Director : I Don't Want A Work Permit

[cclub75]

I want to create a "thai" company Ltd, with 51 % share for thais shareholders and 49 % for foreigners. I want to be the Director of this company, but i dont want a work permit and I dont want to have a salary, nor dividends.

The reason is : I have a 100 % real job with proper WP in another company...

The underlined question is : what is the definition of a "Work permit" ?

It refers to any form of work ? Or only position with a salary ?

[Indo-Siam]

No work permit is required to be recorded as a director of a Thai private company limited. A director does not even need to reside within Thailand.

You can be a non-employee director, appointed by the shareholders to supervise their investment. As long as you are a significant shareholder of company, you may pretty much supervise your investment unmolested.

What is it that you are afraid will happen to you?

Cheers!

Steve

Indo-Siam

[cclub75]

Thanx Steve for your reply.

Actually, I am not afraid.... it is just that I wanted to be free of all the hassle of WP/Visa issue, since this part is settled with my "main" job" if I may say.

;-)

And also I wanted to avoid the 2 millions THB capital issue, the 4 thais workers etc.

No work permit is required to be recorded as a director of a Thai private company limited.  A director does not even need to reside within Thailand.

You can be a non-employee director, appointed by the shareholders to supervise their investment.  As long as you are a significant shareholder of company, you may pretty much supervise your investment unmolested.

What is it that you are afraid will happen to you?

Cheers!

Steve

Indo-Siam

<{POST_SNAPBACK}>

[Indo-Siam]

As long as you do not mix a BOI and a non-BOI job on one work permit, you may easily add a second job for a second employer to your work permit.

No Thai employees are required for a work permit. 2,000,000 baht registered capitalization is required, and you would have to pay personal income tax withholding on the salary that you listed in the work permit application.

It is probably a good idea to NOT be the only signatory director on a company for which you are not officially employed - there are situations (obtaining an import/export license, opening a company account at SOME banks, and similar) where you cannot proceed unless you hvaea work permit for THAT company. But - as long as you have a Thai director to handle these things - not a real problem.

Good luck!

Steve Sykes

Manging Director

Indo-Siam Group

Bangkok

[email protected]

www.thaistartup.com

[doctormann]

cclub

Is your Thai company actually going to trade or is it just going to be a 'paper' company for the purpose of land acquisition?

The reason that I ask is that I raised the issue of work permits etc. with my lawyer when I wanted to set up a land holding company (non-trading). My visa expressly forbids me to work so I wanted to be sure that being a director of such a company would not violate the terms of the visa.

I was assured that there would be no problem with this (and this lawyer comes recommended by the UK Embassy, so should be kosher). The company has subsequently been registered for tax purposes, as have I, as the managing director. The company wil not trade and I shall draw no salary so the tax liability will be small - the main running expense will be the provision of accounts every year.

So, in summary, it appears that if you are not trading and not drawing a salary you don't need a WP because you are not actually working.

DM

[thai_italy_trade]

How intersting. I am being told by my lawyer that according to Thai law, if you are a Director and have any signing authority at all, then you are deemed to be in a position of "work", thus employed, thus need a work permit. Hence, you need a work permit if you intent to sign...anything, on behalf of your company. Note also that if you intend to open a current account at a bank with you as the signatory, then you WILL need a work permit. You will also need to be registered with the revenue department for VAT.

In my case, I recently set up a second company (a JV with a foreign partner) which is only 1 million Baht capitalised. My company (Company A ) is registered as a 51% shareholder in the new company (Company B ). My work permit is in Company A. Since Company A, a Thai juristic person, is a shareholder in Company B, I am allowed to sit on the board of Company B and be a signing Director even though the capital is not 2 million registered. Unfortunatly, we are not able to open a current account which makes for payment hassles.

I am not certain if you require any signing authority or not for your new company, however if you do, then take heed. Is the company you are currently with, a shareholder in the new company? Or is it completely separate?

Hope this helps. Of course, my lawyer could possibly be full of &*^&%$$. Nobody here, including Govt officials, really understands the law.

Edited April 21, 2005 by thai_italy_trade

[Indo-Siam]

I do believe that official Thai banking law does require that any non-Thai director who wishes to have signature authority over a Thai Private Co. Ltd. bank account must have a work permit - but I also know for sure that we have on more than 10 occasions in the past year seen that rule ignored, and many clients allowed to have signature authority without even a non-immigrant entry permit, much less a work permit - but ONLY if they were a company director.

I also believe it to be true that banking rules state that a company must first have a passbook savings account for six months, before it is eligible for a current acount - but I have also seen that rule generally ignored.

For certain, we have had clients run into situations where both of these rules were rigidly enforced - this generally happens at bank Head Office branches.

As I indicated above, I would recommend that no one try to operate as the only authorized signatory official without a work permit - so that if you run into a "wall", you have an alternative signatory person Enforcement of procedures here can change very quickly, upon issuance of government "reminders."

I firmly believe that it is NOT true that a director must have a work permit. We have operated in support of directors who have not set foot in Thailand since before incorporation - and they could still sign papers from overseas. What they cannot do - as far as I know - is become bank signatories - because I have yet to see a bank allow bank signature cards - even blank ones - to be removed from the bank building.

In my experience, it is EXTREMELY unlikely that anyone outside the nightlife industry, and in the Bangkok area, will experience any "illegal work" enforcement problems in relation to acting merely as a signatory director, without a work permit. Things may be different in beach areas, or up-country. But - in Bangkok, officals have better things to do than harrass company directors on this basis. But - any low-level Thai official - government or commercial sector - can refuse to allow you to sign, without a work permit - and there is not much you can do about it.

Cheers!

Steve

Indo-Siam

[bino]

No Thai employees are required for a work permit.    2,000,000 baht registered capitalization is required, and you would have to pay personal income tax withholding on the salary that you listed in the work permit application.

I am interested to know more about this as I thought that a company needed minimum 4 Thai employees to support a work permit application. My work permit was once declined for this reason.

Is it true that I could start a company (for example, IT Tech services / web design) with 7 shareholders being 6 Thai totalling 51% holding, myself Foreigner holding 49%, myself and one Thai shareholder as authorized signatory for the company. No one would be paid but me.

Could I obtain a work permit based on this company?

I understand that I would have to pay personal income tax on the salary listed in the work permit application. As a Canadian, I am believing that my minimum salary must be 60,000 Bt / month. Is this true? Also, if I don't earn 60K, can I pay the equivalent tax?

Looking forward to your answers.

[Indo-Siam]

Bino -

In my work permit, which was initially issued on 24 April 2002, on page 19, in the "Conditions" block, there is a typein section that states that I must mainatin a minimum of four Thai employees in order to keep my work permit valid.

They stopped putting this section in work permit booklets in late 2002. Now - the work permit application process not even address the issue of This employees - they do not ask anything about this. We can (and have) routinely obtain a work permit for a Managing Director, within ten days after company is incorporated.

The Managing Director's job -presumably - is to recruit Thai employees, and arrange to be able to pay them. He must first exist, in order to do that.

Cheers!

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[email protected]

www.thaistartup.com