What is procedure for a Thai national to register a business (e.g. selling somtam)

[koeko]

Objective: getting a bank loan for the wife

Requirement: be either employed or self-employed

The bank asks for bank statements of the past 6 months, but they don't say if they need any other documents, my guess is that they do.

So let's say she would like to sell somtam or lottery tickets or whatever, how would she go about getting her commercial activity registered and get all the legal documents? Where to go, what is required, how long does that take, and how much does it cost? Lastly, what taxes will she have to pay?

Thanks!!!

[koeko]

Thanks for all the great replies, it was really helpful!!

[MMarlow]

Thanks for all the great replies, it was really helpful!!

Never mind, with that attitude you've guaranteed yourself a response next time you ask a question with an obvious answer...zero response again.

[umbanda]

Look at the DBD web site. It is in English, but better just go to a local DBD office or your Amphur office and ask. It is very easy and fast for Thai people and can be done in jut 1 to 3 days. Bring prove of residence and/or any doc.about the place of business, plus ID. Will cost about 1000 thb for a individual registration, or a little more for a 2/3 people limited partnership. After that, bring the company docs to a Tax and VAT local office for registration if necessary. That's all. Good luck. About the bank loan....Will require to have prove of enough income, even if she owns a business.....

Edited December 29, 2013 by umbanda

[koeko]

Look at the DBD web site. It is in English, but better just go to a local DBD office or your Amphur office and ask. It is very easy and fast for Thai people and can be done in jut 1 to 3 days. Bring prove of residence and/or any doc.about the place of business, plus ID. Will cost about 1000 thb for a individual registration, or a little more for a 2/3 people limited partnership. After that, bring the company docs to a Tax and VAT local office for registration if necessary. That's all. Good luck. About the bank loan....Will require to have prove of enough income, even if she owns a business.....

Thank you very much! Found this: http://www.dbd.go.th/dbdweb_en/ewt_news.php?nid=3974&filename=index

"any doc.about the place of business"

Do you know if there are certain conditions for selling on the street? like walking on the beach selling fruits or whatever? is it even legal?

Thanks again!

[koeko]

Look at the DBD web site. It is in English, but better just go to a local DBD office or your Amphur office and ask. It is very easy and fast for Thai people and can be done in jut 1 to 3 days. Bring prove of residence and/or any doc.about the place of business, plus ID. Will cost about 1000 thb for a individual registration, or a little more for a 2/3 people limited partnership. After that, bring the company docs to a Tax and VAT local office for registration if necessary. That's all. Good luck. About the bank loan....Will require to have prove of enough income, even if she owns a business.....

"About the bank loan....Will require to have prove of enough income, even if she owns a business....."

Yeah I know they require at least 15k baht monthly income according to the SCB website. We could fake this income (I can just borrow her that money), I wonder if that would work! She'll still have to pay taxes on this money, that's the real pain in the a..

[cronus]

Look at the DBD web site. It is in English, but better just go to a local DBD office or your Amphur office and ask. It is very easy and fast for Thai people and can be done in jut 1 to 3 days. Bring prove of residence and/or any doc.about the place of business, plus ID. Will cost about 1000 thb for a individual registration, or a little more for a 2/3 people limited partnership. After that, bring the company docs to a Tax and VAT local office for registration if necessary. That's all. Good luck. About the bank loan....Will require to have prove of enough income, even if she owns a business.....

"About the bank loan....Will require to have prove of enough income, even if she owns a business....."

Yeah I know they require at least 15k baht monthly income according to the SCB website. We could fake this income (I can just borrow her that money), I wonder if that would work! She'll still have to pay taxes on this money, that's the real pain in the a..

and how to pay the bank loan back ... ?

[koeko]

Look at the DBD web site. It is in English, but better just go to a local DBD office or your Amphur office and ask. It is very easy and fast for Thai people and can be done in jut 1 to 3 days. Bring prove of residence and/or any doc.about the place of business, plus ID. Will cost about 1000 thb for a individual registration, or a little more for a 2/3 people limited partnership. After that, bring the company docs to a Tax and VAT local office for registration if necessary. That's all. Good luck. About the bank loan....Will require to have prove of enough income, even if she owns a business.....

"About the bank loan....Will require to have prove of enough income, even if she owns a business....."

Yeah I know they require at least 15k baht monthly income according to the SCB website. We could fake this income (I can just borrow her that money), I wonder if that would work! She'll still have to pay taxes on this money, that's the real pain in the a..

and how to pay the bank loan back ... ?

My own income?

[Briggsy]

There may be an alternative route for your wife to obtain a bank loan, that is have the loan secured with a land title deed.

[koeko]

There may be an alternative route for your wife to obtain a bank loan, that is have the loan secured with a land title deed.

Hmmm... thanks but... she doesn't own any land. Her parents do, and I'm sure this is the kind of land I could pay in one time myself without even noticing the difference on my bank account.

[Briggsy]

The land does not need to be owned by the recipient of the loan but the owner of the land must sign and accept if the loan is not repaid, the land can be forfeited.

Landless Thais use this method all the time to get loans.

It seems it might be a lot less hassle than setting up a business just to get a loan. Cart before the horse and all that.

[Minnehaha]

This also raises some interesting questions.

If it is a company ltd, which required invested capital, then you could enjoy tax loss carryforward and legally request the withholding tax back. This is how the law works. Having said that I have been in that situation and the Revenue Department were total <deleted>, screwing the company out of 800,000 Baht. Initially they said you cannot enjoy a tax loss carryforward and re-claim the withholding tax. This is not true. We talked to several lawyers. The problem is they threatened to drag it out and audit every satang. Even though our books were clean in the end we decided to accept a smaller refund.

My wife has her own business which ran at a loss this past year. I have been pushing her to form a company and run it through just so she can take a loss and not have to pay taxes. I am not sure if a Sole Proprietorship or Partnership form would be eligible for this. Forming a Company Ltd, requires certain capital, 7 shareholders, etc.

[louse1953]

There may be an alternative route for your wife to obtain a bank loan, that is have the loan secured with a land title deed.

So why don't' you lend your wife the money Mr.Moneybags.

Hmmm... thanks but... she doesn't own any land. Her parents do, and I'm sure this is the kind of land I could pay in one time myself without even noticing the difference on my bank account.

[koeko]

The land does not need to be owned by the recipient of the loan but the owner of the land must sign and accept if the loan is not repaid, the land can be forfeited.

Landless Thais use this method all the time to get loans.

It seems it might be a lot less hassle than setting up a business just to get a loan. Cart before the horse and all that.

Thanks for the info, but I believe they've already used their land to get personal loans themselves.

There may be an alternative route for your wife to obtain a bank loan, that is have the loan secured with a land title deed.

Hmmm... thanks but... she doesn't own any land. Her parents do, and I'm sure this is the kind of land I could pay in one time myself without even noticing the difference on my bank account.

So why don't' you lend your wife the money Mr.Moneybags.

I'm not really sure but I recall the wife telling me that in her village the land used to worth 10k baht per rai not long ago, and that it was now worth 20k or 40k baht per rai. In any case, that would be less than 50k baht for her parent's land, which is nothing compared the loan we would like to get (5 millions).

[Briggsy]

Ahh, you are talking about a considerable loan here, equivalent to a mortgage in Western Europe.

100,000 Euro or a lot more.

[umbanda]

To sell som tam on the street or in a local market is not necessary to have a Limited Company, showing or investing money, etc Just a sole company or a limited partnership with 1 to 3 Thai people.without showing any money will do it. For a foreigner be part of the partnership is a little more complicated, but it is possible. When registering the limited partnership just looks at the future and declare all kind of company activities you may have, from selling food, to sell cars, furniture, etc, etc, avoiding activities not permitted for foreigners like farming, real estate, etc.. In that way, you can get into the partnership later and even get a work permit.

About the location of the business, the DBD will check the location. Ask everything at the DBD office, you may be lucky and found an English speaker and helpful employee. Do not forget to smile.

About the loan, most banks will look at at least 6 months deposits to calculate the income, tax receipts, collateral, etc, etc. Some banks will look also at spouse income, even from foreigners. All depend of the bank policies and use of the loan.

Edited December 29, 2013 by umbanda

[laobali]

Does she have related business experience in Thailand and a proper plan?

[koeko]

To sell som tam on the street or in a local market is not necessary to have a Limited Company, showing or investing money, etc Just a sole company or a limited partnership with 1 to 3 Thai people.without showing any money will do it. For a foreigner be part of the partnership is a little more complicated, but it is possible. When registering the limited partnership just looks at the future and declare all kind of company activities you may have, from selling food, to sell cars, furniture, etc, etc, avoiding activities not permitted for foreigners like farming, real estate, etc.. In that way, you can get into the partnership later and even get a work permit.

About the location of the business, the DBD will check the location. Ask everything at the DBD office, you may be lucky and found an English speaker and helpful employee. Do not forget to smile.

About the loan, most banks will look at at least 6 months deposits to calculate the income, tax receipts, collateral, etc, etc. Some banks will look also at spouse income, even from foreigners. All depend of the bank policies and use of the loan.

Does she have related business experience in Thailand and a proper plan?

I think you all misunderstood our plan here. I don't want nor need a work permit, she doesn't want nor need to work. We want to get a loan for a house, and as a foreigner I can only get a loan for a condo + they won't cover the full price. Only Thais seem to be eligible to a 100% loan for a house, and for that they need to work for at least 6 months and earn at least 15k baht/month.

The bank accept both employed and self-employed so the easiest is to get her to "work" for 6 months just to get the loan. She won't really work, and the simplest, I believe, is to get her to be a self-employed and I'll just give her some 15k each month. The bank doesn't say if the bank statements are enough or if they also need business registration documents, but I prefer to be sure and get those documents so it will all look legit. Once we get the loan, I believe she can just cancel her registration...

I hope that makes sense!

[koeko]

To sell som tam on the street or in a local market is not necessary to have a Limited Company, showing or investing money, etc Just a sole company or a limited partnership with 1 to 3 Thai people.without showing any money will do it. For a foreigner be part of the partnership is a little more complicated, but it is possible. When registering the limited partnership just looks at the future and declare all kind of company activities you may have, from selling food, to sell cars, furniture, etc, etc, avoiding activities not permitted for foreigners like farming, real estate, etc.. In that way, you can get into the partnership later and even get a work permit.

About the location of the business, the DBD will check the location. Ask everything at the DBD office, you may be lucky and found an English speaker and helpful employee. Do not forget to smile.

About the loan, most banks will look at at least 6 months deposits to calculate the income, tax receipts, collateral, etc, etc. Some banks will look also at spouse income, even from foreigners. All depend of the bank policies and use of the loan.

"the DBD will check the location"

so how does it work for moving sellers with no specific location? they're working illegally?

[TerryLH]

Any bank loan will be based on the ability to pay it back.

For an income of 15k a month, she won't be able to borrow much, if anything. Certainly not anywhere near 5m.

Street stall vendors in this area pay a fee to the police. They have a special office that handles this.

They are able to pay daily. They are paying for the space.

[thailandbeachisland]

She won't get a loan if she has no property or regular paid job.

Some banks offer to put money and block it in an account monthly during years to expect to be allowed to get a loan...

[Xonax]

Any bank loan will be based on the ability to pay it back.

For an income of 15k a month, she won't be able to borrow much, if anything. Certainly not anywhere near 5m.

Street stall vendors in this area pay a fee to the police. They have a special office that handles this.

They are able to pay daily. They are paying for the space.

As far as I know, she will not be able to mortgage more than a maximum of 4 or 5 times her annual salary. So with a 15K monthly salary, she may in best scenario be able to loan 700,000-900,000 THB for a house / condo. For a house, she may in addition need to provide a downpayment, while new condo´s with good location in Bangkok, sometimes can be fully mortgaged, but are rarely sold for 1 million. Second hand houses and condo´s will have to be valuated by the bank and will not be financed 100%. You will have to pay probably 20-30,000 THB for the evaluation.

Edited December 29, 2013 by Xonax

[HUAHIN62]

Start an online shop in her name. Deposit small amounts every other day to make the B 15 000 a month plus her purchase cost of the goods.

[12DrinkMore]

If you love her, why not just buy the house and land, plus essentials like the pick-up and a motorcycle in cash?

[koeko]

Any bank loan will be based on the ability to pay it back.

For an income of 15k a month, she won't be able to borrow much, if anything. Certainly not anywhere near 5m.

Street stall vendors in this area pay a fee to the police. They have a special office that handles this.

They are able to pay daily. They are paying for the space.

She won't get a loan if she has no property or regular paid job.

Some banks offer to put money and block it in an account monthly during years to expect to be allowed to get a loan...

Any bank loan will be based on the ability to pay it back.

For an income of 15k a month, she won't be able to borrow much, if anything. Certainly not anywhere near 5m.

Street stall vendors in this area pay a fee to the police. They have a special office that handles this.

They are able to pay daily. They are paying for the space.

As far as I know, she will not be able to mortgage more than a maximum of 4 or 5 times her annual salary. So with a 15K monthly salary, she may in best scenario be able to loan 700,000-900,000 THB for a house / condo. For a house, she may in addition need to provide a downpayment, while new condo´s with good location in Bangkok, sometimes can be fully mortgaged, but are rarely sold for 1 million. Second hand houses and condo´s will have to be valuated by the bank and will not be financed 100%. You will have to pay probably 20-30,000 THB for the evaluation.

To all:

1. She's not alone, so both our incomes will be considered (mine is 2500 EUR+ monthly withdraw to Thailand since more than 3 years)
2. The primary borrower must be Thai National and earn at least 15k baht/month, no matter how much the guarantor/co-borrower earns.
3. Different banks differ:
   1. Kasikorn Bank requires 2 years of regular job before applying for a loan, while Siam Commercial Bank requires only 6 months.
   2. Kasikorn offers 80% for a house, while SCB offers 100%.
4. I've already asked to be the primary borrower (as I have local banking history) but they would only provide a loan for a condo and only 50%.
5. Getting a mortgage in my home country wouldn't work either as it's for a property in Thailand, not in Europe. I could get a personal loan, but with much higher rate and for much shorter time (we're talking about 30 years mortgage).
6. I've already made my homework so I know more or less what is possible and what isn't. My original question was just about getting my wife a legal document for a small independent job like the street sellers have etc. which seems the cheapest/fastest/simplest to proceed, isn't it?

Thanks anyway for all your unrelated (to my OP) answers!

[koeko]

If you love her, why not just buy the house and land, plus essentials like the pick-up and a motorcycle in cash?

I beg your pardon?

The house is also mainly for me and my children, I just want to replace my current rent by a mortgage.

[Benmart]

Thanks for all the great replies, it was really helpful!!

Never mind, with that attitude you've guaranteed yourself a response next time you ask a question with an obvious answer...zero response again.

Perhaps, he got multiple PM which we can't see. It is easy to be rude. The challenge is to understand and not to pass judgement.

"Be nice. It's contagious".

[umbanda]

To sell som tam on the street or in a local market is not necessary to have a Limited Company, showing or investing money, etc Just a sole company or a limited partnership with 1 to 3 Thai people.without showing any money will do it. For a foreigner be part of the partnership is a little more complicated, but it is possible. When registering the limited partnership just looks at the future and declare all kind of company activities you may have, from selling food, to sell cars, furniture, etc, etc, avoiding activities not permitted for foreigners like farming, real estate, etc.. In that way, you can get into the partnership later and even get a work permit.

About the location of the business, the DBD will check the location. Ask everything at the DBD office, you may be lucky and found an English speaker and helpful employee. Do not forget to smile.

About the loan, most banks will look at at least 6 months deposits to calculate the income, tax receipts, collateral, etc, etc. Some banks will look also at spouse income, even from foreigners. All depend of the bank policies and use of the loan.

"the DBD will check the location"

so how does it work for moving sellers with no specific location? they're working illegally?

Probably moving street vendors do not need it. It is also a minimum sales required for business and tax registration....

[umbanda]

I believe that you already spoke with a bank's loan officer. If you will register a business just to qualify for a loan, my advise is to get ALL the qualification info in WRITING before doing it....

I may be wrong, because even at the same bank you can get different info from different people.... but.... I will tell you what I know about....

You said that she is "not alone"....Well......banks MAY consider your income, but ONLY is you are legally married with her and you will co-sign the loan.

Bank house loans are only granted for people under 66 years old and the max term is for the years between the applicant age and 66.

Example..If the applicant is 46 years old, the maximum term will be 20 years.

By my understanding, no 100% loans anymore, and the the monthly payment for 1 million bath in 20 years is about 10000 thb...not so much less for a 30 years loan because the interest will be higher, and the required applicant's monthly income about 25000thb. A house in that value can be rented for a lot less than 10000thb/month.....no doubts about..

To obtain a house loan is not so easy like you think it is without a collateral. Banks already have too many foreclosures in its portfolio. You may have 'special' contacts if you get one in your terms.

Let me know what kind of loan you got it, and its conditions. I am curious about.

..

Edited December 29, 2013 by umbanda

[koeko]

I believe that you already spoke with a bank's loan officer. If you will register a business just to qualify for a loan, my advise is to get ALL the qualification info in WRITING before doing it....

I may be wrong, because even at the same bank you can get different info from different people.... but.... I will tell you what I know about....

You said that she is "not alone"....Well......banks MAY consider your income, but ONLY is you are legally married with her and you will co-sign the loan.

Bank house loans are only granted for people under 66 years old and the max term is for the years between the applicant age and 66.

Example..If the applicant is 46 years old, the maximum term will be 20 years.

By my understanding, no 100% loans anymore, and the the monthly payment for 1 million bath in 20 years is about 10000 thb...not so much less for a 30 years loan because the interest will be higher, and the required applicant's monthly income about 30000thb. A house in that value can be rented for a lot less than 10000thb/month.....no doubts about..

To obtain a house loan is not so easy like you think it is without a collateral. Banks already have too many foreclosures in its portfolio.

By the way.....If you gf or wife?....does not work, who will pay the loan if you leave her? Sorry....Just asking....

I already know most of that, yes we are legally married, yes we are young enough (25yo), this written info says 100% loan possible: http://www.scb.co.th/en/personal-banking/loans/home-loan/housing-loans

If I leave my wife I'll still pay for the loan as I want the house to live in myself and my children for the next 30 years. Extreme cases it's also possible to rent the house to cover the loan or even to sell the house...

The kind of house we want with private swimming pool etc. currently rents for 40k+ baths/month so getting a mortgage for anything less than that is a smart move anyway.