Thai Business

[choppychugger]

My partner(Thai) is looking at starting up a small business with maybe 5-7 staff, for commercial and domestic cleaning. There will be a basic one page website and we will be renting the first part of a shophouse for customer enquires with a sign board out the front. The main custom will be expats, but the business will be 100%Thai. I have a few friends with a business plus work permit, and Thai friends with small businesses that don't seem to be registered in any way.

There are so many small businesses here and I was wondering how (if at all ) do you go about registering one of these companies ? What is required from the local amphur/gov office/tax office ?

We would like everything above board and would much appreciate it if you could share your knowledge with us regarding setting up a Thai business.

Have lived here long enough so please spare me your thoughts on how lucrative/unsuccesfull you think this idea is - we are not depending on it to pay the bills, and our only investing what we could walk away from.

cheers

Choppy

[Nio]

My partner(Thai) is looking at starting up a small business with maybe 5-7 staff, for commercial and domestic cleaning. There will be a basic one page website and we will be renting the first part of a shophouse for customer enquires with a sign board out the front. The main custom will be expats, but the business will be 100%Thai. I have a few friends with a business plus work permit, and Thai friends with small businesses that don't seem to be registered in any way.

There are so many small businesses here and I was wondering how (if at all ) do you go about registering one of these companies ? What is required from the local amphur/gov office/tax office ?

We would like everything above board and would much appreciate it if you could share your knowledge with us regarding setting up a Thai business.

Have lived here long enough so please spare me your thoughts on how lucrative/unsuccesfull you think this idea is - we are not depending on it to pay the bills, and our only investing what we could walk away from.

cheers

Choppy

If you keep your name out of the business, the Thai person will have no problems and very minimal cost doing this. However, if you wanted your name on it as an expat the expense to start and legalize a company would be astronomical compared to the potential for income.

The problem as we all know is, once the Thai sets up a company in their name, it is 100% theirs.

If there are any issues if the future, you will have no claims at all.

Go to the local office for a business permit and a tax stamp to pay tax each month.

For Thai people quite simple to set up and cheap to get started.

There is a shop house near my office that does basically the same thing you are trying to do and they have been there in the shop house for a few years.

It is very possible to do if you can find the clients.

[richardt1808]

Hi,

If you are aiming at expats, you would need staff who would be able to communicate with your clients, so you would need at least an English-speaking supervisor and that person would probably need to be on site at any ex-pat client premises while work is in progress, so it would probably be quite a handful for your partner. If you decided to employ lower level staff who can speak English, then you would be facing significantly higher labour costs - if indeed you were able to find the right people at all. So, I'd think long and hard about aiming it at expats because the profitability would be questionable, when comparing to the business model of a Thai cleaning company aiming at the local market only.

In terms of business registration, your partner could register as a single juristic person, but this is normally the route taken by mom and pop stores and vendors. If you wanted to have a proper office and a company with a public face and employing staff legally, you would need to register a limited partnership. To do this, you will need the names of 7 persons on the business register and the minimum registered capital would be B 300,000 of which at least 10% must be paid up at the time of registration.

You will need to nominate a juristic person from the list of 7 and this person would be responsible for signing all documents, cheques and company forms. This is where you need to be careful since this is probably going to be your partner. If you are only investing an amount you are prepared to walk away from, then you are thinking correctly. Be aware that the Juristic person is legally able to do everything on behalf of the company - including taking out loans, so beware. Dont put yourself in a situation where you own half the shares in the company but have appointed another person is able to sign documents in a foreign language on the company's behalf. If you dont expect to be reaping any profits, then no problem to put all the share's in your partner's name so you will not face any shared liability in the case of fraud at some point in the future. Case in point: a friend of mine set up a company with a partner, each owning 49% of the shares. Partner took out a million baht loan using his shares in the company as part of the collateral and didnt tell anyone about the loan. He then reneged on the loan a year later and disappeared, leaving the company with a rather sticky problem in that the bank then tried to attach all the profits from the company in order to recover the outstanding amount. They wanted the full 100% of the amount, not only the 49% owned by the disappearing shareholder. If you've lived here a while, you will no doubt have heard worse stories than this.

If your partner has some business ablity, you could do the entire process without a lawyer; but as you are posting on this forum I assume that you will need a lawyer or accouting company to help you set things up. The costs would range from 6,000 to 20,000 to do all the registration for you. You will need a suitably qualified accountant to set up your books and to prepare an annual statement and you will need to submit an audited financial statement each year, certified by a registered auditor. Fee for this would be 12,000 to 20,000. You could probably do your own books, or if you need to pay a freelance accountant, the monthly fee would be around 7,000. You would have to register for VAT if your turnover is more than 180,000 per year (or somewhere around this amount) and once you are in this category you will be watched a little more closely and the revenue department will expect you to make your monthly VAT payments, based on your turn-over, on time. Also, you will need to register your employees and deduct tax according to the tax table if they are earning over the minimum amount and you will need to register them with the social security fund, of which the company needs to contribute a matching amount based on their salary. These are the main things which would be required to set up your business and any law company or business office would be able to help you put things in place.

Best of luck

[choppychugger]

^ ^ Thank you for the detailed replies. Plenty to think about and lots to divulge.

My partner is checking things out at her end as I'm out of the country at the momment - which brings me to my next question:

Can you obtain a work permit for Thailand if you spend a certain amount of time out of the country? My friends with work permits are all there full time, however I work for a multinational company based in Singapore, my work taking me all around the asia pacific. Roughly spend 6 months in Thailand a year.

Cheers

Choppy

[monty]

Can you obtain a work permit for Thailand if you spend a certain amount of time out of the country? My friends with work permits are all there full time, however I work for a multinational company based in Singapore, my work taking me all around the asia pacific. Roughly spend 6 months in Thailand a year.

You can, but it would need some careful planning date wise.

The easiest would be if you work for a big company, which would allow you to get a 1 year extension based on employment. You'll have a 1 year WP as well then. Get a re-entry permit (multiple) and you are free to go and leave as many times as you like. You'll just have to make sure you'll be here in the period your visa/WP needs renewal. Also, your social security contributions and tax on your salary will have to get paid, regardless whether you are here or not!

Getting a WP on the new company/entity your partner is about to start will be more complicated as they would not qualify to get you a 1 year extension of stay (2 years audited bookkeeping needed for that).

Which means you'll be here on a multiple entry non immigrant visa, requiring you to leave every 90 days, but also requiring you to extend your WP every 90 days, as it will run in sync with your entry stamps.

You can't extend your WP much before it expires, and you only have a 7day window to extend it after it expires!

So you'd need to be here exactly every 90 days which might not always be possible dur to your other commitments.

Apparently it is now possible for the labor department to give you a WP not tied to your entry stamps, however I haven't seen one yet. They are also allowed to charge up to 20,000 Baht for one, which they luckily aren't doing yet AFAIK.

Mine is still tied into my "have to leave Thailand before" stamp.

[Mario2008]

Apparently it is now possible for the labor department to give you a WP not tied to your entry stamps, however I haven't seen one yet. They are also allowed to charge up to 20,000 Baht for one, which they luckily aren't doing yet AFAIK.

Mine is still tied into my "have to leave Thailand before" stamp.

My last extension of WP was under the new rules and I didn't need to go to immigration first before having my WP extended. They just did it on the spot, before I went to immigration.

[monty]

My last extension of WP was under the new rules and I didn't need to go to immigration first before having my WP extended. They just did it on the spot, before I went to immigration.

Excellent news!

Makes it much easier for people working for a new upstart business!

[choppychugger]

Monty: My work is so unpredictable that it would be impossible to pin down a certain date that I would be present in Thailand.

Mario2008: Are you saying it is possible for me to obtain a work permit without having to report exactly every 90 days ? How does this new process work and what visa will I be required to be on for it?

I have been with my partner 5 years we have a 3 and a half year old son and another on the way, within the last year purchased a house with me acting as garuntor ( dont know if this helps ).

Thanks again for your replies

Choppy

[monty]

Monty: My work is so unpredictable that it would be impossible to pin down a certain date that I would be present in Thailand.

Mario2008: Are you saying it is possible for me to obtain a work permit without having to report exactly every 90 days ? How does this new process work and what visa will I be required to be on for it?

I have been with my partner 5 years we have a 3 and a half year old son and another on the way, within the last year purchased a house with me acting as garuntor ( dont know if this helps ).

Thanks again for your replies

Choppy

You can apply for your work permit on any non immigrant visa, apart from the ED (educational) one, and where you would have an O-type, extended to 1 year based on retirement.

Basically you apply for the WP, and when you receive it it will be likely valid for a year, regardless of your visa status. Although you would have to be in Thailand on a non immigrant to be allowed to work, regardless of the fact you have a work permit.

This way you'd only need to be in Thailand when extending it after one year.

Children and owning a house have no effect on the issuance of a work permit.