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[richard0460]

Hi Everyone

My boyfriend is Filipino and a fashion designer (on student visa) and I am an American here on a retirement visa. We want to open a small design business for ladies dresses with one Thai employee who has design experience in the fashion field. We will contract most of the work out to Thai seamstresses for sewing and export to US. My boyfriend will register the business name with the city but not work himself just pay the Thai lady to do the work and the sewing contractors. I guess he would have to sign the city form registering the name. There are no partnerships involved.

Do you guys see any legal, immigration or other issues with this as far as the Thai government is concerned.

Thanks for your experience on this.

All the best

Richard

[boosta]

Yes, one minor issue.

It's not allowed.

[boosta]

Only Thai nationals can operate that way, foreigners can set up limited corp's, but can't be the sole owners.

Well maybe under the American Amity treaty, but very expensive to set up, not worth it for a small business.

Otherwise have to have X number of Thai "promoters", that is, partners, foreigner not allowed to be majority owners, minimum registered capital, have to employ four Thais for every foreigner at higher-than-usual wages, pay accountants and lawyers for shareholder meeting reports and reporting income and taxes etc etc etc.

Not quite as expensive as the Amity route, maybe worth it for a small business but only if you've got decent startup capital and a solid business plan.

And you have to have a group of wealthy Thais that you trust to hold your company's stock. Lawyers will tell you you can work around by using their nominees for an annual fee, but that is technically illegal and puts the foundation of your company at risk if they crack down in the future.

And of course you have to find lawyers that you trust.

Basically Thailand doesn't want foreigners to operate as small entrepreneurs, everything is setup to make it easy for large MNC to invest here but not SMEs.

Edited June 18, 2013 by boosta

[arthurwait]

There are thousands of threads on this already, but you need 4 thai employees minimum per foreigner and you need a 51% holding Thai partner who isn't included in the 4 employees. 2 million baht capital if asked to show it. business premises which maybe inspected. Pay tax for a year before getting a visa etc etc.

Whether foreigners are allowed to do fashion production here you need to find out yourself.

[arthurwait]

You'd be better off doing this in the phiilipines. Phillopino companies buy from Thais. Start there without the legal hassles and have a local customer base as well.

[boosta]

As long as you're not selling and marketing here I'm sure you can get the manufacturing done at a grassroots level without actually setting up a local company.

Set the company up overseas and once a line has proven itself, have the product manufactured in bulk by local subcontractors.

[Eesat]

You cannot be self-employed/sole trader in Thailand full stop!Minority ownership of 49%,4 Thai employees per foreigner and very expensive work permits,around USD $60,000 I believe?It's a total non-starter here I'm afraid!

[SteveReilly]

No problem..american gives orders via email to thais and pay in thai baht to thai and thai sends to address in the US..no need to set up company etc..

[arthurwait]

You cannot be self-employed/sole trader in Thailand full stop!Minority ownership of 49%,4 Thai employees per foreigner and very expensive work permits,around USD $60,000 I believe?It's a total non-starter here I'm afraid!

???

[Eesat]

You cannot be self-employed/sole trader in Thailand full stop!Minority ownership of 49%,4 Thai employees per foreigner and very expensive work permits,around USD $60,000 I believe?It's a total non-starter here I'm afraid!

???

I believe you need a work permit to work in Thailand or is that not the case if you incorporate a Thai company?I'm going on the stories of bar owners not being allowed to go behind their own bar without a work permit!

If you know better please share instead of a row of question marks,who does that help?

[boosta]

Maybe questioning your ballpark cost estimate?

Is that first year's startup costs or what, that's what isn't clear I think.

[VocalNeal]

Just musing.

Is the boyfriend studying fashion design? If so could he not get a seamstress to make clothes for his study. Mail them overseas. If it gets worth doing, open a company the right way maybe even using the original dressmaker as a partner, as long as the real money is paid into a non-thai account you only bring here enough money for the business here?

[chrisinth]

You cannot be self-employed/sole trader in Thailand full stop!Minority ownership of 49%,4 Thai employees per foreigner and very expensive work permits,around USD $60,000 I believe?It's a total non-starter here I'm afraid!

???

I believe you need a work permit to work in Thailand or is that not the case if you incorporate a Thai company?I'm going on the stories of bar owners not being allowed to go behind their own bar without a work permit!

If you know better please share instead of a row of question marks,who does that help?

I understand Arthur's ???. If this is the information you are getting from (or about) bar owners, stop listening.

Work permits are required for work here yes, but do not cost $60,000 or even 60,000 baht............

Edited June 18, 2013 by chrisinth

[arthurwait]

You cannot be self-employed/sole trader in Thailand full stop!Minority ownership of 49%,4 Thai employees per foreigner and very expensive work permits,around USD $60,000 I believe?It's a total non-starter here I'm afraid!

???

I believe you need a work permit to work in Thailand or is that not the case if you incorporate a Thai company?I'm going on the stories of bar owners not being allowed to go behind their own bar without a work permit!

If you know better please share instead of a row of question marks,who does that help?

I understand Arthur's ???. If this is the information you are getting from (or about) bar owners, stop listening.

Work permits are required for work here yes, but do not cost $60,000 or even 60,000 baht............

Yep that.

[boosta]

I missed the USD$, you're right that's way over the top, unless s/he interpreted the capital requirements to mean you actually need that much set aside in the bank accounts or something.

But the total company setup expenses, say for the first year even excluding actual operating costs are not insubstantial, not like a Delaware corp or something.

[chrisinth]

60,000 Baht I believe is the minimum paid wage for an employee from the US on a work permit (outside teaching).

Maybe that is where he was getting mixed up.......................

[richard0460]

I think Steve Reilly's response makes the most sense. Keep as far away from the business as possible, have a Thai person do the work and set up the business in another country. Thailand obviously is not interested in foreigners setting up businesses here.

[sbk]

Moving to Business in Thailand forum

[Eesat]

I missed the USD$, you're right that's way over the top, unless s/he interpreted the capital requirements to mean you actually need that much set aside in the bank accounts or something.

But the total company setup expenses, say for the first year even excluding actual operating costs are not insubstantial, not like a Delaware corp or something.

I know about capitalisation of companies because it's something I've done for clients before many times but generally in Europe and South/Central America.I've set up offshore tax protection vehicles ranging from Panama to Guatemala,Cyprus & Madeira to St Vincent and the Grenadines,so whatever you think you know on this subject believe me I know a hell of a lot more!

Thailand is comparable from what I know,around USD $5,000 will get you a Thai company setup but I'm unclear about the work permit situation.

Do you need one with a Thai company setup and how much is this?I went to a solicitor's in Phuket that deals with incorporation and these were the figures he gave me but who knows?Delaware is just about the cheapest because it's a rubbish jurisdiction,i.e. the US!

[Eesat]

You cannot be self-employed/sole trader in Thailand full stop!Minority ownership of 49%,4 Thai employees per foreigner and very expensive work permits,around USD $60,000 I believe?It's a total non-starter here I'm afraid!

???

I believe you need a work permit to work in Thailand or is that not the case if you incorporate a Thai company?I'm going on the stories of bar owners not being allowed to go behind their own bar without a work permit!

If you know better please share instead of a row of question marks,who does that help?

I understand Arthur's ???. If this is the information you are getting from (or about) bar owners, stop listening.

Work permits are required for work here yes, but do not cost $60,000 or even 60,000 baht............

No,it was from a solicitor in Phuket near to Central Festival that incorporates Thai entities!

So why don't you,or arthurwait tell us the true figures then if you're experts on the subject?

[boosta]

You're saying some scammer quoted you SIXTY THOUSAND US DOLLARS to do a bit of dodgy paperwork for you?

Or did this include all the (only in theory required) working capital, operating expenses for the company, salaries for the staff etc.

The real price for the legal side of things shouldn't be much more than 20K baht, and in my case included not only the initial filing and followup, but the first years' fees for stockholders' reports, accounting reports and the (technically illegal) nominees they were providing to front as "promoters", pre-executed undated stock transfer paperwork in the event I wanted to switch nominees, and so on.

Fortunately posters here made me see how shaky this kind of workaround is and I didn't proceed.

Edited June 19, 2013 by boosta

[Eesat]

You're saying some scammer quoted you SIXTY THOUSAND US DOLLARS to do a bit of dodgy paperwork for you?Or did this include all the (only in theory required) working capital, operating expenses for the company, salaries for the staff etc.The real price for the legal side of things shouldn't be much more than 20K baht, and in my case included not only the initial filing and followup, but the first years' fees for stockholders' reports, accounting reports and the (technically illegal) nominees they were providing to front as "promoters", pre-executed undated stock transfer paperwork in the event I wanted to switch nominees, and so on.Fortunately posters here made me see how shaky this kind of workaround is and I didn't proceed.

If you mean undated resignation letters from the nominee directors then no,there's nothin shaky about it.It's common practice for many places,Panama Private Interest Foundations for instance.

You will not incorporate a company in Thailand for 20k baht if that's what you're trying to say,no chance!

Maybe for the running of the corporation for a year,pay off nominees,address or virtual address which in

Thailand pretty much has to be the incorporator's office or a separate office you are renting,not your home.Plus accounts et al. but these are of course annually recurring fees also!

I was told that work permits were USD $60,000 but maybe that's to be deposited in a Thai bank account,more than likely with the Farang as a 49% minority shareholder!

The Thai solicitors speak no better English than your average bargirl anyway and of course are just telling you what they think you want to hear,as Thais do!

[chrisinth]

@ Eesat

Sir, the OP asked the question about setting up a company here, and you provided him false information about the cost of a work permit ($60,000) (Post #7). Both Arthur & myself queried that, as from my experience (can't speak for Arthur) I know that is wrong.

In a later post (#16) I stated that "60,000 Baht I believe is the minimum paid wage for an employee from the US on a work permit (outside teaching)" and that perhaps you had got that mixed up.

I most certainly am not an expert on the subject, have never claimed to be, I only work here! I only commented on an incorrect statement from yourself to the OP. I was not the one giving advice, that was you, so one would assume that you would deem yourself the expert............... .

BTW, the company I work for pays 3,000 baht each year for my work permit, not 1,861,702 baht (today's conversion from $60,000).

[richard10365]

Your bf...as a citizen of ASEAN should invest as an ASEAN citizen. I believe he has more rights if he chooses this path.

[Soutpeel]

@ Eesat

Sir, the OP asked the question about setting up a company here, and you provided him false information about the cost of a work permit ($60,000) (Post #7). Both Arthur & myself queried that, as from my experience (can't speak for Arthur) I know that is wrong.

In a later post (#16) I stated that "60,000 Baht I believe is the minimum paid wage for an employee from the US on a work permit (outside teaching)" and that perhaps you had got that mixed up.

I most certainly am not an expert on the subject, have never claimed to be, I only work here! I only commented on an incorrect statement from yourself to the OP. I was not the one giving advice, that was you, so one would assume that you would deem yourself the expert............... .

BTW, the company I work for pays 3,000 baht each year for my work permit, not 1,861,702 baht (today's conversion from $60,000).

WP cost is per what you have said,

as regards THB 60,000 salary minimum wage for an American, this is incorrect as well...the DOL sets no minimum salary to be issued a WP, the THB 60,000 quoted is to get the extension of stay ,ie you dont visa run every 3 months, but do 90 days reports...this requirement is set by immigration, not the department of labour who issues the WP...

The THB 2.0million (60k) referrred to capitalisation of a Thai limited company, does not need to be in cash in an account and under a Thai limited company 4 X thai employees are required, if the foreigner setting the company is married to a Thai national these requirements are halved.

what the OP has in mind as regards company structure is basically not workable under current laws, unless he decides to go the Amity route being an American.

The only other viable route is forming a representative office in Thailand of say an American or Phillipines company, to get round THB 2.0 capitalisation, 4 employee route, but would need to repatriate THB 5.0 million into Thailand over 3 years and if memory serves the first THB 3.0 million needs to within the first 2 years..so not sure how workable that would be either, if the OP doesnt have the cash

Also seems to me that "Eesat" has some anger issues he needs to get resolved....

[rwdrwdrwd]

//ignore - repeating the suggestion that the $60k refers to the 2 million baht paid up capital

Edited June 29, 2013 by rwdrwdrwd