From Farang Employee To Owner Of A Boi Company

[froglegisgood]

From Farang Employee to Owner of a BOI company,

a trip of discovery through immigration, labor dept and the BOI office

I have been in Thailand for about 24 months now and my first year was as an employee of a large Thai company. I went through all the requirements for my visa, family visa and work permit, using 2 different companies specialized in work permit for the initial one and the renewal. It was easy.

Then one day, with a couple of friends, also farangs with and without WP, we decided to have a go at having our own company, and why not apply for BOI to help with our process and enjoy some of the benefits that come with the package.

The difficulty...

A first look around the landscape was not promising, capital needed was far beyond our means, process seems to be long, complicated and fees required from the pro's were definitely too high.

Quotes went as high as B70K for the BOI registration, plus service fee and all legal expenses for the company registration, plus B25-35K per work permit (process fee) and then all legal fees on top and then we were told that our current Non-B obtained over a year ago for our initial work permit, would require that we all leave the country to get a new Non-B and start the process...

We needed 6 WP, a capital close to 20 Millions to get a chance and lots of money to pay the fees, and some additional cash, we were told, in case we need to pay tea money... Total expected costs and fees were about 200K for the company and BOI, 150K for all WP (with a discount on quantity), and 100K for the Non-B trip + visa fee and then the unplanned expense... close to B500K...

Our determination...

I guess I am not one of those who gives up easily but in this case the task seemed horrific and we were seriously thinking about looking at other countries to host our ideas. One of my friends kept talking about Indonesia where it was so easy to get WP and own a business, but we came here because we love the place and the people and many things that make our life here so easy and so pleasant, so i decided to look closer at the process and go for a low budget approach. I had a maximum of B5M to invest, not a penny over that, and seriously this was really stretching my limits.

Where do we go from here? We are in the software business, and this usually means low investment, limited cost of equipment, and all the professionals we visited seemed to only have expertise in the manufacturing industry, where investing B500M is the norm, I guess this is why they never really took us seriously.

So, looking around, we remembered Software Park and a first conversation with Dr. Rom who told us how much Thailand was keen to help companies work in the software industry.

Our first appointment at SW Park was end of August 2004, where we met Dr. Rom and his legal staff who said that this was far from mission impossible and that our legal cost could be limited if we chose carefully who is going to help.

First attempt...

Software Park legal department gave us the forms to fill in and offered to review them with us after we had finished our plans. The document is the standard BOI request for software industry, it is about 20 page long and they required that you document what you plan to do, how you will achieve your objective, how much you will invest and how it will benefit Thailand. You need to explain your budget in broad form, define your capital investment and show a Profit and Loss over the next 3 years.

You also need to tell them what expertise will be required from overseas, position and what expert qualification you will require to justify hiring foreigners.

I reviewed my plan 3 times with SW park before submitting it to the BOI Office in September.

Appointment with the BOI...

I received a letter from the BOI telling me that a BOI officer had been attached to my case and I would need to contact him to organize an appointment to review my file. I did not know what to expect but feared the big Admin syndrome where nothing is ever right and something is always missing...

First surprise, I exchanged some email with the officer to organize our appointment and in order to help me contact him without wasting time through the switchboard, he gave me his mobile phone number. He offered to speak with the taxi driver if I were to get lost on the way to their office... I visited him beginning of October.

We had an extremely pleasant conversation, talking about Thailand and the software industry and then we reviewed my plan and budget and started talking about investment and initial capital. I had declared a paid up capital of B5M because i had been told that nobody would consider us seriously if we did not invest at least 5M but my business plan only required 1.8M, and he immediately suggested to cut it back to B2M as we did not need it and it would reduce the registration fees... He then gave us hints on what they like to see in a plan and helped me clarify my capital expenditure and I left their office with enough information to correctly rewrite my plan.

I modified accordingly and re-submitted via email, and after a week he confirmed by phone that he had approved my submission. He explained that the next step would be a presentation of my idea to SIPA, the board appointed to verify that my project really falls in the software development category.

and then SIPA...

I followed the instruction and I was invited to present my project in 20 min to the board of SIPA, on a Friday afternoon at 430, just before a long weekend. I thought this was unlucky because they would be in a hurry to leave for their weekend and would have no time for me, so I went to the meeting with some apprehension.

I got there around 400 pm and was told that unfortunately the people before me where late so my turn would be around 530. I waited sitting next to a British bloke who was presenting before me. He went in and out in less than 15min and left with an unhappy face then i was called in...

8 gentlemen were in the room with some sandwiches and coffees, i was offered coffee as well and then connected my laptop on their projector and went on with my project. They kept me there for over 1 hour, with questions on how and why and what if, and these guys were not admin people, they knew what we were talking about, had a clear understanding of the software industry and were there to really assess whether my project was worth it or not. They checked my understanding of software development process, asked about benefit to Thailand, and training for Thai Engineers etc... many questions I never anticipated, and I could see that I really switched them on with my ideas. They liked my project...

Back to BOI...

I received a call from my BOI officer telling me that the first step was successful and SIPA approved us, now i needed to defend my budget plan with the BOI. Same idea, presentation and discussion. I went there fully prepared this time and the meeting went well. I got lots of feedback about what to do next and what having the BOI privileges would mean and then i was told to go home and wait... About another 10 days the phone rang and my assigned officer said good news, you got it, congratulations...

Company creation, Immigration and visa...

We then had to wait 3 weeks for the official mail and then we started the process of registering the company, apply for VAT, etc... again lots of help and advise from SW Park, however by that time we had hired a Thai assistant who filled in all the forms for us.

Once the company got registered, we took everything to the one stop service for BOI on Ratchada. This is where it became complicated because we were BOI approved but did not yet have the certificate, this would take another month, our existing visa and work permit which were under control of immigration at Suan Plu, as a first step in starting the process had to be cancelled in our passport, and then transfered to one stop service. So we started the process and first went to Suan Plu and got our visa cancelled.

To make the matter worse, one stop service does not approve WP and visa immediately, they first need about one week to approve the company as needing expert foreigners, than they approve the position based on your organisation chart and then you submit your candidate for the job approved and only then they approve the candidate if they have enough experience. This would take at least another 15 days...

Timing was now an issue, between losing the current visa and getting the next one, the gap was too wide and the situation was risky. BOI said they could not help, we had to be patient!

This is when i called a lawyer who confirmed that we all had to leave Thailand to get Non-B, then come back and apply from zero for visa extension and WP. Cost of 25K per WP were quoted because of the nature of BOI and the difficulty with our case... Way too much money. He also confirmed that we had to leave immediately as we just cancelled our legal visa so would be overstay tomorrow.

We all came back from the one stop service pretty sad and unhappy with the sudden increase in costs, the additional lenght in procedure and the additional risks now with an overstay as all visas had been cancelled, and on the way back, i decided to have another go at immigration at Suan Plu.

In fact, people over there had only shown constant intention to help and maybe they had some ideas. I remember thinking this is pure madness as you are going to visit the people who should arrest you since you are now illegal...

I got in there just before closing time and had a conversation with the head officer who looked at all the passports and said the solution for us was simple, we pay an overstay fine, ask for extension of our visa and during the extension we start the process of handing over the VISA from them to one stop service, get our position approved and if our BOI certificate arrives before the one month, it should all work fine. It was too late to do anything that afternoon and she asked us to come back the next morning to start the process...

We did not go to soi cowboy or anywhere else that night, having no valid visa in hand and first thing in the morning were at immigration again to pay the fine and ask for a visa extension. It took one hour, we got it all confirmed as being extended for 1 month and left happy and legal again...

BOI certificate arrived within 10 days, company was approved in 4 days and we went back to Suan Plu, closed our extension request, and transfered again to One stop service and from there were given all the work permit.

Nobody needed to leave the country, the existing Non-B from previous company were still valid, extension at Suan Plu was painless and BOI one stop got it all in less than 1 day, we all now have a one year visa and work permit. And at the same time, had our first audit from the revenue department were we were told what to do to comply with their requirement...

as a conclusion, everybody at SW Park, BOI, SIPA, immigration and one stop service were extremely helpful. We were dealing with people whose only intention was to help us succeed with no other purpose in mind, we were helped by all solving the various problems and we were only a bunch of guys starting a small business in Thailand. No money except published fees was exchanged, it was all transparent and clear.

Today we have 12 employees, growing to 20 by the end of the year and a great business.

Anyone who believes Thailand is difficult, well think twice and approach people with the right attitude would be my recommendation. We did what they wanted and got what we wanted. We now have full BOI privileges for 8 years, with a business based in Bangkok...

[HarryHacker]

Well done Frog!

[Rags]

Congratulations!

Interesting post. It's always good to hear a happy story about such subjects, as opposed to the more frequent "Thailand hates Farangs" type topics.

Hope it all works out for you.

Rags

[Merlin]

amazing Thailand!!!

LOL

[Indo-Siam]

Very good write-up. A few comments:

1) This does sound like an accurate description of the BOI process for a software company, to be located at Software Park Thailand. People in other industries should not necessarily expect similar treatment - some BOI departments are corrupt, and the process of gathering required data on machinery and raw materials,and projecting cost componenst of manufactured goods - can be quite difficult.

2) You mentioned nothing about the required "Technology Transfer Plan" - the plan to transfer knowledge to Thai employees. This is normally the single biggest stumbling block - and it is directly linked to work permit justifications for each foreign work permit. It is - in my eyes - a fairly ridiculous document, that basically requires you to fabricate training programs for non-existent employees. It appears that your company planned to - and in fact did - hire numerous Thai employees - and that they have in fact received some professional training. This must have been in your proposal -and helped it be approved. If you are a bunch of software guys trying to start a BOI software company, and you have no intention to hire Thai employees - and thus have no good documentation showing a Thai employeee training plan, you should not expect to be treated so kindly.

3) Personally, reading your summary, and making mental note of the time you invested - including what sounds like several repeat visits to several offices - I have to say that "saving 25,000 or 40,000 baht" by investing considerable time climbing the learning curve for a process that you will most likely never pursue again - is to me a pretty hollow "victory." Your time must - frankly - not be very valuable, if you consider this a successful outcome. The whole concept of fees is based on the opportunity cost of the client's time. Others reading your summary should ask themselves "Can I not make better use of my time by paying someone who has done this before to process for me, to free me up to pursue more valuable activities?"

4) The standards for a BOI work permit are the hardest in Thailand. You must document relevant education - generally at University level - and you must be able to document your most recent five years of employment or other activity. I was literall stunned when we were unable to obtain a work permit for a client because he was unable to document one year, three years back, when he worked for a non-registered business here. He had spent past years 4 and 5 completing the Sasin MBA course at Chulalongkorn, and his most recent two years had been spent as a Senior Consultant for the Kennan Institute Asia.

Cheers!

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[email protected]

www.thaistartup.com

[froglegisgood]

thanks guys, yes it is a happy story and I was mainly motivated to write it in response to all the negative comments I had seen in the past on this forum. I hope it brings a bit of optimism to those who wonder if they can try it...

I would like to add the following comments to the last response from Steve:

1) This does sound like an accurate description of the BOI process for a software company, to be located at Software Park Thailand.

Yes it is an accurate description, No we are not located in software park, never even considered it. These guys helped us knowing perfectly well we would not locate over there. The first document we submitted to the BOI through them had our address in Bangkok.

2) You mentioned nothing about the required "Technology Transfer Plan"

you are absolutely correct, the nature of our software required that we train Thai staff to work with us, and during the process, we had to review our plan to include a very descriptive paragraph on transfering technology. We took this seriously as we believe training our Thai employees will increase their loyalty. Probably we need to learn a lot in this area... any advise appreciated...

3) Personally, reading your summary, and making mental note of the time you invested - including what sounds like several repeat visits to several offices - I have to say that "saving 25,000 or 40,000 baht" by investing considerable time...

we guess we saved 450,000 baht from real quotes we received from professional highly recognised like your company. if you read my description you will see the details.

Yes our time is very valuable and we don't believe that you or anyone else would have had our expertise to prepare the document for technology transfer, or the business plan, or the software development cycle, nor would you have been able to avoid the mandatory visits in persons required to get the visa extension (where they want to see your face) or receive the work permit (when you have to be there in person) or the presentations to SIPA and BOI where our credibility was on the line as well as a recognition of our expertise. So we think the time we spent there was required and maybe 10-15% would have been saved by using professional service.

No we didn't do visits that we did not have to do.

Yes we had someone doing the paperwork, a Thai assistant who probably took twice as long as knowledgeable staff and went herself 3 times to immigration rather then one, but we didn't, and she was paid a normal assistant salary... so big savings again

No we are not professionals however our lack of knowledge and the fact that we questionned everything made us realise that we DIDN't need to leave the country and fly to Singapore for a new NON-B. According to pros, there were 6 of us who had to fly to Singapore for 3 days + cost of hotel + very valuable time, this by itself is an easy savings of 150K.

3 large organisations specialised in this expertise, and one lawyer expert on work permits confirmed with no doubt that we had to get out of the country. They were wrong since we didn't and got all our documents. Procedure was explained to us by an officer at Suan Plu

4) The standards for a BOI work permit are the hardest in Thailand. You must document relevant education - generally at University level

Yes you are right, all of us had university degree and documented experience in previous companies at senior level. And Thai staff we hire comes strait out of Uni...

I would not recommend that anyone as a junior or unexperienced person attempt a similar approach. BOI is for people who bring expertise in Thailand, we can not expect to obtain a work permit for a person with little expertise.

As a conclusion, it is important to understand that I simply wanted to explain that we took the most difficult road, and without outside help we made it, so for those less confident or less experienced, in a normal environment, with professional help, you should make it.

I wanted to express also that we never paid any bribe nor was it ever mentioned or hinted. The people we dealt with were all very professional and helpful. And we went to the same place as all of you guys go to renew your work permit at Suan Plu, or labor department. Only after it all got approved did we use the BOI one stop.

Right attitude, right documentation, patience, determination and many smiles got us through this, now we only need to make money...

Frogy

[pedro01]

3)  Personally, reading your summary, and making mental note of the time you invested - including what sounds like several repeat visits to several offices - I have to say that "saving 25,000 or 40,000 baht" by investing considerable time climbing the learning curve for a process that you will most likely never pursue again  - is to me a pretty hollow "victory."

I've been running a software company here for the pas 4.5 years & I have to agree with that one - "don't sweat the small stuff"

I pretty much outsource all dealings with Thai govt. I am in the process of BOI application under a new outsourcing category they have. I haven't even been to BOI but my lawyer has. Should be comlpete in 2 weeks. Not that I'll have had a clue what hoops they had to jump through. For my Visa & Work permit - I end up at immigration about once a year - just to show my face.

I got better things to do - like develop software ;-)

[BaDboD]

I have been working in technology for 20 years, last position as CTO for international dotcom. I am now looking for work in Thailand (Thai wife). Need I say more froglegisgood?

If you have an opportunity available I will happily send you my resume and details.

There, I said more anyway.

[froglegisgood]

PM with your CV... will reply privately after