On March 15, 2024, Thailand’s Board of Investment (BOI) updated its investment incentives for software development and data centers by issuing a regulation replacing the previous categories of software or platforms for digital services or content (category 8.1) and data centers (category 8.2.1).
The new and updated categories are detailed below.

Software and Platform Development

Under the new promotion policy, the BOI has made separate subcategories for “development” and “improvement” of software or platforms, each with its own set of incentives. The BOI is expected to clarify the characteristics of these two activities in a forthcoming announcement. Qualifying development activities are eligible for a corporate income tax (CIT) exemption for eight years (capped), while improvement activities are not eligible for any CIT exemption.

A number of adjustments have been made to the eligibility criteria for development of software and platforms for digital services or content. These include the following:

• Salary expenditures for Thai information technology (IT) personnel hired temporarily after applying for investment promotion can now be included in the calculation of total salary expenditures for Thai IT personnel hired subsequent to applying for investment promotion. Previously, only salary expenditures for permanently employed personnel could be included in this figure. The minimum salary expenditures for each project remain unchanged at THB 1.5 million per year.
• Similarly, salary expenditures for temporary hiring of Thai IT personnel can be included in calculating the actual expenditures in the year that the project would like to benefit from the CIT exemption.
• Projects must commence operations within 12 months of the promotion certificate being issued. No extensions are allowed.
• Projects are no longer allowed to extend the machinery importation period.

The other eligibility criteria for development of software and platforms for digital services or content remain unchanged.

Projects in the new BOI subcategory for improvement of software and platforms for digital services or content are not eligible for CIT exemption but can receive other incentives. To be eligible for these incentives, projects in this category must meet the following criteria:

• Expenditures on salaries for Thai IT personnel hired (including temporarily) after applying for investment promotion must be at least THB 1.5 million per year.
• Projects must propose a plan for improvement of the software, digital platform, or digital content to be sold or provided, as stipulated by the BOI.
• Projects may not amend the category in which they benefit from investment promotion.
• Projects must commence operations within 12 months of the promotion certificate being issued. No extensions are allowed.
• Projects may not extend the machinery importation period.
• Projects may not own land.

In addition, projects in this subcategory are notably allowed to utilize secondhand machinery or the project’s existing machinery, and are not subject to the common BOI prohibition on such use.

Data Centers

Qualifying data centers are still eligible for CIT exemption (no cap) for eight years, but there are minor updates to the eligibility criteria:

• Projects must install an electrical system of at least two megawatts to support the power consumption of computer equipment.
• Projects are no longer required to have an area of at least 3,000 square meters.
• Projects must still obtain ISO/IEC 27001 certification before they can receive CIT exemption, but there is no longer an explicit requirement that they obtain the certification before the full operation deadline.

In addition, projects in the data center category are exempt from the general BOI requirement that projects benefiting from investment promotion obtain ISO 9000, ISO 14000, or other equivalent international certification.

For more details on BOI incentives for software and data center activities, or on any aspect of investment promotion in Thailand, please contact Athistha (Nop) Chitranukroh at [email protected], Nopparat Lalitkomon at [email protected], or Napassorn Lertussavavivat at [email protected].