Work Permits Cancelled If Co. Is Not Profitable!

[junkofdavid2]

Under another section of Thaivisa.com (under General Topics), there's some news report (from the Strait Times) suggesting that the work permits of employees of "inactive or non-profitable" companies will be withdrawn when the employees apply for renewal.

Anyone know if this is true?

The Labour office officially denied it, but according the the news clipping, it was from "sources within the labor department."

Interestingly, when my farang friend's WP was renewed the last time, the Labour officer did indeed stamp in the terms and conditions section, that her company's 2006 annual audit would need to be shown come WP renewal time. (Although luckily, I think her company is profitable... it seems to be but of course it wouldn't be polite of me to ask.)

Maybe Sunbelt or someone else could answer that....

cheers!

Edited February 24, 2007 by junkofdavid2

[Galong]

My accountant says a company can only show no profit for two years. After that, it's considered a company that shouldn't be in business. However, I wonder if they would take into consideration external forces (such as tsunamis, SARS, bombing, media-generated hysteria, etc.), that could have adverse, yet limited time influence on profit for tourist-based businesses?

I wonder how long Thai companies can show a loss? I wonder how long Thai companies in my home country can show a loss?

[Axel]

Guess, it is not a question of the WP but the extension of a permission to stay for another year. To do this the the sponsoring company must have Bt1 million positive equity. If the company started with a capital of 2 million and is down to one, still ok, if below a recapitalisation might be needed.

[bino]

This is probably "self effecting"... in that if the capital is spent and the company is not profitable, there will be no money to pay the foreign employee. Without a paycheck, they will probably be long gone in search of greener pastures.

Edited February 24, 2007 by bino

[Sunbelt Asia]

Under another section of Thaivisa.com (under General Topics), there's some news report (from the Strait Times) suggesting that the work permits of employees of "inactive or non-profitable" companies will be withdrawn when the employees apply for renewal.

Anyone know if this is true?

The Labour office officially denied it, but according the the news clipping, it was from "sources within the labor department."

Interestingly, when my farang friend's WP was renewed the last time, the Labour officer did indeed stamp in the terms and conditions section, that her company's 2006 annual audit would need to be shown come WP renewal time. (Although luckily, I think her company is profitable... it seems to be but of course it wouldn't be polite of me to ask.)

Maybe Sunbelt or someone else could answer that....

cheers!

Never to any of the over 5,000 work permits we have taken care of. Have heard of it happening, however. They do look at the audits of the company.

www.sunbeltasiagroup.com

[ruffneck]

I am just about to do my first tax balance sheet, as my company will be 1 year old next month. I was originally told that the company must show a minimum B600,000 revenue, to cover my declared salary of B50,000/month which i pay personal tax on. Now I am being told that I have to show a B600,000 profit, and pay B40-50,000 tax on this profit - is this correct?? My adviser told me that this was a new requirement of Pattaya immigration, before they will consider the 1 year extension visa.

Thanks

[junkofdavid2]

I am just about to do my first tax balance sheet, as my company will be 1 year old next month. I was originally told that the company must show a minimum B600,000 revenue, to cover my declared salary of B50,000/month which i pay personal tax on. Now I am being told that I have to show a B600,000 profit, and pay B40-50,000 tax on this profit - is this correct?? My adviser told me that this was a new requirement of Pattaya immigration, before they will consider the 1 year extension visa.

Thanks

In my opening post, I was referring to the renewal of Work Permit, issued by Labor Department. I was not referring to "Extension of Visa", granted by Immigration.

Immigration Dept is a whole different ballgame from Labor Dept regarding rules. Anyway, to help answer your question... Yes, the Immigration Dept has very strict rules regarding Extension Visa (much stricter than Labor Dept's requirements regarding Work Permit).

Moreover, each Immigration branch has it's own rules regarding that.

Therefore, although I can't confirm it, it's probably true that your Pattaya immigration has imposed that as a rule.

If you can't meet that profitability requirement (or even if you can), it might be cheaper for you to not have your visa extended via Immigration anymore. Instead, fly to Singapore with your documents (have it prepared by lawyer... I personally use Sunbelt), and get a 90 day Type B visa there. You can do that every 3 months with minimum requirements and don't need all that $$%#% that the immigration requires (and you won't even need to employ Thai workers anymore, because that "4 employees rule" is a requirement of Immigration for your one year Visa extension; and it is NOT a requirement of the Labor Dept for issuance of work permit).

Flying to Singapore every 3 months for 1 year is cheaper than paying 50k a year in taxes (if your company is not that profitable yet), and is also far cheaper than paying 216,000 a year (minimum!) in salaries to 4 Thai employees.

If you wana do it cheaper still, you try Thai embassy in Laos every 3 months to renew your Type B visa there every 3 months.

Cheers.

Edited February 28, 2007 by junkofdavid2

[ruffneck]

Thanks for your quick response. I struggle to keep up with the ever changing rules of the Imm/Tax/Lab depts. Think I will just pay the tax this time, and keep my fingers crossed that my 1 year visa will finally get approved. If not, then I will just renew my B visa when it expires in May, as you suggested.

Cheers

[Cyberstar]

Now I am being told that I have to show a B600,000 profit, and pay B40-50,000 tax on this profit - is this correct?? My adviser told me that this was a new requirement of Pattaya immigration, before they will consider the 1 year extension visa.

I would check directly with Pattaya immi office. A profit of 50,000 a month (or rather 100,000 in some sense) requires how much turnover? --- The requirement is way off the official requirements.

[Sunbelt Asia]

Now I am being told that I have to show a B600,000 profit, and pay B40-50,000 tax on this profit - is this correct?? My adviser told me that this was a new requirement of Pattaya immigration, before they will consider the 1 year extension visa.

I would check directly with Pattaya immi office. A profit of 50,000 a month (or rather 100,000 in some sense) requires how much turnover? --- The requirement is way off the official requirements.

Can confirm this is Pattaya's Immigration rules. Why? This is how they interpret the National Police Order and their interpretation is all that matters as they make the rules.

Apply in Bangkok and only the gross sales in 2006 has to be higher than 600,000 (Based on having one European/ American work permit)

Nothing to stop you to apply for the extension at Bangkok Immigration rather than at Pattaya Immigration (even if your office is in Pattaya.) Only the work permit must be done in Pattaya.

www.sunbeltasiagroup.com

[freitag1]

The company that wants to hire me had 900.000 Baht profit last year (3.5 million before all expenses), 4 thai employees, is 3 years old and has 1 million registered capital that they will increase to 2 if needed.

Is that fine?

[Sunbelt Asia]

The company that wants to hire me had 900.000 Baht profit last year (3.5 million before all expenses), 4 thai employees, is 3 years old and has 1 million registered capital that they will increase to 2 if needed.

Is that fine?

You can get a work permit with a million Baht registered company if you are married to a Thai and this is a 51% Thai owned and 49% owned Foreigner Company (only exception would be a BOI company). Even if you are married or not married to a Thai and its own more than 50% by foreigners then it must be two million Baht registered capital. (Exception being the BOI)

If you are not married, then its two million baht registered capital (exception BOI)

As for the extension of stay based on business (Immigration) the balance sheet must be audited and show a minimum of one million equity (this can not be good will)

www.sunbeltasiagroup.com

[freitag1]

The company that wants to hire me had 900.000 Baht profit last year (3.5 million before all expenses), 4 thai employees, is 3 years old and has 1 million registered capital that they will increase to 2 if needed.

Is that fine?

You can get a work permit with a million Baht registered company if you are married to a Thai and this is a 51% Thai owned and 49% owned Foreigner Company (only exception would be a BOI company). Even if you are married or not married to a Thai and its own more than 50% by foreigners then it must be two million Baht registered capital. (Exception being the BOI)

If you are not married, then its two million baht registered capital (exception BOI)

As for the extension of stay based on business (Immigration) the balance sheet must be audited and show a minimum of one million equity (this can not be good will)

www.sunbeltasiagroup.com

Thanks a lot. I'm not married so it got to be 2million. What is equity? Is that the profit I was talking about minus the expenses (900.000)?

Edited March 5, 2007 by freitag1

[Sunbelt Asia]

What is equity? Is that the profit I was talking about minus the expenses (900.000)?

That is the P/L.

This is the balance sheet which shows the equity. Equity is total assets minus total liabilities, in which case it is also referred to as shareholder's equity or net worth or book value.

www.sunbeltasiagroup.com

[freitag1]

What is equity? Is that the profit I was talking about minus the expenses (900.000)?

That is the P/L.

This is the balance sheet which shows the equity. Equity is total assets minus total liabilities, in which case it is also referred to as shareholder's equity or net worth or book value.

www.sunbeltasiagroup.com

Thanks! We are not sure what it is. I have a list of shareholders here and the owner has 9.900 shares each worth 25 bath. Is it that? We thought so far the Profit/Loss is the balance sheet which is obviously not the case. Do you know how it is called in Thai that I can talk to the accountant?

[Sunbelt Asia]

Thanks! We are not sure what it is. I have a list of shareholders here and the owner has 9.900 shares each worth 25 bath. Is it that?

no

We thought so far the Profit/Loss is the balance sheet which is obviously not the case. Do you know how it is called in Thai that I can talk to the accountant?

Ask him for the 2006 audit. The balance sheet would be in the audit.

www.sunbeltasiagroup.com

[freitag1]

thanks again i will do that. you guys are great!

[Sunbelt Asia]

thanks again i will do that. you guys are great!

You are welcome. Good luck.

www.sunbeltasiagroup.com