International Business Center (IBC) in Thailand
Who qualifies, the tax incentives, the conditions and the risks, for groups that run regional services from Thailand.
An International Business Center (IBC) in Thailand is a company incorporated in Thailand that provides management, technical, support or treasury services to its associated enterprises in Thailand and abroad, in exchange for tax incentives.
The IBC regime replaced the earlier headquarters incentives in 2018 and its rules have changed since. Groups with global revenue of EUR 750 million or more may also owe a top-up tax under Thailand's 15% global minimum tax, in force since 2025, which can reduce the benefit of the low IBC rates. The Board of Investment (BOI) also promotes International Business Center activities under its own criteria. Check the current conditions with us before you plan around these incentives.
To qualify for IBC status, the center must provide one or more of the following services:
- Business administration, planning and management
- Procurement of raw materials and parts
- Research and development
- Technical support
- Marketing and sales promotion
- Human resources training and development
- Financial advisory services
- Credit control and management
- Treasury center services
- International trade
- Other services approved by the authorities
Plizz can prepare your IBC application and help you track the conditions every year.
Benefits of an International Business Center
An IBC can be majority or 100% foreign-owned, usually with BOI promotion or a Foreign Business License, depending on its services. It can bring in foreign experts, and qualifying foreign staff can obtain visas and work permits.
With BOI promotion, an IBC may be allowed to own land. Otherwise, a company must be majority Thai-owned to buy land, so this is a real advantage.
IBCs can also repatriate foreign currency, and BOI-promoted IBCs that carry out research and development or training can import machinery free of import duty.
The tax incentives last up to 15 years. Instead of the standard 20% corporate income tax, qualifying income is taxed at 8% if the IBC spends at least THB 60 million a year in Thailand, at 5% if it spends at least THB 300 million, and at 3% if it spends at least THB 600 million.
Dividends paid to foreign shareholders out of qualifying income are exempt from tax, and so is interest paid to foreign lenders on loans used for treasury activities.
Qualifying treasury income is exempt from specific business tax, and eligible foreign employees pay personal income tax at a flat 15%.
Drawbacks of an International Business Center
An IBC also has drawbacks. The Plizz legal team can go through them with you if you are not sure an IBC fits your group.
First, the application needs complete supporting documents, or it will be refused. Plizz gathers them for you.
Our legal team then files them on your behalf, so the application is complete the first time.
Second, the benefits can be withdrawn. If the IBC does not meet the conditions in a given year, it loses the tax incentives for that year. If it misses them for two consecutive years, it can lose its IBC status, and the incentives received in earlier years can be clawed back.
Finally, IBC transactions with related parties must follow Thai transfer pricing rules, with arm’s-length prices and supporting documentation. Take advice before you set your intercompany fees.
Legal requirements
An IBC must meet several conditions to start and to keep its status.
It must provide management, technical, support or treasury services to associated enterprises, as defined under Thai law. It needs at least 5 skilled employees if it acts only as a treasury center, and at least 10 otherwise.
It must have paid-up capital of at least THB 10 million at the end of each accounting period, and at least THB 60 million a year of operating expenses in Thailand.
How to set up an International Business Center
Preparing the application takes work. That is where Plizz helps.
Companies that held the older regional operating headquarters (ROH), international headquarters (IHQ), international trading center (ITC) or treasury center (TC) status could convert to IBC status; those older regimes are closed to new applicants.
Once an application is approved, the IBC benefits apply from the accounting period set out in the approval.
If you are starting from scratch, the application must describe the business, the business plan and the associated enterprises, and list the foreign employees who will claim the 15% personal income tax rate. It is filed with the Director-General of the Revenue Department (RD). A complete, well-prepared file is approved faster.
An IBC can cut a regional group’s tax bill significantly, but only if it meets the conditions every year. Plan the structure before you apply.
Plizz prepares the file for you, whether you are converting an existing structure or setting up an IBC from scratch. Get a quote and we start with an eligibility check.
