Setting Up An It Office In Thailand

[SurferBob]

Hi all,

I'm currently researching the viability of starting up an office/registering a Thai company to resource project tasks sent over from our established IT company in the UK. Initially would be looking to employ 2-3 persons with myself heading up and running the office in Thailand. I would like to do this in Phuket as I like to surf in my spare time and would like to stay close by the beach! I've got 3-4 years experience of living in Thailand and understand a bit about the culture and language.

So far I've got all the figures and general information for the set-up and paper running costs of the business, from Sunbelt.

I would welcome any information from people who have experience of setting up a similar business scenario, as outlined above... or just general business information and links that people think may be useful.

The biggest question really is... 'Is it viable?' .. so far from what research I've done I would say the answer is yes.

Thanks & Regards,

Bob

Edited January 7, 2008 by SurferBob

[seres]

Hi Bob,

What a life! I'm from Singapore married to a Thai and incidentally I'm also doing preliminary costing of setting up an IT firm in BKK leveraging on my current employer's projects and prospects... to server as their agent really.

I'm in business development and I do have a couple of leads which are now very warm. Assuming you're sourcing for local implementation vendors to support business coming from your UK principal, my thoughts would be to secure local thai partners first. I've heard that Thai IT staff aren't as proactive as client's would like them to be. But my own interaction with them tells me otherwise, with proper management, of course.

Project revenue quantum wise, I see that since 3rd quarter 2007, thai enterprises are actively pursuing projects to either replace existing IT platforms or introduce from scratch electronic means into their business processes. I'm working closely with Oracle-BKK and i'm sure they can attest to that. I wouldn't think the same for the years leading to 2007. For instance in healthcare, budgets have been signed and approved Oct 2007 for IT projects roll-outs slated in 2008.

The only problem is how do you pay your principals in UK? I don't know if there's any witholding taxes for paying overseas IT talents from overseas. Is your UK principal invoicing thru your thai company?

Since you've spoken to sunbelt, how much is the estimated registration costs? That's the only cost element I'm not aware of. As a foreign businessman, you'd need to register your IT company with 6 local partners am I right?

Appreciate if you could share...

[ray08]

Hi all,

I'm currently researching the viability of starting up an office/registering a Thai company to resource project tasks sent over from our established IT company in the UK. Initially would be looking to employ 2-3 persons with myself heading up and running the office in Thailand. I would like to do this in Phuket as I like to surf in my spare time and would like to stay close by the beach! I've got 3-4 years experience of living in Thailand and understand a bit about the culture and language.

So far I've got all the figures and general information for the set-up and paper running costs of the business, from Sunbelt.

I would welcome any information from people who have experience of setting up a similar business scenario, as outlined above... or just general business information and links that people think may be useful.

The biggest question really is... 'Is it viable?' .. so far from what research I've done I would say the answer is yes.

Thanks & Regards,

Bob

Just in regards to Sunbelt , i tried them a few years ago and a friend recently , I do not reccomend them, the employing the good staff will be an initiall hurdle for 2 reasons

a) finding the right english speaking person who could work well ( except for language , this problem is worldwide

i found over 4 years ago when i started the peoplei found good were not interested in a startup company ,( very strange for me)

All the best

[aqua4]

Hi,

Tough questions for a number of reasons. In late last year I helped a friend who setup an outsource operation. There are a number of problems as the first is finding programmers who had English skills. There are ways around it as you could do what he did by hiring Thai programmers with Filipino writers. If you cant strike a balance then you end up with a lot of staff sitting around idle and it is not cost effective. This is what was used for sourcing personnel and the company registration:

Thai Programmers: http://th.jobsdb.com

Filipino Staff : http://www.ajarn.com

Company Registration & WP's : http://www.siam-legal.com

"Viable" is a business question and this depends on your target market. Try to source people who have more than one skill. It cuts down on the paperwork and overheads when you start.

Edited February 4, 2008 by aqua4

[seres]

Hi,

Tough questions for a number of reasons. In late last year I helped a friend who setup an outsource operation. There are a number of problems as the first is finding programmers who had English skills. There are ways around it as you could do what he did by hiring Thai programmers with Filipino writers. If you cant strike a balance then you end up with a lot of staff sitting around idle and it is not cost effective. This is what was used for sourcing personnel and the company registration:

Thai Programmers: http://th.jobsdb.com

Filipino Staff : http://www.ajarn.com

Company Registration & WP's : http://www.siam-legal.com

"Viable" is a business question and this depends on your target market. Try to source people who have more than one skill. It cuts down on the paperwork and overheads when you start.

Hi Acqua,

Would you advise using IT vendors to do the actual programming work and save on the HR costs? Wonder how much they'd charge per manday in BKK.

[SurferBob]

Hi,

Tough questions for a number of reasons. In late last year I helped a friend who setup an outsource operation. There are a number of problems as the first is finding programmers who had English skills. There are ways around it as you could do what he did by hiring Thai programmers with Filipino writers. If you cant strike a balance then you end up with a lot of staff sitting around idle and it is not cost effective. This is what was used for sourcing personnel and the company registration:

Thai Programmers: http://th.jobsdb.com

Filipino Staff : http://www.ajarn.com

Company Registration & WP's : http://www.siam-legal.com

"Viable" is a business question and this depends on your target market. Try to source people who have more than one skill. It cuts down on the paperwork and overheads when you start.

Hey..

Thanks lot for the info, bookmarked for future reference!

Our plans for the office are currently in the early stages and it will probably be half way through the year before we start getting it together. Agreed staffing is the problem area, finding decent staff is looking tricky so far. I'll only be after 2-3 persons initially and myself managing, so it should be ok, time will tell I guess. I have some Thai language skill which I'm currently improving, but English speaking is still a must. We'll be offering a good package also so may be able to get someone to relocate from elsewhere in Thailand.

I'll post back in here as things develop.

Cheers,

//Bob

Edited February 14, 2008 by SurferBob

[dinog]

Hi all,

I'm currently researching the viability of starting up an office/registering a Thai company to resource project tasks sent over from our established IT company in the UK. Initially would be looking to employ 2-3 persons with myself heading up and running the office in Thailand. I would like to do this in Phuket as I like to surf in my spare time and would like to stay close by the beach! I've got 3-4 years experience of living in Thailand and understand a bit about the culture and language.

So far I've got all the figures and general information for the set-up and paper running costs of the business, from Sunbelt.

I would welcome any information from people who have experience of setting up a similar business scenario, as outlined above... or just general business information and links that people think may be useful.

The biggest question really is... 'Is it viable?' .. so far from what research I've done I would say the answer is yes.

Thanks & Regards,

Bob

Hi,

I was in Thailand for 2 year from 2005 to 2007 to make marketing analisys about to start a new activity in Thailand and i plan to come back at the end of 2008.

I am a IT consultant for Oracle and Unix and more

I started the thai company already and i own my company at now

maybe can be interesting talk more about it

Best regards

Dino

[taxin]

Hi all,

I'm currently researching the viability of starting up an office/registering a Thai company to resource project tasks sent over from our established IT company in the UK. Initially would be looking to employ 2-3 persons with myself heading up and running the office in Thailand. I would like to do this in Phuket as I like to surf in my spare time and would like to stay close by the beach! I've got 3-4 years experience of living in Thailand and understand a bit about the culture and language.

So far I've got all the figures and general information for the set-up and paper running costs of the business, from Sunbelt.

I would welcome any information from people who have experience of setting up a similar business scenario, as outlined above... or just general business information and links that people think may be useful.

The biggest question really is... 'Is it viable?' .. so far from what research I've done I would say the answer is yes.

Thanks & Regards,

Bob

Bob, dont use Sunbelt, use Siam Legal. They also have an office in Phuket.

Sunbelt did have an office in Phuket but it closed a while back. Was a bit of a joke, couple of Aussie guys running around trying to sell bars for commission. At the end of the day thats all Sunbelt are, they are a business broker.

I use Siam Legal for all my stuff, very good company and reasonably priced. And yes, working by the beach beats the filthy streets of Bangkok any day !!

[SurferBob]

Bob, dont use Sunbelt, use Siam Legal. They also have an office in Phuket.

Sunbelt did have an office in Phuket but it closed a while back. Was a bit of a joke, couple of Aussie guys running around trying to sell bars for commission. At the end of the day thats all Sunbelt are, they are a business broker.

I use Siam Legal for all my stuff, very good company and reasonably priced. And yes, working by the beach beats the filthy streets of Bangkok any day !!

Thanks for the heads up & info mate - a few friends have also recommended Siam Legal to me, I think It's likely I'll be using them instead.

Cheers,

//Bob

[manuva]

We are in the process of setting up an IT office in Bangkok also For the last 3 Months we've been trialing the process with 1 Senior Thai staff member. It has worked out so well we are going to expand to 4 or 5 staff.

The idea being that the Thai office works solely on our Australian based company IT projects - so funding for the Thai company will be 100% from the Australia company.

I'm wondering if anyone has any experience with this kind of arranagment. In Particular i'm wondering if there are any ramifications for A Thai company that will most likely not make a profit?

Cheers,

Alex

[davejonesbkk]

SurferBob and Manuva - Id love to hear how you guys have been getting on since last year... a college and myself are currently looking into setting up an IT company in BKK with 4-5 staff.

[gtm2k]

Hi Bob,

I happen to be working in thailand since the past 5 years as a SAP Consultant. Over the years i have freelanced, consulted and sold SAP Products / Solutions as well as Bespoke (.net based) applications.

At the moment, I am contemplating setting up my own company, to begin with market my QA Products for manufacturing companies and SAP B1.

Since you are actively planning to do your own startup here, could we please meet sometime and see if we could collaborate & work together ? I am based in Bkk.

Do let me know your thoughts on this,

Cheers,

Gautam

Hi all,

I'm currently researching the viability of starting up an office/registering a Thai company to resource project tasks sent over from our established IT company in the UK. Initially would be looking to employ 2-3 persons with myself heading up and running the office in Thailand. I would like to do this in Phuket as I like to surf in my spare time and would like to stay close by the beach! I've got 3-4 years experience of living in Thailand and understand a bit about the culture and language.

So far I've got all the figures and general information for the set-up and paper running costs of the business, from Sunbelt.

I would welcome any information from people who have experience of setting up a similar business scenario, as outlined above... or just general business information and links that people think may be useful.

The biggest question really is... 'Is it viable?' .. so far from what research I've done I would say the answer is yes.

Thanks & Regards,

Bob

[iqbal]

Hi my name is Iqbal I too am considering setting up an IT business also in Bangkok. I was in the UK before and someone suggested using the Sutlet Group to set up the business. Does anyone have any experience with this group?

[iqbal]

So far I've got all the figures and general information for the set-up and paper running costs of the business, from Sunbelt.

Honestly, there is no worse choice as a counseillor or for whatever else you want to use them, avoid them like the plague!

Thanks for the information, do you have any specifics? You can send to me privately if you like.

They are highly recommended by the British Chamber of Commerce Thailand (BCCT)

[surayu]

They are highly recommended by the British Chamber of Commerce Thailand (BCCT)

That really give me a sense of disgust if not worse , i cannot honestly imagine anyone recommending them other than all those people that just sell themself for a sandwich or two (you can find them in this forum).....i sent you a private message to evaluate everything by yourself...

[JamDown]

Hi my name is Iqbal I too am considering setting up an IT business also in Bangkok. I was in the UK before and someone suggested using the Sutlet Group to set up the business. Does anyone have any experience with this group?

Hello Iqbal,

I would echo Surayu's sentiments for you to avoid the Sutlet Group like the plague.

I will send you details of my contact with the Sutlet Group and its Managing Director, and details of what they did to my company and its bank account. Then you can decide if this is the sort of organization with which you want to be involved.

My characterization of that organization, is that they are practiced embezzlers and will defraud your company.

Based upon my unfortunate and costly experience, whomever you choose to help you set up a company, make sure:

1. They do not give you a shelf company (i.e) a previously formed company that is sitting on their shelf that they just rename
   
2. Make sure the majority shareholder(s) who need to be Thai citizens, are not employees of the firm
   
3. Make sure you open your bank account at a bank that will allow you to open an account with a business visa so you can open it yourself
   

We made the above mistakes and the Sutlet Group separated us from the funds in our account, as a consequence we had to abandon that company and form another one. No doubt our former company is sitting on their shelf waiting to be renamed for some other poor farang who wants to establish a company in Thailand.

[iqbal]

Thanks for everyone who sent me information. Very eye opening and very scary.

Now I have another question, does anyone know what legal recourse is there in Thailand if your accounting company is cheating you?

Is the Thai legal system a "fair" one? Or is it a case of if you are foreign you are automatically wrong?

Iqbal

[surayu]

I would echo Surayu's sentiments for you to avoid the Sutlet Group like the plague.

Sorry but i wasn't talking about the "Sutlet Group" of which i have no knowledge at all, please read again my previous posts, thanks.

[ebug2004]

Hi, I want to start business in Thailand as preparation for a permanent stay in future. The business idea is to do outsourced software development work for my German company, but also sell technical products (measuring instruments), that i can buy for a good price in Germany. Tried this kind of business before with a local agent,but unsuccessful, because the agent was not active - now I hope doing this matter under own control is a better way.

I have already 2 people that would like to work in sales and software development. I would like to let them work as freelancers for my German company first (give them a name card with local office address in their house), cause I dont want to go through the difficult procedure of setting up a real company in Thailand before I know that the business is really working. What does the Thai law says about this, and what are the possible implications if I pay these guys a salary, but they are not officially my employees (I heard the Thai employer has to pay the income tax for the employee to the government..)?

[raro]

Hi, I want to start business in Thailand as preparation for a permanent stay in future. The business idea is to do outsourced software development work for my German company, but also sell technical products (measuring instruments), that i can buy for a good price in Germany. Tried this kind of business before with a local agent,but unsuccessful, because the agent was not active - now I hope doing this matter under own control is a better way.

I have already 2 people that would like to work in sales and software development. I would like to let them work as freelancers for my German company first (give them a name card with local office address in their house), cause I dont want to go through the difficult procedure of setting up a real company in Thailand before I know that the business is really working. What does the Thai law says about this, and what are the possible implications if I pay these guys a salary, but they are not officially my employees (I heard the Thai employer has to pay the income tax for the employee to the government..)?

The income tax is paid by the employee, but the employer does this normally on the employee's behalf in form of a Withholding Tax (Quellensteuer) - just like in Germany. The employee must file once a year his tax and income report with the Revenue Department (Lohsteuerjahresausgleich) - just like in Germany.

The employee has to be registered with the social security fund and the contributions (10% of the salary with a maximum of 1,500 Baht a month) are paid 50/50 by employer and employee. Again, the employer withholds the deductible amount - just like in Germany.

Since you do not have a legal entity in Thailand, both employees would be technically employed through your German entity and here it gets a bit difficult, I recommend you to consult a tax adviser (Steuerberater) in Germany.

Best of luck!

[ebug2004]

Hi, I want to start business in Thailand as preparation for a permanent stay in future. The business idea is to do outsourced software development work for my German company, but also sell technical products (measuring instruments), that i can buy for a good price in Germany. Tried this kind of business before with a local agent,but unsuccessful, because the agent was not active - now I hope doing this matter under own control is a better way.

I have already 2 people that would like to work in sales and software development. I would like to let them work as freelancers for my German company first (give them a name card with local office address in their house), cause I dont want to go through the difficult procedure of setting up a real company in Thailand before I know that the business is really working. What does the Thai law says about this, and what are the possible implications if I pay these guys a salary, but they are not officially my employees (I heard the Thai employer has to pay the income tax for the employee to the government..)?

The income tax is paid by the employee, but the employer does this normally on the employee's behalf in form of a Withholding Tax (Quellensteuer) - just like in Germany. The employee must file once a year his tax and income report with the Revenue Department (Lohsteuerjahresausgleich) - just like in Germany.

The employee has to be registered with the social security fund and the contributions (10% of the salary with a maximum of 1,500 Baht a month) are paid 50/50 by employer and employee. Again, the employer withholds the deductible amount - just like in Germany.

Since you do not have a legal entity in Thailand, both employees would be technically employed through your German entity and here it gets a bit difficult, I recommend you to consult a tax adviser (Steuerberater) in Germany.

Best of luck!

Hi Raro,

thank you for the information.

My problem is whether the Thai law requires that I have an official office in Thailand if I want to employ Thai people. Setting up an office is the same paperwork as making a new company, thats why I like to do this after(!) I know that the business can be sucessful.

The much easier way would be to employ the guys as freelancers - same as I hire freelancers in Germany, where you can have some kind of "one man company". Is this possible in Thailand, and what need to be done for it? The 2 people that I like to hire also don't know about the best way to do this, so I have to give them advice.

Thanks for the help!

[CWMcMurray]

The practicality of this (if the Freelancers are not Thai) is going to be really difficult to do legally.

If they are foreign nationals, they would be required to apply for work permits. If you do not have a Thai Company set up, you can not apply for WP for them.

That means that each would need to open their own Thai company and apply for WP on their own.

[CWMcMurray]

If freelancers are Thai, then their shouldn't be any problems with what you propose.

[monty]

Freelancers (Thai Nationals) can be self employed under the "sole proprietorship" system.

They can declare their income (no paperwork or invoices required) and they get automatically an expense deduction of between 65 and 85% (depends on line of business, again, NO paperwork/invoices required!)

They will get taxed on the remainder as if it were personal income, not corporate income.

They will have to pay their own social security, and if their yearly revenue is higher then 1.8 million they will have to register for VAT and pay this...Of course they can register for VAT if revenue is less, useful if they have to issue VAT invoices to their customers!

Of course if they issue VAT invoices, their declared income should be inline with or higher then their invoices. Although the VAT system seems not yet linked to the regular tax system, this might happen soon though....