Opening Business In Thailand

[Flatlander]

Hi,

I have checked through posts re this topic as I know its come up numerous times but still have a few things I wanted clarifying/explaining.

Its not a bar or restaurant business by the way but to do with UK/thai student exchange programs.

I was speaking to someone from UK recently who has set up a business in a similar area and he says you need to set up a limited company. For this you get a work visa and you need 30,000 pound (2 mill baht) in a thai bank account plus 4 payrolled thai employees and 51% thai ownership.

This doesn't really help if you want to start in a small way and build the business up. Is this correct? Placing 2mill baht in bank is do-able provided I can get back what I haven't spent if things don't work out, but having 4 thai staff with potentially nothing to do at first is a different matter.

Also it seems to contradict what I have been told by another person (though he is canadian so I don't know if rules differ - as far as I am aware it only differs for US citizens). I need to meet with him again to check this, but he has had his business here for 5 years now and he owns company and only has one thai employee. Its same area of work but he deals with canada.

I also wondered if anyone knows about the options for having the business based in UK under their laws as its dealing with UK as much as Thailand? With all the changes people are talking about it seems worth considering (I am guessing that taxes would not actually be that high unless you were making a killing). However, I would need to be based here at least 9 months of the year. So does anyone know if this is a possibilty or does it discount you from even being able to get a work visa?

A final query is to do with these changes in owbership/business laws. Sunbelt Asia said on a post that it is better to set up a business sooner rather than later due to these changes, however another poster said these changes will apply to all business in retrospect anyway in which case it seems it makes no odds when you do it. Can anyone clarify this yet?

And with these business rule changes that have been discussed in previous posts, how exactly in reality do these changes affect any business in terms of control. I understand having majority voting rights may no longer be possible. Does it in effect mean that you have to consult over all decisions, Thai shareholders could veto any decision you made or, if worse came to worse, actually kick you out of the business if for example you fell out?

Any info would be much appreciated

Thanks

Edited February 6, 2007 by Flatlander

[Chang_paarp]

Hi,

I have checked through posts re this topic as I know its come up numerous times but still have a few things I wanted clarifying/explaining.

Its not a bar or restaurant business by the way but to do with UK/thai student exchange programs.

I was speaking to someone from UK recently who has set up a business in a similar area and he says you need to set up a limited company. For this you get a work visa and you need 30,000 pound (2 mill baht) in a thai bank account plus 4 payrolled thai employees and 51% thai ownership.

This doesn't really help if you want to start in a small way and build the business up. Is this correct? Placing 2mill baht in bank is do-able provided I can get back what I haven't spent if things don't work out, but having 4 thai staff with potentially nothing to do at first is a different matter.

It has to be a company wit B2mil registered capital, you may not have to put the whole amount up front, a minimum of 25% in cash is needed. The Thai staff is a point of contention some say, yes some say no. It depends on the structure and line of business. If it is a branch office of your UK company you MAY not need the staff.

There are some businesses a foreigner can own 100%, hotel management, export are 2 is your business covered by that rule?

Also it seems to contradict what I have been told by another person (though he is canadian so I don't know if rules differ - as far as I am aware it only differs for US citizens). I need to meet with him again to check this, but he has had his business here for 5 years now and he owns company and only has one thai employee. Its same area of work but he deals with canada.

I also wondered if anyone knows about the options for having the business based in UK under their laws as its dealing with UK as much as Thailand? With all the changes people are talking about it seems worth considering (I am guessing that taxes would not actually be that high unless you were making a killing). However, I would need to be based here at least 9 months of the year. So does anyone know if this is a possibilty or does it discount you from even being able to get a work visa?

A final query is to do with these changes in owbership/business laws. Sunbelt Asia said on a post that it is better to set up a business sooner rather than later due to these changes, however another poster said these changes will apply to all business in retrospect anyway in which case it seems it makes no odds when you do it. Can anyone clarify this yet?

This is getting in to crystal ball areas. It can and may well change again. Under current form they do not make the law changes retrospective, HOWEVER they may change the way they interpret the existing laws and enforce these retrospectively. If you stick to the letter of the law without any "creative" solutions you should be OK, if you use some of the "standard practices" that take a creative look at the law, you may be in trouble if they change the way they look at the law. Until recently it was acceptable to have 2 classes of shares, 1 with more voting rights than the other, to control a company. This is no longer an acceptable way of controlling you investment, currently voting rights are in direct proportion with shares owned.

And with these business rule changes that have been discussed in previous posts, how exactly in reality do these changes affect any business in terms of control. I understand having majority voting rights may no longer be possible. Does it in effect mean that you have to consult over all decisions, Thai shareholders could veto any decision you made or, if worse came to worse, actually kick you out of the business if for example you fell out?

Remember you need a minimum of 7 shareholders to form a company, if they only meet at shareholder meetings you reduce the chance of a coup. If your articles of association state that shareholder decisions have to be made with a 60% majority vote, it is very hard to exclude you from the decision making process. If you are the active Managing Director, you get a handle on the day to things too.

Any info would be much appreciated

Thanks

[Sunbelt Asia]

Hi,

I have checked through posts re this topic as I know its come up numerous times but still have a few things I wanted clarifying/explaining.

Its not a bar or restaurant business by the way but to do with UK/thai student exchange programs.

I was speaking to someone from UK recently who has set up a business in a similar area and he says you need to set up a limited company. For this you get a work visa and you need 30,000 pound (2 mill baht) in a thai bank account plus 4 payrolled thai employees and 51% thai ownership.

This doesn't really help if you want to start in a small way and build the business up. Is this correct? Placing 2mill baht in bank is do-able provided I can get back what I haven't spent if things don't work out, but having 4 thai staff with potentially nothing to do at first is a different matter.

Also it seems to contradict what I have been told by another person (though he is canadian so I don't know if rules differ - as far as I am aware it only differs for US citizens). I need to meet with him again to check this, but he has had his business here for 5 years now and he owns company and only has one thai employee. Its same area of work but he deals with canada.

I also wondered if anyone knows about the options for having the business based in UK under their laws as its dealing with UK as much as Thailand? With all the changes people are talking about it seems worth considering (I am guessing that taxes would not actually be that high unless you were making a killing). However, I would need to be based here at least 9 months of the year. So does anyone know if this is a possibilty or does it discount you from even being able to get a work visa?

A final query is to do with these changes in owbership/business laws. Sunbelt Asia said on a post that it is better to set up a business sooner rather than later due to these changes, however another poster said these changes will apply to all business in retrospect anyway in which case it seems it makes no odds when you do it. Can anyone clarify this yet?

And with these business rule changes that have been discussed in previous posts, how exactly in reality do these changes affect any business in terms of control. I understand having majority voting rights may no longer be possible. Does it in effect mean that you have to consult over all decisions, Thai shareholders could veto any decision you made or, if worse came to worse, actually kick you out of the business if for example you fell out?

Any info would be much appreciated

Thanks

Four Thai employees is not a requirement for a Thai Limited company, to get a work permit for an employee. As of today, if anyone can show me where in the Department of Employment Regulations Governing the Criteria of Considering Permitting the Work of Foreigners A.D. 2004, " a Thai company is required to have four Thai employees per work permit", they will get a reward of one million Baht. We can show over 5,000 work permits that were issued with none of them being required to have ANY Thai employees.

The company does not need to have 51% Thai shareholders with an Alien Business License.

On January 9th, the interim government approved in principle amendments to the Alien Business Act. As it stands now, on List 3, voting rights will be allowed if the company was formed before it becomes law. If you get the Alien Business License then you do not need to worry about control as you will have it, along with foreign ownership of 100% of the shares.

With the Alien Business License, you will need to invest a minimum of three million Baht. These funds must come from outside Thailand. This can be used as operating capital.

With a Thai majority company in order to get a work permit it would be 2 million Baht (if married then its one million Baht) however the paid up capital can be cash, equipment and % as service. The Thai shareholders must show proof of this investment.

If you have an American partner, the company can be 100% owned by foreigners. The company will need to show three million Baht from overseas in order for you to get the work permit. (This is subject to change but currently being enforced)

www.sunbeltasiagroup.com

[twix38]

Don't even think of trying to do a business in Thailand where the rules and requirements are one sided before you even try to break even with a good business model and can and do change at a moments notice and perfectly possibly retrospective!

There are success stories of those who have prospered against the odds or with a very very good business model, unique something or fallen on their feet. Rare.

There are thousands and thousand that make less than outgoings or a minimal profit only and regret as they cannot sell for anything reasonable and thousands more who loose money or regret entering into business here, if truth be known.

The risk/reward ratio is terrible and why sink savings in just to start up and employ often lazy disinterested Thai's. The success stories are like a treasure hunt gone wrong, with unequal rules and culteral differences that can infuriate in business.

I love Thailand as a tourist. Would I go into business here. I'd rather put it on the roulette wheel and save a slow torturous stressfull existence. hel_l, I may even get my number come up at roulette.

I look at all the additional problems (political and business) and the extra requirements for foreigners and the regular sad stories of lost life savings or corruption, staff problems, tax returns, visa and work permit problems.....Jesus you have to be mad or 1 in a million to invest in a business profitably here, where rules and laws change at a whim. You would NEVER dream of taking so many risks in your home country with your hard earned money!!!!!!!!!!!!!!

WAKE UP TO REALITY. Thailand will disperse your money to the Thai's as you fight an unfair, uphill battle to do business.

Edited February 6, 2007 by twix38

[Okidoki]

Don't even think of trying to do a business in Thailand where the rules and requirements are one sided before you even try to break even with a good business model and can and do change at a moments notice and perfectly possibly retrospective!

There are success stories of those who have prospered against the odds or with a very very good business model, unique something or fallen on their feet. Rare.

There are thousands and thousand that make less than outgoings or a minimal profit only and regret as they cannot sell for anything reasonable and thousands more who loose money or regret entering into business here, if truth be known.

The risk/reward ratio is terrible and why sink savings in just to start up and employ often lazy disinterested Thai's. The success stories are like a treasure hunt gone wrong, with unequal rules and culteral differences that can infuriate in business.

I love Thailand as a tourist. Would I go into business here. I'd rather put it on the roulette wheel and save a slow torturous stressfull existence. hel_l, I may even get my number come up at roulette.

I look at all the additional problems (political and business) and the extra requirements for foreigners and the regular sad stories of lost life savings or corruption, staff problems, tax returns, visa and work permit problems.....Jesus you have to be mad or 1 in a million to invest in a business profitably here, where rules and laws change at a whim. You would NEVER dream of taking so many risks in your home country with your hard earned money!!!!!!!!!!!!!!

WAKE UP TO REALITY. Thailand will disperse your money to the Thai's as you fight an unfair, uphill battle to do business.

Well, starting and SUCCEEDING with a business is hard everywhere in the world. And of course, even harder if you do not understand the culture. But the main problem for most people, starting a business is that they are undercapitalized. I have seen it so many times. Without financing, own or by others, you wount come far and will end up bitter. (Like some seems to be here.)

But of course you can make money in Thailand. You can even have better earnings in Thailand then in most European countries or US. On the other hand that is when you calculate in percentage. Calculate it in USD, it is mostly not much.

Don´t start a bar, restaurant or something similar that has low possibilities of really earning some serious money. If that is what you are looking for. To much work for to little return,

In my opinion that´s why so many are involved in real estate. Today, that´s where the money is. Despite all new rules. Good luck with your adventure.

[Flatlander]

Thanks for the replies. By the way, re the negativities about setting up business in Thailand, I've heard a lot about that and I am wary. I wouldn't consider it unless a lot of research etc makes me as sure as is possible that it could work. Could be a long way down the line!

Edited February 7, 2007 by Flatlander

[twix38]

Indeed Flatlander,

Think very hard and then answer, No. For the reasons I gave and many more you would encounter in your stress filled probably unprofitable working life here, it doesn't really need that much thought when you get told the truth and know the facts to see that it's a risk too far........far too far.

Well done in anticipation. You are immediately some 2 million Baht better off just for not having to set up a company to trade.

Invest this in a company called Vialogy on the UK AIM stock market and take me for a beer ;-)

Thanks for the replies. By the way, re the negativities about setting up business in Thailand, I've heard a lot about that and I am wary. I wouldn't consider it unless a lot of research etc makes me as sure as is possible that it could work. Could be a long way down the line!

[twix38]

Further evidence today (if any were needed) that Thailand is not a good place to do business. There is a new Government directive to ban foreigners from opening any more fixed term bank accounts. We just have to settle for our funds getting 0.75% and the Banks making the profit. As per below extract.

"My wife told him (the bank clerk) that I wanted a 12 month Fixed Interest account and he responded that "as of today" Bangkok Bank are following a new Government directive that prohibits "Farang" from opening a new account (Fixed Rate Deposit). "Farang" can now ONLY open a standard Savings account. "

Indeed Flatlander,

Think very hard and then answer, No. For the reasons I gave and many more you would encounter in your stress filled probably unprofitable working life here, it doesn't really need that much thought when you get told the truth and know the facts to see that it's a risk too far........far too far.

Well done in anticipation. You are immediately some 2 million Baht better off just for not having to set up a company to trade.

Invest this in a company called Vialogy on the UK AIM stock market and take me for a beer ;-)

Thanks for the replies. By the way, re the negativities about setting up business in Thailand, I've heard a lot about that and I am wary. I wouldn't consider it unless a lot of research etc makes me as sure as is possible that it could work. Could be a long way down the line!

Edited February 7, 2007 by twix38

[Cyberstar]

Further evidence today (if any were needed) that Thailand is not a good place to do business. There is a new Government directive to ban foreigners from opening any more fixed term bank accounts. We just have to settle for our funds getting 0.75% and the Banks making the profit.

... and exactly what does a fixed term bank account have to do with doing business? ... Everywhere - including Thailand - business means taking risks with ones money, not letting it sit dead on a fixed term account. From that post, I gather you have no actual experience on what you're trying to promote yourself as an expert on.

[twix38]

It's further evidence of the unfair status that foreigners have to operate in. Of course it is nothing to do directly with a business. It does relate, however, to my strong point that it is an unfair and daunting task to financially survive here as a foreigner when so many things are against you by law and design.

Whether a business, a bank account, a corrupt official, and numerous laws to benefit Thais and disadvantage foreigners. It's their land, so fair enough, but I certainly don't want to help them out!

Surely anyone who has read my posts and has a grasp of the general point can see this is more supporting and related information.

Cyberstar, are you really unable to see a common thread and a clear link to the message I am expressing? It's related, obvious and just as I said "Thailand is not a good place to do business" for a foreigner, or invest in now either, at least in cash.

I wonder what law or rule will be amended or introduced next week. Whatever one, you can bet it will not help the foreigner!!! Wake up.......... and Cyberstar..sharpen up!!

Further evidence today (if any were needed) that Thailand is not a good place to do business. There is a new Government directive to ban foreigners from opening any more fixed term bank accounts. We just have to settle for our funds getting 0.75% and the Banks making the profit.

... and exactly what does a fixed term bank account have to do with doing business? ... Everywhere - including Thailand - business means taking risks with ones money, not letting it sit dead on a fixed term account. From that post, I gather you have no actual experience on what you're trying to promote yourself as an expert on.

Edited February 7, 2007 by twix38

[rogerinthai]

Further evidence today (if any were needed) that Thailand is not a good place to do business. There is a new Government directive to ban foreigners from opening any more fixed term bank accounts. We just have to settle for our funds getting 0.75% and the Banks making the profit.

... and exactly what does a fixed term bank account have to do with doing business? ... Everywhere - including Thailand - business means taking risks with ones money, not letting it sit dead on a fixed term account.

What a joke... If you had minimal financial understanding you'd know that everyone have available funds now and then, that are not in long term investments, individuals as well as businesses. Sometimes those funds are very large. You MUST have a reasonable risk-free interest in order to avoid losing the value of those funds by inflation. Not allowing foreigners to open such accounts in quite outragous.

If you don't get how it affects doing business, you probably never ran one.

[rogerinthai]

Whether a business, a bank account, a corrupt official, and numerous laws to benefit Thais and disadvantage foreigners. It's their land, so fair enough, but I certainly don't want to help them out!

Spot on. But, as we can see, even under those conditions, there are suckers born every day. As someone put it in another thread "the government underestimates the power of cheap Isarn pussy".

[twix38]

well said Rogerinthai,

Cyberstar really needs to expand his/her thinking and so do many others who can't see the wood for the trees. It comes down to the rule "don't bring in more money than you can afford to loose" Time and time again this is the governing rule of Thai investment.

[thaigene2]

Yes..agree.

But I am getting tired of one minor annoying error (on many threads). LOOSE means loose as in "loose women"...LOSE means lose as in lost and loser.."don't lose your virginity to just anyone."

Some of the non-english natives can be forgiven..but come on the rest of you, raise the game.

Edited February 8, 2007 by thaigene2

[Cyberstar]

Cyberstar, are you really unable to see a common thread and a clear link to the message I am expressing? It's related, obvious and just as I said "Thailand is not a good place to do business" for a foreigner, or invest in now either, at least in cash.

I wonder what law or rule will be amended or introduced next week. Whatever one, you can bet it will not help the foreigner!!! Wake up.......... and Cyberstar..sharpen up!!

If one goes a few steps beyond what has been repeated in about 100,000 posts ont this site: "Thailand is not a good place to do business" and "Don't invest more in Thailand than you can afford to lose" one of the next precautions in line will be: "Don't keep more funds in Thailand than you need". Funds on a fixed term account mean funds that can't be withdrawn on request, right? - What would be the terms? 3 months notice? 6 months? 12 months? - For one thing, you can't get them out of country quick if something gets introduced or amended next week.

The only business reason (besides unknown fluctations on exchange rates) I can see for having non-working funds in Thailand (beyond amounts where interest truly makes a dfference) is if required by government, business asociates, banks, etc. ... This leads to the more detailed level beyond "Thailand is not a good place to do business" where the term "business" is used rather all-embracing by the nay-sayers... Surely, there are kinds of businesses that is not good to do in Thailand - such as the ones that requires you to keep large non-working funds in a bank account. However, as some of us will know, it's actually possible for foreigners to make thriving businesses in Thailand.

Cyberstar really needs to expand his/her thinking and so do many others who can't see the wood for the trees. It comes down to the rule "don't bring in more money than you can afford to loose" Time and time again this is the governing rule of Thai investment.

I beg to differ. Who'd be the ones that can't see the wood for trees - the ones that can't see the wood or the ones that make the wood fit their needs?

[rogerinthai]

However, as some of us will know, it's actually possible for foreigners to make thriving businesses in Thailand.

Hoobaa! Please enlighten us, which businesses did you open in Thailand? Or is it the usual bullsh!t of those who are here mostly for the bar scene, with no local biz experience, and are offended when someone makes valid criticism about Thailand? How can someone say things like that about a country with such sweeties?!

[Cyberstar]

However, as some of us will know, it's actually possible for foreigners to make thriving businesses in Thailand.

Hoobaa! Please enlighten us, which businesses did you open in Thailand? Or is it the usual bullsh!t of those who are here mostly for the bar scene, with no local biz experience, and are offended when someone makes valid criticism about Thailand? How can someone say things like that about a country with such sweeties?!

Obviously posted by a guy in dire need of expanding his way of thinking.

[twix38]

one of the few business operations that make a profit for foreigners is Estate Agency. Unregulated and in a mini boom. Also practices that are illegal in the West such as the Net price, whereby the agent will add all costs and try to sell at an inflated price in order to keep anything extra. The net price ONLY is given to the seller and the agent keeps any balance in addition to their agreed commission.

This business is profitable largely inspite of the Thai laws/rules etc and not because of them. The corruption aspect assist the unregulated market and the property boom of recent years has led to many Estate Agents. The market and practices in Pattaya are a scandal as reported by the Pattya Mail last April and Sunbelt services in another thread. I was today asked to pay 100,000 Baht to one agent as well as my commission to the agent I registered with, if this other agent introduced their potential buyer and he actually buys!!! So 3% commission to my estate agent and a further 100,000 to another agent who actually had the potential customer, as they work together. I said no and that was the appointment over!

Otherwise, most (nearly all) other foreign companies have their work cut out just staying afloat. Believe me I know many of them, who privately admit it's tough and the extra requirements etc etc are a big disadvantage and many don't really understand what they are letting themselves in for or the additional hassles.

I agree to a sufficiency economy. Just enough foreign currency converted into Thai Baht to meet expenses with an emergency float, on an ongoing basis and don't let the buggers have a Baht more!

Edited February 8, 2007 by twix38

[rogerinthai]

However, as some of us will know, it's actually possible for foreigners to make thriving businesses in Thailand.

Hoobaa! Please enlighten us, which businesses did you open in Thailand? Or is it the usual bullsh!t of those who are here mostly for the bar scene, with no local biz experience, and are offended when someone makes valid criticism about Thailand? How can someone say things like that about a country with such sweeties?!

Obviously posted by a guy in dire need of expanding his way of thinking.

You did not answer my question, so I must assume you have no experience whatsoever in starting or running a business in Thailand, therefore your views on this subject do not worth much.

Edited February 9, 2007 by rogerinthai

[Cyberstar]

However, as some of us will know, it's actually possible for foreigners to make thriving businesses in Thailand.

Hoobaa! Please enlighten us, which businesses did you open in Thailand? Or is it the usual bullsh!t of those who are here mostly for the bar scene, with no local biz experience, and are offended when someone makes valid criticism about Thailand? How can someone say things like that about a country with such sweeties?!

Obviously posted by a guy in dire need of expanding his way of thinking.

You did not answer my question, so I must assume you have no experience whatsoever in starting or running a business in Thailand, therefore your views on this subject do not worth much.

The answer to both questions is no