Alternatives To A Limited Company

[HarryHerb]

Apologies if this has been discussed before, but neither search engine came up with anything relevant.

Basically, I'd like to know if there is any other set up where I can pay less tax and still receive a work permit. All the info sites just tell you to form a limited company, but I am sure there are other options if you are married.

When I first arrived, I went the classic route and now "own" a limited company, through which I get my work permit. But I'm starting a new business, which will be a joint venture with my soon-to-be husband. I've heard a lot of anecdotal evidence about foreigners having privately-run businesses in their wives' names (sole owner?), through which they are allowed to get a work permit, but are not liable for VAT etc.

Is this true, or one of those farang myths?

Can a business in an individual's name, or joint partnership issue work permits?

What taxes are these type of businesses liable for?

If anyone could outline the options, I'd be really grateful!

[Sunbelt Asia]

If you worked for a natural person, this person must meet one of the criteria to hire you if you are an foreigner...(1) working for an employer earning an income from business operation in the past year cycle or the amount year: one person may be permitted for every seven hundred thousand Baht, the maximum being three persons;

(2) working for an employer who has paid taxes to the government in the past year cycle: one person may be permitted for every fifty thousand Baht, the maximum being three persons;

(3) working for an employer having Thai employees: one person may be permitted for every four Thai employees, the maximum being three persons.

You cannot apply for an extension of stay based on business as Immigration does not recognize sole proprietorships.

The sole proprietorship has unlimited liability and your name is not on the bank account( unless you have formed it under the Amity Treaty as you are an American)

Tax is based on assessable income minus actual expense or 65-85% deductions depending on the types of income ( no proof needed in reference to expenses) and allowances.

On a limited partnership you can get a work permit but your name cannot be on the bank account.

The Thai partner has unlimited liability while you have limited liability unless you get involve in the day to day business ( If you do then its unlimited liability as well) the 1 million Baht register capital( married to a Thai) has to be 1 million paid in cash ( remember your name is not on the bank account) Also note this showing of the bank acct, is not a requirement on a Thai Limited Company.

You are able to get a pink slip at anytime and not a thing you can do about it as you can not be the MD.

You are liable if your partner rings up debt( if you have been involved with the business then this is unlimited. Othewise up to your portion of the capital)

The tax rate is the same as a Thai Limited Company.

Must be in the Vat system to get a work permit.

www.lawyer.th.com

[HarryHerb]

Thanks for the comprehensive answer, Sunbelt.

Now I know why everyone recommends a limited company . Yet I know loads of people who go the limited partnership / sole proprietor route, so I can't help but feeling there must be some advantage in this somewhere. Or perhaps it's because they simply don't meet the criteria for a limited company. Anyone?

[Sunbelt Asia]

Thanks for the comprehensive answer, Sunbelt.

Now I know why everyone recommends a limited company . Yet I know loads of people who go the limited partnership / sole proprietor route, so I can't help but feeling there must be some advantage in this somewhere. Or perhaps it's because they simply don't meet the criteria for a limited company. Anyone?

Most do it because they don't know better. How many people put cars, property in the gf's name or a lease. I could go on and on. They simply was told by a friend to do it and you know the rest of the story... they think with the little head.

The criteria is less with a limited company to get the work permit!

www.lawyer.th.com