Boi

[ThaiAdventure]

Hi All.

I didn't want to hijack CroftRobins thread so I hope no-one minds if I continue on a new one!

Caughtintheact wrote:

You have to form a company and then apply for BOI. The risk is that if you base your expectations and business plan on getting the BOI approval, and are rejected, you will have spent a bunch of extra time and money for nothing.  

Question.

If you cannot join the BOI without first having a company AND you cannot have majority shareholding without BOI approval. How can you start a company and have majority shareholding????

I of course want majority shareholding (say 94% me 6 percent other) so that no-one can close the company and strip it of its assets. In addition, I am doing all the work (and investment) so I think I should get most of the dividends.

The Thai government seem not to want serious investment from overseas.... just the money. It strikes me that the cost of setting up is extortionate (3 times the cost in the UK) and the tax incentive is poor. The only saving grace for my proposed company seems to be that labour and office costs are low. But can the Thai's deliver to Western deadlines and standards?

I would be grateful of your thoughts.

[Wisarut]

First of all, I do confirm that Thai government really wants serious investment from overseas.

For your question, you can submit the project plan to the BOI, without any company registration process. After the BOI approve your project, you will form the company with foreign shareholder up to 100%.

To avoid wasting time and resource, you need to have someone who knows BOI procedures, criteria, and people at the BOI to help you prepare the project. It need time at least 2 months to get the approval and another month to get the certification. Just the BOI’s approval can allow you to get 100% foreign shareholder.

Please take a look at this link… http://www.boi.go.th/english/boi/activity.html Then tell me, what is the business categories you would like to set up.  We will talk in more detail…

[ThaiAdventure]

It was difficult to characterise the business under the sections listed in your web posting but I would have thought the following would be applicable.

6.5.9 Electronic design (Category 5.7)

6.5.10 Software (Category 5.8)

The company is to be an engineering company (Specialist is Electromechanical test and measurement for the aviation and automotive industries) which will eventually consist of 1 Mechanical Engineer, 1 Systems Engineer, 1 Electrical Engineer, 2 office staff (PA, Secretary/Receptionist) and 4 software engineers. Maybe an accountant judging by the extortionate cost of consultants   )

The customers are UK based (initially) and I have 3 orders awaiting a company to interface to. (I have to supply the company information so that they can raise the orders).

I don't think that the BOI would be able to reach a decision on approval in time for the formation (judging by the indicated timescale) but ultimately I do want majority shareholding for the aforesaid reasons.

I have an appointment with the British Emabssy for when I arrive in Bangkok (june 3rd 2003) where I will be discussing this and other aspects of the company.

If you know where I can obtain information as to the procedure for obtaining approval please e-mail me with a web-link so that I am prepared for my meeting.

[fester]

Bring in 10 M THB into your Thai Company Ltd., and you have a one year visa and work permit within 3 hours, or at least the same day.

Thaiadventure, how much USD is your investment?

You don't need us here at this sunky forum, you should contact BOI for special priviliges indeed.

[ThaiAdventure]

Bring in 10 M THB into your Thai Company Ltd., and you have a one year visa and work permit within 3 hours, or at least the same day.

Thaiadventure, how much USD is your investment?

You don't need us here at this sunky forum, you should contact BOI for special priviliges indeed.

No USD only pounds sterling I'm afraid :ghostface:

[Wisarut]

For 6.5.9 Electronic design (Category 5.7) is classified as a priority List of the BOI. That’s mean; you can get the corporate income tax exemption 8 years, no matter where your location is. In ordinary case, the 8 years tax incentive will be grant to the project, only in the Investment Zone 3. The corporate income tax exemption includes revenue from sale of products and related products, which are of own design but manufacture by others.

For 6.5.10 Software (Category 5.8), the corporate income tax exemption would be 5 years out side the Software Park, or 8 years for the location is in the Software Park, or in the investment Zone 3.

For your business model… The best fit to yours, would be in the category 5.7… The minimum investment is 1 million Baht only, but the more investment the more BOI prefer. Your number of Thai employees makes no difference in BOI decision-making, as the BOI law can allow them issue no limitation number of work permit. The strategic plan is the most importance.

As the ex BOI officer, I do confirm that BOI can approve your project on time of 2 months. You need the cooperator to keep contact and feed the information to the BOI officers who has responsibility to your project. The delay project approval always from lack of information need. It’s may be almost all of lawyers at law firm don’t know the business model and don’t know the technical. Your strategic plan is the most BOI pay attention to.

For sake of work permit, once you submit the application to BOI. You eligible to get the work permit under section 24 of the BOI law. This allows you to get 6 months work permit, until BOI approve your project. After the project is approved you can get 2 years period.

For the detail of your meeting at Bangkok… I will talk to some directors involved your project, and then tell you via your e-mail, the available time of them during the June 3rd 2003.

If you have any questions please don’t hesitate to post in the board, or e-mail me.

[ThaiAdventure]

Interesting.....

I believe the minimum investment by a farang is fixed by the company formation process @ THB 2M. Any more without majority shareholding is too higher a risk. The number of initial employees may not be of interest to the BOI but the proportioning of skills may be to determine catagorisation.

The work permit (for myself) is only critical in the sense of company administration. I would prefer initially not to have one since I will be in the UK for the first 8 months, but (if I understand correctly) I need one to administer the company bank accounts and to sign offical documents. As for my employees, they will be Thai nationals and therfore not require any although according to the business plan I will need a UK resident sales engineer in the future who may (or may not) require a permit.

I am not sure what a "Software Park" is or what investment Zone 3 is. Clarification would be greatley appreciated.

Regards

Thai Adventure

[Wisarut]

The THB 2Million is enough; the work permit in viewpoint of BOI is the way to invite investor to bring in the knowledge people to work in Thailand. That’s mean the more work permit is the more prefer, as long as they come here with their knowledge to transfer to Thai people, in the form of on the job training.

For your business model, the machinery import tax exemption/reduction incentive of BOI would be benefit to yours, as you would import the testing equipment or design equipment from the technology source. If you import any raw material to use in the process, the BOI can also give you the raw material import tax exemption/reduction incentive. Your strategic plan will be the good point to negotiate with the BOI.

[Wisarut]

The THB 2Million is enough; the work permit in viewpoint of BOI is the way to invite investor to bring in the knowledge people to work in Thailand. That’s mean the more work permit is the more prefer, as long as they come here with their knowledge to transfer to Thai people, in the form of on the job training.

For your business model, the machinery import tax exemption/reduction incentive of BOI would be benefit to yours, as you would import the testing equipment or design equipment from the technology source. If you import any raw material to use in the process, the BOI can also give you the raw material import tax exemption/reduction incentive. Your strategic plan will be the good point to negotiate with the BOI.  

Software Park Thailand is a government agency under National Science and Technology Development Agency was established to stimulate the development of Thai software industry. The software park and the BOI are working together to invite investor from oversea. Then the software company locate in the software park can get income corporate tax exemption as same as they are in the Investment Zone 3.

For more information, just go to www.swpark.or.th. Or mail to Mr.Rom Hiranpruk, Ph.D. [email protected]. He is the director of the software park. Just tell him that you have got information from Khun Wisarut.

[ThaiAdventure]

It sounds as though the Software Park may be a good recruiting ground. I was thinking of taking on graduates from the universities, but if they are consolidated in one place it makes things easier.

At the moment, however, my focus is on company formation and getting the infra-structure and processes in place and functional. It seems that the BOI approval will not happen in time for this. So I still have the problem of protecting my investment (i.e shareholder majority) in the initial 2 months. It is not acceptable to trust a person I have never met or have a history of dealing with in control of accounts and assets so I still have one hurdle to overcome.

Regards

ThaiAdventure

[Wisarut]

Mr.ThaiAdventure... Check your mail box

[Wisarut]

"It sounds as though the Software Park may be a good recruiting ground. I was thinking of taking on graduates from the universities, but if they are consolidated in one place it makes things easier.”

The software park’s purpose is to serve above.

“At the moment, however, my focus is on company formation and getting the infrastructure and processes in place and functional. It seems that the BOI approval will not happen in time for this. So I still have the problem of protecting my investment (i.e shareholder majority) in the initial 2 months. It is not acceptable to trust a person I have never met or have a history of dealing with in control of accounts and assets so I still have one hurdle to overcome."

After you have got the BOI approval, you will form the company with 100% foreign shareholder.

BOI have the “Investment Service Center” provide the service such as yours.

[ThaiAdventure]

Can I use the service center to apply for BOI approval?