Starting Small And Growing

[tourleadersi]

Need some advice from the wise ones here. I am about to start a small business with a Thai friend (I am from the UK) and have a thai wife who could be there third shareholder. The thing is, we are really only just starting out, and initially the company will be small time. Would you advise that we go through the process of registering a Limited Company right from the get go, or does it make sense to run it as a sole proprietership for the first few months until it starts moving and then consider the options again? Whilst the expense is not considerable, it seems like a lot of effort at the start with something that is expected to grow relatively slowly. I do not expect the Thai friend to do a number on me, and once things are looking good then it will be time to lock things down a little more.

Back in the UK, often companies start out as sole traders or partnerships and expand from there, changing legal structure as they become more developed. Just wondering if it is the same here.

Dont need a work permit and no real assetts to risk at this time, in case you were wondering.

Thanks in advance for any shared thoughts.

[tombkk]

If this is a small company owned by your wife, sole proprietor might have the advance that you don't need to register for VAT. I am not sure about your business and the size (in turnover) you will initially have, but she can do business without registering a company, just paying Withholding Tax, using he national ID. There are some restrictions you might want to check.

A Co., Ltd. has the advantage that the liability is limited if you go bankrupt, but then again, the Managing Director is liable without limitation.

Please note that you do need a work permit, if you intend to work in that company. Signing a check already counts as work, let alone contacting customers. This means that you need to register that Co., Ltd. and comply with all the conditions.

[tourleadersi]

If this is a small company owned by your wife, sole proprietor might have the advance that you don't need to register for VAT. I am not sure about your business and the size (in turnover) you will initially have, but she can do business without registering a company, just paying Withholding Tax, using he national ID. There are some restrictions you might want to check.

A Co., Ltd. has the advantage that the liability is limited if you go bankrupt, but then again, the Managing Director is liable without limitation.

Please note that you do need a work permit, if you intend to work in that company. Signing a check already counts as work, let alone contacting customers. This means that you need to register that Co., Ltd. and comply with all the conditions.

Thanks for your advice Tom. Turnover is expected to be small at the beginning, probably no more than a couple of million baht in the first year. If I have a work permit for a job here already, does that cover me for helping out in another business, or does that work permit only allow me to work for the company that applied for it? I mean, do I technically need 2 work permits in that case?

[tombkk]

If this is a small company owned by your wife, sole proprietor might have the advance that you don't need to register for VAT. I am not sure about your business and the size (in turnover) you will initially have, but she can do business without registering a company, just paying Withholding Tax, using he national ID. There are some restrictions you might want to check.

A Co., Ltd. has the advantage that the liability is limited if you go bankrupt, but then again, the Managing Director is liable without limitation.

Please note that you do need a work permit, if you intend to work in that company. Signing a check already counts as work, let alone contacting customers. This means that you need to register that Co., Ltd. and comply with all the conditions.

Thanks for your advice Tom. Turnover is expected to be small at the beginning, probably no more than a couple of million baht in the first year. If I have a work permit for a job here already, does that cover me for helping out in another business, or does that work permit only allow me to work for the company that applied for it? I mean, do I technically need 2 work permits in that case?

A look at your work permit will answer your question. It clearly says for which company it permits you to work, even which location, and in which position.

If you also want to work for another company, you have to apply for a second work permit. That's possible, but the second company must fulfill the same conditions.

[raro]

If your turnover is a couple of million in the first year, this is not considered small and you need to be VAT registered (exceptions apply, transport business for instance). The maximum turnover is 1.2 Mio a year (if I remember correctly) for no VAT registration.

[Khun Jean]

It is 1.8m baht:

http://www.rd.go.th/publish/6043.0.html