Sunbelt Asia

Depending on the kind of partnership your friend entered into, ie a Limited Liability Partnership, an ordinary Registered Partnership or an unregistered Partnership your friend's liability in the business still remains even if he were to walk away.

Firstly, there are three kinds of partnerships, each with different liabilities:

1. Unregistered ordinary partnerships; partners are jointly and wholly liable for all obligations of the partnership.
2. Registered ordinary partnerships; once registered the partnership becomes a legal entity, separate and distinct from the individual partners. Partners with unlimited liability are liable for all the obligations of the partnership without limitation.
3. Limited partnerships in which liability is limited to only the amount invested in the partnership;
   

If a creditor files charges against the partnership the courts could either force it into reorganization or into liquidation. They can still go after the assets of the other partner up to his liability assuming it was a Limited Liability Partnership. The liability for the partnership ends two years after the partner leaves.

However, it is important to note that if the majority partner commits a crime by talking out a bank loan knowing the partnership was in trouble or wrote a bad check then the other partner's liability can exceed the amount invested and is not limited to the amount of money invested in the business.

If your friend chose to leave the country without dissolving the partnership he could find himself faced with difficulties on his return should his partner leave the business with liens or debts.

[sunbelt][/sunbelt]

Yes a Thai company can purchase and run an overseas company but it must follow the taw laws of that country and any tax treaties that country may have with Thailand just as any foreign company setting up in Thailand must follow Thai laws and tax treaties.

You will need to check and see if any agreements and tax treaties may exist between that country and Thailand to determine if you receive any special tax benefits.

[sunbelt][/sunbelt]

Hi

First let me give a more complete explanation of a Representative or Branch office

Representative Office – Regional Office – Branch Office is a type of juristic entity which allows an offshore company to establish their own office in Thailand with restricted business activities. There are only 5 business objectives allowed for a Representative Office. They are:



OBJECTIVE 1. To report the business movements in Thailand to the head office or affiliated company or the group company;

OBJECTIVE 2. To give advice on various aspects pertaining to the goods distributed by the head office or affiliated company or the group company to the distributors or the users;

OBJECTIVE 3. To seek for the supply source of goods or services in Thailand for the head office or affiliated company or the group company;

OBJECTIVE 4. To inspect and control the quality and quantity of goods that the head office or affiliated company or the group company purchased or hired to manufacture in Thailand;

OBJECTIVE 5. To disseminate the information in relation to the new goods or services of the head office or affiliated company or the group company;



These objectives are just a broad description, the applicant would also need to consider other less broad (but important) terms and condition.



Some of the many factors that the official would look into in granting a license to operate would be 1.What are the contributions that this Alien Business making into the Thai economy? ex;: employment, technology transfer. 2. How could Thailand benefit from allowing this foreign entity to establish an office in Thailand?



Benefits for Regional or Representative Office (any type of branch office for Offshore companies)?


Usually they are established as an internal factor of an offshore company:

1. Company’s policy that when they expand, they must maintain their ownership, they would not accept 51%-49% format

2. Company is just trying to create brand awareness

3. In certain countries, there are proposed tax incentive to companies that establish a representative office to achieve corporate tax incentive from their home country.



Advantage of this type of juristic entity:

1. Work permit (Thai to foreign ratio) is 1 Thai : 1 work permit



Disadvantage of this type of juristic entity:

1. Lengthy approval & preparation process

2. Higher government (approval) fees (they are calculated by the registered capital of the HQ)

3. Limited business scope (you can only do what you are approved to do)

4. Limited number of work permits (Min. of 2 work permit and max. of 5 work permit depending on the category applied)

5. Cannot generate any form of income (money used for operating expenses must be from funding [cash injection] from HQ)

Hope this explains why overseas companies will set up this type of company and if it suits your needs or not. Please feel free to come in for an initial free legal consultation if you have any further questions

[sunbeltlegal][/sunbeltlegal]

Thai officials expect your office to help the economy through employment and technology knowledge transfer. So, yes, Thai employees are required as the foreign entity is expected to educate the Thai labor force through the dissemination of knowledge.

[sunbeltlegal][/sunbeltlegal]

As a Thai national it is possible for your son to own a sole proprietorship company, but how old is he? And what is the business objective of this entity? Please be reminded that the liability for this type of entity is unlimited. The Child Protection Act controls and restrict any act which could place a burden on a minor child (under Thai law, any age below 20 is still consider a minor) with liabilities.

If your child is under 20 then, it is unlikely it would be approved for this reason

[sunbeltlegal][/sunbeltlegal]

Pros are the ownership of the company (allowing majority ownership by Americans while allowing this foreign (American) company to perform business as close to normal as a Thai limited company, except for the 7 restricted business activities (e.g. land related, national security, transportation). You won’t need Thai shareholders to hold 51% of your equity, if they were true investors, that would be fine, but if your Thai shareholders did not have the funds to buy the 51% of the total shares and were just doing you a favor by holding on to them on your behalf then you would be running the risk of violating the Foreign Business Act and the nominee issue.

It doesn't matter to the Revenue Department who pays the tax so long as the 3% gets taken out of the commission and given to them. Try talking to your local revenue department as they are usually quite helpful and can give you instructions on how best to submit it.

[sunbeltlegal][/sunbeltlegal]

We contacted Robin at Dawn Shipping for his opinion on this as we use him quite regularly and have always found him to be helpful. He suggests that you try their website www.dft.go.th or you can go to the Department and ask for a print out. They charge about 5 baht per page.

[sunbeltlegal][/sunbeltlegal]

• Working for more than 120 days but less than 1 year = 30 days severance pay
• Working for more than 1 year but less 3 years = 90 days severance pay
• Working for more than 3 years but less than 6 years = 180 days severance pay
• Working for more than 6 years but less than 10 years = 240 days severance pay
• Working for more than 10 years = 300 days severance pay

Hi Emilyb

Although the second job is not a new work permit, and is added into your current work permit with the necessary documentation from the second company and a letter of permission from your initial employer, the minimum salary is required for each job and cannot be applied as a cumulative total of both jobs. That is to say; the separate salary from each employer must meet the minimum requirement for your nationality.

[sunbeltlegal][/sunbeltlegal]

Sorry for the delay, I was awaiting confirmation from our property expert.

In order to reclaim property you would need the following documents:

Hi

To answer your questions one by one:

1. The Labour Ministry's Department of Employment that issues work permits?

They do but it is random.

2. The Social Security Office checking that new employees registered for social security are genuine?

This is done at the initial registration of the company and the listing of the first employees.

3. The Commerce Ministry's Business Development Department that registers new companies checking that new companies with foreign shareholders and/or directors are bona fide.

This is checked at initial registration to ensure that the Thai shareholders are not nominees. They can ask for a bank statement from each Thai shareholder as well as a confirmation of the bank balance in a bank letter.

Would the same apply to long established companies applying for a new work permit and/or applying to register new employees for social security?

We have only encountered it for new company registrations as long running companies can provide supporting documentation such as audits.

[sunbeltlegal][/sunbeltlegal]

To answer you posts point by point

1. The Labor Office in Bangkok used to allow two employees but since the floods they have required four Thai employees per work permit. Outside of Bangkok it may vary, we have heard reports that some officers in the provinces will allow 2.

2. The Thai director does not count as an employee as the company does not pay into the Social Welfare fund on a director and the Labor Office requires that you pay into the Social Welfare fund in order to obtain a work permit.

3. Bangkok has started investigating new firms, checking on their offices and checking employees. Where Bangkok leads, the provinces will often follow

[sunbeltlegal][/sunbeltlegal]

It would depend on what type of business activity the Thai national wished to register as a sole proprietorship. Some would not require registration, however most would. You can check with the District Office to confirm if the business must be registered or not. For example, if the Thai were going to operate a restaurant they would need to register the sole proprietorship (formally known as a Trade Certificate) at the District Office (Amphur), indicating the restaurant's name. The owner would also need to apply for licenses for food, alcohol and tobacco sales.

[sunbeltlegal][/sunbeltlegal]

Labor Department regulations state that you must pay into the social welfare fund on four Thai employees to obtain one work permit.

If the foreigner is on a non-O visa extension married to a Thai national then capitalization requirements are relaxed from the required 2 million baht to 1 million baht, however, this does not apply to the number of Thai employees that is required. Previously, during the flood, this was relaxed to 2 employees the first year and 4 for the renewal but our experience in Bangkok since then has been that four are required.

While we have heard some reports from upcountry that some officials may relax that regulation but we wouldn't recommend to our clients to rely on that as the regulations do require 4 Thai employees

[sunbeltlegal][/sunbeltlegal]

A bill of lading is required for shipments by boat,while an Air Waybill is for sending goods by air transport. A Railways Receipt is for sending goods by train, aTruck’ Receipt is for sending goods by land transport (truck) and a Parcel Receipt is for sending goods by postal service.

Please note that you must invoice the buyer so that import duties can be calculated by the destination authorities.

Below are the documents usually needed

An export only company can be 100% foreign owned, please note that you cannot sell anything inside Thailand. However, the company still need three shareholders but you can hold the controlling shares.

You should have at the bare minimum 25% in paid up capital to start the company. You will need to pay into the social fund on 4 Thai employees to obtain a work permit and you must have
a physical location where the employees work to be fully compliant with the law.

[sunbeltlegal][/sunbeltlegal]

Sunbelt Asia has fluent English speaking Thai lawyers who have studied overseas, Please feel free to contact us with regards to your case.

[sunbeltlegal][/sunbeltlegal]

While it is not mandatory that the company have its own bank account it is legally required for regular shareholder meetings to be held.

Under Section 1171, The first shareholder’s meeting (the General Meeting) must be held within six months after the establishment of the company, and then subsequently at least once in every twelvemonths. This is called an Ordinary Meeting.

Additionally, the Thai government requires the filing of annual audits from the company. If you wish, Sunbelt Asia can check to see if these audits are being filed. Additionally, we can request a shareholders list and contact them directly to call a meeting and have her voted out.

Also, if you did not sign a share transfer agreement and she has removed you from the shareholders list it is possible to file acriminal complaint against her with the police.

Please contact us by personal message if you wish to move against your ex-girlfriend in the company.

[sunbeltlegal][/sunbeltlegal]

If you are located in Bangkok, Sunbelt Asia's accountants can fill out the forms and file your personal income tax for you.

The required documents to file the personal income tax return (PND.90/91) are as follows:

1. Assessable Income Under Section 40 (1) to (8) form your employer – The Original Withholding Tax Certificate (50 ทวิ)

2. Copy passport and Thai visa update – your signature on every page

3. Copy work permit - your signature on every page

4. Copy of the Personal Tax ID (13 digits)

5. Original receipt: Thai Provident Fund Contribution/Thai Government pension fund – if any.

6. Copy of marriage certificate (if married and the husband/wife live in Thailand over 180 days) – your signature and that of your spouse on every page

7. Copy of birth certificate (if you have children that live in Thailand over 180 days) - your signature and that of your spouse on every page

8. Original school certificate OR the original receipt for the school fee for the year 2012 for each child -if the child is enrolled in any school in Thailand, - your signature and that of your spouse on every page

9. Any original supporting documents concerning your private income, such as the original receipt of payment, the withholding certificate issued by your client/customer/employer.

10. Original Form ล.ย 03 (Form Parental Care Allowance Certificate for Thai wife’s) together with copy ID card of parents with the signatures, if such parent is above 60 years old and earns less than 30,000 baht per year–If any.

11. Original receipt: Life insurance premium of 2012 (period 10 years) – with the Thai insurance company.

12. Original receipt: Pension insurance premium paid of 2012- if any.

13. Original receipt: Retirement Mutual Fund (RMF) of 2012 – if any.

14. Original receipt: Long-Term equity Fund (LTF) of 2012 – if any.

15. Original receipt: Interest paid on Loan of 2012 for purchase mortgage loan, hire-purchase or construction of residence – if any.

16. Original receipt under your name: donation supporting education (in Thailand) (twice the actual amount paid but not exceeding 10 percent of net income after deducted expense and allowances) – if any.

17. Original receipt under your name: paid for other donation (in Thailand) (not exceeding 10 percent of the net income after deduct the expense, allowances and donation supporting education) – if any.

Our professional fee is 1,391.00 baht (including VAT 7%). The deadline to submit the personal income tax return (PND.90/91) of 2012 is Monday 1st of April 2013.

[sunbeltlegal][/sunbeltlegal]