Company Investment

[overone]

Both me and my company is about to invest in a new small company limited as two of the new shareholders. The outcome is to own 25% of the new company.

1. Is there any special implications that I should take in to account when doing this?

2. Any reductions I can make in my accounting? (I’ve heard very different views on this one)

3. Is it better for me (the person) or my company to own more, less or nothing?

Advice is needed…

Cheers!

Eric

[lannarebirth]

Both me and my company is about to invest in a new small company limited as two of the new shareholders. The outcome is to own 25% of the new company.

1. Is there any special implications that I should take in to account when doing this?

2. Any reductions I can make in my accounting? (I've heard very different views on this one)

3. Is it better for me (the person) or my company to own more, less or nothing?

Advice is needed…

Cheers!

Eric

My advice is, get a lawyer. Though I've never used them personally, there have been many positive testimonials of the sponsor of this forum, ie: SunbeltAsia. I note their rates are quite reasonable, and the general advice they give on this forum is quite good I find. Good Luck.

[Martin_F]

I must agree with Lannarebirth. Seek legal advise.

We do not know what the intention of the venture is, what your business is, who the other paries are, are there thai/foreign considerations, your tax situation, your companies tax situation, the intended purpose for the new company.

But if it is a joint venture you need a joint venture agreement with the other parties (as there are five other shareholders) that sets out the rule and regulations for the operation of the company and the financial requirments for the partners.

[overone]

I must agree with Lannarebirth. Seek legal advise.

We do not know what the intention of the venture is, what your business is, who the other paries are, are there thai/foreign considerations, your tax situation, your companies tax situation, the intended purpose for the new company.

But if it is a joint venture you need a joint venture agreement with the other parties (as there are five other shareholders) that sets out the rule and regulations for the operation of the company and the financial requirments for the partners.

Oh, it’s nothing serious like this at all. The other party is my brother, so the legal matters in controlling the actual risk are not an issue at all.

The question above is purely from a financial standpoint. General advice in bookkeeping and tax is what I was looking for.

[Martin_F]

It really depends on your tax situation and if the new company is expected to be a cash cow.

Also on where the money is coming from to finance the new venture.

If your existing co has money then finance it through the company you can then control returns to you.

Inter-company dividends and dividends received from a Thai

company by a company listed on the Stock Exchange of

Thailand. Dividends received by a non-listed company from

another Thai company are also exempt from tax, provided

that the company receiving the dividends holds at least 25%

of the total shares with voting rights without any direct or

indirect cross-shareholding. In other cases where one Thai

company receives a dividend from another Thai company,

one-half of the dividend is exempt from tax. However, in all

cases, the listed or non-listed company receiving a dividend

must have held the shares in the company paying the dividend

for at least 3 months before and 3 months after the dividends

were received.

But look at the rules and make sure of the 25% not 24.999%.

It is also easier on withholding tax between companies.

[overone]

Ok. Thank you.

If investing from a company, do I need to pay any withholding tax on the investment?

[Martin_F]

There is no withholding tax on the investment except in the case of dividends.

There is stamp duty and government fees but the lawyer handling the company formation should discuss these details with you.