Reasons of change

[kevintan]

Dear all,

I have gone through several websites and threads here to understand more about the requirement to set up a company in Thailand.

It seems most of the people with questions here are of American or other western Europe nationals therefore the problems I encounter might be different.

1st off, I am a Malaysian and planning to set up this company mainly with my partners (2 other Malaysian) mainly in F&B industry.

But after reading from some sites, it is stated that Private Limited companies had the foreign ownership limited to 49% and only certain special application to the BOI would enable it to become a full foreign ownership companies.

Therefore, the option of looking for a local partner is in mind however we have not yet decided about it yet. At the same time I also have a few questions in mind.

Questions :

1) Is it possible to set up a company with complete foreign ownership in the F&B Industry, (because I saw in the "Restricted Business Activities under the Foreign Business Act of 1999, it does mentioned "Sale of food and beverages" )HERE

2) I also read a few posts here and some stated that there is a need of 2m baht min. as paid up capital to start up a Ptd Ltd company. Is this true or is it 2m bhat min. as authorised capital? Does this only apply to foreign owned company only? or also to locals?

3) What about work permit and visa application. I have read somewhere that 2m baht as min. paid up capital would enable us to apply for permanent/long term working permit. What if I don't intend to invest 2m baht yet, and plan to use the temporary working permit/visa. How to go around with this?

4) Assuming there's too much hassle and problems faced to set up a full foreign company ownership, is it ok to set up a 51/49 company with a local partner however limiting his/her power as a shareholder only as a sleeping/inactive shareholder and therefore have no control of company management and direction and also assets of the company? Is this possible assuming the local partner accept the terms and agreements?

I would appreciate if anyone could give me some advise or guide about on my concerns.

Thanks in advance.

Regards,

Kevin

[Soutpeel]

Kevin,

You would be better talking to a local legal company as regards BOI, you generally have to be investing a big heap of money to get through on BOI

1. In essence I believe you will not be able to set up a 100% foreign owned Ltd company (exception would be Amity agreement for US citizens)

it will always be 49/51% split in favour of Thai nationals, your item 4 could be applicable

2. There are no long term/short term work permits per se and to get a WP, you will need to employ 4 Thai nationals, per WP....the WP can be a 1 year or two year renewable, the 1 year being the most prevelant. On a start up company/WP you will have to "visa run" every 90 days, you will not be able to apply for extension of stay (ie dont have to leave Thailand every 90 days) until year 2 or 3 of operation, taxes paid, audited company books etc

3. THB 2.0 mil refers to capitalisation of the Ltd company

[kevintan]

Kevin,

You would be better talking to a local legal company as regards BOI, you generally have to be investing a big heap of money to get through on BOI

1. In essence I believe you will not be able to set up a 100% foreign owned Ltd company (exception would be Amity agreement for US citizens)

it will always be 49/51% split in favour of Thai nationals, your item 4 could be applicable

2. There are no long term/short term work permits per se and to get a WP, you will need to employ 4 Thai nationals, per WP....the WP can be a 1 year or two year renewable, the 1 year being the most prevelant. On a start up company/WP you will have to "visa run" every 90 days, you will not be able to apply for extension of stay (ie dont have to leave Thailand every 90 days) until year 2 or 3 of operation, taxes paid, audited company books etc

3. THB 2.0 mil refers to capitalisation of the Ltd company

First off, thank you very much for your time and effort to reply to my queries.

1) From what I can understand from your posts, it is rather advisable or agreeable that I should try to set the company up with a local partner, right?

That being said, as we are only a 49% holder, are we able to limit the power of the local partner?

2) From what I can understand. Basically we need to employ 4 local employees to get 1 WP. And the common WP we would get is the 1 year renewable and we will have to do "'visa run" every 90 days until the company is being 'settled down'.

This should be not much of a problem since we did plan to take such a route since our home country is just around the corner.

But now our concern will be, since me and my partners (3 of us) would need to get the WP, is there any other way besides employing 12 local employees? because I doubt we really need that much employees to run a F&B outlet.

3) Capitalisation of 2mil THB, as in registered capital and not the total amount of money that we need to pump in during the set up, right? or am I wrong?

1 more question, Would it be easier to get our local partner to set up a wholly local owned company and hired us as the management team?

That being said, we would not have any share in the company but we will be working as the director or management team. Is this scenario possible?

If possible, how do we get our WP done? Do we use the company to apply for us and would it be easier?

Thank you again for your time and effort.

I wish to get these clarified before proceeding to take any further actions.

Regards,

Kevin

Edited May 28, 2011 by kevintan