Business

[hitori_one]

What is the most difficult process of the company registration process and is there a minimum of working capital required for the startup.

Richard

[Sunbelt Asia]

What is the most difficult process of the company registration process and is there a minimum of working capital required for the startup.

Richard

Getting the Tax and Vat required documents from the Landlord. We have solved that problem though.

Register capital must be 2 million Baht if you are single. One million if you are married to a Thai.

If its a Thai Limited Co. noone will look at your bank account.

www.lawyer.th.com

[sting01]

What is the most difficult process of the company registration process and is there a minimum of working capital required for the startup.

Richard

Getting the Tax and Vat required documents from the Landlord. We have solved that problem though.

Register capital must be 2 million Baht if you are single. One million if you are married to a Thai.

If its a Thai Limited Co. noone will look at your bank account.

www.lawyer.th.com

And if you choose to open a Partnership limited, there is no minimal capital, and the capital can be constituated by other things than money (a bunch of clients for exemple).

After 4 years here, I still wonder why Sunbelt, and earlier IndoSiam, always forget to speak about the Partnership Limited.

Also, for the Partnership limited, trully better to go directly to the Ministry, there people there (civil servants) who will willingly help you (and for free).

Have a good day.

[Indo-Siam]

Thai Limited Partnership still needs 2,000,000 baht registered capital (or 1,000,000 with Thai spouse) to sponsor a foreigner for a work permit. There are also personal liability vs. operational control issues with a Limited Partnership.

Indo-Siam

[Sunbelt Asia]

And if you choose to open a Partnership limited, there is no minimal capital, and the capital can be constituated by other things than money (a bunch of clients for exemple).

After 4 years here, I still wonder why Sunbelt, and earlier IndoSiam, always forget to speak about the Partnership Limited.

In fact, have written about it a number of times but never in a positive light.

Feb 16th 2006

http://www.thaivisa.com/forum/index.php?s=...ndpost&p=647259

Nov 4th 2005

http://www.thaivisa.com/forum/index.php?s=...ndpost&p=535404

Why the Limited partnership is a very bad way to form a business...

A foreigner cannot be involved in the day to day operations as a manager, if he does, he will be considered having the same liability as the Thai which is unlimited.

The foreigner cannot have control.

When applying for a work permit, The funds for the registered capital must be shown in a bank account. ( 2 million Baht for a work permit unless the applicant is married to a Thai, then its 1 million Baht)

The foreigner cannot be on the bank account.

You as the foreigner are at the mercy, being told any day " Your services are no longer needed"

Here is another case on Oct 18th 2004, that I went into much detail when the guy went to apply for a work permit and he did not have 2 million in the bank which is required from the Labor Dept on a partnership.

http://www.thaivisa.com/forum/index.php?s=...ndpost&p=191067

And here is a post all the way back in Dec 14th 2003 Sting that you responded to back then.

http://www.thaivisa.com/forum/index.php?s=...indpost&p=31606

Nothing has changed. For a foreigner who wants to be the one calling the shots and protecting his money, this is a very bad formation, when using a partnership.

Also, for the Partnership limited, trully better to go directly to the Ministry, there people there (civil servants) who will willingly help you (and for free).

Unfortunately they don't go into all the stipulations as this guy found out. By the way, he became a client of ours and I still have the big bottle of tequila he gave me as a gift, in the office. Have to drink it one of these days.

http://www.thaivisa.com/forum/index.php?s=...ndpost&p=190980

[hitori_one]

What is the most difficult process of the company registration process and is there a minimum of working capital required for the startup.

Richard

I appreciate all the information so far. I am married to a Thai citizen and was worried about having the 2M THB or 1MTHB starting capital. I really don't need that amount for an import/export buisness that is just starting out. Also, I envision most of my initial work will be B2B via the internet. I know I will have to spend some time in Thailand, but from what I see, you still have to have the work permit and show some form of capital?

Richard

[Indo-Siam]

If you will not seek a work permit, you can legally establish the company with any level of initial capitalization above 35 baht. If you are participating in the business by Internet, from outside Thailand (or even from inside Thailand), and do not need salary (as a business expense) paid to you in your name - and you do not need to have signature authority to sign documents for your company inside Thailand - then I do not see where you would need a work permit. You could even work as an overseas subcontrcatir, who invoices your Thai company (although 15% withholding is supposed to be collected by Thai Revenue Department from invoice remittances to overseas vendors).

If most of your customers are outside Thailand, and your turnover is large, you would probably do well to establish an offshore company, with an offshore bank account - if the two jurisdictions are chosen carefully, you have no tax or reporting obligations to either jursidiction (company and bank). Your Thai company can then be a sub-contract vendor to your offshore company - you can allocate whatever portion of incomig sales revenue (received at offshore company bank account) you wish to the Thai company - you retain the rest offshore (which you can access via ATM card).

My company can assist anyone interested in establishing such an arrangement - I personally have an offshore company and bank account that control an online trading business that I run - with my Thai company as a subcontractor.

Cheers!

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[email protected]

www.thaistartup.com

[sting01]

I hope both Sunbelt and Indosiam did not get me wrong. I did not supposed they provide bad services, I do know 'in visu' for IndoSiam how serious and dedicaced he is, and I am honestly sure Sunbelt provide 'more bangs for the bucks' when choose him as advisor. I shopuld maybe have started by that, because they are far better than many others.

Nowaday it seems my point, even if not correctly expressed, was valid. There is out there, some people that are not looking for a work permit, for various reasons (already working as corporate, not in thailand), and who do not need invest the 2. 000 .000 bht. not need is a key word, because it imply the person can (not a the usual backpacker without a copper), but who (respecting the usual rules of business) are willing to take risk and accept personnal liability.

For some case, the partnership is fully relevant, but I do agree it's only for some cases :

1) most of the earning/income of the society are abroad based (export, but also work remote as doing outsourcing work).

2) when also the 'immobilisation' in site are aroud 100 000 bht (in case of outsourcing work, cost is a table, a computer, a chair, maybe a printer...).

3) in case of acting simply as man in the middle btw an abroad company and local suppliers, what do you need appart to pay the dinner' bills when you meet the local suppliers, and pay the customs when you send the goods abroad.

I am in case 1, since several years, and I can say Ministry of Commerce was great, I went there only 2 times (first time to get the document, the second to deposit the document and get the official documents as my company was existing), but there is more hassle with the tax office (Lam Lu Ka). Maybe also I am a special case, I have some clues about business and relation with governement agencies, and my gf is also more than well educated, able to ask the right questions in case I forgot.

So, the partnership limited is not the miracle solution that will watch your clothes better I do agree, but in some cases (and not so rare I suppose), it could be the right choice. It will imply maybe more concern from the farang who choose that solution, but it can also allow more flexibility when starting, or even in my case allow to start a legitimate business. It also, and I like it, due the personnal liability, make more difficult the usual thinking : I deposit some money, do a society that will exist only on paper, get the visa, and do the same 2 years after.

[sting01]

I forgot something.

Steve said as a joke 35 bht are enought. Do not do that, or your application will be refused.

By experience, a starting declared capital less than 250 000 bht will make people laught and your application will be refused. half a million is the way to start, assuming you will realise first only the 25% needed by the law, and realise the rest within 2 years.

The good point is you can include in the declred capital, non material goods, as for exemple a group of future clients. It can be helpfull in one case : you declare 1 . 500 . 000 of capital in cash, and 600 000 for a group of people who have say they will be your customer. So you have a capital superior at 2 Millions, but your realisation (money deposit at the bank for exemple) is only 1 M and half. In case of limitate starting money, it will allow to start a company and have pocket money for your personal life while waiting your comp start to make profit (invest 1M and half is not made by a packbacker, but there is not everyone who can invest 2 M + and on the same time pay the rent in a decent place, buy food, pay bills during some month with his money until the comp make money, because it's infact imply an investment not of 2 M, but more 2M and half).

[Indo-Siam]

The 35 baht minimum capitalization is clearly stated in Thai Civil and Commercial Code.

But - the minimum initial capital registration fee at incorporation phase is 5,000 baht - which is the same level as for 1,000,000 baht capitalization.

Many Thai companies have low capitalization. We recently completed registering a Thai majority owned company for Danish investors - at 100,000 baht registered capital. Completely routine process, not even an eyebrow raised at Commercial Registration Department in Bangkok. They couldn't care less.

Something to consider - if your assets (much less registered capital) is very low, your company can be rendered insolvent by any invoice larger than you assets. The Thai Revenue Department does look at this - and if your company is determined to be insolvent (even if you have been paying bills off the books, in cash), they can revoke your tax registration - basically putting you out of business.

Practically-speaking, it seems to me that capitalization below 1,000,000 baht does not make much sense for a foreign investor, except in rare cases. Two that I can think of involve qualifying to submit applications to Thai Government, in situations where approval is necessary to pursue business, but approval can take a long time - those two examplesituations being to register a trademark, or to file for Thai FDA import approval. If you will have a Thai person as local signatory director, company can have minimal capitalization while awaitig approval.

Cheers!

Steve

Indo-Siam

Edited April 7, 2006 by Indo-Siam

[hitori_one]

I really want to thank all who responded, some very good information. I was really concerned about the starting capital for my company. I wanted to make sure that I was registerd lawfully and avoid running afoul of the law. My son (from previous marriage) attends Bangkok Univeristy and has a student visa. I live in Japan so it easy for me to spend the $650 to fly from Japan when I really need to be there. Also, I am planning to move there and build a house. I spent most of my life outside of the United States so I pretty comfortable wherever I go. Just trying to decide were. Anyway, if you have any more insightful information about owning and opertating a business i will be watching this forum. Again, thank all the responded.

Richard

Hitori_one

Remember, "In school you get the lesson first, then the test. In life, you get the test first, then the lesson."

[~G~]

Remember, "In school you get the lesson first, then the test. In life, you get the test first, then the lesson."