Its Happening - Law to Tax Overseas Income Now in Progress

[cloudos]

Hello

I have been going through a lot of confusion regarding the easiest way to run my business in Thailand (consultancy business) and also allow me to legally work there for my business. From my understanding, I need a work permit, and need to employ four Thais to do so (or two, depending upon some grey areas). My business is a start up and I see no need at this stage to employ anybody other than myself yet (at least for the moment).

I have read that an options exists to open a branch office for my company in Australia, but there does not seem to be much information on there and I do not know how tricky it is to get one set up. However, from the information that I gather I would need 2 million baht capitalization over a five year period, and I can bypass the four Thai to one foreigner aspect in regards to getting a work permit.

Does anybody have experience in setting up a branch office, especially one in which a start up was involved?

Much appreciation for your advice!

[ubonjoe]

Some good info here http://www.boi.go.th/index.php?page=setting_up_a_business

You would still need one Thai employee to get work permit and extensions of stay.

See 2.1 of police order 777/2551 for more info for extension.

Also in business guide. Download: http://www.boi.go.th/upload/content/AW_BOI-BusinessGuide2014-20130905-web_36759.pdf

Edited September 25, 2013 by ubonjoe

[cloudos]

Thanks Ubonjoe. The link and info is much appreciated!

[Arkady]

I don't have experience of setting up Australian businesses in Thailand but under TAFTA you should be able to open a branch of an Australian management consulting firm. I would think it might need an alien business license because that is required for 100% owned American companies under the American-Treaty of Amity but that should be fairly routine, involving a lot of extra form filling. The same is needed for foreign rep offices. You would need B2m paid up capital for one WP. I don't know, if there are any reductions of Thai staff needed for one WP under TAFTA. I can't see any wording to that effect. If not, you would need 4 Thais registered in the social security system - less in the first year, if you can send a convincing letter to explain why. Some regions only require 2 Thais.

If you are going to put significant revenue through the business, you might find a limited company more tax efficient than a branch. Australian investors setting up a management consulting business in Thailand are allowed to own 100% under TAFTA but there again I think you would need to apply for a business licence.

If you don't want to put business through the Thai office, a rep office might do the trick. You have to remit funds to Thailand over the 5 years of the licence to pay expenses. WPs issued by the Commerce Ministry instead of the Labour Ministry and no need to have 4 Thais for each WP.

Under TAFTA you are supposed to be allowed to apply for WP and visa in the one stop service centre, which is otherwise reserved for large companies only.

[cloudos]

Thanks Arkady for your information.

I had done a bit of leg work and found out that I indeed need to apply for an Alien Business Registration. I also had a look at the forms required and it does seem a bit daunting. I want to say that I would indeed go down that route, but at the moment I am still deciding which route is the best.

The main limiting factor for me at the moment is that I need a WP, but I don't need to employ any Thai employees, not at least till my business in Thailand results in some consistent revenue coming in. Setting up a Thai limited company would therefore seem to be a bit of a wasted effort money wise, as I had intended for my business to be a one man show, at least for the first few months.

Any thoughts in regards to the following?

1) Is it possible to open up a Representative office, but with invoices issued out of my Australian company? I understand that Representative offices are not supposed to make money per se, but as this falls into a bit of a grey area, I am not sure if legally this is allowable

2) If I go the Thai limited office route, am I obligated to fully pay four Thai employee salaries (or two), or can I just pay the equivalent into the social system to cover for the employees? Sorry for the silly question, but I am trying to see exactly what my options are because my business at the moment is really just a start up

Much appreciated!

[Soutpeel]

1) Is it possible to open up a Representative office, but with invoices issued out of my Australian company? I understand that Representative offices are not supposed to make money per se, but as this falls into a bit of a grey area, I am not sure if legally this is allowable

Isnt the purpose of a representative office in Thailand is only to source local products and services ?

So suspect you may a small problem convincing someone that what your doing would fall under this

[schietkop]

Hi Cloudos,

I just set up a new company, there are many regulations like they say minimum investment amount, hire staff, pay yourself a minimum salary (50K) etc etc. Whats most important is, find a good lawyer. My lawyer did everything for me including arange the working permit, he has his "connections" and that makes all the difference. I didnt even have to send our company logo when opening the Ltd (which wasn't ready at that time) as he called some friend:). Also, I could not register my Companies name since my girlfriend used it for her Partnership before. Such a stupid regulation, you start a partnership, your company grows so you want to change the form to a Company Ltd, and then u cannot use the same name . He called another friend and it was aranged:). Just let me know if u need some help.

Greetz
Arno