Opening a web/software related business

[dotroy]

I was looking for opening up a

Software development/ Web development / Web marketing company

I have many clients that gives me work and I get it done via free lancers but the problem arises when I have to get the payment because I am a foreigner and since I don't have a company so I can't issue invoice.

I wanted to open a compnay but the cost of opening and obtaining a work permit is beyound my reach, and even if I had that much of money, I would never keep 2m bhat as paid up capital just for work permit.

I wonder if there is any other way i can open a e-compnay and can obtain a work permit.

Thanks

[Indo-Siam]

Note for you - You do NOT have to maintain a standing bank balance of two million baht.  All you need due is pay in that amount of capital at some point - and even that requirement is not really enforced.  Many start-ups do not capitalize initially - although by time of annual audit, you need to have something to show.

Effectively, your costs to set up and run a company for initial year (including work permit and long-term entry permit) are roughly:

30-60,000 baht to launch company and obtain permits.

30-40,000 baht to establish physical office (not counting computer and software - and some of this is refundable deposit for office and phone service)

60-120,000 baht for office rental (depending on format)

24,000 baht in social fund contributions for four "ghost' employees

72,000 baht in taxes that must be paid on your salary, which most likely will have to be at least 60,000 baht

72,000 baht in bookkeeping and annnual auditing fees.

60,000 baht in electricity, basic phone, etc.

Add to those figures any actual salary you receive, and any salaries you pay out to real employees.  Also any costs for computers, internet access, etc.

So - you could capitalize at 2 million, pay in same, and pay out 1.1 million in first year. If during that same time you earned 50,000 per month income from website work (over and above costs), you would end first year with about 1.5 million baht balance.  Figure on one million baht in annual costs thereafter - run the numbers out for follow-on years.

I run Siam Website as a division of my main company - meaning that I have no "carrying costs" for that business.  But the parent company does do the invoicing and bookkeeping (typically 3-4 invoices per month).

I also use freelancers - by the time I pay them, this piece of my company typically only generates about 10-12,000 baht per month income to the parent company.  I hope to gradually raise that income contribution to about 25-30,000 baht per month.

Good luck!

Steve Sykes

Managing Director

Indo-Siam Group

www.indo-siam.com

[dotroy]

Thanks for your kindness. It still seems a lots of money to me.

From what I calculated for my business: (You can correct me if I am wrong)

1. What about all the money I invest here, Does it has to come from outside thailand ? because all my money is earned here)

2. can I get my work permit after I start my company or I would have to wait till 2m paid up capital ?

My rough Estimates ( used your hint)

Compnay registration is 20-25,000 baht

25,000 baht to obtain work permits.

25,000 baht to establish physical office (3 months deposit  and one month rent; 6000 baht )

20,000 baht to buy furniture and others for office

24,000 baht in social fund contributions for four "ghost' employees (Is it yearly ?, I don't relly need 4 employess!)

72,000 baht in taxes that must be paid on your salary, which most likely will have to be at least 60,000 baht (Well, can i have less salary ? )

72,000 baht in bookkeeping and annnual auditing fees. (this sounds expensive, it should not cost more than 4000 baht a month )

30,000 baht in electricity, basic phone, etc. will do...

Still I would be spending around 1/4 million baht.

[Indo-Siam]

Hi -

For bookkeeping, don't forget the end of first year audit - typically 10-15,000 baht.  The monthly fee will depend on whether bookkeeper also makes runs to handle Vat, tax, and socialn fund pay-ins, and whether they also prepare your individual tax returns.

I don't know your nationality - minimum wage for my nationality is heading to 60,000 baht (you have to be payting taxes on that amount - but not actually paying yourself).

You must document having four Thai employees - typically by showing social fund pay-in receipts.  That is 8% of salary (4% withheld from employee, 4% matching contribution by employer).  Assuming minimum wage at 6,000 baht (it's actually a bit less), that's 480 baht per employee per month - 1,920 baht per month - figure 24,000 baht (I'm lazy with rounding).

I think you left out monthly office rental.

But - you generally have the right idea.  

You can obtain a work permit without paid in capital - although it is helpful if you have a corporate account with substantial pay-in.    They no longer seem to be concerned with national origin of paid-in money.

If you ever do decide to proceed, let me know and I'll give you a current estimate of actual costs applicable to your specific situation.

In my estimation, a lot of people will soon be learning that if they want to continue "hanging out" in Thailand, they will have to get legal - with a work permit and non-immigrant entry permit.  "Endless" 30 day visas on arrival will no longer be available.  Or - maybe its just a temporary thing for APEC.  Time will tell.

Good luck!

Steve Sykes

Managing Director

Indo-Siam Group

[email protected]

[Sunbelt Asia]

"my estimation, a lot of people will soon be learning that if they want to continue "hanging out" in Thailand, they will have to get legal - with a work permit and non-immigrant entry permit.  "Endless" 30 day visas on arrival will no longer be available.  Or - maybe its just a temporary thing for APEC.  Time will tell."

Thats what were seeing too Steve. Lots of people coming out of the woodwork and trying to get legal now.  Is this new Government stance because of Apec?  Wanting to collect taxes? or they are scare of terrorist?

[dotroy]

Thanks for all the help. I am not an American citizen, I  am from indian sub-continent, this is the reason many say's I will have hard times when I apply for work permit, when I am opening my company because normally in Thailand dark skinned people always has to go through more difficulty.

Do you have any charge for consultancy ? If it is free, may be I would like to dropin in your office and talk about opening a company.

Regards

doTRoy

[Indo-Siam]

There are several people active in the discussion - in my case, I'm happy to initiate discussions- and there is no charge at that level.

But - my firm is relocating offices to Soi Asoke, starting today - and hopefully concluding over the weekend.

I would suggest that - in my case - you send me a direct e-mail to [email protected], and I will send you my firm's detailed fee schedule, as well as some information about the start-up process.  If - after reviewing that information - you feel ready to proceed, then I'd be happy to get together.

Good luck!

Steve Sykes

Managing Director

Indo-Siam Group

www.indo-siam.com