Foreign Business Licence

[pj123]

I have been speaking to some Thai accountants about the options for setting-up a company in Thailand. I would prefer to have a Foreign Business Licence rather than depend on the nominee shareholder route. One accountant said that the drawback of a company with a Foreign Business Licence is that it draws more attention from the authorities. ie more visits, more paperwork, more hassle. I would be interested to hear the opinions of anyone with a Foreign Business Licence. Please PM me if you would rather discuss in private. Thanks!

[raro]

in the 15 years of doing business in Thailand I cannot recall anyone who actually has done that. There must be a reason for it...

[pj123]

in the 15 years of doing business in Thailand I cannot recall anyone who actually has done that. There must be a reason for it...

Do you mean applied for a foreign business licence? A FBL allows a foreigner 100% ownership of the company. No need for nominees.

[raro]

in the 15 years of doing business in Thailand I cannot recall anyone who actually has done that. There must be a reason for it...

Do you mean applied for a foreign business licence? A FBL allows a foreigner 100% ownership of the company. No need for nominees.

yes, right...that's what I mean. The FBL exists and can certainly be applied for, but I am not aware of one single company that actually id this. Either BoI or 49/51 shareholdership.

[pj123]

My interest in the FBL is to avoid the nominee shareholder route which makes me nervous. With the FBL I have control of the business without the use of nominees. My concern about using nominees is not with the nominees themselves but the prospect of the authorities taking too close a look at my business.

[keepwalkingthewalkingman]

what kind of buisiness you lie to do i think this is one of the mail and basic quetions

[pj123]

what kind of buisiness you lie to do i think this is one of the mail and basic quetions

Nothing unusual. I don't want to go into details but it would be a consultancy service for the construction industry.

[StoneSoup]

Here is the link to a listing of all companies that have obtained Foreign Business Licenses, or Foreign Business Certificates, between March 2000 and November 2011.

http://www.dbd.go.th/mainsite/fileadmin/statistic/2554/24/24_201111.pdf

FBC's are issued to:

BOI approved companies

Thai-US Amity Treaty Companies

Thai Rep and Thai Regional Offices

Info about application for FBL at http://www.dbd.go.th/mainsite/index.php?id=35&L=1

Using Thai nominee shareholders is an illegal practice, if done so as to circumvent the Foreign Business Act. With that said, a consulting business with 2,000,000 baht registered capital, and 51% Thai shareholdings is MUCH less likely to receive unusual scrutiny, compared to a company with a FBL This includes at Ministry of Commerce, Immigration, Work Permit Office, and Revenue Department.

To apply for an FBL, company must have at least 3,000,000 baht registered and paid up capital - and is very likely to have to show bank documentation that this has all been paid up. With 51% Thai shareholding, there is no such requirement to document actual bank deposit of share capital.

Because of the long-standing corporate tax rates, and withholding rates on dividends, it has been very uncommon for Thai private companies to issue dividends - and thus shareholders have rarely been rewarded - meaning that identity of shareholders have not usually been very important.

If the Thai government follows through on plans to reduce top corporate tax rate to 23% in 2012, and to 20% for 2013, it my become more common for Thai Private Companies to issue dividends.

Cheers.

SS

Indo-Siam

[pj123]

Here is the link to a listing of all companies that have obtained Foreign Business Licenses, or Foreign Business Certificates, between March 2000 and November 2011.

http://www.dbd.go.th/mainsite/fileadmin/statistic/2554/24/24_201111.pdf

FBC's are issued to:

BOI approved companies

Thai-US Amity Treaty Companies

Thai Rep and Thai Regional Offices

Info about application for FBL at http://www.dbd.go.th/mainsite/index.php?id=35&L=1

Using Thai nominee shareholders is an illegal practice, if done so as to circumvent the Foreign Business Act. With that said, a consulting business with 2,000,000 baht registered capital, and 51% Thai shareholdings is MUCH less likely to receive unusual scrutiny, compared to a company with a FBL This includes at Ministry of Commerce, Immigration, Work Permit Office, and Revenue Department.

To apply for an FBL, company must have at least 3,000,000 baht registered and paid up capital - and is very likely to have to show bank documentation that this has all been paid up. With 51% Thai shareholding, there is no such requirement to document actual bank deposit of share capital.

Because of the long-standing corporate tax rates, and withholding rates on dividends, it has been very uncommon for Thai private companies to issue dividends - and thus shareholders have rarely been rewarded - meaning that identity of shareholders have not usually been very important.

If the Thai government follows through on plans to reduce top corporate tax rate to 23% in 2012, and to 20% for 2013, it my become more common for Thai Private Companies to issue dividends.

Cheers.

SS

Indo-Siam

Thank you for your helpful reply.