Virtual Offices - Illegal?

[lingling]

I set up a thai co ltd at the beginning of this year. So far I have used a "virtual office" address provided by the company that helped me with the company setup. Today, when my accountant went to the revenue dept to file last month's withholding taxes etc she was told that unless we stop using the virtual office address within a month they will hit us with a fine.

Is it illegal to use these virtual offices?

[Sunbelt Asia]

Is it illegal to use these virtual offices?

No if they have facilities you can use...meeting room, computers, desk.

If however when the tax people visited this office, it was explained that you are never there and it was a "front" Of course this is not kosher.

The key is that this is a registered office that you can use the facilities.

The tax people, social fund officials, Immigration and Work permit officials visit offices everyday checking up on companies. It is important that who ever greets them, knows about you and what you are doing and its explained that this is a “ real “ office that you can be found from time to time.

Couple situations their could be a problem…Vat officials will not be happy if you request a refund back on equipment and they come out to your virtual office. They’ll want to inspect where your equipment is that you ask for credit on. If its not there they’ll feel fraud is going on with your company.

Second would be stating income from food and drink sales but yet you are still using a virtual office. They come out to investigate and the virtual office has no kitchen.

Virtual offices are great for consultants. Even great for a restaurant till they set up but once you are getting income; you need to change the address.

www.lawyer.th.com

[samran]

how does one work from home then in LOS. Is it possible to be a 'consultant' and have part of your house as your workplace, and have a (legitimate) registered business at the same address?

[~G~]

how does one work from home then in LOS. Is it possible to be a 'consultant' and have part of your house as your workplace, and have a (legitimate) registered business at the same address?

<{POST_SNAPBACK}>

As far as I know, that depends on your landlord. Whether they are willing to let you use it for commercial purposes (which puts them in the books). If you own the place, I believe this should not be a problem.

[~G~]

I set up a thai co ltd at the beginning of this year.  So far I have used a "virtual office" address provided by the company that helped me with the company setup. Today, when my accountant went to the revenue dept to file last month's withholding taxes etc she was told that unless we stop using the virtual office address within a month they will hit us with a fine.

Is it illegal to use these virtual offices?

<{POST_SNAPBACK}>

There are many tricks used to quickly set up companies - as your case shows some of these tricks don't last long.

[Indo-Siam]

lingling -

Your report is surprising, if you have met all the requirements:

1) Building owners certification that your business is a registered tenant.

2) Company name sign displayed at office entrance, with photograph of same turned in to Revenue Dept. (photo must show sign, and also building or office number)

3) Thai language street location map provided to Revenue Dept.

If you have all these things, and Revenue Dept. inspector visits your company's office (as they normally do for newly registered businesses), they will normally just open to door and ask whoever is there "Is this where Company X has its office?". If they receive a "yes" - that's it. They normally inquire no further.

What gets you in trouble is if there is no company name sign, or if it is taken down. Or - if there is no human presence at the address - just a permanently locked door. In these cases, they leave behind a 30 day warning letter - if they return 30 days later, and situation remains unchanged, they revoke your tax registration.

If run properly, a "virtual" office should not cause any trouble. The only thing that cannot be accomplished this way is to obtain a long-term entry permit extesnion based on employment. Immigration requires that both foreign applicant, and at least four Thai employees per applicant - actually work out of the registered office address. At the edges, you can stretch this a bit - but Immigration will not accept as valid an address which you are obviously not occupying with your employees.

What city and Revenue Office jurisdiction are you in?

Good luck!

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[email protected]

www.thaistartup.com

[billd766]

how does one work from home then in LOS. Is it possible to be a 'consultant' and have part of your house as your workplace, and have a (legitimate) registered business at the same address?

<{POST_SNAPBACK}>

As far as I know, that depends on your landlord. Whether they are willing to let you use it for commercial purposes (which puts them in the books). If you own the place, I believe this should not be a problem.

<{POST_SNAPBACK}>

Yes, it is possible. I used to have a company that was registered at the house my wife and I had rented but the landlord did have to agree first.

I had to set aside an area which was my office pretty much fully equipped and though I was not there most of the time as I was consulting with Motorola on the CDMA project for Hutch.

I had to employ a Thai lawyer to set the company up which in retrospect was a bad idea but at that time I did not know about Thai Visa or Sunbelt which would have made my life easier.

At that time I had to register the company with 2m baht capital though I did not actually have to pay that much.

I had to employ 4 Thai people (family and friends), pay their salaries, pay social security for all of us though that got us medical cover at hospital etc. I also had to supply photos of my office and the toilet (for some reason), employ an accountant and a host of other things. I was also visited by the authorities a couple of times, once they gave notice and another time they did not but my wife was at home anyway.

I also had to do the following: -

1) Building owners certification that your business is a registered tenant.

2) Company name sign displayed at office entrance, with photograph of same turned in to Revenue Dept. (photo must show sign, and also building or office number)

3) Thai language street location map provided to Revenue Dept.

(Thanks to Indo-Siam for that info)

This also got me a work permit.

I closed the company down a couple of years ago as I was no longer working and even then it cost money for a while to sort out the closure with the accountant who is Belgian, married to a Thai and a very nice guy. Should anyone need a good accountant PM me and I will send details.

On the side my office was actually a real and not a virtual office.

I don't know if I would ever do it again but if I did I would take some good legal advice first. Time and money spent in preparation is never wasted.

[lingling]

lingling -

Your report is surprising, if you have met all the requirements:

1)  Building owners certification that your business is a registered tenant.

2)  Company name sign displayed at office entrance, with photograph of same turned in to Revenue Dept. (photo must show sign, and also building or office number)

3)  Thai language street location map provided to Revenue Dept.

If you have all these things, and Revenue Dept. inspector visits your company's office (as they normally do for newly registered businesses), they will normally just open to door and ask whoever is there "Is this where Company X has its office?".  If they receive a "yes" - that's it.  They normally inquire no further.

<{POST_SNAPBACK}>

I don't know if they have been there and got another answer, but my company name is on a sign there along with maybe 100 other company names. The revenue dept told my accountant is that this particular place has "too many" companies in a too small office so they don't believe that they all are based there.

What city and Revenue Office jurisdiction are you in? 

<{POST_SNAPBACK}>

Bangkok, Din Daeng

[lingling]

A related question; can anyone recommend some place in BKK that has cheap serviced offices where I can move my company to and where they have receptionists etc that can greet the revenue dept if they show up?

Preferrably somewhere near a skytrain or MRT station. All I need is a desk that I will rarely use as I work from customer sites and home...