation of visas and work permits
• Land ownership rights for promoted projects

BOI does not automatically provide:

• Zero-tariff export rights
• FTA eligibility
• Origin qualification for exported goods

Key insight:
A BOI-promoted company may still fail to qualify for FTA zero-tariff treatment if its products or structure do not meet Rules of Origin.

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2. FBL: Is a Foreign Company Allowed to Operate This Business in Thailand?

An FBL (Foreign Business License) is a legal permission, not an incentive.

It answers the question:

Can a foreign-owned entity legally conduct this activity in Thailand?

FBL is relevant when:

• The business falls under restricted categories
• Services or trading activities are involved
• BOI promotion is not applicable

FBL does not provide:

• Tax incentives
• Tariff reductions
• Export privileges by itself

Key insight:
FBL determines whether you can operate — not how cheaply you can export.

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3. FTA: Can This Product Enter a Market at 0% Import Duty?

FTA (Free Trade Agreement) benefits are trade privileges, not licenses.

They answer the question:

Can goods produced in Thailand enter a specific market at zero or reduced tariff?

FTA eligibility depends on:

• Destination country
• Product HS code
• Rules of Origin
• Manufacturing and sourcing substance
• Trade documentation (e.g. Certificate of Origin)

Key insight:
FTA benefits apply to products, not companies.

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Why Investors Often Choose the Wrong Path

Many investors approach Thailand with assumptions like:

• “If we have BOI, tariffs should be zero.”
• “If we get an FBL, exports will be easier.”
• “FTA will solve licensing issues.”

These assumptions conflate three separate regulatory regimes.

The result is often:

• BOI projects that cannot use FTAs
• FBL companies that cannot export tariff-free
• Structures that are legal but not trade-efficient

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The Right Way to Think About BOI, FBL, and FTA

Instead of asking:

Which one should we choose?

Investors should ask:

How do these tools work together for our business model?

A common strategic alignment looks like this:

• BOI or FBL → determines legal right to operate
• Company & supply-chain structure → determines origin qualification
• FTA selection → determines tariff outcome in target markets

None of these steps can be skipped.

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Case Insight: “Legal but Not Export-Ready”

It is common to see companies that are:

• Properly registered
• Fully licensed
• Operationally active

…but still unable to claim zero-tariff benefits because:

• Manufacturing substance is insufficient
• Sourcing breaks origin rules
• Documentation does not match actual operations

The structure is legal — but not export-ready.

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Strategic Takeaway for Investors

• BOI is about incentives and policy alignment
• FBL is about legal permission to operate
• FTA is about tariff treatment of products

Zero-tariff exports are achieved only when all three are aligned correctly — from the start.

Fixing misalignment after investment is often expensive, slow, and risky.

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How BRW Supports the Right Path from Day One

Determine whether BOI or FBL is appropriate (or neither)

• Design company and operational structures with FTA eligibility in mind
• Align licensing, tax, customs, and trade considerations
• Avoid “legal but unusable” export structures
• Build defensible zero-tariff strategies that survive audits

Zero-tariff outcomes are not the result of a single approval —
they are the result of correct structural design.

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At BRW – Boonrawee Co., Ltd., we offer comprehensive legal, business, and property consulting services to support foreign investors and business owners looking to establish and grow in Thailand.

Our services include:

• Helping you understand and comply with Thai property and land ownership laws.
• Company registration and structuring for business and property purposes.
• Applying for BOI or IEAT promotions if land ownership or special privileges are needed.
• Drafting and reviewing land lease agreements to ensure legal protection.
• Finding suitable land or property locations that match your business needs (factory, office, or commercial spaces).
• Advising on site selection for business operations, including industrial estates, office buildings, and commercial zones.
• Providing architectural design and construction services for buildings, offices, and factories, including customized designs to meet specific business requirements.
• Coordinating with professional architects, engineers, and contractors to ensure your building project complies with Thai laws and standards.

📞 Contact BRW today for expert advice and a one-stop solution to establish your business and property in Thailand!