Monthly cost of running a small company?

[robsamui]

Can anyone tell me the overall yearly (and therefore estimated monthly ) cost of maintaining a small limited partnership?

Not the initial cost to set it up.

 

But the outlay for accounting services, the yearly costs for financial statements and auditing, renewal of my WP each year (I would be the only employee) and anything else I might be overlooking? In other words - just the cost of keeping the company running?

 

PLUS - what will it cost to close it down if it all goes pear-shaped?

 

Thanks in anticipation.

Edited January 9, 2018 by robsamui

[FritsSikkink]

you can't be the only employee if you want a work permit

[robsamui]

14 minutes ago, FritsSikkink said:

you can't be the only employee if you want a work permit

Can you explain, please?

[tonray]

25 minutes ago, robsamui said:

Can you explain, please?

How Many Thai Staff are Required for my Business

 

1. Requirements for Business Visa

Business visas (“non-immigrant-B-visas”) are issued by Thai embassies and consulates abroad. They can be issued for a 90 days period or for one year.

 

a) Non-B visa 90 days (from Thai embassy abroad)

For a 90 days non-B-visa, some embassies/consulates (particularly in the neighboring countries may require the presentation of an approval letter (WT3 form) which is issued by the Labor Department in Thailand. As a requirement for this approval letter, the Thai employer who is supporting the visa application must employ four Thai employees for each foreigner, however in our experience it is possible to negotiate and the number may be reduced to 1-2 Thai employees. Such employees must be registered at the Social Security Office in Thailand.

In our experience, not all embassies/consulates require this approval letter and it is worth contacting the embassy/consulate in advance to inquire about their policy (particularly in western countries).

 

 Non-B visa 1 year (from Thai embassy abroad)

Business visas can also be issued by the Thai embassy/consulate for one year.

It should, however, be noted that even for the 1 year visa, the permission to stay is only for 90 days. This visa is suitable for foreigners who travel and leave Thailand frequently. In other cases, foreigners holding this type of visa do so called “visa-runs”.

A new application at the Thai embassy/consulate abroad required after the expiration of the visa (after 1 year).

The same applies here regarding the requirement of a WT3 form and the requirement of 1-2 Thai employees.

 

c) Non-B visa extension for 1 year (from Immigration Office in Thailand)

The Immigration Office in Thailand issues visa extensions for one year without the need of visa-runs (‘Visa Extension”).

For this kind of permission to stay, the employer must strictly comply with a ratio between foreign and Thai staff of one foreign national per four (4) permanent Thai staff. Based on our experience, there is no room to negotiate with the Immigration Office regarding the number of Thai employees.

The employment of Thai staff must be evidenced by presenting detailed documentation, including

• Evidence of social security payments;
• Documentation related to withholding of personal income tax
• Photographs of each Thai staff, working place, together with the foreigner;
• Financial statements of the employer (the company) of the preceding year
• Corporate income tax return of eth employer of preceding year

The Thai staff must have been employed since at least since 3 calendar months before the date of application. It is notable that bank statements are not required to be presented.

 

 

2. Requirements for Work Permit

Also, the work permit in Thailand requires the employer to employ Thai staff.

 

a) Regular work permit

The employing company must employ four (4) Thai employees for each work permit. Also here, in the first year of business after the registration of a new company, the Labor Department may allow a ratio of only 1-2 Thai employees per work permit, i.e. per foreigner working in the company.

Such employees must be registered at the Social Security Office in Thailand. There is no requirement of other documentation (such as for the Immigration Office).

It should be noted that the Labour Department, if it accepts the initial application with employment of only two Thai staff, it will follow up in the following year at the time of the work permit renewal, and then strictly require that the employer employs 4 Thai staff.

 

If married to Thai spouse

If a foreign employee is married to a Thai citizen, he/she is then entitled to apply for a work permit under privileged conditions from the Department of Employment. For such work permit, only two (2) Thai staff need to be employed for this foreigner.

There is no requirement for a non-immigrant-B-visa in connection with such work permit, the non-immigrant-O-visa is sufficient.

[robsamui]

Thanks for this. So can anyone answer my question please?
What is the monthly cost of running a small company?

[Mattd]

18 minutes ago, robsamui said:

Thanks for this. So can anyone answer my question please?
What is the monthly cost of running a small company?

It is a bit like asking how long is a piece of string, without knowing what type of company, the likely overheads, expected turnover, etc.

[yankee99]

1.accounting 5000 per month

2.yearly audit 15,000

3.social security based on employee salary

[PoorSucker]

13 minutes ago, yankee99 said:

1.accounting 5000 per month

2.yearly audit 15,000

3.social security based on employee salary

You can get accounting for 500 per month on Samui. 

[seancbk]

39 minutes ago, yankee99 said:

1.accounting 5000 per month

2.yearly audit 15,000

3.social security based on employee salary

 

To add to this. 

Social security contributions for employees amount to 5% of salaries - up to a maximum of 750 Baht per month (per employee)

[seancbk]

OP might find this useful.

https://www.activpayroll.com/global-insights/thailand

[VocalNeal]

56 minutes ago, yankee99 said:

1.accounting 5000 per month

2.yearly audit 15,000

3.social security based on employee salary

..and if you have a work permit.

4. Income tax based on a minimum salary of 50,000 Baht a month (heard rumours it may go up tp 60,000)

[PoorSucker]

49 minutes ago, VocalNeal said:

..and if you have a work permit.

4. Income tax based on a minimum salary of 50,000 Baht a month (heard rumours it may go up tp 60,000)

That's for extension of stay based on employment, there is no minimum salary for work permit. 

Although Samui labour likes to see a salary of minimum 30.000 baht, this means 1000 baht tax per month. 

[Boatfreak]

Cost of yearly Visa renewal: 25000 B

Cost of yearly work permit renewal: 15000 B

Cost of Auditing: 15000 B

Salary Tax (per year): 30000 B (min. avg)

Cost of Social insurance: 78000 B (min, avg)

Social insurance yearly fees: 3600 B

Agent fees: 1500 B 

and a few other minor costs 

Thus a minimum of 168100 B to be allowed to provide jobs in Thailand

 

[Peter Aherne]

2 hours ago, seancbk said:

 

To add to this. 

Social security contributions for employees amount to 5% of salaries - up to a maximum of 750 Baht per month (per employee)

That's what my costs are for accounting etc. For social security I think the minimum salary is 10,000B so the employee get's 9,000 and SS is 1,000 though I'd have to double check but it roughly right...

[FritsSikkink]

45 minutes ago, Boatfreak said:

Cost of yearly Visa renewal: 25000 B

Cost of yearly work permit renewal: 15000 B

Cost of Auditing: 15000 B

Salary Tax (per year): 30000 B (min. avg)

Cost of Social insurance: 78000 B (min, avg)

Social insurance yearly fees: 3600 B

Agent fees: 1500 B 

and a few other minor costs 

Thus a minimum of 168100 B to be allowed to provide jobs in Thailand

 

You are getting ripped off on the visa and work permit renewal.

Salary tax depends on personal circumstances: married, children, ... create a lot of deductibles

Your social insurance yearly fees are a joke.

[stevenl]

My expenses for a small company amount to 75,000 baht per year. That includes social security for 2, taxes, work permit renewal, accountancy, 90 day reporting, extension of stay. sign tax, tat license, re-entry permit.

[seancbk]

1 hour ago, Peter Aherne said:

3 hours ago, seancbk said:

 

To add to this. 

Social security contributions for employees amount to 5% of salaries - up to a maximum of 750 Baht per month (per employee)

That's what my costs are for accounting etc. For social security I think the minimum salary is 10,000B so the employee get's 9,000 and SS is 1,000 though I'd have to double check but it roughly right...

 

The maximum social security payment (as I understand it) is 750 baht per month.   That would be 5% of a 15,000 baht salary.   If the employee's salary is 10,000 you pay them 10,000 and pay 500 into their social security fund.   Why would you deduct from their salary?

 

 

[yankee99]

8 minutes ago, seancbk said:

 

The maximum social security payment (as I understand it) is 750 baht per month.   That would be 5% of a 15,000 baht salary.   If the employee's salary is 10,000 you pay them 10,000 and pay 500 into their social security fund.   Why would you deduct from their salary?

 

 

we only pay 1/2 the ss the employee pays the other 1/2

[Suradit69]

2 hours ago, Boatfreak said:

Cost of yearly Visa renewal: 25000 B

Cost of yearly work permit renewal: 15000 B

Sounds a tad expensive.

[seancbk]

1 hour ago, yankee99 said:

1 hour ago, seancbk said:

 

The maximum social security payment (as I understand it) is 750 baht per month.   That would be 5% of a 15,000 baht salary.   If the employee's salary is 10,000 you pay them 10,000 and pay 500 into their social security fund.   Why would you deduct from their salary?

 

 

we only pay 1/2 the ss the employee pays the other 1/2

 

Fair enough.  That is allowable under the labour law.   I'll be paying the full amount for my employee as a small bonus.

 

[khunPer]

21 hours ago, robsamui said:

Thanks for this. So can anyone answer my question please?
What is the monthly cost of running a small company?

Service fee for accounting is often 1,000 baht a month, i.e. 12,000 baht a year;

Annual audit 18,500 baht, i.e. 1,542 baht a month.
Numbers are from Koh Samui 2018-accounting, presumably quite typical for that island, and might be different in other areas. If you have no other activities in the company – i.e. no employees – the annual cost is 30,000 baht, i.e. 2,500 baht a month.

 

Adding an employee you'll need to pay Social Security of 10% of the salary, min. 500 baht and max. 1,500 baht a month (if min./max. has not changed); count ca. 850 baht to 1,000 baht a month to cover a minimum Thai salary, where normally half (5%) is paid by the employee, and half (5%) by the employer (i.e. 400 baht to 500 baht a month); furthermore you shall pay 157 baht a year (2018) to Social Fund.

 

There's no minimum salary for alien workers on Work Permit, but Immigration will not allow extension of stay based on Work Permit without a certain income and corresponding income tax paid; the size of income is depending of the alien's home country; in average you shall count minimum 50,000 baht a month. An alien worker is not mandatory in Social Security, but can join and receive similar benefits, herunder health benefits, as Thai employees.

 

Normally you'll need 4 Thai employees plus a fully paid shareholder capital of 2 million baht for obtaining one alien Work Permit, but there might be lower limits of number of Thai workers depending of business requirements; consult an experienced business lawyer for specified information.

 

With four Thai employees and similar high activities with increased number of account records, your monthly accountant service fee will probably be higher than 1,000 baht.

[robsamui]

4 hours ago, khunPer said:

Service fee for accounting is often 1,000 baht a month, i.e. 12,000 baht a year;

Annual audit 18,500 baht, i.e. 1,542 baht a month.
Numbers are from Koh Samui 2018-accounting, presumably quite typical for that island, and might be different in other areas. If you have no other activities in the company – i.e. no employees – the annual cost is 30,000 baht, i.e. 2,500 baht a month.

 

Adding an employee you'll need to pay Social Security of 10% of the salary, min. 500 baht and max. 1,500 baht a month (if min./max. has not changed); count ca. 850 baht to 1,000 baht a month to cover a minimum Thai salary, where normally half (5%) is paid by the employee, and half (5%) by the employer (i.e. 400 baht to 500 baht a month); furthermore you shall pay 157 baht a year (2018) to Social Fund.

 

There's no minimum salary for alien workers on Work Permit, but Immigration will not allow extension of stay based on Work Permit without a certain income and corresponding income tax paid; the size of income is depending of the alien's home country; in average you shall count minimum 50,000 baht a month. An alien worker is not mandatory in Social Security, but can join and receive similar benefits, herunder health benefits, as Thai employees.

 

Normally you'll need 4 Thai employees plus a fully paid shareholder capital of 2 million baht for obtaining one alien Work Permit, but there might be lower limits of number of Thai workers depending of business requirements; consult an experienced business lawyer for specified information.

 

With four Thai employees and similar high activities with increased number of account records, your monthly accountant service fee will probably be higher than 1,000 baht.

Thank you very much for this thoughtful break-down, and  for taking the time and effort to outline it all for me. I appreciate it. I was on the point of giving up, as most of the other replies were so dismissive.

(Would you be kind enough to private message me the details of an "experienced business lawyer" if you know one, please?)

Edited January 11, 2018 by robsamui

[robsamui]

7 hours ago, stevenl said:

My expenses for a small company amount to 75,000 baht per year. That includes social security for 2, taxes, work permit renewal, accountancy, 90 day reporting, extension of stay. sign tax, tat license, re-entry permit.

Thanks for this.

[khunpa]

In this process, I would highly recommend you to also remember the costs, headaches and time you need to spend, when one day you want to close the company down. (or keep it running, without activity)

 

Opening a company in Thailand is pretty easy. They just forget to tell you the costs etc. of closing it down.

[Boatfreak]

10 hours ago, FritsSikkink said:

You are getting ripped off on the visa and work permit renewal.

Salary tax depends on personal circumstances: married, children, ... create a lot of deductibles

Your social insurance yearly fees are a joke.

AVG stands for Average. 

[tryasimight]

For a successful business the ' costs' should be zero.  The profits should outweigh the costs or you will be insolvent fairly quickly. 

[pearciderman]

21 hours ago, PoorSucker said:

That's for extension of stay based on employment, there is no minimum salary for work permit. 

Although Samui labour likes to see a salary of minimum 30.000 baht, this means 1000 baht tax per month. 

 

Income tax on a 30k salary would only be 463 Baht, (5% of taxable income, which on 30k only 9250 Baht is taxable).

[FritsSikkink]

55 minutes ago, PoorSucker said:

5% is the minimum witholding tax rate. 

Calculate again with real tax rates. 

 

Where did you get the picture from? If you go to the source website, the tax rates are different for the over the million bracket: http://www.rd.go.th/publish/6045.0.html 

Edited January 12, 2018 by PoorSucker
Removed 2008 tax rates to avoid confusion.

[RapidMethod]

Hello Tonray, please could you provide details about the source of your information for

 

"As a requirement for this approval letter, the Thai employer who is supporting the visa application must employ four Thai employees for each foreigner, however in our experience it is possible to negotiate and the number may be reduced to 1-2 Thai employees. "

 

and: 

 

"a) Regular work permit The employing company must employ four (4) Thai employees for each work permit. Also here, in the first year of business after the registration of a new company, the Labor Department may allow a ratio of only 1-2 Thai employees per work permit, i.e. per foreigner working in the company."

 

I've been in touch with the Labor Department and no-one there seems to know anything about this. Maybe it's possible at certain regional offices...?

 

Could you PM me or post a reply here.

Thanks.

[Get Real]

On 1/10/2018 at 10:34 AM, robsamui said:

Thanks for this. So can anyone answer my question please?
What is the monthly cost of running a small company?

Just estimated. If you want to work in your own company, you will need to employ 4 thai nationals. Then you can get a WP.

That is going to cost you about a minimum of 60K baht per month. (Information from lawyer this year)

In that your own salury is not included, and for getting your WP it will range between 30-60K per month.

I would say, anything between 100K-120K per month, but it´s just a quick estimation.

There is also going to be ways around some of these things, so you can lower the costs. Not recommended, though. In that case you most surely will break the law in some way.