How To Start A Company In Thailand

[yeehi]

afaik a foreigner can start a company as long as a thai owns 51% of it.

This immediately makes me want to not start a company in thailand.

Is there any way that somebody can start a company here without opening themselves to being ripped off? I am thinking small business. Of course i could find somebody i trusted. But i don't trust anybody and dont want to hand control over to anybody else even if i did.

One way would be me 49% and then two separate people (!) controling the rest.

Or what about becoming a thai citizen or permanent resident?

There must be some way...

[penelope]

afaik a foreigner can start a company as long as a thai owns 51% of it.

This immediately makes me want to not start a company in thailand.

Is there any way that somebody can start a company here without opening themselves to being ripped off? I am thinking small business. Of course i could find somebody i trusted. But i don't trust anybody and dont want to hand control over to anybody else even if i did.

One way would be me 49% and then two separate people (!) controling the rest.

Or what about becoming a thai citizen or permanent resident?

There must be some way...

<{POST_SNAPBACK}>

what nationality are you ?

[Indo-Siam]

There is a procedural way to arrange majority or total share ownership by foreigners - by obtaining an Alien Business License. But - this is a fairly painful, and somewhat costly process - it requires detailed disclosure of your business plan to the Thai Department of Commerce.

A very simple way to maintain control is to register with articles of incorporation that state that a supermajority - say 75% - of shares must vote in approval in order to:

1) Add, delete, or chnage directors

2) Declare or pay out dividends

3) Liquidate shares, or the company

4) Increase capitalization, or issue new shares

5) Open a new bank account

With such articles in place, you now launch company, with yourself as sole signatory director - and with you owning at least 26% of shares.

Now,you have complete control of all decisions - management and financial. If you sign an action, it flies. If you decliine to sign an action, it dies. Shareholders have no power - and cannot unseat you without your approval.

Another thing you can do is purchase from Thai shareholders, via contract, their rights to future share-based distributions, on an "after they pay tax on distributions" basis. As a business decision, many Thais will sell to you - for a fixed, guaranteed payment now - their future rights to any dividends or distributions that may - or may not - someday materialize. They prefer a sure thing now, to a "maybe" payout "someday."

If you send me a personal E-mail to which I can reply with attachments, I will send you English versions of formats for what I describe above.

Cheers!

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[email protected]

www.thaistartup.com

Skype: sykesbkk

[yeehi]

Hi Penelope.

I am a farang. Does it matter which nationality somebody is? Doesn't the thai government treat foreign nationals equally?

[penelope]

Hi Penelope.

I am a farang. Does it matter which nationality somebody is? Doesn't the thai government treat foreign nationals equally?

<{POST_SNAPBACK}>

No.

For example, if you have NZL citizenship, from 1st July, in certain industrys you can have a company with NZLers holding 100% equity and all directors being NZLers (NZL -Thai CEP). Also if you are American, you have the Treaty of Amity to consider.And I believe Australia is also working on a CEP (closer economic partnership) with Thailand. Sorry I can't be more specific, but you didn't answer my question.

[Maka]

Isnt there some deal that a US Citizen can hold 90 something % of a Thai company Exporting from Thialand?

What about a US Company owning a Thia Company for Export from Thailand?

Anyone know?

[Sunbelt Asia]

Any nationality can own and control a Thai business 100% that is doing exporting, manufacturing or hotel management.

If you are American you can own and control 100% most all types of business under the Thai Amity treaty. We are strong advocates of the Amity and processed more applications than other legal firms and service providers last year. Most people feel the Amity has expired and it has not.

If you are Australian, in some cases you can own a majority of the shares of a Thai limited business under the FTA agreement of Jan 1 2005.

If you are BOI approved you can own a majority or 100% of the shares.

If you have an Alien Business License you can own a majority of the shares as a foreigner.

If you don't meet these criteria, it is a MUST to have some type of control over the company.

Methods are used such as...

1.Preferred and ordinary shares with the foreigner having more voting rights. ( the preferred shares are 10 shares equal 1 vote and the ordinary ( foreigner) has 1 share equal 1 vote.

2. Changing the by-laws that no shares can be bought, sold or transferred without the managing directors authorization as he/she is the share register as well as the MD.

3. Setting up two Thai companies. One being the holding and the other operating company. Example ABS Co. LTd 51% shares is owned by XYZ Co.Ltd. the 49% by the foreigners. The 51% shares of XYZ Co., Ltd are owned by ABS Co., Ltd and the 49% by the same foreigners. The math will show the foreigners indirectly own a majority of the shares.

4. As Steve pointed out register with articles of incorporation that state that a super majority - say 75% - of shares must vote in approval.

www.lawyer.th.com

www.sunbeltasia.com

www.property.th.com

[Soon2BXpat33]

I hope someone can help. With all the new Visa laws and only being allowed to stay for a maximum of 90 days in a 180 day period, I have been trying to figure out how I can get a Work Visa/Permit. I am from the USA and I don't have a graduate/college degree. I'm 34yo and I don't want to start taking college courses just so I can teach English.

I've been talking to people and someone mentioned to me about being a scuba dive instructor.

He said that I would have to start a company "on paper", then I could be a contractor and contract out my services of being a dive instructor. This option sounded great to me.

Then I said to him that I thought a company needed to have 7 shareholders etc etc etc and he told me that I could get an accountant to help me.

Does anyone know about this?

(Truthfully, I would rahter not work. I would like to come to Thailand for 5-6 month vacation and stay with friends, but with new Thai Visa laws I can't. SO I've been trying to figure out another way. If I have to start a company "on paper" just to get a 1yr work permit.)

[sbk]

I hope someone can help. With all the new Visa laws and only being allowed to stay for a maximum of 90 days in a 180 day period, I have been trying to figure out how I can get a Work Visa/Permit. I am from the USA and I don't have a graduate/college degree. I'm 34yo and I don't want to start taking college courses just so I can teach English.

I've been talking to people and someone mentioned to me about being a scuba dive instructor.

He said that I would have to start a company "on paper", then I could be a contractor and contract out my services of being a dive instructor. This option sounded great to me.

Then I said to him that I thought a company needed to have 7 shareholders etc etc etc and he told me that I could get an accountant to help me.

Does anyone know about this?

(Truthfully, I would rahter not work. I would like to come to Thailand for 5-6 month vacation and stay with friends, but with new Thai Visa laws I can't. SO I've been trying to figure out another way. If I have to start a company "on paper" just to get a 1yr work permit.)

Those laws only apply to people who arrive without visas. People who arrive on a visa free exemption (ie no visa in their passport from the embassy) can only stay in the country for 90 in a 180 day period.

Apply to a Thai Consular office in the US for a tourist visa, see if they will give you a multi entry tourist visa, if not ask for a multi entry non-imm.

You do not need to start a company just to stay in Thailand for 5-6 months, all you need to do is apply for a visa from the Thai consulate in the US. Here is a list of their offices and what you need to apply for a visa.

[Soon2BXpat33]

I hope someone can help. With all the new Visa laws and only being allowed to stay for a maximum of 90 days in a 180 day period, I have been trying to figure out how I can get a Work Visa/Permit. I am from the USA and I don't have a graduate/college degree. I'm 34yo and I don't want to start taking college courses just so I can teach English.

I've been talking to people and someone mentioned to me about being a scuba dive instructor.

He said that I would have to start a company "on paper", then I could be a contractor and contract out my services of being a dive instructor. This option sounded great to me.

Then I said to him that I thought a company needed to have 7 shareholders etc etc etc and he told me that I could get an accountant to help me.

Does anyone know about this?

(Truthfully, I would rahter not work. I would like to come to Thailand for 5-6 month vacation and stay with friends, but with new Thai Visa laws I can't. SO I've been trying to figure out another way. If I have to start a company "on paper" just to get a 1yr work permit.)

Those laws only apply to people who arrive without visas. People who arrive on a visa free exemption (ie no visa in their passport from the embassy) can only stay in the country for 90 in a 180 day period.

Apply to a Thai Consular office in the US for a tourist visa, see if they will give you a multi entry tourist visa, if not ask for a multi entry non-imm.

You do not need to start a company just to stay in Thailand for 5-6 months, all you need to do is apply for a visa from the Thai consulate in the US. Here[

/url] is a list of their offices and what you need to apply for a visa.

I've looked at the link and its a bit confusing. If I apply for a VISA in my country the Tourist Visa is a maximum of 90 days.

I am looking for a way to stay 5-6 months at a time.

The non-immigrant visa requires that I have a letter on business letterhead. Or an invitation from teh Thai Kingdom????

I dont get it.

[Rossi]

Any nationality can own and control a Thai business 100% that is doing exporting, manufacturing or hotel management.

That is new to me, but sounds very interesting! How does this work out especilly for exporting business? Are there any more benefits for an exporting business, with respect to the formation costs or running costs? Couldn't find any specific "Exporting" thread where this might be already discussed...

Methods are used such as...

1.Preferred and ordinary shares with the foreigner having more voting rights. ( the preferred shares are 10 shares equal 1 vote and the ordinary ( foreigner) has 1 share equal 1 vote.

2. Changing the by-laws that no shares can be bought, sold or transferred without the managing directors authorization as he/she is the share register as well as the MD.

3. Setting up two Thai companies. One being the holding and the other operating company. Example ABS Co. LTd 51% shares is owned by XYZ Co.Ltd. the 49% by the foreigners. The 51% shares of XYZ Co., Ltd are owned by ABS Co., Ltd and the 49% by the same foreigners. The math will show the foreigners indirectly own a majority of the shares.

4. As Steve pointed out register with articles of incorporation that state that a super majority - say 75% - of shares must vote in approval.

At the end of the day, what is the difference of the methods. Is it possible to say what is safer or what is more legal?

[younghusband]

Any nationality can own and control a Thai business 100% that is doing exporting, manufacturing or hotel management.

If you are American you can own and control 100% most all types of business under the Thai Amity treaty. We are strong advocates of the Amity and processed more applications than other legal firms and service providers last year. Most people feel the Amity has expired and it has not.

If you are Australian, in some cases you can own a majority of the shares of a Thai limited business under the FTA agreement of Jan 1 2005.

If you are BOI approved you can own a majority or 100% of the shares.

If you have an Alien Business License you can own a majority of the shares as a foreigner.

If you don't meet these criteria, it is a MUST to have some type of control over the company.

Methods are used such as...

1.Preferred and ordinary shares with the foreigner having more voting rights. ( the preferred shares are 10 shares equal 1 vote and the ordinary ( foreigner) has 1 share equal 1 vote.

2. Changing the by-laws that no shares can be bought, sold or transferred without the managing directors authorization as he/she is the share register as well as the MD.

3. Setting up two Thai companies. One being the holding and the other operating company. Example ABS Co. LTd 51% shares is owned by XYZ Co.Ltd. the 49% by the foreigners. The 51% shares of XYZ Co., Ltd are owned by ABS Co., Ltd and the 49% by the same foreigners. The math will show the foreigners indirectly own a majority of the shares.

4. As Steve pointed out register with articles of incorporation that state that a super majority - say 75% - of shares must vote in approval.

www.lawyer.th.com

www.sunbeltasia.com

www.property.th.com

This is relatively familiar ground but I wonder whether Indo-Siam is advising clients to delay any decisions until the position is clearer on what may be called for want of a better term, nominee structures.

I don't incidentally see how having super majority rights gives control.I can see exactly how it prevents awkward majority Thai shareholders imposing their will over the foreign minority shareholder, but it still surely constricts the ability of the foreign shareholder from taking decisions he want to press for.

[johnnyk]

I don't incidentally see how having super majority rights gives control.I can see exactly how it prevents awkward majority Thai shareholders imposing their will over the foreign minority shareholder, but it still surely constricts the ability of the foreign shareholder from taking decisions he want to press for.

Because there are 2 classes of shares and one class is worth more votes per share.

Therefore no decisions can be taken against the holder's interests because he controls more votes, that's all.

This is a common share structure in many many countries and is how crooks like Conrad Black, Bernie Ebbers (two fine upstanding Canucks, I might add ) and Dennis Kozlowski could loot huge companies while owning relatively few shares - they simply had Preferred Shares which had more votes attached to each share than Ordinary Shares. Perfectly legal.

[~G~]

Methods specified above by Indo-Siam and Sunbelt assure control by the foreigner. However, it is important to remember that all the shareholders should be real investors and not puppets, or otherwise the setup may be questioned.

[younghusband]

I don't incidentally see how having super majority rights gives control.I can see exactly how it prevents awkward majority Thai shareholders imposing their will over the foreign minority shareholder, but it still surely constricts the ability of the foreign shareholder from taking decisions he want to press for.

Because there are 2 classes of shares and one class is worth more votes per share.

Therefore no decisions can be taken against the holder's interests because he controls more votes, that's all.

This is a common share structure in many many countries and is how crooks like Conrad Black, Bernie Ebbers (two fine upstanding Canucks, I might add ) and Dennis Kozlowski could loot huge companies while owning relatively few shares - they simply had Preferred Shares which had more votes attached to each share than Ordinary Shares. Perfectly legal.

Thanks but it doesn't answer my question.Leaving aside the fact that different classes controlling different numbers of votes is illegal in Thailand, I can see how an appropriate structure prevents decisions being taken against the "owner"s" interests.But how can the "owner" enforce decisions he initiates against the wishes of the majority.

[~G~]

I can see how an appropriate structure prevents decisions being taken against the "owner"s" interests.But how can the "owner" enforce decisions he initiates against the wishes of the majority.

Very simple. As a Managing Director who is sole signatury authurity, you just need to use your company seal and sign your name and the decision is made. It is legal, since you are not required to hold shareholding meetings to approve every decision.

[younghusband]

I can see how an appropriate structure prevents decisions being taken against the "owner"s" interests.But how can the "owner" enforce decisions he initiates against the wishes of the majority.

Very simple. As a Managing Director who is sole signatury authurity, you just need to use your company seal and sign your name and the decision is made. It is legal, since you are not required to hold shareholding meetings to approve every decision.

Can't be the full answer not least because sole signatory arrangements are seen as bad practice.More to the point, if the Articles of Incorporatiom include sa 75% super majority requirements then the MD apart from day to day stuff is still very constrained.I remain puzzled and suspect only a proper lawyer could enlighten me.

[~G~]

Can't be the full answer not least because sole signatory arrangements are seen as bad practice.

And why exactly is that a bad practice?

[~G~]

Leaving aside the fact that different classes controlling different numbers of votes is illegal in Thailand

And where did you get this information from?

[younghusband]

Leaving aside the fact that different classes controlling different numbers of votes is illegal in Thailand

And where did you get this information from?

You're right and I'm wrong on this point.Voting rights of preferred shares for example can be limited, eg 10 preferred shares for 1 vote or alternatively more votes per share.It all depends on how shareholders meeting defines the rights of prefs.Anyway I take your point about control now.Still can't be too comfortable a position to be in these days in Thailand.

On sole signatory arrangements, these in public companies would not be acceptable -good governance, audit committees etc.But on reflection I suppose nobody will object in private companies essentially run as sole proprietor arrangements.But still not a great idea.