Question About Wp, Company Capital And Number Of Employees

[Theyreallrubbish]

Hi there,

Looking to start a company and met with a number of lawyers regarding the issues. Apart from the fact that most of them hadn't even heard of Preference Shares, the one that did seem to know what he was doing told me two things that I wasn't really sure about.

First of all he said that the 2 million Baht registered capital necessary for a work permit to be issued had to be fully paid up, rather than 25% paid which I had previously read was the minimum. Is this correct?

The second issue is the employees. The business needs 4 employees on at least minimum wage to issue a work permit. Is there any way around this as my business will not need 4 employees for some time to come and staff that we do need will be mostly commission based.

Can commission based contracts count towards the total?

He also said that immigration will visit the premises to interview the staff. Is this correct/likely?

Also, if it takes 4 employees to get the work permit issued, and I can't work until the work permit is issued, how do I hire the staff without working illegally?

Thanks for anyone who could share their knowledge and experience

[samILO]

Hi,

The 2 Mio THB issue is right, but if you married legally to a thai only half applies, there are other ways to apply for WP as of the Thai Labor Code, but these are for big businesses and hotels. The 4 employees issue is over since a long time if you apply for a work permit , but for a 1 year visa extension under the WP you need such. the Labor department expects you to have some employees, depending on your business). Minimum Thai salaries applies anyway. Minimum Salary for foreigner should be 35,000 at least on phuket (for WP purpose different then for 1 year visa extension) .

Capital of the company has to be paid up fully correct in order to apply WP. Preference shares are legal and can have different voting and profit sharing rights, such has to be incorporated into the articles of association of the company. Payments or commissions or salaries or Know HOw or assets can be used in lieu of payment, but then such shareholder has to pay personal income tax on the 'payment' in lieu.

Immigration in BGKK I heart go and visit applicants businesses, not on phuket though and that only if you apply for a 1 year visa extension. Other areas I don't know, maybe other viewers in hear know.

You can not work during the application process of your Work Permit, that is very important. You have to have a Thai Director in the company to apply for a WP, again that is the custom on Phuket. So the Thai would employ the staff and sign for your application of WP

Friedrich 'Sam' Fauma

(Senior Partner, Director, Advisor)

International Law Office, Patong Beach Co., Ltd.

076 222191-5

www.ilo-phuket.com

[EvilDrSomkid]

Hi sam,

If legally married to Thai national cuts the 2million in half, does that apply also for the number of Thai employees requirement? Ie, 2 iso 4?

I am not clear on this.

I am thinking of a consultant/advisor type company.

Sorry for thread hi-jack OP, but this could be relevant to you, too.

[ubonjoe]

Hi sam,

If legally married to Thai national cuts the 2million in half, does that apply also for the number of Thai employees requirement? Ie, 2 iso 4?

I am not clear on this.

I am thinking of a consultant/advisor type company.

Sorry for thread hi-jack OP, but this could be relevant to you, too.

The number of employes is reduced to to 2. It is also possible to get a work permit if your wife was to set up a business as a sole trader.

Since you can get an extension based upon marriage you don't need all the paperwork needed to get an extension of stay based upon employment either. Just show 3 months of tax payments to prove 40K income and work permit.

[Theyreallrubbish]

Hi sam,

If legally married to Thai national cuts the 2million in half, does that apply also for the number of Thai employees requirement? Ie, 2 iso 4?

I am not clear on this.

I am thinking of a consultant/advisor type company.

Sorry for thread hi-jack OP, but this could be relevant to you, too.

No problem, but its not relevant as I'm not married.

Always worked for a big company before in Thailand or when I set up a company before I was a small minority with Thai partners who put up all the money and took care of all the admin and govt stuff.

So setting it up on my own is new to me.

[EvilDrSomkid]

Hi sam,

If legally married to Thai national cuts the 2million in half, does that apply also for the number of Thai employees requirement? Ie, 2 iso 4?

I am not clear on this.

I am thinking of a consultant/advisor type company.

Sorry for thread hi-jack OP, but this could be relevant to you, too.

The number of employes is reduced to to 2. It is also possible to get a work permit if your wife was to set up a business as a sole trader.

Since you can get an extension based upon marriage you don't need all the paperwork needed to get an extension of stay based upon employment either. Just show 3 months of tax payments to prove 40K income and work permit.

Right, thanks again.

[Mario2008]

Hi sam,

If legally married to Thai national cuts the 2million in half, does that apply also for the number of Thai employees requirement? Ie, 2 iso 4?

I am not clear on this.

I am thinking of a consultant/advisor type company.

Sorry for thread hi-jack OP, but this could be relevant to you, too.

No problem, but its not relevant as I'm not married.

Always worked for a big company before in Thailand or when I set up a company before I was a small minority with Thai partners who put up all the money and took care of all the admin and govt stuff.

So setting it up on my own is new to me.

With a new company you will not be able to get an extension of stay from immigration, as for that you will need to show tax papers over the last 2 years. So for the first 2 years you will be on a multiple non-B and have to leave the country every 90 days.

[Theyreallrubbish]

Hi sam,

If legally married to Thai national cuts the 2million in half, does that apply also for the number of Thai employees requirement? Ie, 2 iso 4?

I am not clear on this.

I am thinking of a consultant/advisor type company.

Sorry for thread hi-jack OP, but this could be relevant to you, too.

No problem, but its not relevant as I'm not married.

Always worked for a big company before in Thailand or when I set up a company before I was a small minority with Thai partners who put up all the money and took care of all the admin and govt stuff.

So setting it up on my own is new to me.

With a new company you will not be able to get an extension of stay from immigration, as for that you will need to show tax papers over the last 2 years. So for the first 2 years you will be on a multiple non-B and have to leave the country every 90 days.

OK thanks, I used to get a 1 year non-immigrant B multi entry without a work permit, just sponsorship from my company. Can I only get a single entry on my first application and then have to get a multi after the WP is issued?

[samILO]

Hi again,

1. As you don't need the 4 employees for application of Work Permit anymore, especially if you are in consulting business, there is no cut into half of the requirement of Thai staff.

2. This does not help on the 1 year visa extension

3. You don't need to show income tax for last 2 years for visa extension under work permit , a letter of informing the Immigration why a new company can't show such documents are sufficient and just showing 3 months. For extension of such visa in a year ahead you will need to show the evidence though.

4. After receipt of such visa extension you have to report yourself to the Immigration every 90 days if you did not leave the country in between such time.

5. Yes it is right if your legally married Thai wife/husband starts a sole proprietorship in Thailand, she could employ you and you don't need to go through all the problems with minimum salary, employees, company, registered capital etc. I advised a few friends of mine to do so, especially as they did not invest anything in the business and if they walk away the business has no income anymore. I would though not advice to go this route if one invest heavily into the buisness.

[Mario2008]

OK thanks, I used to get a 1 year non-immigrant B multi entry without a work permit, just sponsorship from my company. Can I only get a single entry on my first application and then have to get a multi after the WP is issued?

Depending on where you will apply and if you have a work permit you can get a multiple entry straight away. Especialy if you apply in a western country. Without a WP you will have trouble getting a non-B in Asian countries.

[Theyreallrubbish]

OK thanks, I used to get a 1 year non-immigrant B multi entry without a work permit, just sponsorship from my company. Can I only get a single entry on my first application and then have to get a multi after the WP is issued?

Depending on where you will apply and if you have a work permit you can get a multiple entry straight away. Especialy if you apply in a western country. Without a WP you will have trouble getting a non-B in Asian countries.

I used to get the triple-entry non-immigrant B from Singapore with no work permit and only a letter from a Thai company stating they wanted to discuss business with me and copies of their accounts.

I'm gathering its now tightened up?

[ubonjoe]

Things have changed since then. You would not get a multiple entry of any kind in Singapore now unless you are a citizen or resident there.

KL is the only place you can get one if you have a work permit valid for a year. Or Penang if the company has 8 million in registered capital.

You could get one in Perth with just a letter that is the nearest place now.

[samILO]

I agree with ubonjoe, things changed very much, all embassies around Thailand are tighten up the regulations. In the place of your home country or residence it is easier, but one of the best places are in Australia, easiest of all.

[pwm]

It is also possible to get a work permit if your wife was to set up a business as a sole trader.

Since you can get an extension based upon marriage you don't need all the paperwork needed to get an extension of stay based upon employment either. Just show 3 months of tax payments to prove 40K income and work permit.

Joe, can you elaborate on the terms/conditions of this particular arrangement (work permit from wife's sole trader business)? Can you refer me to references in official documents permitting this practice and what documentation needs to be submitted with WO application?

Regards,

Pat.

[ubonjoe]

It is also possible to get a work permit if your wife was to set up a business as a sole trader.

Since you can get an extension based upon marriage you don't need all the paperwork needed to get an extension of stay based upon employment either. Just show 3 months of tax payments to prove 40K income and work permit.

Joe, can you elaborate on the terms/conditions of this particular arrangement (work permit from wife's sole trader business)? Can you refer me to references in official documents permitting this practice and what documentation needs to be submitted with WO application?

Regards,

Pat.

See articles 6 and 7 for a business. Article 3 for a company. http://www.thaivisa.com/forum/Department-E...0/#entry188450/

To find out what documents are needed it would be best to contact the labor office for the provence where you live. It can vary from office to office.

[pwm]

It is also possible to get a work permit if your wife was to set up a business as a sole trader.

See articles 6 and 7 for a business. Article 3 for a company. http://www.thaivisa.com/forum/Department-E...0/#entry188450/

To find out what documents are needed it would be best to contact the labor office for the provence where you live. It can vary from office to office.

Sorry to be dense, but are you specifically referring to Article 6 part 2?

(2) Foreigners working for an employer who has paid taxes to the government in the past year cycle: one person may be permitted for every Baht fifty thousand, the maximum being three person;

If I understand correctly then, a "natural person employer" (ie: a sole trader or partnership) may employ up to 3 foreigners, provided the employer has paid 50 000 baht in tax/year per foreigner?

Thanks for your feedback.

Pat.

[ubonjoe]

It is also possible to get a work permit if your wife was to set up a business as a sole trader.

See articles 6 and 7 for a business. Article 3 for a company. http://www.thaivisa.com/forum/Department-E...0/#entry188450/

To find out what documents are needed it would be best to contact the labor office for the provence where you live. It can vary from office to office.

Sorry to be dense, but are you specifically referring to Article 6 part 2?

(2) Foreigners working for an employer who has paid taxes to the government in the past year cycle: one person may be permitted for every Baht fifty thousand, the maximum being three person;

If I understand correctly then, a "natural person employer" (ie: a sole trader or partnership) may employ up to 3 foreigners, provided the employer has paid 50 000 baht in tax/year per foreigner?

Thanks for your feedback.

Pat.

I was thinking of (1) because the amount is cut in half by Article 7.

For 2 that is probably correct. Business income is paid as individual income. The income of 750,000 for (1) would result in a tax paymnet of about 50,000 baht. See this webpage for tax info. http://www.rd.go.th/publish/6045.0.html

[samILO]

It is also possible to get a work permit if your wife was to set up a business as a sole trader.

See articles 6 and 7 for a business. Article 3 for a company. http://www.thaivisa.com/forum/Department-E...0/#entry188450/

To find out what documents are needed it would be best to contact the labor office for the provence where you live. It can vary from office to office.

Sorry to be dense, but are you specifically referring to Article 6 part 2?

(2) Foreigners working for an employer who has paid taxes to the government in the past year cycle: one person may be permitted for every Baht fifty thousand, the maximum being three person;

If I understand correctly then, a "natural person employer" (ie: a sole trader or partnership) may employ up to 3 foreigners, provided the employer has paid 50 000 baht in tax/year per foreigner?

Thanks for your feedback.

Pat.

The sole proprietor can not employ a foreigner with WP (except the burmese, Lao, Cambodia where allowed under special regulations) This is an exemption under the Labor Code for the legally married spouse only. Unfortunately the Labor Department home page is very poor on this matter and I ony got the new laws as PDF file, will get you the regulation and the necessary documents tomorrow after I am back at the office.

[samILO]

The above link is perfect you got all the rules in there, as provided by ubonjoe's link including the rule for Thai spouse

See articles 6 and 7 for a business. Article 3 for a company. http://www.thaivisa.com/forum/Department-E...0/#entry188450/

[ubonjoe]

The sole proprietor can not employ a foreigner with WP (except the burmese, Lao, Cambodia where allowed under special regulations) This is an exemption under the Labor Code for the legally married spouse only. Unfortunately the Labor Department home page is very poor on this matter and I ony got the new laws as PDF file, will get you the regulation and the necessary documents tomorrow after I am back at the office.

I think you might be suprised at the number of people that have work permits and are working for a sole proprietors. The problem many have is that they cannot get an extension of stay working for one. They are getting multiple entry B visas instead.

A person married to a Thai has the advantage of being able to get an extension of stay based upon marriage instead of employment. But can use the income from the business to get the extension after the business is up and running.

[asiawatcher]

Initial incorporation nearly 10 years back was a stroke of the pen for the Paid Up Capital i.e. 2M which disallowed Directors loans by paying wages then a balance sheet rebank to create liability to the company. The thought process was if there was a 2M Baht PUC then why would the company need rebanked cheques. These rebanked cheques from paid salary (real or perceived) once accumulated to 3M Baht could then be converted to PUC at 5,000 Baht per million so it would cost 15,000 Baht to end up with a 5M Baht PUC. It is frankly cheaper to do this from the beginning (cost now for 5M PUC about THB45,000).

Changes have been reduced number of employees i.e. used to be 4 Thai per 2M Baht PUC and that gave 1 Farang a work permit. But I worry about minimum salary quoted above in various threads. You will most likely find resistance at Immigration unless you pay around Baht 55,000 per month. That has been my experience anyway and I have been on WP here since 2001.

I also understand present rules are grey areas especially when it comes to the cash content of the PUC. SCB quoted 25% of the paid up capital is required to open a bank account i.e on 2M you need to bank 500k. There can be loan agreements in place from offshore for the balance and the paper work will suffice "to be applied".

If you have a spouse, I was not aware they could incorporate and then have you as a consultant. That is news to me so if Sam can clarify that would be excellent.

Good luck.

[Andyfez]

First of all, I should tell you my experience is about 2-3 years out of date, and as you probably know in the Land Of Sorrows every minor official who comes into office loves to show his shortlived authority by changing the rules.

Secondly, I would stress I have no relationship with Sunbelt whatsoever, other than they helped me. But a knowledgable guy in Fortune Tower called Dennis Pawlek will give you the low-down in about 10 minutes. They also know about preferential shares, while most 'qualified' Thais haven't got as clue.....

The 2 million (or one million if you have a marriage visa) does not have to be fully paid. Technically you do put it in there, but it doesn't have to show on the bank books, and you will naturally take it out immediately as a Directors loan......

I did not need any employees due to having a marriage visa, however I know some of these rules may have changed. Of course another way round it is to have four 'volunteer employees' use their ID cards, and pay the social security.

Of course there is always the question of an inspection. However I never had one, and I was told they would always give 24 hours notice.

I ensured that there was space for the 4 employees and the ones I used on paper was local so that they could sit at the desks if necessary. A cheap office is easy to find if you're not fussy about location.

By the way, I can sell you a fully paid up company to release me from the monthly accounting if you want one!!! (very cheap).!!

Andrew Ferrett

[asiawatcher]

They also know about preferential shares, while most 'qualified' Thais haven't got as clue.....

Andy that scares the hel_l outta me. Current rules are Pref Shares that do not allow the same voting rights to thai's are now illegal. Please be careful indicating voting rights as these days, 51% ownership means 51% of the vote to Thai's. There are ways around this of course but don't use pref shares or find yourself being investigated.

As to visits - yes they will come - sooner or later. They used to inspect the premises prior to issuing compliance back in the good ole days! Be aware, you need your sign in place and all the appropriate workings of a functional office even if there are no employees present at the time.

Cheers

[ubonjoe]

You will most likely find resistance at Immigration unless you pay around Baht 55,000 per month.

There is no written minimum salary rule for getting a work permit from the labor departement. Some offices may have their own rules.

For an extension of stay at immigration it is 50,000 baht for most western countries and as low as 25,000 for other countries when working for a company.

[Mario2008]

Nationality/ Minimum Income

1. European countries (except Russia), Australia continent, Canada, Japan, and U.S.A.

Baht 50,000/month

2. South Korea, Singapore, Taiwan and Hong Kong

Baht 45,000/month

3. Asian countries (except Japan, South Korea, Singapore, Taiwan, Hong Kong, Cambodia, Myanmar, Laos and Vietnam), South America continent, Countries in Eastern Europe, Countries in Central America, Mexico, Turkey, Russia and South Africa

Baht 35,000/month

4. African countries (except South Africa), Cambodia, Myanmar, Laos and Vietnam

Baht 25,000/month

As Ubonjoe said: this is to get an extension of stay from immigration, there are no income requirements for a WP.

Note that this is only for an extension based on business, not for example teachers, journalists or artists.

[thaibkk]

the constrains on foreigners are so big i would never even consider to start a company here, most people lose their life investments and then can go head home with nothing anymore

i would like to see the day, that in my home country, a foreigner has to hire 4 local people and pay himself 5 times more than his own staff or national average income, without even earning one baht, just for income tax

i guess thailand wants you to be 50 and open a hooker bar in pattaya or phuket... there you need at least 4 bargirls

if you are an ICT expert that would want to help the local economy with your knowledge, forget it

[DTiger]

The sole proprietor can not employ a foreigner with WP (except the burmese, Lao, Cambodia where allowed under special regulations) This is an exemption under the Labor Code for the legally married spouse only. Unfortunately the Labor Department home page is very poor on this matter and I ony got the new laws as PDF file, will get you the regulation and the necessary documents tomorrow after I am back at the office.

I think you might be suprised at the number of people that have work permits and are working for a sole proprietors. The problem many have is that they cannot get an extension of stay working for one. They are getting multiple entry B visas instead.

A person married to a Thai has the advantage of being able to get an extension of stay based upon marriage instead of employment. But can use the income from the business to get the extension after the business is up and running.

All interesting information....

In your ideas then, what would the "best" way for a foreigner "married to a thai", and so already allowed to stay in Thailand, to start some little business? For each what are the conditions to get a WP?

I'm trying to collect the different information from different threads, but I get as much white as black!!

- The sole proprietorship owned by his wife.

But what are exactly the conditions then to get a WP?

- the private limited company.

with 1M bahts (fully paid or not - not sure yet) and at least 2 thai employees.

I still have to fill all the blanks

[Sunbelt Asia]

The second issue is the employees. The business needs 4 employees on at least minimum wage to issue a work permit. Is there any way around this as my business will not need 4 employees for some time to come and staff that we do need will be mostly commission based.

Can commission based contracts count towards the total?

He also said that immigration will visit the premises to interview the staff. Is this correct/likely?

Also, if it takes 4 employees to get the work permit issued, and I can't work until the work permit is issued, how do I hire the staff without working illegally?

Thanks for anyone who could share their knowledge and experience

Thailand is the land of changes. What worked or was applied a month ago does not mean this is the case today. For many years no Thai employees were required for the Labour Dept.

This is the latest today.

The work permit process allow foreigners to get one year work permits ( regardless how long the visa is) as long as they have sufficient numbers of Thai staff in their companies. According to the Department of Labour, the number of Thai employees per foreigner has been increased from 2 to 4 in order to apply for the one year work permit. This is not an official notification in writing, just a policy change applied and verbally enforced at the application counter.

If you use only 2 Thai employees or less, the officers at the Department of Employment will give only three months work permit because they want to be the same as immigration on the one year. On any new application in Bangkok they want to see at least two employees per work permit.

In Bangkok, you now must have proof you have paid Thai employees by filing the social fund tax for three months before you can apply for the work permit. This also has to be certified.

When you apply for the work permit, you must have at least one Thai staff of the company be at the office location for questions from the officer after the work permit application has been submitted for around 10 days. This is needed as there now are officers from the Department of Employment that go to check out the companies with registered address and if when they are there no one in that company on side to meet with them, the work permit application could be rejected.

www.sunbeltasiagroup.com

[asean]

After reading this string i am now convinced that one of the riskiest things you can do in Thailand is ask legal questions on this forum. There is so much conflicting misinformation. Go to someone that does this stuff everyday or a good Thai firm that has been doing this for at least 30 years because of their connections.

As far as the preference shares are concerned.... legal or not legal, when it comes to the crunch do you really believe a Thai judge in a Thai court, with a Thai plaintiff/shareholder will look favorably on that arrangement?

[ivowatson]

A person married to a Thai has the advantage of being able to get an extension of stay based upon marriage instead of employment. But can use the income from the business to get the extension after the business is up and running.

All interesting information....

In your ideas then, what would the "best" way for a foreigner "married to a thai", and so already allowed to stay in Thailand, to start some little business? For each what are the conditions to get a WP?

I'm trying to collect the different information from different threads, but I get as much white as black!!

- The sole proprietorship owned by his wife.

But what are exactly the conditions then to get a WP?

- the private limited company.

with 1M bahts (fully paid or not - not sure yet) and at least 2 thai employees.

I still have to fill all the blanks

Yes, very interesting information!

For some 'little business' I feel the first optiion would be much less complicated.

I guess the same conditions would apply as getting a WP from a company i.e. has to be work that is allowed to do by a foreigner, no criminal record, has to be something a thai cannot do, worked here before or show diploma's, etc,

Would love to get more info and/or confirmation on this.

Also, how to set up the sole proprietorship?