FAQ

These three numbers cannot each be decided by rule of thumb. One of the core rules for new BOI projects is that the project's debt and registered capital (or equity) must satisfy a structure of no more than 3:1, and the project investment amount usually has to reach the minimum threshold for the corresponding activity. For manufacturing, the correct approach is to first calculate the total investment from equipment, plant and other project inputs, and then work back to the capital and financing structure, rather than registering a very low capital amount first and then trying to explain it afterwards with a large investment plan.

I. First Clarify Three Concepts

II. How Should the "3:1" Between a New Project and Its Equity Structure Be Understood?

The BOI's current public rules make it clear that the debt-to-equity ratio of a newly established project must not exceed 3:1, while expansion projects are assessed on a case-by-case basis. The BOI's official FAQ also gives an example: if a new project involves an investment of about THB 2 million, at least about THB 500,000 of own capital is required in order to satisfy the 3:1 requirement, with the remainder able to be financed by debt.

Zhongxin Tax & Accounting takes the view that "registered capital = one quarter of the total investment" cannot be mechanically treated as a statutory formula for all projects. The reason is that different projects also involve existing capital, expansion, activity category, cash flow, paid-in capital under company law, BOI certificate conditions and other funding arrangements. The 25% figure can only serve as a simplified example for understanding the 3:1 financing structure.

III. The Two Most Common Ratio Design Mistakes Identified by Zhongxin Tax & Accounting

First, the registered capital is set too low while the investment amount and equipment scale are very high. This directly raises the question at the interview of "where the funds come from and whether the company is capable of completing the project".

Second, the investment amount is reported too low. The corporate income tax exemption ceiling of some BOI activities is related to the qualifying project investment; if the investment plan, equipment list and actual inputs are not managed in a unified way, inconsistencies may later arise between the incentive ceiling, capital verification and the project conditions. The specific ceiling remains subject to the activity category and the promotion certificate.

IV. How Does Zhongxin Tax & Accounting Usually Carry Out the Calculations?

Zhongxin places "statutory/BOI thresholds + equipment and plant inputs + sources of funds + work permit and operating needs + ODI funding rhythm" into the same capital structure table, simulates different capital amounts and borrowing ratios, and only then decides the registered capital. For projects that plan to contribute funds through a mainland China entity, the timing of ODI outbound remittance must also be considered together with the capital arrival milestones on the Thai side.

V. Professional Basis and Service Boundaries

The BOI's public rules set clear requirements for the 3:1 debt-equity ratio and the minimum investment amount for new projects, but the specific registered capital, paid-in milestones, recognition of the investment amount and incentive ceiling should be confirmed in light of the activity category, the nature of the project and the final promotion certificate. Zhongxin can provide BOI and Thailand-side capital structure calculations; the mainland China ODI, foreign exchange and group tax arrangements should be confirmed by the enterprise together with domestic professional advice.

VI. Next Step Recommendation: Do a Capital Structure Calculation Before Registration

If the project already has a preliminary equipment budget and investment scale, it is recommended to align the four figures of total investment, planned capital, borrowings and sources of funds before submitting the company registration and BOI application. Once the capital structure has entered the registration, ODI and BOI documents, the cost of changing it rises significantly.

Component name: Apply for a Preliminary BOI Capital Structure Calculation. Target clients: Chinese enterprises that already have a preliminary investment budget and are preparing to register a Thai company or to start a BOI application. Filling principle: fill in only 5 core figures/status items, on the basis of which Zhongxin judges whether a further capital structure proposal is needed.

Zhongxin will prioritize communication around the key items you fill in. Component handover path: check the key nodes → apply for professional review → Zhongxin business engagement → professional needs diagnosis → proposal and quotation.

Professional notice: this component is used for a preliminary mapping of the key project nodes and does not constitute a BOI approval opinion or any guarantee of specific project outcomes; the specific matters are subject to the enterprise's documents, the BOI promotion certificate and the current requirements of the competent authorities, and will be reviewed by professionals.

Policy note: Thailand BOI, "Criteria for Project Approval": the minimum investment amount for general projects is THB 1 million (excluding land and working capital, with separate provisions for specific activities), the debt-equity ratio for newly established projects must not exceed 3:1, and expansion projects are considered on a case-by-case basis; Thailand BOI FAQ (Thai), "Minimum capital investment and project feasibility", in which the official example of a new project of THB 2 million explains that under a 3:1 structure at least about THB 500,000 must be own/paid-in capital, and restates the general minimum investment threshold of THB 1 million.