Work Permit: 65 000 Baht For Set Up + 78 000 Baht A Month?

[vediovis]

Hi

I'm actually looking for a solution to hire 1 or 2 IT engineers for customers based in Europe. Everything will be made online for European people, nothing will happen in Thailand except the production.

As I have a Non-B, I told myself the perfect solution would be to set up a company with a work permit and to start hiring my staff in a quiet place somewhere. And it's when the hassle began.

As SunBelt hasn't any office in Pattaya anymore so they couldn't receive me, I had to try to find some lawyers here, and between the non serious answers and the offering around 150 000 for initial set up, it was quite hard to meet the right person. Somebody even received me in his garden one morning, in a house which wasn't his, introducing himself as a "work permit expert". Scary.

Finally, I just met a lawyer this morning in Pattaya and the fees were totally incredible. To tell you, it's more expansive than in Europe.

First, to set up the company and the work permit, they want 65 000 Baht. I can understand this point. But, after, they explained to me it will cost me around 28 000 Baht per month just in tax and accountancy services. This includes the tax and social security for the 4 workers and myself, VAT declaration (even if I don't have any) and the tax forms, work permit + visa fees, the annual report with the stamp, etc...., so 327 000 Baht per year. I will have to pay myself 50 000 Baht of salary which are not included in these expenses.

It means to have a company here, I must have 78 000 Baht of income per month, and it will cost me 28 000 Baht per month after an initial setup of 65 000 Baht. Every expenses and salaries will be added to these expenses.

I find it absolutely incredible. In Europe I never had to consider to pay 1 5000 €just to set up a company, and to pay 568 €per month, just to have the right to hire somebody and to pay him salary (not included in the previous fees).

I know I am not the only one in this situation. But tell me people, did you have to pay so much just to make things legally and in the correct way????

hank for your coming answers.

S.L.

PS: This is a copy of a post posted in the "Jobs, economy, banking, business, investment in Thailand" forum. As it concerns both a business and a work permit matter, I'm mot sure where I can post it. In doubt, I send it to both. All apologies to the moderator if this way is incorrect, I'm just looking for the best answers : )

[ivowatson]

To set up the company and WP, it costs less than half if you do it by yourself. I did it some years ago for 17.000 and that was the 'speedy' solution (ready in one week). It's not so easy but very rewarding. Just smile and ask for help from the staff and bring them some small gifts. Great experience.

I think there is no personal tax to be paid on salaries less than 15.000/month so just pay them that (officially). For you would be 5000 (10%).

Social security must be something like 300 thb/p/m

Twice a year you'll have to pay for an audit report (10 to 15.000).

A good, normal Thai accountant should charge you 5 to 10.000/month for his/her services.

You'll have to pay corporate tax too.

If it's too much hassle, just hire a couple of engineers freelance but I wouldn't recommend this.

Edited May 22, 2009 by ivowatson

[Briggsy]

My friend did this for 2 or 3 years. He paid over 100,000 Baht a year for the same things you have detailed, accountancy fees, legal fees, work permit fees, social welfare for the 4 employees, VAT and whatever else, I can't remember.

He tried to stop paying the VAT saying he was under the threshold but his lawyer said if you stop paying, his company would be immediately investigated by the Excise people ( or whoever deals with VAT ).

His total annual costs were under 130.000 Baht.

[monty]

It's indeed the monthly cost which is way to expensive.

Your own income tax is 31,000 Baht/year, or 2583 Baht/month (based on 50,000 salary, tax can be slightly less if you have other things you are allowed to deduct from yuor salary, such as children, pension fund, life insurance, etc...).

You also pay social security, both for yourself and your employees.

The social security works out to 10% of salary, but with a ceiling of 1500 Baht. So for yourself you'd pay 1500 Baht/month, and say your 4 employees are on a 10,000 Baht salary, this would mean another 4000 Baht/month.

Your total tax liability on your workforce is just over 8000 Baht.

Paying those taxes is easy to do, no need for an accountant here.

Next obviously come the corporate taxes. For this you need an accountant, who normally files audited bookkeeping twice a year. Corporate tax usually is easy to keep low, remember, all the above salaries for your employees are deductible from your corporate income, including half of the social fund contributions (as actually 5% is paid by the employer and the other 5% by the employee, although mostly the employer pays for the employee's part as well).

[monty]

And I'll move this to the "Jobs, economy, banking, business, investment in Thailand" section which is more appropriate then the visa section.

[ubonjoe]

I closed your other topic in this forum because it had no replies.

[vediovis]

Dear Monty and ubonjoe

Thank you very much for your answers and your thread management.

I hope the Week End and the coming days will bring me more useful answers and, who knows, maybe some profitable contacts : )

Cheers

S.L.

Edited May 22, 2009 by vediovis