"Private investment may be frozen until next year, as we expect a lengthy process before the new board is established and starts approvals for new applications," said Thanit Sorat, a vice-chairman of the Federation of Thai Industries (FTI).
A new BoI is not expected until a new government is installed.
Normally, its committee meets every month. It is chaired by the prime minister and members include ministers and permanent secretaries of economic ministries, four experts and the chairmen of the FTI, the Thai Chamber of Commerce and the Thai Bankers' Association.
The BoI's subcommittee is legally allowed to approve investment privileges for applications valued below 200 million baht. Those higher than 200 million baht need to go through the BoI board.
Mr Thanit said projects that win BoI approval generally take up to six months to one year to kick off construction. Operation could take about two years.
"Private investment is projected to continue to slow down in the first quarter despite the recovering world economy," he said.
"Investor confidence is the most crucial component of their decisions rather than the world's economic outlook."
Mr Thanit said about 400 projects worth a combined 500 billion baht are awaiting BoI approval. Most are large projects worth more than 200 million baht that are estimated to create 50,000 to 100,000 new jobs. There will be 300,000 to 400,000 new graduates this year.
He said the delay in investment approvals will mostly affect the machinery and construction industries as well as the export industry because most BoI projects are related to exports.
Mr Thanit said foreign investment is likely to move to neighbouring countries if political problems are prolonged until the latter half this year.
"I've just come back from Vietnam, where there was a very active influx of foreign investment, unlike what's happening in Thailand," he said.