Partnership Or Company?

[beatrice]

I am an expat currently working in Thailand with a foreign organisation and have a work permit. However I will no longer have this job soon and would like to set up a small service doing consultancy work for companies and offering counseling and clinical psychology services for expats. Perhpas training and supervising Thai counselors. I have a Thai friend who is interested in joining me. We do not have a lot of start up capital and want to know should we set up as a company or a partnership. Can I then get a work permit to do this work.

I will seek legal advice however just want to get an idea of how to proceed. Also if consultant services are provided outside of Thailand - is thai tax applicable for foriegn sourced income?

Khunum

[Sunbelt Asia]

The safest option is to set up a Thai Limited Company which is Thai majority owned. This limits your liability in a way that partnerships do not. The Thai Limited Company needs a minimum of 3 shareholders, and at least 51% owned by Thai nationals, although some offices may require a higher ratio of Thai to foreign shareholders.

Additionally, it can be difficult to obtain a work permit on a partnership.

You need 2 million Baht registered capital, however this does not mean you need 2 million Baht in the bank. Capitalization fees are 500 baht per 100,000 baht of capital. You will need to pay in at least 25% of your registered capital within 90 days of registering your company either by cash, assets inventory or equipment. To pay up your registered capital by assets you would be required to transfer the designated assets into the company’s name (once the company is registered).

To obtain a work permit, you need 2 million baht in registered capital and at least 2 Thai employees the first year, many offices relax the 4 Thai employee requirement in the first year but in the 2nd year you will need 4 Thai employees, social security must be paid on these employees.

Marriage to a Thai spouse can be advantageous in reducing the required paid-up registered capital from 2 Million to 1 Million baht for 1 work permit as well as reducing the number of Thai employees to two in the first year.

Additional licenses would be requested as you would be involved with clinical psychology. The company would be requested to obtain Medical Institute certification, the therapist would be needed to have a license to operate as a physician (medical degree, etc).

You should consider talking to a lawyer before starting this procedure, Sunbelt Asia has extensive experience setting up Limited Companies. Without the proper guidance, pitfalls may and have occurred.

[sunbelt][/sunbelt]