Petropolis

We are setting up a Thai limited company, with funding from a parent company abroad. In line with Thai regulations, the foreign sponsors hold less than 50% of the shares. We currently have THB 2 million paid-up capital, of which 25% is paid up. We now need to pay up to THB 2 million in order to get our first work permit. Our understanding is that we will have to pay up an additional THB 2 million baht when we want to hire our second expat early next year.

We cannot find a clear explanation or understanding of the guidelines for registered capital.

Our understanding is that we register the paid-up capital with the Ministry of Commerce by showing a list of shareholders, number of shares, and value, with the total paid-up amount, backed up by evidence of bank balance from a bank statement.

Is it possible to use a loan (in this case from the foreign affiliate, which is a minority shareholder in the Thai limited company) to "pay up" the capital? In this case, how would the loan value be allocated to existing shareholders?

Would it be possible for individual shareholders to get loans and then to use these loans to "pay in" their share values for their share of the company?

In this case, parent company is willing to put in the capital, but they would like to be able to have control of it. For example, if the capital is in a form of loan, they could later call the loan if necessary (thus reducing the registered capital).

Are there any clear guidelines about this -- registered capital in Thailand?

-- Petropolis

Why is there such a lack of clarity about the criteria?

Indo Siam says that BOTH THB 2 million registered capital and 4 workers are required per Expat work permit, but this is disputed by the next respondent, who says that in practice THB 2 million baht paid up registered capital per work permit suffices. In my discussions with several lawyers, the latter is what I have been repeatedly told.

But I have also heard others mention another criteria:

"An expatriate having an income and duty to pay personal income

tax to the Revenue Department of equivalent or more than 18,000 Baht, or

already paid personal income tax in the past year of equivalent or more

than 18,000 Baht."

This was posted on www.thaivisa.com.

However, our firm's lawyer told me that the tax criterion would not apply for getting a NEW work permit -- but rather for just renewing a work permit on an annual basis.

What is the real story? If I have paid > THB 18,000 tax in the past year, can my company get a work permit for me, and avoid the THB 2 million registered capital requirement?