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

[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 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.

A house that rents for 40000 thb/month probably cost at least 10 millions. I hope you spoke with a loan officer or bank manager about the loan,....and got something in writing from them....not just looked on the website.

[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.

A house that rents for 40000 thb/month probably cost at least 10 millions. I hope you spoke with a loan officer or bank manager about the loan,....and got something in writing from them....not just looked on the website.

I will take your advice and ask something in writing.

Regarding the 40000 thb/month rent, I'm sorry to disappoint but here in Pattaya it's common rent for a 5 millions house. For comparison, 20k bahts/month rent is common for a 3 millions+ house or condo, and 12k baht/month is even more common for a 1.3 million condo.

I'm well aware of the rental values in Pattaya, and they can differ a lot from other areas of Thailand. I've been renting from different agencies, direct owners, friends, investors, for many years, and under different circumstances, so I'm pretty sure about this!

[Briggsy]

9.6% of saleable value per annum. Maybe a little high but depending on furnishing and rental demand would be in acceptable range.

[penwithcris]

My spouse just added an inexpensive extension to the family home, bought the minimum of stock, and started selling hot food and cold drinks. Nobody in authority seemed a little bit interested in her new venture and she has been trading successfully for the past 3 years.

I suppose it helps that members of the extended family work in the nearby government offices and the local police station. No thought to declare the existence of a business to any of the authorities. Just trying to stay under the radar

I'm sure it all depends on the location of the business. Street sellers in Bangkok and Pattaya are constantly harassed for donations by the local police

The idea of taking out a bank loan for a quite substantial amount of money seems foolhardy. Just give your partner a few thousand baht a month allowance. Far less hassle

[koeko]

My spouse just added an inexpensive extension to the family home, bought the minimum of stock, and started selling hot food and cold drinks. Nobody in authority seemed a little bit interested in her new venture and she has been trading successfully for the past 3 years.

I suppose it helps that members of the extended family work in the nearby government offices and the local police station. No thought to declare the existence of a business to any of the authorities. Just trying to stay under the radar

I'm sure it all depends on the location of the business. Street sellers in Bangkok and Pattaya are constantly harassed for donations by the local police

The idea of taking out a bank loan for a quite substantial amount of money seems foolhardy. Just give your partner a few thousand baht a month allowance. Far less hassle

"Just give your partner a few thousand baht a month allowance. Far less hassle"

What do you imply? I WANT to buy and stop renting, not her. The house would be mainly for me to live. I don't give money to my wife nor is she asking, she's my wife not some Pattaya girl............

[Chao Lao Beach]

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.

Commonly called mafia

[MMarlow]

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..

That's called fraud.

[koeko]

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..

That's called fraud.

I wonder how exactly would that be fraud if I'm her only customer overpaying whatever she sells???

[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.

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".

Was my comment addressed to you?

Understand and not pass judgement? Be nice? Well, to quote some of your own recent posts, "I try to avoid telling people, either in person or on-line, what they should or shouldn't be doing", (21/12/13). Recent change of attitude?

"The feeling you are getting is most likely mental illness", (12/12/13).

"And sometimes buffoons appear as impish posters", (29/11/13).

Don't be two-faced, it's not very becoming.

[penwithcris]

My spouse just added an inexpensive extension to the family home, bought the minimum of stock, and started selling hot food and cold drinks. Nobody in authority seemed a little bit interested in her new venture and she has been trading successfully for the past 3 years.

I suppose it helps that members of the extended family work in the nearby government offices and the local police station. No thought to declare the existence of a business to any of the authorities. Just trying to stay under the radar

I'm sure it all depends on the location of the business. Street sellers in Bangkok and Pattaya are constantly harassed for donations by the local police

The idea of taking out a bank loan for a quite substantial amount of money seems foolhardy. Just give your partner a few thousand baht a month allowance. Far less hassle

"Just give your partner a few thousand baht a month allowance. Far less hassle"

What do you imply? I WANT to buy and stop renting, not her. The house would be mainly for me to live. I don't give money to my wife nor is she asking, she's my wife not some Pattaya girl............

[penwithcris]

I apologise if I offended you with my response. It certainly wasn't intentional

I've had a read again of your topic and I guess I became confused by the various propositions put forward.

You seem to be wanting a bank to lend your wife a considerable amount of money by setting her up in a small business as a self-employed person

Again without wishing to cause offence this seems to be a very unlikely scenario. If you were the manager of a bank would you be prepared to loan a large amount to a young couple with such limited collateral?

I would suggest you remain patient and build up a large capiital sum over the next two or three years. With any luck the baht will continue to depreciate given the uncertain political situation and your nest egg will build or buy a lot more bang for your bucks

Attempting to use dubious financial tactics is never a good idea

[umbanda]

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..

That's called fraud.

I wonder how exactly would that be fraud if I'm her only customer overpaying whatever she sells???

I need to tell you this. A bank employee or a bank manager do not make decisions about loans, they just send the paperwork to the bank's main lending office, probably in BK. Who makes the decision is another employee called "underwriter". That person will check all the loan's related documentation. No client can talk with that person for any reason, you even will not have its name. Any info that looks fishy for him it is enough to denied the loan. When the bank says 15000 K minimum for income, is referring to a minimum loan offered and not telling the other conditions, like credit history, job or own business history, collateral, etc, etc, etc. It is something called loan to income ratio. House payment cannot be more than 45% of the NET income. Bank knows that 15000 may cover a maximum 7000 monthly rent plus basic expenses, if the applicant do not have any other kind of payments or expenses. That all. Do no get into trouble or get other people in trouble, trying to do it in "your way".

Anyway, you are very young, it is the right time to learn...asking and listening...and not to get stressed if things are not like you expected.

Good luck, and the best for you and your family in 2014.

[belg]

just pay the BIB and your fees are cleared, monthly payments doh

[Usana]

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

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?

My wife got a loan 6.5 million from the bank after she paid her tax and got salary certify letter from a Singapore company and endorse by a Singapore lawyer. Her house bought from a developer in chonburi which cost only 5 million but she manage to get 6.5 million . She is not working and No income at all .

[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

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?

My wife got a loan 6.5 million from the bank after she paid her tax and got salary certify letter from a Singapore company and endorse by a Singapore lawyer. Her house bought from a developer in chonburi which cost only 5 million but she manage to get 6.5 million . She is not working and No income at all .

Interesting....Can you tell me please how much she put down? House or Condo? I do sales for a local developer and I will like to know about because I am doing marketing in other countries...Thank you...

[penwithcris]

I seem to be missing something here. Large loans being advanced based on limited incomes? How are the repayments going to be met.

Normally banks will only lend a certain % of the value of the property being loaned against ,say 80% of the property value. So for a house valued & 5 million baht the maximum loan would be 4 million baht to ensure the lender can recoup the loan by selling the property should the lender default.

I would be very interested to learn what kind of arrangement was entered into with the Singapore bank, what the interest rate was, how much were the monthly repayments ,and the length of the repayment period i.e.25 or 30 years.

Furthermore what disposable income was assessed in order for such a large loan to be advanced?

Of course this is very personal information , but I am sure the forum would appreciate at least some rough figures from you to enable us to secure such a good deal as you have should we wish to

[Usana]

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 work permit.

About the location of the business, the DBD will check the location. Ask everything at the DBD office, you

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?

My wife got a loan 6.5 million from the bank after she paid her tax and got salary certify letter from a Singapore company and endorse by a Singapore lawyer. Her house bought from a developer in chonburi

which cost only 5 million but she manage to get 6.5 million . She is not working and No income at all .

Interesting....Can you tell me please how much she put down? House or Condo? I do sales for a local developer and I will like to know about because I am doing marketing in other countries...Thank you...

A house we pay 100k to book the place , we using quite some time to get the document for the loan . the loan approval are from bkk head office and the loan is more than 5 million . Please note that we were ask to buy insurance for my wife just to protect the bank interests. The bank will ask u to buy certain products just to get ur loan approved . I do know a few bank here , if you need any help I can introduce a few for u .

[Usana]

I seem to be missing something here. Large loans being advanced based on limited incomes? How are the repayments going to be met.

Normally banks will only lend a certain % of the value of the property being loaned against ,say 80% of the property value. So for a house valued & 5 million baht the maximum loan would be 4 million baht to ensure the lender can recoup the loan by selling the property should the lender default.

I would be very interested to learn what kind of arrangement was entered into with the Singapore bank, what the interest rate was, how much were the monthly repayments ,and the length of the repayment period i.e.25 or 30 years.

Furthermore what disposable income was assessed in order for such a large loan to be advanced?

Of course this is very personal information , but I am sure the forum would appreciate at least some rough figures from you to enable us to secure such a good deal as you have should we wish to

Yes I tried to get the loan from Singapore uob but I feel that Thai bank are more flexible and less admin fee than the Singapore bank . They only loan for condo purhcase and above 5million baht . Please note that in Thailand everything is adjustable depends on how u do it . U may pm if u need any help . I am not a agent or something I just share my past experiences .

[umbanda]

Bank follow lending rules, private lenders, like the developers not.

If a developer have in portfolio so many units for sale, the qualification for its approval may be very flexible ...even may offer a lease to own program, short term plus balloon payment program, foreigner loan with large down payment and not qualification documentation, etc, etc, etc....They will take higher risk sometimes, because will prefer have to forecllure later and not to have so much inventory now...

[Usana]

Bank follow lending rules, private lenders, like the developers not.

If a developer have in portfolio so many units for sale, the qualification for its approval may be very flexible ...even may offer a lease to own program, short term plus balloon payment program, foreigner loan with large down payment and not qualification documentation, etc, etc, etc....They will take higher risk sometimes, because will prefer have to forecllure later and not to have so much inventory now...

Honestly in real life we should not put so much restriction for ourself . If u can't do it does not mean other can't do it . I have done it before , I just share but if u wanna report to anyone saying they dint have enough qualification so be it and happy new year .

[umbanda]

Bank follow lending rules, private lenders, like the developers not.

If a developer have in portfolio so many units for sale, the qualification for its approval may be very flexible ...even may offer a lease to own program, short term plus balloon payment program, foreigner loan with large down payment and not qualification documentation, etc, etc, etc....They will take higher risk sometimes, because will prefer have to forecllure later and not to have so much inventory now...

Honestly in real life we should not put so much restriction for ourself . If u can't do it does not mean other can't do it . I have done it before , I just share but if u wanna report to anyone saying they dint have enough qualification so be it and happy new year .

You got it wrong....I was giving HOPE..and a good info. I have 30 years experience in lending, the last 2 years a loan advisor for Century 21 Thailand.

HAPPY NEW YEAR!!

[Usana]

Bank follow lending rules, private lenders, like the developers not.

If a developer have in portfolio so many units for sale, the qualification for its approval may be very flexible ...even may offer a lease to own program, short term plus balloon payment program, foreigner loan with large down payment and not qualification documentation, etc, etc, etc....They will take higher risk sometimes, because will prefer have to forecllure later and not to have so much inventory now...

Honestly in real life we should not put so much restriction for ourself . If u can't do it does not mean other can't do it . I have done it before , I just share but if u wanna report to anyone saying they dint have enough qualification so be it and happy new year .

You got it wrong....I was giving HOPE..and a good info. I have 30 years experience in lending, the last 2 years a loan advisor for Century 21 Thailand.

HAPPY NEW YEAR!!

. Good to know that you are giving hope. Happy new year