What Thai legal entity for a "one man business" firm to do business and get work permi

[HarryNL]

What legal entity for a "one man business" firm to do business and get a work permit
-In the Netherlands I am just a self employed person without any employees and want to continue my work in Thailand in
a. interim management /consultancy assignments
b. recruitment
c. to do some trading too
d. and provide internet services
Trading and internet services do have an increase turnover as interim management and recruitment are slowing down.

Some comments which will determine the legal options:
- I do not want to be an employer for Thai employees (I am an one man company, in principal it is only me)
- I have since 1993 in the Netherlands already a private Limited (BV) mainly to practise executive interim management
- I have a Thai girlfriend and if a marriage would be make working and doing business inThailand more easy, we would consider this.

- please consider also other forms of enterprise that could be attractive instead of a private company with limited liability

I have spoken some Thai Legal Advisers but they suggest:

Thai limited with minory of shares and minimum 4 Thai employees for 1 work permit.
Are there any other legal entities which are more appropriate in my situation?

Today, there must be thousands of foreigners who work in Thailand: work from home, small business owners, SME - how do they do that in a proper legal manner ?

Options which i have considered

- Thai payrolling firm who hires me with a work permit in Thailand and get paid by my dutch ltd.

- only work for (foreign) companies but only if they are not located in Thailand they will be able to offer a work permit / contract (this is not a realistic option because i would be an employee and it limits the number of potential clients)

so I am stuck but there must be still a possibility!

[pistachios]

There isn't that I am aware of.

the thousands who do work as a one man company do it under the radar.

[JLCrab]

I posted on your early topic. Thailand has regulations that encourage the inflow of business and discourage if not prohibit the outflow of business. You seem stuck on the outflow.

[brit1984]

step 1: register company under name of girlfriend / wife

step 2: employ some low-wage Thais (e.g. driver, maid, accounts, secretary, etc)

step 3: get your work permit and start doing business

[yankee99]

step 1: register company under name of girlfriend / wife

step 2: employ some low-wage Thais (e.g. driver, maid, accounts, secretary, etc)

step 3: get your work permit and start doing business

This is your only option

[recycler]

Agree that the 1.2.3. steps is your only option if you want to legally work in Thailand.

But why would you legally work in Thailand? It's not easy to get consultancy jobs here like in NL, Thais don't pay for advice.

Most of what you do can be done from home and without any visible work in Thailand.

For sure it will be cheaper to run your business over an NL BV than to set it up in Thailand, I've seen several cases compared and it's only worth it if you want to tap in to cheap labor and cheap raw materials on a larger scale, for a 1 man business it won't pay.

By the way I moved here 10 years ago, also from a consultancy job in NL, very hard to get in to here, took a long time to get sustainable business and I would advise you to make a very good plan before your leave.

PM me if you need more help.

[robblok]

I like he payrolling idea if they have that in Thailand and prices are reasonable you keep the turnover in the Netherlands and work legally in thailand if they provide the work permit it would be minimum hassle with thai accountants ect.

Most here might not understand this concept.

Payrolling company in thailand hires you and "sells" you to your dutch limited to work for. The Dutch limited gets all proceeds from your work.

Possible problems are how to handle vat and how to receive the money owed on your services. Your limited should get those on its bank. Maybe opening a Thai bank in its name. That might be hard.

You might collect the money yourself and deposit it.

Sent from my iPad using ThaiVisa app

[thaidel48]

step 1: register company under name of girlfriend / wife

step 2: employ some low-wage Thais (e.g. driver, maid, accounts, secretary, etc)

step 3: get your work permit and start doing business

This is your only option

If you do this as advised you will end up paying taxes . You will also have to keep books and have an accountant.

My advise is just keep yourself to yourself and no one will bother looking and get a retirement visa .

[impulse]

My apologies in advance, since the previous posters seem to have handled the serious aspects of the OP:

Skip a few steps and hand your Thai GF all your money. Chances are pretty good that you'll save a lot of heartache and years of mystery wondering what the heck just happened.

I'll go away now.

[brit1984]

step 1: register company under name of girlfriend / wife

step 2: employ some low-wage Thais (e.g. driver, maid, accounts, secretary, etc)

step 3: get your work permit and start doing business

This is your only option

If you do this as advised you will end up paying taxes . You will also have to keep books and have an accountant.

My advise is just keep yourself to yourself and no one will bother looking and get a retirement visa .

i think the OP is planning a legitimate commercial enterprise with real clients and suppliers - not filling out online surveys for 5 cents/hour

[brit1984]

I like he payrolling idea if they have that in Thailand and prices are reasonable you keep the turnover in the Netherlands and work legally in thailand if they provide the work permit it would be minimum hassle with thai accountants ect.

Most here might not understand this concept.

Payrolling company in thailand hires you and "sells" you to your dutch limited to work for. The Dutch limited gets all proceeds from your work.

Possible problems are how to handle vat and how to receive the money owed on your services. Your limited should get those on its bank. Maybe opening a Thai bank in its name. That might be hard.

You might collect the money yourself and deposit it.

Sent from my iPad using ThaiVisa app

why would anyone do that?

[robblok]

I like he payrolling idea if they have that in Thailand and prices are reasonable you keep the turnover in the Netherlands and work legally in thailand if they provide the work permit it would be minimum hassle with thai accountants ect.

Most here might not understand this concept.

Payrolling company in thailand hires you and "sells" you to your dutch limited to work for. The Dutch limited gets all proceeds from your work.

Possible problems are how to handle vat and how to receive the money owed on your services. Your limited should get those on its bank. Maybe opening a Thai bank in its name. That might be hard.

You might collect the money yourself and deposit it.

Sent from my iPad using ThaiVisa app

why would anyone do that?

He already has a Dutch company setup. So if he does this he does not have to setup a Thai one with all the hassle you get. Hiring fake employees you don't need. not having to deposit 2 million bt Having greedy accountants charge and arm and a leg and minimizing your contact with Thai government officials.It might even be cheaper depending of course on the fee of the pay-rolling agency.

Only part I am not sure about is the VAT thing as the Dutch limited is now providing services in Thailand so they might be Thai vat Liable on those services.

Like I said i like the idea i haven't checked it 100%. In his case it might be a good idea, because he already has a company and he does not need employees.

[brit1984]

I like he payrolling idea if they have that in Thailand and prices are reasonable you keep the turnover in the Netherlands and work legally in thailand if they provide the work permit it would be minimum hassle with thai accountants ect.

Most here might not understand this concept.

Payrolling company in thailand hires you and "sells" you to your dutch limited to work for. The Dutch limited gets all proceeds from your work.

Possible problems are how to handle vat and how to receive the money owed on your services. Your limited should get those on its bank. Maybe opening a Thai bank in its name. That might be hard.

You might collect the money yourself and deposit it.

Sent from my iPad using ThaiVisa app

why would anyone do that?

He already has a Dutch company setup. So if he does this he does not have to setup a Thai one with all the hassle you get. Hiring fake employees you don't need. not having to deposit 2 million bt Having greedy accountants charge and arm and a leg and minimizing your contact with Thai government officials.It might even be cheaper depending of course on the fee of the pay-rolling agency.

Only part I am not sure about is the VAT thing as the Dutch limited is now providing services in Thailand so they might be Thai vat Liable on those services.

Like I said i like the idea i haven't checked it 100%. In his case it might be a good idea, because he already has a company and he does not need employees.

mate - i don't want to be rude as you made it clear this was just an idea but just want to make clear to the OP this isn't a great idea

not because of "the VAT thing" (as he will have to pay that regardless).. but because he will be liable to pay corporate tax and dividend tax in the netherlands (both at higher rates than in thailand) and the hassle (and cost)of getting someone to give you a fake job is going to be more than hiring (very cheap) people to do tasks he would otherwise have to outsource or do himself

as for the 2 mb, i assume you are talking about share capital - his accountant can just record a corresponding figure (i actually thought 3 mb was the magic number) in the balance sheet as a loan from the company to the directors so it is not necessary for the funds to be in the company as such

[robblok]

I like he payrolling idea if they have that in Thailand and prices are reasonable you keep the turnover in the Netherlands and work legally in thailand if they provide the work permit it would be minimum hassle with thai accountants ect.

Most here might not understand this concept.

Payrolling company in thailand hires you and "sells" you to your dutch limited to work for. The Dutch limited gets all proceeds from your work.

Possible problems are how to handle vat and how to receive the money owed on your services. Your limited should get those on its bank. Maybe opening a Thai bank in its name. That might be hard.

You might collect the money yourself and deposit it.

Sent from my iPad using ThaiVisa app

why would anyone do that?

He already has a Dutch company setup. So if he does this he does not have to setup a Thai one with all the hassle you get. Hiring fake employees you don't need. not having to deposit 2 million bt Having greedy accountants charge and arm and a leg and minimizing your contact with Thai government officials.It might even be cheaper depending of course on the fee of the pay-rolling agency.

Only part I am not sure about is the VAT thing as the Dutch limited is now providing services in Thailand so they might be Thai vat Liable on those services.

Like I said i like the idea i haven't checked it 100%. In his case it might be a good idea, because he already has a company and he does not need employees.

mate - i don't want to be rude as you made it clear this was just an idea but just want to make clear to the OP this isn't a great idea

not because of "the VAT thing" (as he will have to pay that regardless).. but because he will be liable to pay corporate tax and dividend tax in the netherlands (both at higher rates than in thailand) and the hassle (and cost)of getting someone to give you a fake job is going to be more than hiring (very cheap) people to do tasks he would otherwise have to outsource or do himself

as for the 2 mb, i assume you are talking about share capital - his accountant can just record a corresponding figure (i actually thought 3 mb was the magic number) in the balance sheet as a loan from the company to the directors so it is not necessary for the funds to be in the company as such

You are not rude at all we are discussing something here.

Pay-rolling is not a fake job its a legitimate thing. That is the beauty of it and hiring people you don't need cost money too.

The tax rates are actually quite similar 20-25% not that much of a difference.

Thanks for clearing up that the money can be there as a loan, but I guess you have to pay interest on it then.

So all in all it depends on the circumstances and it MIGHT still be cheaper doing it this way as the tax-rates are close, you don't have to hire fake employees. Plus best of all you don't have to pay for an extra accountant as you don't have a Thai company.

It of course all depends on actual figures of projected profit and such.

[recycler]

If you can, avoid opening a Thai Co. Ltd. there is too much that will surprise you even if you have the luck of finding a good accountant.

It's hell complicated, ever changing rules and even more different interpretations of these.

You can't read the documents nor can most Thais, including some lawyers and accountants!

I work for a Thai company now and after 4 years I'm still trying to close the company I used before, maybe I succeed in a few years, but not too sure about that...

Keep your BV in NL, that's complicated enough as it is and at least you can read the paperwork and it's interpreted by the revenue department in a sensible way.

Edited November 5, 2013 by recycler

[brit1984]

@robblok - the loan is from the company to the directors, not a 3rd party - he could just say its PIK interest and let the balance accrue

i am no expert on netherlands tax but (from 2 mins googling) it seems both corporate / dividend tax are +5% higher for any likely outcome on profit - could be a lot of money

he will still need thai accounts / admin staff (or to use an outsource provider) to process invoices / thai language contracts and he would be crazy not to take advantage of the fact that in thailand you can find staff for <300 euros/month to allow him to focus on meeting clients and driving his business forward rather than bookkeeping and washing the dishes

apologies to the OP for making assumptions - this is your thread - if you google for tax guides for netherlands and thailand you can do some quick calcs on the relative economics (given your forecast pre tax profit and payout ratio on dividends)

[robblok]

@robblok - the loan is from the company to the directors, not a 3rd party - he could just say its PIK interest and let the balance accrue

i am no expert on netherlands tax but (from 2 mins googling) it seems both corporate / dividend tax are +5% higher for any likely outcome on profit - could be a lot of money

he will still need thai accounts / admin staff (or to use an outsource provider) to process invoices / thai language contracts and he would be crazy not to take advantage of the fact that in thailand you can find staff for <300 euros/month to allow him to focus on meeting clients and driving his business forward rather than bookkeeping and washing the dishes

apologies to the OP for making assumptions - this is your thread - if you google for tax guides for netherlands and thailand you can do some quick calcs on the relative economics (given your forecast pre tax profit and payout ratio on dividends)

So there is a an interest component as i expected. Yes he does not have to pay it but it is owed.

Yes 5% higher tax. Why would he need Thai staff ? No need as the Dutch company is doing all the invoicing and they can be in English its a Dutch based company no need to use Thai. (no law) I would say that this person (assumption) would be working for other foreign companies and not Thai ones so not much of a problem. All the administrative things lie in his Dutch company and for all intent and purposes he is just a hired employee here. (that is what payrolling is)

Of course it all depends on the actual figures there i completely agree with you. But let me tell you this accountants in Thailand are not that cheap or that competent. I have had loads of problems with them. I closed one business and they never closed it lost the documents years later (truth here) The tax office contacted us about this and of course fines were handed out. This makes me really weary of Thai accountants. The prices were crazy too and the amounts of papers too. (i am an accountant myself)

If I could I would do all in my power to avoid it here and keep it in the Netherlands even if it cost me a bit more. This is however a personal opinion.

Only thing is the VAT that might be hard, but if he is only sending out a limited amount of invoices then its not hard at all.

[HarryNL]

Thx all here the OP

I know all about VAT in NL and TH, and even on insurrances, pension and so on

my account already dit do his job.

And as mentioned I will not work "under the radar" and would set up a serious business in Thailand too.

My main problem is that a foreigner in Thailand is not allowed to work without a work permit.
And the Thai private LTD conditions of minority and 4 Thai workers are not attractive for someone who wants to work flexible and as a 1 man company.

So it is all about "what Thai legal entity will fits best to do some business and get a work permit".

At the moment the Thai consulate here is not sure to give me -on behalf of my Dutch company - a non immigration B (business) visa.
Normally you would expect that this is a first step to obtain a work permit.

Formally, I can not work and even perform a market research and establish business contacts as “work” in Thai law is defined very broadly, covering both physical and mental activities, whether or not for wages or other form of compensation.

[HarryNL]

Thx all here the OP

I know all about VAT in NL and TH, and even on insurrances, pension and so on

my account already dit do his job.

And as mentioned I will not work "under the radar" and would set up a serious business in Thailand too.

My main problem is that a foreigner in Thailand is not allowed to work without a work permit.
And the Thai private LTD conditions of minority and 4 Thai workers are not attractive for someone who wants to work flexible and as a 1 man company.

So it is all about "what Thai legal entity will fits best to do some business and get a work permit".

At the moment the Thai consulate here is not sure to give me -on behalf of my Dutch company - a non immigration B (business) visa.
Normally you would expect that this is a first step to obtain a work permit.

Formally, I can not work and even perform a market research and establish business contacts as “work” in Thai law is defined very broadly, covering both physical and mental activities, whether or not for wages or other form of compensation.

[Tatsujin]

Your only option is a Limited Company + 4 x Thai staff. Simple. Or work for another larger company that will supply a work permit.

Of course, if you don't want to be "legal", just do what everyone else does and work under the radar. Works great right up until you piss off a Thai during the course of business.

[simon43]

Your only option is a Limited Company + 4 x Thai staff.

Not true. 'Farang' lawyers tell you that because they are generally greedy and untrustworthy.. I stopped using such lawyers about 10 years ago and now use an honest Thai accountant.

You have several other legal choices:

1 - Registered Limited Partnership with your GF, where she owns 51% and you own 49% of the business partnership (or other ratios, but she must be the majority partner). You can apply for a WP, (so long as your profession is not on the prohibited employment list). The requirement for 4 Thai staff relates to visa extensions, not to your B visa. However, depending on your local labour office, they may require you to have 4 Thai employees or possibly 2.

Note - I have used this type of structure for the past couple of years for one of my small hotels, partner was ex-wife

2 - Registered sole Trader Business. Your GF goes to her local Tessabahn office and registers the business as a sole trader. Cost is about 100 baht if I recall. This type of business has no limited liability protection. She can employ you as above.

Note - I have used this type of structure for the past couple of years for another of my small hotels, partner was another ex-wife.

We used our Thai accountant to help us to register both types of business. The sole trader fees were about 400 baht, the partnership fees were a few thousand baht.

For both of these types of entity, you do not have legal 'control' over the business. But (as with my businesses), if you possess the skill upon which the business relies, then you do have 'control'

But! Your success may vary because some accountants deny that you can use this type of legal entity to employ a foreigner. Check the Thai law and you'll see that it is quite legal.

Good luck

Simon

Edited November 6, 2013 by simon43

[HarryNL]

Your only option is a Limited Company + 4 x Thai staff.

Not true. 'Farang' lawyers tell you that because they are generally greedy and untrustworthy.. I stopped using such lawyers about 10 years ago and now use an honest Thai accountant.

You have several other legal choices:

1 - Registered Limited Partnership with your GF, where she owns 51% and you own 49% of the business partnership (or other ratios, but she must be the majority partner). You can apply for a WP, (so long as your profession is not on the prohibited employment list). The requirement for 4 Thai staff relates to visa extensions, not to your B visa. However, depending on your local labour office, they may require you to have 4 Thai employees or possibly 2.

Note - I have used this type of structure for the past couple of years for one of my small hotels, partner was ex-wife

2 - Registered sole Trader Business. Your GF goes to her local Tessabahn office and registers the business as a sole trader. Cost is about 100 baht if I recall. This type of business has no limited liability protection. She can employ you as above.

Note - I have used this type of structure for the past couple of years for another of my small hotels, partner was another ex-wife.

We used our Thai accountant to help us to register both types of business. The sole trader fees were about 400 baht, the partnership fees were a few thousand baht.

For both of these types of entity, you do not have legal 'control' over the business. But (as with my businesses), if you possess the skill upon which the business relies, then you do have 'control'

But! Your success may vary because some accountants deny that you can use this type of legal entity to employ a foreigner. Check the Thai law and you'll see that it is quite legal.

Good luck

Simon

Thx Simon, here the OP

this is good news

does a "Registered sole Trader Business" has any restrictions on foreigner work permit

like in LTD it is 4 Thai for 1 foreign WP -that has been said by those falang laywers

bye Harry

[EBlair48]

SNIPPET

My main problem is that a foreigner in Thailand is not allowed to work without a work permit.

And the Thai private LTD conditions of minority and 4 Thai workers are not attractive for someone who wants to work flexible and as a 1 man company.

I agree with Simon, this is not correct , you only need one worker at 300 baht a day to qualify for a work permit. ( You do need 4 workers to qualify for yearly extensions on your B visa plus show an adequate income after 1 year, or is it 2? And probably some tea money. ) One worker only means you have to do a border stamp run every 90 days and a new visa run ever 15 months ( you get five, 90- day entries as long as you do the last re entry just before your B visa expires. )

Be wary of Thai consultants, they do not have you best interests at heart, in fact they have other Thai interests as priority- And bewre of Foreign consultants as they tend to be over priced , ignorant or crooks, or all three. Good luck it's tough world out there - you'll do well not to trust ANYONE, ever. And double check that accountant, too. Like piranhas, they all take a bite until nothing is left.

If you are American you can register a Thai Co Ltd.under Amity Treaty which allows you majority share - 19,998 out of 20 ,000shares. You need two Thai share holders ( 1 share each ) at first to register it, then you can switch to wholly American.

If you go under the radar, quite possible with an internet type business, you are subject to retribution and being turned in.

Edited January 17, 2014 by EBlair48

[simon43]

does a "Registered sole Trader Business" has any restrictions on foreigner work permit

like in LTD it is 4 Thai for 1 foreign WP -that has been said by those falang laywers

The requirement to employ 4 Thais (or 2 if you are married to a Thai) is not a legal requirement to obtain a WP - it is a requirement of the immigration office to extend a non-immigrant B visa.

That being said, some labour offices are reticent to issue a WP where you are the only employee in a sole-trader business.

My suggestion would be for your GF to ask at the Labour office if they will issue a work permit for her foreign husband so that they can work together in her sole trader internet business that does not complete with other local Thai businesses. she can emphasize that your little business can help local Thai businesses to set up their websites etc, sell online etc ==> ie put some spin on it.

But it is certainly doaable, and legal, and cheap.

Edited January 22, 2014 by simon43

[Razzler1973]

SNIPPET

My main problem is that a foreigner in Thailand is not allowed to work without a work permit.

And the Thai private LTD conditions of minority and 4 Thai workers are not attractive for someone who wants to work flexible and as a 1 man company.

I agree with Simon, this is not correct , you only need one worker at 300 baht a day to qualify for a work permit. ( You do need 4 workers to qualify for yearly extensions on your B visa plus show an adequate income after 1 year, or is it 2? And probably some tea money. ) One worker only means you have to do a border stamp run every 90 days and a new visa run ever 15 months ( you get five, 90- day entries as long as you do the last re entry just before your B visa expires. )

Be wary of Thai consultants, they do not have you best interests at heart, in fact they have other Thai interests as priority- And bewre of Foreign consultants as they tend to be over priced , ignorant or crooks, or all three. Good luck it's tough world out there - you'll do well not to trust ANYONE, ever. And double check that accountant, too. Like piranhas, they all take a bite until nothing is left.

If you are American you can register a Thai Co Ltd.under Amity Treaty which allows you majority share - 19,998 out of 20 ,000shares. You need two Thai share holders ( 1 share each ) at first to register it, then you can switch to wholly American.

If you go under the radar, quite possible with an internet type business, you are subject to retribution and being turned in.

Good info

To sum it up, you can obtain a work permit by setting up a company with your missus in which see is majority shareholder and hiring one worker is enough for that work permit? All it means is you won't get B visa? What kind of visa would you have with your work permit then? One that involves visa runs it seems but is that likely to arouse suspicion that you are coming/going so much or it won't cause you have a work permit?

[simon43]

All it means is you won't get B visa

Yes you will get a B visa, but you will not be able to do yearly extensions in Thailand, (because you won't have enough Thai employees to meet the requirement for B visa extensions). Rather, you simply do visa-runs every 90 days, and re-apply outside Thailand for a new B visa when it expires.

[Razzler1973]

Ah, I see

If that generally a successful way of doing things though? Do they not look at all your stamps and start questioning you or when re-applying for the new B visa they not ask why you don't hire more Thais or it's totally no problem and a choice as to how many Thais you hire vs convenience of visa renewals?

* (I say this as I am not sure how difficult getting a B visa is)

This is the option with a missus but without a missus there's no chance? It's basically an under the radar thing or 2m baht + 4 staff? Advice on previous page focused on the guy and his missus and she doing things?

Useful info, cheers

[falangUK]

Your only option is a Limited Company + 4 x Thai staff.

Not true. 'Farang' lawyers tell you that because they are generally greedy and untrustworthy.. I stopped using such lawyers about 10 years ago and now use an honest Thai accountant.

You have several other legal choices:

1 - Registered Limited Partnership with your GF, where she owns 51% and you own 49% of the business partnership (or other ratios, but she must be the majority partner). You can apply for a WP, (so long as your profession is not on the prohibited employment list). The requirement for 4 Thai staff relates to visa extensions, not to your B visa. However, depending on your local labour office, they may require you to have 4 Thai employees or possibly 2.

Note - I have used this type of structure for the past couple of years for one of my small hotels, partner was ex-wife

2 - Registered sole Trader Business. Your GF goes to her local Tessabahn office and registers the business as a sole trader. Cost is about 100 baht if I recall. This type of business has no limited liability protection. She can employ you as above.

Note - I have used this type of structure for the past couple of years for another of my small hotels, partner was another ex-wife.

We used our Thai accountant to help us to register both types of business. The sole trader fees were about 400 baht, the partnership fees were a few thousand baht.

For both of these types of entity, you do not have legal 'control' over the business. But (as with my businesses), if you possess the skill upon which the business relies, then you do have 'control'

But! Your success may vary because some accountants deny that you can use this type of legal entity to employ a foreigner. Check the Thai law and you'll see that it is quite legal.

Good luck

Simon

Hi Simon,

Thanks for the information, Sorry for digging up this old thread.

I was just wondering whether it is still possible to use those 2 options.

I visited a farang lawyer today and was given the option 1, because it has limited liability and he advised to form a 100% Thai owned company for my GF and then get a workpermit for myself (employed as the GM)

The cost to form a company = 24000 Bahts

The cost for workpermit = 18100 Bahts (3000 more for the visa application)

from your post, I think we should be able to do this for a lot less.

I would be most grateful for any advice.

TIA:)

[simon43]

I was just wondering whether it is still possible to use those 2 options.

As far as I am aware, nothing has changed

[rwdrwdrwd]

There are some options aside from starting your own Thai business and employing people, and this is one - http://iglu.in.th/freelance/

AKA option 1 of your 'other options'

Personally I think it is overpriced. You could just run a fraction of work through it though, and it's certainly much less bureaucracy than other options.

Edited July 20, 2015 by rwdrwdrwd