Purchasing A Guesthouse/small Hotel

[dg1980]

I am a dual Canadian/British citizen,

I would like to purchase a small guesthouse/hotel.

What are the necessary steps involved in making this happen?

ie. work permits, registered capital, visa, registrations, fees etc.

dg1980

[Maestro]

To make this happen, you would buy 100% of the shares of the guest house/hotel, but Thai law does not allow this; 51% of the shares must be held by Thai nationals.

[Sunbelt Asia]

First and foremost you will need to form a Limited Thai company. Setting up a company requires quite a few steps and begins with the reservation of the Company name. The name cannot be similar to another company name in Thailand and certain names are not allowed. The next step in company registration involves filing a Memorandum of Association with the Commercial Registration Department. The Memorandum registration fee is 50 baht for every 100,000 baht of registered capital. The minimum fee is 500 baht, and the maximum is 25,000 baht.

The third step in Company Registration involves convening a statutory meeting; a minimum of 25% of the value of each subscribed share must be paid. Finally, the directors must submit their application to establish the company and within 60 days of the start of operations a tax identity card must be applied for. A company seal is required .

Three shareholders are required and at least 51% of the shares must be owned by Thai nationals if the business does not fall under certain qualifications allowing for 100% foreign ownership; such as a company that only exports, or if the company is being set up by American nationals using the Amity Treaty, or under the aegis of the Board of Investment (BOI).

The Thai Government requires that accounting procedures must be strictly adhered to and you may need VAT registration id (required if the company earns more than 1,800,000 baht a year), Government fees per 1 million baht of capitalization are 5,500 baht, document certification fee is 1,500 baht, the Application form fee is 100 baht and fee for stamp duty is 430 baht. If a work permit is required for the foreigner then additional fees will incur.

A limited company in Thailand must have at least 2,000,000 Baht of registered capital in order to obtain one work permit unless the foreigner is married to a Thai and then it is 1 million baht. We recommend that 25% of the shares are paid in when setting up the company, to show that the business has working capital and has not been set up purely to provide a work permit. Once you hire four Thai employees and have 2,000,000 Baht of registered capital, you will be able to obtain one work permit through the company.

If you intend on selling alcohol or cigarettes you will need licenses for those as well.

Criteria for applying for hotel license are:

1. Building type (must be concrete)

2. Purpose of the hotel (must serve the accommodation purpose for tourists (locals & foreigners)

3. Location (must not be situated near the school, temple/religious place, governmental offices [at least 100m away], must be convenient for inspection, entrance must not cause traffic congestion)

4. Parking lot – must have sufficient parking space, parking space must be separated from the accommodating place)

Approval fee and annual fees (calculated on the rental rate basis)

1. Room rental rate charging for no more than 40 Baht will be incur a government fee of 10 Baht per room

2. Room rental rate charging for more than 40 Baht but less than 80 Baht will be incur a government fee of 20 baht per room

3. Room rental rate charging for more than 80 Baht but less than 120 Baht will be incur a government fee of 30 baht per room

4. Room rental rate charging for more than 120 Baht but less than 160 Baht will be incur a government fee of 40 baht per room

5. Room rental rate charging for more than 160 Baht but less than 200 Baht will be incur a government fee of 50 baht per room

6. Room rental rate charging for more than 200 Baht but less than 240 Baht will be incur a government fee of 60 baht per room

7. Room rental rate charging for more than 240 Baht but less than 280 Baht will be incur a government fee of 70 per room

8. Room rental rate charging for more than 280 Baht will be incur a government fee of 80 per room

The license would have to be approved from the Provincial Mayor at Provincial’s City Hall which would take approximately 30 days

[sunbeltlegal][/sunbeltlegal]