I am setting up a company to hold my property (Condo) - Total Value about 12 million baht. I understand the Corporate tax rates are less (15%) for a company that is considered "Small Company" (Less than 5 million paid in capital - http://www.rd.go.th/publish/6044.0.html ) Is this just the cost of stock or does it include additional paid in capital and retained earnings?... Guess I could treat some of the 12 million as loan to company but then I'd have to pay myself interest and that would most likely be considered ordinary income to me?

How can I structure this so I can be considered a small company?

PS - I do not want to own my condo outright for personal reasons (Share with my Thai partner)

I am setting up a company to hold my property (Condo) - Total Value about 12 million baht. I understand the Corporate tax rates are less (15%) for a company that is considered "Small Company" (Less than 5 million paid in capital - http://www.rd.go.th/publish/6044.0.html ) Is this just the cost of stock or does it include additional paid in capital and retained earnings?... Guess I could treat some of the 12 million as loan to company but then I'd have to pay myself interest and that would most likely be considered ordinary income to me?

How can I structure this so I can be considered a small company?

PS - I do not want to own my condo outright for personal reasons (Share with my Thai partner)

It is registered paid up capital. I have seen a number of Thai companies holding 5 to 1 assets( with a loan) versus registered paid up capital in Thailand.

www.lawyer.th.com

The general corporate tax rate in Thailand is 30% for companies with a paid up share capital of more than 5 Million Thai Baht. The government has reduced corporate tax rates to promote specific business sectors and small and medium enterprises. The tax rate for companies with a paid up share capital not more than 5 Million Thai Baht at the end of its tax year shall be taxed at rate of 15% over the first one million Thai Baht profit, 25% over the profit between one million and three million and 30% for profits over three million Thai Baht.

Capital can have several meanings in Thai law, but paid up capital means the paid up registered share capital of the company. The total capital or money invested in the capital or assets of the company can be several times this amount.

Most foreign managed companies have a registered capital of 2 million Baht - as this will allow one foreigner in the company to apply for a work permit - 4 million Baht share capital will allow 2 foreigners to apply for a work permit.

C

N

The general corporate tax rate in Thailand is 30% for companies with a paid up share capital of more than 5 Million Thai Baht. The government has reduced corporate tax rates to promote specific business sectors and small and medium enterprises. The tax rate for companies with a paid up share capital not more than 5 Million Thai Baht at the end of its tax year shall be taxed at rate of 15% over the first one million Thai Baht profit, 25% over the profit between one million and three million and 30% for profits over three million Thai Baht.

Capital can have several meanings in Thai law, but paid up capital means the paid up registered share capital of the company. The total capital or money invested in the capital or assets of the company can be several times this amount.

Most foreign managed companies have a registered capital of 2 million Baht - as this will allow one foreigner in the company to apply for a work permit - 4 million Baht share capital will allow 2 foreigners to apply for a work permit.

C

N

The part I always have trouble understanding is the "paid up" part.

Is this money actually paid into the company bank account for the company to begin business?

Is it a nominal value, as if the company has issued 1,000,000 shares at a value of (let's say) $2 each?

Is it the maximum liability of the company if bad things happen?

Or am I off base and its none of the above?

The general corporate tax rate in Thailand is 30% for companies with a paid up share capital of more than 5 Million Thai Baht. The government has reduced corporate tax rates to promote specific business sectors and small and medium enterprises. The tax rate for companies with a paid up share capital not more than 5 Million Thai Baht at the end of its tax year shall be taxed at rate of 15% over the first one million Thai Baht profit, 25% over the profit between one million and three million and 30% for profits over three million Thai Baht.

Capital can have several meanings in Thai law, but paid up capital means the paid up registered share capital of the company. The total capital or money invested in the capital or assets of the company can be several times this amount.

Most foreign managed companies have a registered capital of 2 million Baht - as this will allow one foreigner in the company to apply for a work permit - 4 million Baht share capital will allow 2 foreigners to apply for a work permit.

C

N

Would the Government infer that any money in the retained earning category be “Paid in Capital”?… For example additional paid in capital in excess of the 2 million stock par?... Or if you characterize it as a loan and make it a liability are you not then required to pay interest to yourself and then declare that interest as ordinary income that puts you right back in the high tax bracket?... Where can you classify the invested cash to keep under the 5 million rule? And as a general question how much is a respectable income & tax for a company that has 10-20 million baht in real estate assets and keep me out of the tax man's office ?...

Edited February 14, 200620 yr by sfokevin