Own Company Vs Employee Option

[rad1958]

Hi,

I am Australian, married to a Thai, living/working in Dubai at the moment.

I have been offered a contract in an IT consulting role in Bangkok by an Australian company. It's likely to be for about a year, possibly longer. I have two options :

A). Form own Co in Thailand (would be a Thai Pvt Ltd Co I presume) and sign a contract with the Aussie Company - the Aussie Company pays to my Co. in Thailand, I draw salary as employee of this Co.

. work as an employee of the Thailand Company that is the local partner of the Aussie Co. I suppose the Thai Co has to get my work permit done.

I have following questions :

1. If I go option A, does the Company have to register office address in Bangkok ?

2. Option A - Can I form a thai co without additional 4 employees initially ? How long can this co run without the additional 4 employees ? Can these employees be family members of wife living elsewhere in Thailand ?

3. What are the benefits of option A ? Is it possible for the company to own a car and are the depreciation & expenses on the car deducted from company tax ?

4. Since the work is provided by an overseas business (export oriented business), are there any exemptions from the govt for the 1:4 foreigner-to-thai employee ratio ? Any other exemptions, benefits etc. ?

What would you recommend given my situation - A or B ?

Cheers

Rama

[SunbeltAsiaExpert]

There are different forms of business entities available for foreigners depending on the purpose of the business. A company limited or corporation is only one of these forms. You may set up Sole Proprietorship (restricted for foreigners unless applied through certain Treaties such as Amity Treaty but will still pose certain complications with new work permit applications), Partnership, Company Limited or Corporation, Foundation and Association or even a Regional/Representative office. Needless to say, these forms of business entities vary on structure and purpose, including liability. A Corporation or Company Limited among the above forms, is usually the most convenient and safest way to conduct a profit-making business in Thailand due to the protection of its shareholders regarding liabilities, profit and loss. A Corporation or Company Limited can be either public or private in nature. A public company is often listed on the stock exchange and typically has unlimited liability. Privately owned companies have limited liability and are often signified by the term "Co., Ltd" controlled by a “Managing Director”. MD is commonly referred to as CEO or President in western terminologies.

Part of the requirement in registering a company is a business address alongside with the name of the company and the promoters. You may register your company at any given address. However, for purposes of work permit and VAT registration, this has to be a physical office space and preferably a commercial one rather than a residential address. One of the requirements of work permit being that the registered capital of the company must be 2 million baht. This is not just limited to cash; it may be in other forms of assets such as land, building space, car, equipments and the like. The 4 Thai Employees are both an Immigration requirement and a Labor Department requirement per one work permit applicant. The Thai government strictly imposes sanctions for using nominees to fill this requirement. They have to be registered under Social Security Fund as this is one of the major proof that you have Thai Employees; they benefit from it by means of having free medication through the chosen government hospital in cases of accidents and illnesses.

Between option A and B, both will have similar requirements in getting you a work permit. The only difference is, since you will be the Managing Director of option A, you will have full control of the company rather than be an employee of option B. Moreover, you must also consider the cost of setting up a new company (for option A) rather than simply becoming an employee of an existing company (option .

Sunbelt Asia offers a very competitive price in registering the company for you for as low as THB7,500 professional fees (with free 1 month accounting filing). In order for your company to fully function as a company, you are required to comply with other requirements such as VAT and TAX, work permit, social fund registration and the like. In general, our firm can set up a fully-functional company for you starting from THB30,000 (usually for 100% Thai company) to THB70,000 inclusive of all government fees and a possible work permit. Among other things as part of the package, a set of share certificates, VAT and TAX registration, company seal and Social Fund registration shall also be provided for you including a minutes of meeting to open a corporate bank account under the name of the company. Licenses (FDA license etc) and other special license approval (BOI, Amity Treaty etc), however, are separate billing depending on the need for it. Our team of specialized licensed lawyers is ready to assist you in accomplishing this for you. Contact us now at www.sunbeltlegaladvisors.com to begin the process immediately.

www.sunbeltlegaladvisors.com