Side business to meet the requirement for 4 Thai employees?

[LBrew]

I was thinking of forming a Thai company to do some consultancy work and give me a long term visa.

 

I know there's a requirement for the company to have at least 4 Thai employees for every work permit.

 

The consultancy work does not require any employees, but the company could have a side business that had 4.

 

Does anyone see a problem with that, visa / WP wise? Seems ok to me as the requirement applies to the company as a whole.

 

I think the minimum wage in Thailand is about THB 125k pa, but I expect the cost to the employer is more than that. Is there a figure for the total, including whatever employer contributions or charges are payable?

 

No idea what the side business would be by the way. Employ three house cleaners and a person to drum up business and manage the others, maybe. It wouldn't need to make any money but should cover the staff costs without sucking up my time.  Interested in any suggestions.

[OneMoreFarang]

Talk to a lawyer and/or accountant who is used to setting up such companies.

Your problem is (I guess) the most common problem for many foreigners in Thailand.

It seems many accountants find ways to do this. Maybe hire officially a couple of motorcycle guys for deliveries, etc.

Because all that is a very grey area don't expect that it will be discussed in detail here.

Depending how long you live/work already in Thailand you probably know that there are lots of rules and lots of interpretations of those rules...

And make sure you find an experienced Thai person to help you with this. Setting it up once is the easy part, running it for years smoothly can be difficult and that requires the expertise.

[Nonthaburi Boy]

The cost is not likely to be significantly more than that. You just have stuff like social security and some extra accounting/ payroll costs but nothing that is going to put you off, from the sound of it. 

 

Things to think about:

If it's a foreign-owned business, your sideline has to be a business that isn't restricted. I am afraid I have no idea about cleaning services, but that was only an example.. Same applies to your consultancy business too though. 

 

Hiring minimum wage workers might not be easy if you want to keep them (and you do if possible because otherwise you'll not have four employees and there is a very clear paper trail on that via social security).

 

Related, unless you know the people you are employing and know the arrangement suits them, you might find your side business more troublesome than you expect.

 

While you are correct that a company can operate more than one type of business it is going to be pretty obvious to people what you are doing and you can't predict whether the officials who come to inspect your place of business and approve your work permit, etc. will be bothered by that. 

 

I am going to do something similar in a few months but the 'sideline' is related to my field (and my clients will often need that service too). Plus I am married here so I only need one person doing that/ checking email/ following up with contractors and an office maid. It's a lot less daunting to maintain and I'll probably hire my (retired) wife as a back-up employee.

 

Personally, if I had had to hire four not really necessary people I would follow the above advice and talk to somebody experienced and reputable (but not too reputable perhaps). Actually, even though I seem to have things worked out I am going to talk to somebody anyway - they are friends, but I'd still talk to someone if I had to pay a bit.

 

 

Edited December 8, 2022 by Nonthaburi Boy

[blackcab]

The company can undertake any activities specified in its memorandum of association.

 

The standard MOA used by Thai companies covers just about everything a company can do in general, so you should be fine for additional business activity.

[d4dang]

I remember a neighbour opened a simple car wash in Pattaya featuring girls in bikinis. It was more successful than his "real" business. 

[PaoloR]

Don't forget that while the set up costs may be relatively low, you have to add to this the cost of monthly and annual accounting fees; you cannot do this yourself. If you do not make sufficient income (or indeed any income) then you may, as I did, find them on your back enquiring rather too closely into your business.

[Pla Simon]

Thoroughly explore all options before registering anything here - really weigh it up well. I wouldn't do it just for the sake of a LT visa.

 

Feasibility and Laws may have changed since, but after going through the whole process Years ago, and crawling out at the other end - in retrospect I would find a different way, if I could ever manage to come up with a good idea.

 

Obviously your motivations, financial standing, acumen are your own, and I wish you all the best with your endeavours.

[Kwaibill]

Interesting. Is the number of employees required different for marrieds? Must they be full time, or are some part time ok? I could see having my wife on the books for minimum. (She gets much more in the usual course of events ????)
Our daughter has a burgeoning mail order business for which my wife normally handles the shipping.  Maybe easier to just get her under daughter's "umbrella"?

[Nonthaburi Boy]

1 hour ago, Kwaibill said:

Interesting. Is the number of employees required different for marrieds? Must they be full time, or are some part time ok? I could see having my wife on the books for minimum. (She gets much more in the usual course of events ????)
Our daughter has a burgeoning mail order business for which my wife normally handles the shipping.  Maybe easier to just get her under daughter's "umbrella"?

Yes, it is only two employees if you are married. I imagine they have to be full-time equivalents at least but I don't know this - I will be checking. If they don't have other jobs going through social security though, who's to know they are really full or part-time in this age of working from home?

 

LOL re the wife situation - mine is going to insist on separation of payment though so she's getting minimum wage.

 

If your daughter already has an established business you're surely better off looking at setting both of you up under her company, doing whatever you plan to do - provided she's okay with proper paperwork, potentially increasing capital (presumably provided by you) and potentially triggering some extra reporting and tax (VAT) requirements - that your labour would presumably compensate for.

 

So far as I understand (letter of the law may differ from practice) the two employees for married foreigners is not dependent on the foreigner being owner or director of the business, provided you can persuade the Labour Department that your labour is needed and you are qualified to do it. If you have a role like "coordinating with foreign clients", are native speaking (native as in the clients' language of choice) and have a university degree then I know from past experience that the Labour Department can be okay with that. Of course, it's up to them whether they decide to actually be okay with it in the particular situation. Whether they are generally stricter or more relaxed in these situations is something I will be trying to find out (and generally is a big word here - I suspect attitudes may vary a bit by office). If my lawyer friends are unsure I think I will just ask the Labour Department directly - my experience has always been that they are friendly, generally supportive and up for a chat (touch wood). 

 

There are some people in this situation (or at least genuinely knowledgeable about it) posting on this forum so they might come along to add something more now if they note this - the OP's situation is different. Or start a new thread or talk to a lawyer if you get keen on it.