O To B Or Just Start With B?

[seeker108]

Well, months ago I thought I had it all figured out and really researched here and elsewhere about O visa and retirement. Result of research - come back into Thailand with non-imm O and then probably get the retirement status after I am in LOS (or maybe get B visa). Well, my thinking has changed regarding my plans in Thailand and it is getting to be time to apply for the visa and I am now wondering if I should get a B visa right from the start.

I just did some searching for more info about B visa - requirements basic premise, etc. and came up with hundreds of results but not much useful information so far. Hence I am throwing myself at the mercy of our wonderful group here and seeking some direction for finding what I need. Either direct posting here or referring me to some other thread(s) where I can find the info I need will be extremely welcome.

Here are the basic facts. I am American, no Thai wife or children. I have lived in LOS off and on over the past several years, doing the visa run routine.

I am thinking more and more that I would like to start up a business or a non-profit organization for the purpose of providing gainful employment to as many Thais as possible and to try to accomplish something good in the world in general. Hopefully accomplishing something good in other parts of the globe will accomplish supporting the endeavor in Thailand. I would personally not need to take income in Thailand from this and probably would not, but would obviously need to be earning money, at least for a business or non-profit overseas, which would then channel the needed funds to Thailand. I already know that even if no income came to us in Thailand, just the fact that I am engaged in anything resembling work means that I will need a work permit. I do want everything about this to be 100% above board.

I believe that I can get a work permit whether I am in Thailand with an O or B visa. O visas are very easy to obtain from the USA. I don't know about the B visa. Actually I know almost nothing about B visas.

So here are the questions: Do I need a B visa to be running either a non-profit or a company or can it be done on an O visa with a work permit (without having a Thai family to support). I suspect that the former will be true, at least eventually.

Is there any advantage to getting the B visa before coming or just wait to see if this whole thing realy flies. Or maybe, even if it is better to come in with the O, perhaps I need to get the B and/or a work permit before I engage in even looking for local people who want to work with this?

Finally, I know what I need for the O visa, but what is required for the B visa on an annual basis? Money in Bank or in company? Sponsoring company until I get the new entity set up? Minimum number of employees? Sunbelt - feel free to post or contact me. A brief look at your site showed a very reasonable fee for setting up a company, which I am sure I will need help with.

Thanks all for any help with this. Again, feel free to refer me to other threads or other web sites to find what I need to know.

seeker

[Sunbelt Asia]

Do I need a B visa to be running either a non-profit or a company or can it be done on an O visa with a work permit

You can obtain a work permit on any type of non immigrant visa with the exception of a extension of stay based on retirement. " B" ," O", "ED" "R", "RS" and "M" they are all good.

Is there any advantage to getting the B visa before coming or just wait to see if this whole thing realy flies. Or maybe, even if it is better to come in with the O, perhaps I need to get the B and/or a work permit before I engage in even looking for local people who want to work with this?

The advantage of a "B” is if you apply for the extension of stay based on business you will not need to change from another class of visa to "B" to do the extension of stay. If you plan on doing visa runs every 90 days then the class of visa is meaningless.

Finally, I know what I need for the O visa, but what is required for the B visa on an annual basis? Money in Bank or in company? Sponsoring company until I get the new entity set up? Minimum number of employees? Sunbelt - feel free to post or contact me. A brief look at your site showed a very reasonable fee for setting up a company, which I am sure I will need help with.

The first stage before you set up the company is to obtain the visa. If you decide to go with the "B" you need a Thai company to sponsor you which we can do.

Your company is formed and then you apply for the work permit. At that point you need to know if you will employ 4 Thais with at least a minimum salary of 5,250 per month and you yourself will get a minimum salary of 60,000 Baht per month. If the answer is "yes" then you can apply for the extension of stay based on business. Every year you would renew your work permit and visa. You do not need to leave Thailand ever with this type of visa.

If the answer is "no" on employing 4 Thais and your minimum salary, you simply do a visa run every 90 days and extend your work permit. You do not need any Thai employees or a minimum salary of 60,000 Baht with this method. Every year you simply obtain a multi entry non B with your company being the sponsor. The work permit would also be renewed on an annual basis.

We look forward to helping you.

www.lawyer.th.com

[seeker108]

Thanks Sunbelt for the quick and clear responses. This now brings up a couple of other questions. Also I woud like to clarify two points that seem contradictory to my untrained eyes which I will highlight in Red

The advantage of a "B” is if you apply for the extension of stay based on business you will not need to change from another class of visa to "B" to do the extension of stay.  If you plan on doing visa runs every 90 days then the class of visa is meaningless.  .....

The first stage before you set up the company is to obtain the visa. If you decide to go with the "B" you need a Thai company to sponsor you which we can do.

Your company is formed and then you apply for the work permit. At that point you need to know if you will employ 4 Thais with at least a minimum salary of 5,250 per month and you yourself will get a minimum salary of 60,000 Baht per month. If the answer is "yes" then you can apply for the extension of stay based on business. Every year you would renew your work permit and visa. You do not need to leave Thailand ever with this type of visa.

If the answer is "no" on employing 4 Thais and your minimum salary, you simply do a visa run every 90 days and extend your work permit. You do not need any Thai employees or a minimum salary of 60,000 Baht with this method. Every year you simply obtain a multi entry non B with your company being the sponsor. The work permit would also be renewed on an annual basis.

We look forward to helping you.

www.lawyer.th.com

<{POST_SNAPBACK}>

Re help, you already greatly have. And since we are doing this in the context of the forum, hopefully it is helping many others as well.

From the first comment in red I inferred that I could come in with the O and continue with that if I were to take the 90 day visa run option. In the second comment in red you seem to specify that it must be the non B. Is that the case or could one obtain a renewel of any of the appropriate non imm visas and here you were just using the non B as one example?

On to other questions that your replies have prompted:

What are the different legal/governmental expenses (both initial and annual) involved in setting up the two different types of companies that you mention? (let's call them 'small' and 'big' for simplicity).

Most likely within the first year, if all goes even half well, I will have no choice but to chose the 'big' company option (if I have not done so, right from the beginning), but let's look at the small option first as that seems less straight forward and may be of more interest to others reading this in any case.

Let's see if I have this straight and let's assume that I decide to come in with the non O and therefor the visa step is alredy accomplished.

Ok, then the next step is to legally set up the 'small' company and apply for my work permit on this basis (all needing to be done within the first 90 days). Now comes a tricky part. If I have a 1 year non O (or B for that matter) visa and I have an established business and a work permit, why am I now needing to make a visa run?

I am not doubting you, but just wondering why. If I am in on the non O and I am still wanting to look at my options for either doing business or retiring then I would normally be stamped as in process and then granted a 1 year renewal within some short time after the interview and this could go on every year like this, never needing to leave the country (or have I got this wrong and this is only possible if you have chosen the retirement option?).

Hmm, getting late here and I need to hit the sack. The rest of the questions will need to wait.

thanks again.

seeker

[Khutan]

<snip> At that point you need to know if you will employ 4 Thais with at least a minimum salary of 5,250 per month and you yourself will get a minimum salary of 60,000 Baht per month.<snip>www.lawyer.th.com

<{POST_SNAPBACK}>

Don't forget your maid, driver and gardener cook etc can be employees of your company, people seem to forget that.

Worst case, if you have a G/f etc who sends regular money home, the recipiants of that money can also become employees.

It is suprisingly easy to find 4 employees.

[Sunbelt Asia]

From the first comment in red I inferred that I could come in with the O and continue with that if I were to take the 90 day visa run option. In the second comment in red you seem to specify that it must be the non B. Is that the case or could one obtain a renewel of any of the appropriate non imm visas and here you were just using the non B as one example?

See below...

  If you plan on doing visa runs every 90 days then the class of visa is meaningless.  .....

Correct

Every year you simply obtain a multi entry non B with your company being the sponsor.

Still correct. The difference is the first year it was complicated for you to obtain the non B because you had no company and no work permit. The second year you had both so you would apply for the non B. If you wanted to apply instead for the non-O and get the work permit renewal, you could as well.

What are the different legal/governmental expenses (both initial and annual) involved in setting up the two different types of companies that you mention? (let's call them 'small' and 'big' for simplicity).

The companies are the same.. Thai Limited company.

If you had 4 Thais employed per month. This is 21,000 Baht per month times 12 months = 252,000 Baht per year

Your salary is 60,000 Baht times 12 = 720,000 Baht

Social fund is 1,750 per month times 12 = 21,000 Baht

Total is 993,000 Baht

Second example with Thai Visa runs...

No Thais and a salary of 30,000 Baht would be cost of 360,000 Baht.

The government could care less if you are getting this salary as long as you pay tax so this would come out to 18,000 Baht in withholding tax.

Now comes a tricky part. If I have a 1 year non O (or B for that matter) visa and I have an established business and a work permit, why am I now needing to make a visa run?

Because immigration has tougher requirements than the Labor Dept.

Immigration requires for an extension of stay permit based on business that 4 Thais must be employed at least at a minimum salary of 5,250 Baht per month and you need to pay tax at the salary of 60K per month as an American.

The Labor department does not require 4 Thais and the 60K salary. The Labor Dept. only require a non immigrant visa and a 2 million Baht registered capital company per work permit ( unless you get married to a Thai than its 1 million registered capital )

www.lawyer.th.com

[Sunbelt Asia]

Worst case, if you have a G/f etc who sends regular money home, the recipiants of that money can also become employees.

It is suprisingly easy to find 4 employees.

All is well, till Immigration visits and they give you 3 hours to produce these employees. In the old days, ghost employees were common. Now the Immigration Dept checks offices.

www.lawyer.th.com

[seeker108]

Again, great replies, Sunbelt. By the way, please email or PM me so we can be in contact with regard to setting up the company.

And thank you also Mattnich for your input.

Now a couple of more questions. What are the requirements with the 2 million baht capitalization? Where does the money need to be and how often is it looked for?

Next, I read in one post that it was a nightmare to switch from one visa status to another. Is this true? What is involved?

If I come in on the non-imm O, toward the end of the first 90 days when I go in to immigration to apply for the 1 year extension, can the extension be granted just on the basis of still looking around and considering my options or do I need to commit one way or the other to either retirement or business?

If I can't get a "look at options" 1 year extension and I plan on setting up the ‘big’ Thai limited company within say the next 180 days then which option (90 day run or retirement status) would it be easier to switch from (to the B visa based on business). If the switching process is about equal then I would opt for getting the retirement status at the end of that first 90 days (even if it costs a few more baht, and assuming I do not yet need to engage in anything resembling work) as visa runs are not high on my pleasure list.

I look forward to the next installment from sunbelt or any of our other resident visa gurus.

[seeker108]

I just realized that I have not touched on the non-profit aspect of things. Are there any special requirements for setting up a non-profit company and can one get the B visa having set up a non-profit (assuming still the 4 Thai employees at 5,250 and self at 60K)?

[seeker108]

Somehow I had previously had the wrong impression that getting a B visa was quite a bit more difficult. This is not the case. I just spoke with 3 different honorary consulates in the states. You can go through them and it is the same cost ($50 single entry; $125 multiole entry), time (1 day processing) and requirements except that you also need a letter (which, according to one honorary consul, you can write yourself) stating that you are going to Thailand to look at the possibility of starting up a business).

So now I plan on coming in with the non B and therefor no need to worry about any possible complication of switching visa status in LOS. I will also pay the extra $75 and get the multiple entry so that I am not rushed in setting up the 'big' company, hiring 4 employees, paying more taxes, etc and can do 1 or more 90 day visa runs while everything is coming together if need be. Probably will be setup well before 90 days, but the $75 will have bought peace of mind. This, I believe, now ends all of my visa and extension questions.

Still there is the question of where the 2 million baht must reside. Does it need to come into Thailand or can I show these funds in a foreign bank? I have looked a bit more at www.lawyer.th.com and see that there will be all sorts of interesting things that will need to be explored.

seeker

[seeker108]

More questions about non-profits.

Do they have a seperate legal existence in Thailand

Can they be set up under the Amity treaty?

Do they receive any special considerations?

Thanks all for any help on this new twist.

[Sunbelt Asia]

What are the requirements with the 2 million baht capitalization? Where does the money need to be and how often is it looked for?

It should be 25% cash within 60 days of the company being formed. The remaining 75% can be cash or non cash such as equipment, inventory, "Knowledge and Know-how," or even a Directors loan. No one looks at your bank account unless you formed a Thai Limited Partnership.

Next, I read in one post that it was a nightmare to switch from one visa status to another. Is this true? What is involved?

Depends. If it is from a 60 day tourist or non B to a "O" based on retirement. Not a problem. If you want to change a "O" or 60 day tourist to a "B" more difficult as you need to show your original diploma. Which has to be certified by their Embassy, Have it translated and then certified twice by the Ministry of Foreign Affairs.

If I come in on the non-imm O, toward the end of the first 90 days when I go in to immigration to apply for the 1 year extension, can the extension be granted just on the basis of still looking around and considering my options or do I need to commit one way or the other to either retirement or business?

Need to commit.

would it be easier to switch from (to the B visa based on business). If the switching process is about equal then I would opt for getting the retirement status at the end of that first 90 days (even if it costs a few more baht, and assuming I do not yet need to engage in anything resembling work) as visa runs are not high on my pleasure list.

The key is if you have the diploma and resume showing your job experience for the business you will be the Managing Director. Remember Immigration is tougher than the Labor Dept. Labor Dept will not need to see your diploma unless you are a Teacher or you have a Teachers certificate.

Still there is the question of where the 2 million baht must reside. Does it need to come into Thailand or can I show these funds in a foreign bank?

It does not matter where the source of these funds came from in the framework of your shareholding structure. 25% of the registered capital should be paid up within 60 days and deposited in a local bank account in your company’s name.

www.lawyer.th.com

[Sunbelt Asia]

More questions about non-profits

Do they have a seperate legal existence in Thailand.

Yes

Can they be set up under the Amity treaty?

No profit only with a Limited Company. Partnership,Representative Office,Branch Office,Sole Proprietorship,and U.S. Subsidiary

www.lawyer.th.com

[seeker108]

More questions about non-profits

Do they have a seperate legal existence in Thailand.

Yes

Can they be set up under the Amity treaty?

No profit only with a Limited Company. Partnership,Representative Office,Branch Office,Sole Proprietorship,and U.S. Subsidiary

www.lawyer.th.com

<{POST_SNAPBACK}>

Thanks Sunbelt,

Would you mind explaining briefly here what are the advantages, limitations and requirements for setting up an Amity company? Or again you might just want to post a link to somewhere that explains this.

Similarly what if any advantages are there for setting up a non-profit? Also is it much more complicated to set up and maintain a non-profit? Anyone?

[seeker108]

I recently posted the following in another thread but thought it would be good to post it here for those interested in the non B visa option (which may be particularly attractive to those under 50 looking for a long-stay option):

[comparing to non O visa] The same $125 fee can be paid for the 1 year multiple-entry B visa and with this you can do the same 90 day visa runs if this is what you end up wanting to do.

Alternatively, with this visa, you have the option to set up a limited Thai corporation within your first 90 days [or further down the road] without much expense or hassle. Then you never need leave Thailand again. You can keep this visa active and continue to get your extensions and you also need not put time and money into changing to the retirement visa and extensions in two years. However, if you do not intend to ever generate income through this new company of yours then maybe you will want to change to the OA (retirement) in 2 years as that will cost less to maintain. But at least with this option you still never need do visa runs starting immediately. [reference to this thread omitted]

The other advantage is if you do want to do anything even vaguely resembling work (like maybe do a fix up job on your home yourself) you are covered (assuming this is listed as your place of work if someone wanted to get real technical about it).

Speaking of home, from what I understand, having a real corporation established also allows you to own land and buildings through the corporation. Also as an American you can set up the favorable Amity treaty type company. I am not a visa or incorpoation expert by any stretch and some of what I just said I have simplified for the sake of this post, but it seems to me that this route has many advantages.

Can anyone think of any disadvantage of anyone getting the non-imm B as opposed to the O, even if they do not end up choosing to set up a business after looking into it once they are in Thailand?

I suppose if someone is over 50 and absolutely set in their mind on getting the OA (and no chance they will change their mind once in Thailand) then I guess there is no point in getting the B. But still no real disadvantage as changing from B to O once in Thailand, according to the folks at Sunbelt Asia, is not a problem. However going from O to B in Thailand is apparently more complicated.

For me I have no choice but to get the non B as I really do want to establish something serious in Thailand, but, now that I am aware of the advantages, I would probably still go the non B route even though I am eligible for the OA.

Re consulates definitely go through an honorary consulate and not an official one like the one in Los Angeles. Much more user friendly.

Here is a listing of the ones in the USA:

http://www.thaiembdc.org/directry/direc_e.htm#AL

Feel free to email or PM me for more details.

BTW, I have finally decided to go through the Alabama office for a number of reasons, one minor one being that they are willing to send back the passport via FedEx rather than USPS (Denver, though very helpful, will only use USPS).

Good luck all!

[lopburi3]

Above post makes some general assumptions that I believe are iffy if not outright wrong.

A work permit is specific and is the document that allows work - owning a company is not a work permit.

A B visa, especially a multi entry, is not normally issued on your good looks and will not be issued in this area as easily as in the USA. If you intend to extend there will be much higher costs involved than retirement.

Owning land by a company that has no real business would indicate an attempt to circumvent the foreign land ownership laws of Thailand IMO and could come back to bite.

Keeping a company going is not a cost free affair and will be much more expensive than the 1,900 annual fee for a retirement extension.

If you plan to retire the visa to get is for that purpose. You can always change your mind later and the cost will be much less than setting up an unneeded company.

[Sunbelt Asia]

Would you mind explaining briefly here what are the advantages, limitations and requirements for setting up an Amity company? Or again you might just want to post a link to somewhere that explains this.

The Treaty allows American companies to maintain a majority shareholding or to wholly own its company, branch office or representative office located in Thailand,

American companies receive national treatment. That is, they may engage in business on the same basis as Thai companies, and are exempt from most of the restrictions on foreign investment imposed by the Alien Business Law of 1972.

Some restrictions on American investment still exist. They include:

Owning land;

Engaging in the business of inland communication;

Engaging in inland transportation and communication industries;

Engaging in fiduciary functions;

Engaging in banking involving depository functions;

Engaging in domestic trade in indigenous agricultural products;

Exploiting land or other natural resources

The Application Procedures for a Company to Obtain Treaty Certification

To qualify for benefits under the Treaty of Amity, the steps below must be completed.

Company Limited:

The Department of Business Development: The applicant obtains documents

verifying that the company has been registered in compliance with Thai law.

The U.S. Commercial Service: The applicant submits documents confirming that a majority of the company's shareholders are US citizens.

The Department of Business Development: The applicant submits documentation required to obtain Alien Business License.

Partnership,Representative Office,Branch Office,Sole Proprietorship,ans U.S. Subsidiary:

The U.S. Commercial Service: The applicant submits documents confirming that a majority of the company's shareholders are US citizens.

The Department of Business Development: The applicant submits documentation required to obtain Alien Business License.

Similarly what if any advantages are there for setting up a non-profit?

No advantage versus a profit Amity company.

Also is it much more complicated to set up and maintain a non-profit? Anyone?

Click here to see the requirements...

http://www.lawyer.th.com/foundationestablishment.pdf

www.lawyer.th.com

[seeker108]

Above post makes some general assumptions that I believe are iffy if not outright wrong.

<{POST_SNAPBACK}>

Phew! Lop, since your posts are normally spot on, I'll forgive you that general remark this time.

I just carefully read again the post you refer to and all of the posts in this thread. I see nothing wrong or iffy in what I said. But let's take your points one at a time.

A work permit is specific and is the document that allows work - owning a company is not a work permit.

Never said a visa was a permit. If you can find where I did please let me know. I did not mention the work permit in this post as 1.) I was trying to keep the post simple (as I admitted) 2.) It was not pertinent to any of the three points I was trying to make in this post, and 3.) The work permit was already mentioned several times in this thread including in my original post where I said "... just the fact that I am engaged in anything resembling work means that I will need a work permit".

One of the main points of this post however is that if you come in to Thailand on a B visa as opposed to an O visa you do then have the opportunity to establish a business (and get a work permit on that basis) and then engage in profitable activity as your own boss if you so choose. You cannot do this on an O visa without going through the apparently complex process of switching from an O to a B visa.

At this point we are simply talking about keeping all options open as painlessly as possible for as long as possible. And also talking about keeping open-minded to the possibility that after we get to Thailand something might tickle our fancy (business-wise gentlemen) and we (in the over 50 group) may want to do something more stimulating (with our brains, that is) other than "retire" completely or unlawfully operate in a state of semi-retirement.

A B visa, especially a multi entry, is not normally issued on your good looks and will not be issued in this area as easily as in the USA.  If you intend to extend there will be much higher costs involved than retirement.

If by "in this area" you mean Thailand, then that is exactly my point! Getting a B visa in Thailand having come in on any other visa ranges from a royal pain in the backside to impossible. However, according to one honorary consul (and the staff members of two additional honorary consulates that I spoke with today), getting the B visa, here in the USA, (at least from their offices) was no more complicated than adding a letter to the packet of items to be sent, stating that I was going to Thailand to investigate the possibility of establishing a business there. (Not even my 'good looks' were required)

Regarding the much higher costs that you mention, I guess you are referring to the costs of setting up the business as I believe the actual extension costs for either visa are fairly nominal (and probably the same?). Yes there is the expense of setting up the business and I have not yet calculated the total damage (and am still waiting to hear directly from someone at Sunbelt Asia so that I can realistically calculate all possible costs), but it seems pretty reasonable thus far. However with this you also now have the opportunity to (legally) earn an unlimited amount of income that will hopefully more than offset any expense of setting up the business, thereby actually making the ultimate cost of the B extension less than that of the OA extension.

Also, let's face it; many in Thailand on an OA visa do things that are anywhere from a slight bending of the retirement rules to outright ignoring them. For me the cost of setting up a business is not so great as the cost of getting put in a Thai pokey or of getting booted out of the kingdom would be. Maybe that would never happen with the minor bends, but think of the convenience of not having to hide what you are doing (for those who are). You could, for example, legally hire 4 good personal assistants, managers, accountants, whatever, to help you manage your overseas property rental business and thereby double or triple your earning potential without much expense. Not to mention that you need not worry that if you upset someone, that he/she will go to immigration and report that you are working while in Thailand.

Owning land by a company that has no real business would indicate an attempt to circumvent the foreign land ownership laws of Thailand IMO and could come back to bite.

Absolutely no argument there and I hope you noticed that I have been talking about doing everything 100% legitimate, right from the beginning, and that when I mentioned this, I did say "having a real corporation established" I mention this not as the reason for setting up the business, but just as one more possible benefit of doing it (if you need one more).

Keeping a company going is not a cost free affair and will be much more expensive than the 1,900 annual fee for a retirement extension.

[see above] But I also want to point out here, that those under 50 (as most everyone is already aware) do not have the option of a retirement extension. This last post of mine was originally written in another thread to someone who was still 2 years away from OA but wanted to avoid visa runs. To my mind going to the expense of setting up a corporation just to avoid runs without any attempt to make a company profitable is silly, but to do it while creating profit is a great idea for those under 50. Again, in my mind, it seems a much better option than the investment option for avoiding visa runs.

If you plan to retire the visa to get is for that purpose.  You can always change your mind later and the cost will be much less than setting up an unneeded company.

Here we need to differentiate between getting a visa and extending a visa (which is when you potentially get involved in setting up a company). I agree that if you are eligible for an extension based on retirement and by the time you need to get that extension you have decided that you do not want to do any business or can not think of one that will pay for itself then, by all means, apply for the OA. However I still stick by the thinking that if there is no real disadvantage in coming in with a B (and if you can easily obtain one from your honorary consul) then why not leave the business option open for yourself as changing from B to O once in Thailand, according to the folks at Sunbelt Asia, is not a problem. However going from O to B in Thailand is apparently much more complicated."

If after, say 80 days, you decide that you do not want to engage in business of any sort, even some type of business back in your home country that you manage or consult for from Thailand, then make the easy switch to O and extend on the basis of retirement. Perfectly valid to say that you wanted to look at the option of setting up a business here, but decided it was not your cup of tea and you have decided to simply enjoy the 'life of Riley'.

Same goes for someone who goes, say 2 years, on the 'no visa run' business program until they turn 50 and by then find that they just can't seem to more than break even or simply have no desire to continue in business of any sort. If you can no longer justify the expense, then call it quits and officially retire.

Now after all of this typing don't you think Sunbelt Asia should give me a piece of the commissions generated by the hundreds of you deciding to come clean and officially set up a business.

seeker

[seeker108]

Brilliant as usual Sunbelt. I will look at this in more detail after a bit of shuteye.

Please do email or PM me in the mean time so we can get down to the nitty gritty of preparing to set up some sort of organization.

Then I can post the details here of just how easy and inexpensive the process was to encourage others along the path of further financial freedom.

seeker

[seeker108]

Sunbelt and others - I think it would be good to take a closer look at what real expenses there are in setting up and maintaining a company, for my sake as well as others who may be contemplating this business option. Again, one of the real values in setting up a business (and getting a work permit) is that you then can legally work and make money while in the kingdom. You no longer need to look over your shoulder when you do any work for your "wife's business" or when doing work on or hiring someone to help work on your foreign based business.

As Sunbelt mentioned earlier, there are 2 categories of Thai limited companies that can be set up that I have been calling 'big' and 'small' for simplicity.

With the help of those of you who are more knowledgeable, I would like to outline the expenses of each of these. The small company means less expenses but it also means you still need to do 90-day runs, which for those who want to go out of the country a few times a year anyway may be the better option.

For this purpose I would like to overlook the owner's salary (but not your income taxes) as an expense because it is going back in your own pocket. Further, even though I will list them, I will not count employee salaries in my mind because if you are setting up a 'big' company then this means that you really plan on generating a real income and if you can not generate enough income to offset at least this expense or at least get good value for your money for what salaries you are paying then you really should be just on an OA and not thinking of business at all.

In looking at http://www.lawyer.th.com/company-registration.asp I see set up expenses of somewhere between 20,000 and 40,000 baht depending on whether you are married to a Thai or not, how much capitalization you need or want and depending on how much leg work you do yourself. Can anyone tell us which, if any of these government fees need to be paid annually? They seem to be one-time fees, but I would like to be sure.

With a 'small' company what is the minimum salary you can pay yourself? Is it 30,000 baht monthly? Or would they allow as little as 10,000 baht? Anyway figure an annual tax expense of 18,000 or less (again, no need to consider anything higher because if you are paying more, it means you have more than enough income to offset it.

Are there any other expenses worth considering for the 'small' company?

For the 'big' company you have the same expenses as above except that the minimum annual income tax seems to be 36,000 baht even if you don't make any income. Also Sunbelt has outlined the following expenses:

If you had 4 Thais employed per month. This is 21,000 Baht per month times 12 months = 252,000 Baht per year

Social fund is 1,750 per month times 12 = 21,000 Baht

As long as you have a plan for generating some income even the 'big' company option seems pretty reasonable. Especially if one of the employees is your significant other and if the others are employees you might have hired anyway.

Now, what significant expenses have been left out, either initial or annual?

Comments?

[Sunbelt Asia]

depending on how much leg work you do yourself.

What legwork were you thinking of doing?

Can anyone tell us which, if any of these government fees need to be paid annually?They seem to be one-time fees, but I would like to be sure.

one time charges except for the work permit

With a 'small' company what is the minimum salary you can pay yourself? Is it 30,000 baht monthly? Or would they allow as little as 10,000 baht? Anyway figure an annual tax expense of 18,000 or less

33,000 Baht per month for a renewal of the work permit

Are there any other expenses worth considering for the 'small' company?

Withholding tax filing and Vat filing. Our fee is 2,500 Baht per month.

For the 'big' company you have the same expenses as above except that the minimum annual income tax seems to be 36,000 baht even if you don't make any income

Depends on your nationality and the salary required per month via Immigration for an extension of stay based on business

Canada, Japan, United States

60,000

Europe (inc. United Kingdom), Australia

50,000

Hong Kong, Republic of Korea, Singapore, Taiwan

45,000

India, Malaysia, Middle East

45,000

China, Indonesia, Philippines

35,000

Africa (all), Cambodia, Lao PDR, Myanmar, Viet Nam

25,000

Persons working for newspapers in Thailand

20,000

Withholding tax and Social Fund filing filing and Vat filing. Our fee is 2,500 Baht per month.

Social Fund is 5% of the employees salary( capped at 750 Baht per employee) which has to be matched by the corporation.

www.lawyer.th.com

[Steve2UK]

I'm following this thread with very close interest (as I suspect are many others) - because I find myself in a very similar situation to Seeker108: I qualify for the O-A "retirement" visa but I would like to keep the option open to undertake work/business activity legitimately in some form or other - through my own company.

My researches bear out what has been said so far. Getting a "B" from an honorary consulate (UK, in my case) seems to be relatively painless - as is switching from that "B" to "O-A" once in Thailand - whereas getting or converting to a "B" in Thailand is plainly more of a pain.

The obvious downside of the "B" compared to the "O-A" is the need for 90-day visa runs - but that's no big deal as far as I'm concerned. It's the basic annual running costs of the next (company) stage that I'm still unclear about. I have in mind what Seeker108 describes as the "small" company i.e. without Thai employees and therefore without the facility to apply for annual visa extensions. Depending on how things developed for me, I might then go on to "big" company at a later stage.

So, like Seeker108, I'm looking forward to seeing just what those costs are.

Edit: Just one further thought - I see reference to a "diploma" and "resume" for your chosen sphere of activity. The resume I understand well enough, but is the diploma necessarily some kind of degree? I didn't complete my university course but I then went on to get a diploma in stage management from the Royal Academy of Dramatic Art in London. Does that count if I should need one at some stage - and, if so, would it be relevant for work/business activity that is not theatre/TV/film-related?

Edited November 18, 2005 by Steve2UK

[seeker108]

depending on how much leg work you do yourself.

What legwork were you thinking of doing?

<{POST_SNAPBACK}>

For myself, as I am fairly clueless on setting up a business in Thailand and all that is involved with work permits, probably not much initially, except get the non B here in USA myself. Others who are more savy about such things may choose to handle getting the work permit themselves, for example and save a bit on costs there, if finances are tight for them.

More later as I must dash off to an appointment.

[seeker108]

I'm following this thread with very close interest (as I suspect are many others)

<{POST_SNAPBACK}>

Hi Steve, I am glad to hear that you also are finding this useful. I know in my first stays in Thailand I never even considered setting up a business simply because of the hurdle of not knowing what was involved and suspecting that it would be outrageously expensive even to find out what was involved. Now with all of the helpful information on Thai Visa in general and especially with the helpful information that Sunbelt Asia has posted in this thread I find that I can easily and affordably set up a company in Thailand

The obvious downside of the "B" compared to the "O-A" is the need for 90-day visa runs - but that's no big deal as far as I'm concerned.

This 'downside', as you note below, is only with the 'small' company as the 'big' company does allow you the one year extension to your B visa.

It's the basic annual running costs of the next (company) stage that I'm still unclear about. I have in mind what Seeker108 describes as the "small" company i.e. without Thai employees and therefore without the facility to apply for annual visa extensions. Depending on how things developed for me, I might then go on to "big" company at a later stage.

So, like Seeker108, I'm looking forward to seeing just what those costs are.

It seems from what Sunbelt Asia has said that your annual expenses for the 'small' company will be Baht 19,800 for income tax on your salary (whether you earn Baht 33,000 monthly or not, if you want to be able to renew your work permit. I suppose if you end up making no income and you don't care about renewing your work permit, then maybe you will not have even this expense).

Other than this, from what we have heard so far, it seems that your only other possible expenses will be paying someone (like Sunbelt Asia) a somewhat nominal fee to do your various filings for you, if you do not wish to do this yourself or do not have someone in your office who is capable of doing it for you. If you are not producing any goods then VAT probably will not apply to you.

Again, I am a real newbie with this, so if anyone else can think of any other possible expenses for the 'small' company, please let us know. There must be something else. This seems too reasonable considering that you can now earn as much money as you are capable of while residing in paradise.

Here is some useful information from http://www.lawyer.th.com/QR-start-a-business-in-thailand.asp

REPORTING REQUIREMENTS

Companies must keep accurate books and follow the accounting procedures which are specified in the Accounts Act, the Civil and Commercial Code and the Revenue Code. Documents may be prepared in any language, provided that a Thai translation is attached. All accounting entries should be typewritten, printed or written in ink.

Specifically, Section 1206 of the Civil and Commercial Code provides rules on the accounts that should be maintained as follows:

"The directors must cause true accounts to be kept:

Of the sums received and expended by the company and of the matters in respect of which each receipt or expenditure takes place.

Of the assets and liabilities of the company."

1/ Imposition of Taxes

Companies are required to withhold income tax from the salary of all regular employees.

Value Added Tax of seven per cent is levied on the value added at each stage of the production process, and is applicable to most firms. This VAT must be paid every month.

A specific business tax is levied on companies that engage in several categories of businesses that are not subject to VAT. This tax is based on gross receipts, at a variable rate ranging from 0.1 % to 3.0 %.

Corporate income tax is 30 % of net profits and is due twice each economic year. A mid-year profit forecast entails advance payment of these corporate taxes.

Edit: Just one further thought - I see reference to a "diploma" and "resume" for your chosen sphere of activity. The resume I understand well enough, but is the diploma necessarily some kind of degree? I didn't complete my university course but I then went on to get a diploma in stage management from the Royal Academy of Dramatic Art in London. Does that count if I should need one at some stage - and, if so, would it be relevant for work/business activity that is not theatre/TV/film-related?

I think this would only come up when originally applying for your visa in your home country (effectively making it a non-issue). Or when applying for a change of visa status (O to B ) in Thailand, where it may be a big issue.

Does anyone know if this comes up as an issue at the time of applying for your 1 year extension for a non-imm B visa? (Even if so, this would not apply to you Steve if you are choosing the 'small' company 90-day run route.)

I hope wiser heads will look at what I have said and correct any errors of interpretation from my side and especially add more information that you may be aware of.

Cheers,

seeker

[seeker108]

Depends on your nationality and the salary required per month via Immigration for an extension of stay based on business .......

Social Fund is 5% of the employees salary( capped at 750 Baht per employee) which has to be matched by the corporation.

www.lawyer.th.com

<{POST_SNAPBACK}>

Thanks again Sunbelt Asia for all of your brilliant help here. I hope that all of the wonderful information here helps remove the "fear of the unknown" hurdle for hundreds of others as it has for me and they all come flocking to you with their requests to set up a company.

seeker

P.S. For those who are not yet in Thailand, don't forget that setting up your company is easier if you enter Thailand with the non-imm B visa rather than the non-imm O visa.

[Sunbelt Asia]

Just one further thought - I see reference to a "diploma" and "resume" for your chosen sphere of activity

Diploma is needed if you change from one class of visa to a 'B" visa. This is Immigrations requirement. However if you get the "B" visa outside Thailand then of course the Thai Embassy/ Consulate in almost all cases will not required a diploma. Also keep in mind a "B" visa is only important if you will do an extension of stay based on business. If you will have another class of visa ( other than retirement otr tourist) you can apply for a work permit. The Labor Dept could care less about the diploma unless you are teaching than you need a Teachers cert or a diploma.

www.lawyer.th.com

[Sunbelt Asia]

It seems from what Sunbelt Asia has said that your annual expenses for the 'small' company will be Baht 19,800 for income tax on your salary (whether you earn Baht 33,000 monthly or not, if you want to be able to renew your work permit.

Because of exemptions this is just 18,000 Baht per year not 19,800 Baht.

Again, I am a real newbie with this, so if anyone else can think of any other possible expenses for the 'small' company, please let us know. There must be something else. This seems too reasonable considering that you can now earn as much money as you are capable of while residing in paradise.

Registered company address if you don't have one.

http://www.lawyer.th.com/virtual-office.asp

Thanks again Sunbelt Asia for all of your brilliant help here. I hope that all of the wonderful information here helps remove the "fear of the unknown" hurdle for hundreds of others as it has for me and they all come flocking to you with their requests to set up a company.

Thanks for the kind words.

www.lawyer.th.com

[seeker108]

Hi all,

I've been digging into some of the old posts on threads similar to this one and I see how rules have changed from time to time. However, one constant I see is that Greg (Sunbelt Asia) really knows what he is talking about. Same goes for a couple of others who post here regularly. I'm glad there are guys like you out there helping the rest of us falang to navigate these muddy waters.

Quick question: what is this "Alien Business License" and what are the implications for the 'big' and 'small' companies? Sounds like I as the MD of a 'big' company will need to get this. Also it sounded like in the past, at least, that with this they really did look for the 2 million baht to be on hand. I hope this is more of a past history situation.

Greg, George and other wise gurus of this forum I wonder what you gents would think about having a blog on TV somewhere that lays out all of the basic information (kept updated by the gurus as the environment changes) and answers the most common questions about setting up the various kinds of companies. Then uninformed newbies like myself could be referred there so that you don't need to keep answering the same basic questions. You could then just focus on reinforcing what it says there or delving into some finer points here. just a thought to save you time and maybe help the newbies more quickly get over that hurdle of the unknown.

seeker

[Sunbelt Asia]

[

I've been digging into some of the old posts on threads similar to this one and I see how rules have changed from time to time.  However, one constant I see is that Greg (Sunbelt Asia) really knows what he is talking about.  Same goes for a couple of others who post here regularly.  I'm glad there are guys like you out there helping the rest of us falang to navigate these muddy waters

Thank you again for the kind words.

Quick question: what is this "Alien Business License" and what are the implications for the 'big' and 'small' companies?  Sounds like I as the MD of a 'big' company will need to get this. 

As you are an American you do not need to obtain this. What you should file is the application for certification of a Treaty company that allows you to have the same rights as Thais.

The Alien Business Act describes an alien as a natural person or juristic entity without Thai nationality, including a company with half or more than half if its shares held by aliens, or company with half or more than half of its shareholders being aliens.

The Act classifies businesses into 3 categories, details of which may be summarized as follows:

Category A

Businesses under this category is strictly prohibited to foreign individuals or juristic entities for special reasons. Such restricted businesses include Newspaper publication, radio or television station business , Rice, filed crops or horticultural farming, Livestock farming etc.

Category B

Businesses under this category is also prohibited to foreigners, but may be permitted if the business entity concerned receives the approval of the Cabinet. Such businesses are as follows

1. Businesses involving national safety or security.

2. Businesses affecting arts, culture, traditional customs and folk handicrafts.

3. Businesses affecting natural resources or the environment

Category C

Businesses under this category are open to foreigners but are subject to receipt of approval from the Committee. Such businesses may include Rice farming and flour production, Fishery business matters, Accounting service business, Legal service business etc.

Other businesses not mentioned in these three categories are opened to aliens but must have a minimum capital of 2,000,000 Baht.

In the case of doing business carried on by an alien, a minimum capital is 3,000,000 Baht. In the case of businesses under Category B, at least 2/5 of the directors must be Thai nationals and a minimum of 40 percent of the shares must be held by Thai persons, which minimum may be reduced to 25 percent by Cabinet approval. Businesses under Categories B or C may be subject to conditions such as minimum debt/equity ratio, number of alien directors resident in Thailand, period of investment, technology and assets, etc.

Under Amity, you have none of these requirementrs of minimum debt/equity ratio, number of alien directors resident in Thailand, period of investment, technology and assets, etc and no requirement to show funds in the bank like under the Alien Business License. Be aware however the register capital for a Amity treaty company will be increased to 3 million Baht in August 2009. Now it can be any amount above 35 baht unless you are applying for a work permit. ( 1 million if married toi a Thai ( per work permit) or 2 million Baht if you are not.

Greg, George and other wise gurus of this forum I wonder what you gents would think about having a blog on TV somewhere that lays out all of the basic information (kept updated by the gurus as the environment changes) and answers the most common questions about setting up the various kinds of companies. Then uninformed newbies like myself could be referred there so that you don't need to keep answering the same basic questions. You could then just focus on reinforcing what it says there or delving into some finer points here. just a thought to save you time and maybe help the newbies more quickly get over that hurdle of the unknown.

Good idea except every case is so different than others. It could get quite confusing as the great thing about Thailand, you have many legal options.

www.lawyer.th.com

[d44]

Hi, one of the many lurkers here.

Other businesses not mentioned in these three categories are opened to aliens but must have a minimum capital of 2,000,000 Baht.

Is this 2M registered/25% paid, or 2M paid?

In the case of doing business carried on by an alien, a minimum capital is 3,000,000 Baht.

What do you mean by that? Taking over an existing business?

How much does obtaining an alien business license add to setup cost ?

With regard to the 1 year extension; is the requirement 4 thais per 1 year extension application, or per farang ?

i.e. 4M registered capital, 4 thais employed, 1 farang doing visa runs, 1 farang applying for a 1 year extension. Would that be acceptable?

Also, what if a 1 year extension is issued and during any time of that year the number of thai employees drops below 4?

thanks

[Sunbelt Asia]

Hi, one of the many lurkers here.

Welcome to the board d44!

Is this 2M registered/25% paid, or 2M paid?

In this case, paid up 100% in cash. In cases NOT involving the Alien Business License it is 25% paid up and nobody looks at your bank account.

What do you mean by that? Taking over an existing business?

In the case that this is Catagory "B" of the Foreign Business Act. Then you must invest at least 3 million cash with a Alien Business License. Please note if you have a Thai company that you only have 49% of the shares, this does not apply!

How much does obtaining an alien business license add to setup cost ?

Government fees for List 2 with the Alien business license at least 40,000 and 500,000 Baht is the max.

Government fees for List 3 are from 20,000 Baht to 250,000 Baht.

Our professional fees are 69,000 Baht and according to http://www.boi.go.th/english/how/typical_c..._a_business.asp

the typical professional fees are 200,000 Baht.

With regard to the 1 year extension; is the requirement 4 thais per 1 year extension application, or per farang ?

Per Foreigner

i.e. 4M registered capital, 4 thais employed, 1 farang doing visa runs, 1 farang applying for a 1 year extension.

No you need 8 Thais unless you timed it ok…after 1 foreigner gets approved for the extension of stay based on business ( After 3-4 months) then the second foreigner applies for a work permit and does the visa run. You would run into issues when you renew your extension of stay based on business for the first foreigner on the annual basis. That annual renewal would not go thru unless you hired 8 Thais.

Also, what if a 1 year extension is issued and during any time of that year the number of thai employees drops below 4?

No issues after you have been approved for the extension of stay. While it is " under consideration" this would be a concern.

www.lawyer.th.com