Short Answer
Receiving Board of Investment (BOI) approval should not automatically mean that an investor is contractually required to fund.
The approval letter may contain a promoted activity, capacity, minimum investment, capital, timing or other conditions that differ from the assumptions used when the joint venture or investment agreement was signed.
If BOI approval is a condition to the investor’s capital contribution, the contract should define what counts as acceptable approval, who reviews the conditions, how objections are raised and what happens if the approval materially changes the economics of the project.
BOI approval and contractual satisfaction of a funding condition are two different questions.
Why This Matters
Investment agreements often contain a simple milestone:
“Investor funds after BOI approval.”
That wording can be too crude.
A project can be approved but on terms that require materially more capital, reduce the promoted scope, change the eligible activity or otherwise affect the investor’s expected return.
Current BOI procedure also requires the applicant to affirmatively accept the promotion resolution. BOI guidance states that acceptance is generally due within one month after receipt of the approval notification, with a limited extension process, followed by the promotion-certificate process.
The investment contract therefore needs a decision mechanism before time expires.
Typical Scenario
Two investors agree to establish a Thai joint venture.
One investor will inject significant capital after the project receives BOI approval.
The approval later arrives, but its conditions differ from the assumptions in the investment model.
Management asks:
“We received the approval. Does that mean the investor must now fund?”
Not necessarily. The BOI process and the contractual funding trigger must be read separately.
Practical Analysis
01Define the regulatory milestone precisely.
“BOI approval” can refer to different stages: approval notification, acceptance of the resolution or issuance of the promotion certificate.
The investment agreement should use the milestone that actually matters to the parties.
02Define acceptable approval, not merely any approval.
The contract can identify material parameters that must remain within agreed limits—for example promoted activity, project scope, required investment, capital, location, capacity or key incentives.
The aim is not to renegotiate every BOI condition. It is to identify changes that materially affect the investment bargain.
03Give the investor a review period.
The contract should say how quickly the approval is circulated, how objections are raised and what happens if no objection is made.
A deemed-acceptance mechanism may create certainty, but the review period must be realistic given BOI’s own acceptance timetable.
04Coordinate the contractual process with BOI deadlines.
Current BOI guidance generally requires acceptance of the promotion resolution within one month of receiving the approval notification. Extensions are available within BOI’s stated framework.
The joint-venture documents should not create an internal approval process that expires after the BOI deadline has already passed.
05Decide what happens if the approval is materially different.
Possible contractual outcomes include renegotiation, project adjustment, delayed funding, a further approval process, termination or another agreed exit.
The contract should not leave both parties knowing that the economics changed but with no mechanism to decide whether the investment proceeds.
06Keep other operating approvals separate.
BOI promotion does not automatically replace factory, environmental, land-use, product or other regulatory permissions. A BOI funding condition should not be drafted as though the approval alone proves the project is ready to operate.
What We Usually Look At
We review the BOI application assumptions, approval notification, acceptance deadline, proposed promotion conditions, investment agreement, funding milestones, objection rights, project budget, required capital and the consequences if regulatory conditions materially change.
Common Traps
Typical mistakes are defining the trigger as simply “BOI approval,” treating every condition in an approval letter as commercially neutral, allowing an objection period that conflicts with the BOI acceptance deadline and confusing approval notification with the final promotion certificate.
Practical Next Step
Draft the investment condition as a decision tree:
approval received → conditions circulated → material deviation? → investor review → accept / amend / object → BOI acceptance → funding → promotion certificate
The legal drafting should make the regulatory approval and the investment decision work on the same timetable.
Legal Sources
- Investment Promotion Act B.E. 2520 (1977), as amended.
- Thailand Board of Investment, Investment Promotion Guide 2025, procedures on promotion acceptance and promotion-certificate issuance.
- BOI Announcement No. 1/2553 on the time frame for investment-promotion procedures.
- BOI current procedures and forms for amendment of a promoted project.
General legal information only. Please seek advice on your specific facts. Laws and regulatory practice may change.