International Headquarters (IHQ) Structure in Thailand

Setting up an International Headquarters (“IHQ”) in Thailand allows a multinational group to centralize high-value functions (like finance, management, and technical support) within the Kingdom. This can deliver strategic advantages, including potential tax discounts, but requires a deep understanding of eligibility, regulatory conditions, and the evolving incentive landscape. At BASE Law Firm, we provide expert guidance from initial assessment through to application and ongoing compliance.

Our service include:

IHQ eligibility review and assessment
Incentive compliance and maintenance
IHQ-to-IBC conversion guidance
Tax planning for group services
Regulatory review and risk management
BOI and Revenue Department support

What Defines a Thai IHQ

An IHQ is a Thai-registered company that serves as a hub for its group’s regional or global operations. Typical IHQ activities include:

Providing management, advisory, or coordinating services (such as business planning, strategy, HR or R&D) to related firms abroad.
Operating as a regional treasury centre, managing group cash flows, internal lending, or financial services for associated companies.

To qualify initially, the IHQ must meet key thresholds:

A paid-up capital of at least THB 10 million.
Annual operating expenses in Thailand (such as administrative and sales costs) of at least THB 15 million.
It must serve at least one related enterprise outside Thailand.

Incentives Under the Old IHQ Regime

IHQs previously approved by the Revenue Department could benefit from a range of fiscal advantages:

Corporate Income Tax (CIT) Relief
- Exemption on certain net income derived from services rendered to foreign affiliates (e.g., technical, managerial, supporting services).
- Related-party royalties, dividends, and capital gains from sales of shares in overseas branches could also qualify for exemptions.
- Profits from “out-out” trading (i.e., buying and selling goods entirely outside Thailand) and associated service income could be exempt under specific conditions.
Withholding Tax & Specific Business Tax (SBT) Benefits
- Dividends distributed by the IHQ (from income eligible for the CIT incentive) to overseas shareholders may be exempt from withholding tax.
- Interest paid on intra-group loans (where the IHQ relends to related companies) could enjoy SBT exemptions.
Lower Personal Income Tax for Expat Executives
- Foreign executives or specialists working for IHQs could benefit from a flat 15% PIT rate, subject to conditions.
Non-Tax Advantages via BOI
- Approved IHQs may apply for BOI privileges, such as: bringing in foreign specialists, owning land, or importing machinery for R&D/training free of import duty.

Important Regulatory Shift: Phase-Out of IHQ Incentives

On 26 March 2019, Thailand’s Cabinet approved a policy change terminating new IHQ applications and replacing the old regime with a new International Business Centre (“IBC”) regime.
Effective dates: CIT incentives under the IHQ regime ended on 1 June 2019, and reduced PIT rates for expatriates expired on 1 January 2020.
Existing IHQs approved prior to the repeal may continue to enjoy their incentives until their current status expires, but new IHQ registrations are no longer accepted.

Strategic Considerations for Legacy IHQs or Conversion

For companies that already hold IHQ status (or are considering a transition), there are important factors to evaluate:

Grandfathered Status
- Some older IHQs remain eligible for benefits under their original terms, but only until their incentive period ends.
- Conversion options exist: an existing IHQ may apply to convert to the newer IBC regime, if it meets the updated requirements.
Substance Requirements
- To retain eligibility, an IHQ must continue incurring the required local expenses (e.g., THB 15 million) each accounting period.
- Any decline below the threshold could lead to forfeiture of incentives for that year.
Regulatory Compliance & Exit Planning
- Since the IHQ regime has only been grandfathered, planning for the end of the IHQ benefits is essential — whether through conversion to IBC or a full restructuring.
- BASE Law Firm can help assess the financial impact, draft the necessary applications, and map out a long-term strategy.

How BASE Law Firm Can Support You

IHQ Eligibility Assessment
We analyze whether your corporate structure, business model, and projected operating costs meet the historical IHQ criteria.
Incentive Application & Maintenance
For companies that already hold IHQ status, we assist in maintaining compliance with ongoing conditions to preserve existing incentives.
Conversion Advice
If you are considering applying for the IBC regime (to replace IHQ), we provide guidance on the application, conversion mechanics, and long-term planning.
Tax & Structural Planning
We help optimize your intra-group service charges, treasury flows, and organizational model to align with Thai tax laws and minimize risks.
Regulatory Risk Management
Our team prepares you for potential audits or reviews by the Thai Revenue Department or BOI, helping you document substance and satisfy requirements.

In Summary

While the classic IHQ incentive scheme is no longer open for new entrants, many existing IHQs still benefit under their grandfathered status. At BASE Law Firm, we combine legal, tax, and business expertise to help corporate clients optimize their structure, evaluate conversion to the IBC regime, and navigate compliance risks. Reach out to us for a tailored consultation and clear path forward in Thailand.