Managing Condos

[travelmann]

Brief summary, friend of mine owns 50 condos value approximately 120 million baht he would like me to manage them with my wife and find a way for me to do this with/without getting a work permit. I am married to a Thai national and am a UK. Citizen he is an American and not married.

he is speaking with his lawyers already but wanted to ask advice off here if anyone knows a way this could be done.

1. he sets up a company approximate cost 500000 baht

2 as I am married to a Thai maybe we can form a partnership ie myself and my wife and not employ other people?

3 he transfers all the rooms to either myself not easy I think Ill have to buy them off him and show I imported the money and later he has them back if he wants to sell them

4 My wife buys them off him or is given them she of course doesnt have to import the money.

Anyone think of a way to do this not involving 500000 to set up a company?

[travelmann]

Mods can you move this to the business forum? Thanks

[midas]

I read a recent cases of farangs simply sitting in their

bars and letting their wives appear to do all the work but then

still being nabbed by immigration for the simple act of shaking hands

with customers in the bar

IMO you would be taking a huge risk to undertake any kind of activity

regarding this without a work permit and it is you that could end

up in BIG trouble - see the penalty for working without work permit :-

" Warning: The penalty for working in Thailand without a work permit can be from 3 months to 5 years imprisonment. You will also face deportation and be blacklisted from Thailand for 99 years. "

http://www.sunbeltlegaladvisors.com/Thailand-Work-Permit.php

Edited January 11, 2011 by midas

[travelmann]

I read a recent cases of farangs simply sitting in their

bars and letting their wives appear to do all the work but then

still being nabbed by immigration for the simple act of shaking hands

with customers in the bar

IMO you would be taking a huge risk to undertake any kind of activity

regarding this without a work permit and it is you that could end

up in BIG trouble - see the penalty for working without work permit :-

" Warning: The penalty for working in Thailand without a work permit can be from 3 months to 5 years imprisonment. You will also face deportation and be blacklisted from Thailand for 99 years. "

http://www.sunbeltle...Work-Permit.php

You did see the bit that says "with/without" work permit didnt you? Thanks anayway I know the law regarding this.

[WarpSpeed]

Well why isn't he setting up a company under the Amity treaty instead being American?? BTW this is good advice and if followed through on it illustrates that he should be hiring me instead of you ....

[midas]

Well why isn't he setting up a company under the Amity treaty instead being American?? BTW this is good advice and if followed through on it illustrates that he should be hiring me instead of you ....

But how could the Amity treaty benefit a UK citizen ?

Even if he or she was a Director of that Company I still can't see how

a non - American employee can be exempt from needing a work permit ? The American proprietor needs a work permit

even under the treaty so a non- American would also need one surely ?

it says on this webpage :-

" Please note to have an Amity Treaty company you must first have a Thai Company. You still need a work permit and must employ 4 Thais for every work permit. "

http://www.asiatradingonline.com/amity2.htm

Edited January 12, 2011 by midas

[wpcoe]

I think the idea above was for the American owner to set up a business under the Amity Treaty and then hire the UK citizen as an employee. Can the American owner's business sponsor the UK citizen for a work permit?

[midas]

I think the idea above was for the American owner to set up a business under the Amity Treaty and then hire the UK citizen as an employee. Can the American owner's business sponsor the UK citizen for a work permit?

Yes i know but that still means 2 work permits ?

They cant qualify for Amity without the American participating so you need one for the American owner/ director and another for the UK employee plus

8 Thai employees - just to manage 50 condos ?

Edited January 12, 2011 by midas

[Soutpeel]

Being married to a Thai national you can set up a THB 1.0 million company and would only need to employ 2 Thai's ( your wife would be 1, and say a maid/cleaner) and you can get a WP

Set it up as a property managment company and the American as the owner awards the contract to your company to maintain his properties.

But still a little confused, does he want you to manage them or buy them ??

[travelmann]

Being married to a Thai national you can set up a THB 1.0 million company and would only need to employ 2 Thai's ( your wife would be 1, and say a maid/cleaner) and you can get a WP

Set it up as a property managment company and the American as the owner awards the contract to your company to maintain his properties.

But still a little confused, does he want you to manage them or buy them ??

Soutpeel yes w e have looked at his in fact w e need 1 million capital or something due to being married but thats no problem we already have 5 condos of our own .

Yes I am only to manage them he will own them.

A better way is more likely for my wife to be a sole proprieter and then employ me and 2 other thais and its better for tax and other reasons like less acountabiltiy....from what I can gather so far???

[Soutpeel]

Being married to a Thai national you can set up a THB 1.0 million company and would only need to employ 2 Thai's ( your wife would be 1, and say a maid/cleaner) and you can get a WP

Set it up as a property managment company and the American as the owner awards the contract to your company to maintain his properties.

But still a little confused, does he want you to manage them or buy them ??

Soutpeel yes w e have looked at his in fact w e need 1 million capital or something due to being married but thats no problem we already have 5 condos of our own .

Yes I am only to manage them he will own them.

A better way is more likely for my wife to be a sole proprieter and then employ me and 2 other thais and its better for tax and other reasons like less acountabiltiy....from what I can gather so far???

The THB 1.0 million doesnt need to be in cash in the company, its a "paid up captial".....ie could be other assets as well which make up the 1.0million

Not saying you cant get WP as a Sole proprietor type company but beleive its little more complicated as far as I understand.

My biggest concern of a Sole P. vs a limited company (bare in mind I am not a companies lawyer) is regards the liability of the company, As a sole proprieter of a company, if sued, you can (or your wife) can be held in their personal capacity where as a limited company your liability is limited to a certain amount per your company insurance policy, this is certainly the case with Oversea Sole P vs Ltd companies and cant see Thailand being any different.

Therefore if managing your friends properties something happens to those properties as a Sole P, your friend could have ago at you/your wife and your personal assets, where as a limited company, could only sue the limited company for the amount in the insurance policy of the company and you are not a risk in your personal capacity.

This is my understanding of a Sole P vs Ltd company and may well be worth checking out with a competent commerical lawyer (ie one that knows what he is taking about)

[Chunky1]

why did he make such a large investment w/o knowing the laws of the banana republic? tell him to sell the 50 units and a buy a 2 bedroom in tokyo. problem solved.

[travelmann]

why did he make such a large investment w/o knowing the laws of the banana republic? tell him to sell the 50 units and a buy a 2 bedroom in tokyo. problem solved.

I am not him I have no idea..well thats a lie I do know actually but am not prepared to say but lets just say these condos are a very small percenatge of "what he does" The other assets are outside of Thailand.

Thanks for your replies Soutpeel.

Edited January 12, 2011 by travelmann

[travelmann]

Sole proprietership does this mean My wife is then the owner she employs 2 Thai staff and me or can she be one of the staff?

[wpcoe]

Yes i know but that still means 2 work permits ?

They cant qualify for Amity without the American participating so you need one for the American owner/ director and another for the UK employee plus

8 Thai employees - just to manage 50 condos ?

Why eight Thai employees? The American can set up a business under the Amity treaty with NO Thai employees, no? Are you saying that then to hire the UK fellow, the American would have to hire eight Thais? I didn't realize that.

[Soutpeel]

Yes i know but that still means 2 work permits ?

They cant qualify for Amity without the American participating so you need one for the American owner/ director and another for the UK employee plus

8 Thai employees - just to manage 50 condos ?

Why eight Thai employees? The American can set up a business under the Amity treaty with NO Thai employees, no? Are you saying that then to hire the UK fellow, the American would have to hire eight Thais? I didn't realize that.

If the American and the UK fellow wished to work in Thailand then yes 8 employees, if only the UK chap, then 4.

Work permit rules for a Amity company are no different from a normal limited company with the exception of the registered captial which is THB 2.0 million per WP,

Amity treaty allows 100% ownership by US citizen, does not do away with WP requirements etc

[flying]

I think to simplify it I would just have him hire my wife.

Of course you can handle all the logistics, hire repairmen & phone work ( for the falang renters & your wife for the Thai renters. etc.

At the end of the day it would be the simple route.

Edited February 2, 2011 by flying

[alexanderthai]

Just apply for work permitt ,then the problem solve. If you want to work peacfully, why don't you pay about 40k-60k for long term. To get marry with Thai , you can stay in Thailand yearly but not include work permitt.

[Sunbelt Asia]

The member's wife could set up a sole proprietorship, and with four employees and paying social security on four employees, would be able to apply for a work permit for her husband, which may or may not be approved. Liability would be wholly that of the Thai owner and audited books would not be required but personal income tax would have to be paid. The business would be entirely in her name but she could then, as has been pointed out, contract to manage the condominiums for the American friend.

Alternatively, they could set up a limited partnership so that he, as the foreigner, owns 49% of the company, however, Limited Partnerships may also see difficulty in obtaining a work permit. The authorized person of this partnership is called the Managing Partner and the Managing Partner’s liability will be unlimited, minor investors would have limited liability. Limited partnerships will be required to file their annual audits (just like any other limited companies).

A Limited company can appropriately provide a work permit requiring 4 Thai employees (proven by the enrolment of 4 Thai employees in the company social security funds) and 2 Million Baht registered capital. However, such requirement would be halved, in the case if the work permit applicant is legally married to a Thai national.

Limited Companies are much better for foreigners than limited partnerships as it gives them MUCH more protection. Sole proprietorships give the foreigner no protection at all. Limited companies are more strictly regulated and would require help in setting up in addition to the services of a certified accountant to keep audited books.

Furthermore, the Labor department tend to reserve the right not to issue a work permit to a foreigner that works for a Sole Proprietorship as they would prefer to issue this to short-term investors and/or freelancers. Therefore, applying for a work permit under a limited company would be the recommended route.

Your best course of action would be to go through an agency to set up a limited company. Sunbelt Asia has extensive experience in this and would be happy to assist.

[sunbeltlegal][/sunbeltlegal]

[wpcoe]

Why eight Thai employees? The American can set up a business under the Amity treaty with NO Thai employees, no? Are you saying that then to hire the UK fellow, the American would have to hire eight Thais? I didn't realize that.

If the American and the UK fellow wished to work in Thailand then yes 8 employees, if only the UK chap, then 4.

Work permit rules for a Amity company are no different from a normal limited company with the exception of the registered captial which is THB 2.0 million per WP,

Amity treaty allows 100% ownership by US citizen, does not do away with WP requirements etc

I finally re-discovered where I got the notion that a business under the Amity Treaty did not need Thai employees. It was a four-year old ThaiVisa thread.

There are various options which do not require Thai employees:

From post #4 above, Sunbelt says you only need to meet ONE criterion:

Sunbelt Asia, on 2007-03-01 10:03:04, said:

As of now... you have three different ways to qualify and none involve money in the bank. You only need to meet one criteria.

1. You employ 4 Thais ( 2 Thai employees if married to a Thai)

2. Your gross turnover the previous year was 700,000 Baht (350,000 Baht if married to a Thai)

3. You paid personal income tax of 50,000 Baht (25,000 Baht if married to a Thai

In another post, Sunbelt Asia advised me:

One other idea. Do a Thai Limited Partnership under Amity. You as the major partner could pay for your investment by providing a service for the partnership. Most people think paid up capital is cash. The contribution can also be equipment or service as per the Civil Commercial Code.

Your friend would pay for their portion with cash. As the limited partner they cannot use service, the contribution must be in money or other properties. You however as stated can use service as payment for your portion.

With a limited partnership, you do not need to employ 4 Thai employees to get the work permit.

Not sure it's at all helpful or relevant to the OP, but wanted to point out that there ARE ways to have an Amity Treaty company with NO Thai employees.

[saengsureeya]

Yes i know but that still means 2 work permits ?

They cant qualify for Amity without the American participating so you need one for the American owner/ director and another for the UK employee plus

8 Thai employees - just to manage 50 condos ?

Why eight Thai employees? The American can set up a business under the Amity treaty with NO Thai employees, no? Are you saying that then to hire the UK fellow, the American would have to hire eight Thais? I didn't realize that.

I'm not very into the business set-ups, but as far as I know, you need 7 share holders when forming a co., ltd.

The 4 Thais are only needed if a wp will be applied for.

Edited February 15, 2011 by saengsureeya

[Sunbelt Asia]

If the American friend were to set up an Amity company he would be required to obtain a work permit as Director, this would require 4 Thai employees. To then obtain a work permit for you, another set of employees would be necessary, bringing the total to 8 Thai employees for two work permits.

A much more economical way to get a work permit would be to set up your own Thai company with a 49 % shareholding by you and 51% by Thai nationals, with three total shareholders (the 7 shareholder requirement has changed) then you would only need 4 employees to obtain a work permit, 2 may be possible in the first year, (depending on the Labor office) however four will be required the second year.

The company would then manage the properties of the American friend; collecting rents and undertaking repairs for the tenants.

www.sunbeltlegaladvisors.com