Need Work Permit

[Tony Clifton]

I'll try to explain this best I can.

1- We started this company a year ago (co.ltd.)

At first, we tried doing business online only, selling products abroad for a Thai friend ouf ours who is manufacturing here in Thailand. Trying to compete online was quite a challenge and I came to the conclusion that we had to try something else. We did not invest much as I had taken care of creating the website, managing our mail server and everythig related myself. There are 7 shareholders, including my wife and I. I represent 1% as my sister in law ( accountant who takes care of the whole family's finances) warned that if I was to hold 49% , I'd end up paying too much in taxes. Other shareholders are all in-laws and are not involved physically or financially. May I add that they are very honest people and, already wealthy and accepted to be shareholders only to help us establish this company. We never bothered getting a work permit as all the work was done online and servers hosted in the U.S. (even though a work permit is required by law).

2- We will now be manufacturing on our side in cooperation with our same Thai friend, sub-contracting actually. We have hired a staff of twenty, equipment is installed and ready for production, this week hopefuly, at a location we chose to rent for now. My sister in-law has mentioned that I can actually obtain a work permit with our company ONLY after the company has showed profit for two consecutive years. She is a certified accountant, is usually spot on with laws and does work for foreign companies established here as well.

What to do?

I really want to be part of the whole thing and not simply have all responsibilities resting on my wife's shoulders.

I would like to add that the money used for purchasing machinery, rent and all was invested somewhere else but was recently transfered to our joint account in order to start this up.

Thanks,

Tony

[Indo-Siam]

If:

1) You are located in Bangkok area.

2) You can document your marriage with a Thai marriage registration certificate.

3) Your company has at least 1,000,000 baht registered capital

4) Your company is registered for VAT

5) You compny is current on all taxes due

Then you can get work permit immediately, simply by applying.

Your advisor's comments advising you to not hold 49% because of taxes (?) suggests that you were receiving income via after-tax dividends. This is the WORST way to receive compensation (you are taxed twice - once on company profits, and then a second time on distribution of dividends on after-tax profits - which are taxed as ordinary income).

The ONLY way that the scenario your described makes sense is if either:

1) Your company has less than 1,000,000 baht registered capital

2) Your company does not have VAT registration

Correcting these "deficiencies" (relative to work permit) would allow you to immediately obtain work permit.

We routinely obtain initial work permits for foreign directors of new companies within 20 days of incorporation - prior to company having any Thai employees, or a bank ccount, or having issued even one invoice, or having paid one satang of tax. It is for RENEWALS of work permit that you must begin showing evidence of personal income tax withheld/paid.

What is possibly going on here is that the "tail is wagging the dog." You can get a work permit - but accountant has to go through a bit more hassle with Revenue department (with respect to VAT). So - perhaps to avoid that, you don't get a work permit. Instead of her working to support you - the customer - you are instead paying her to have her constrain you, to make her life easier.

Cheers!

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[email protected]

www.thaistartup.com

[SunbeltAsia]

Tony,

You wrote

Other shareholders are all in-laws and are not involved physically or financially. May I add that they are very honest people and, already wealthy and accepted to be shareholders only to help us establish this company.

You are in manufacturing and as long as you export this product. You as the foreigner can own this business 100%. You are not restricted to only have 49% of the shares.

My sister in-law has mentioned that I can actually obtain a work permit with our company ONLY after the company has showed profit for two consecutive years. She is a certified accountant, is usually spot on with laws and does work for foreign companies established here as well.

She is misinformed. You can apply for a work permit now.

www.lawyer.th.com

[CL0R0X]

on the same subject from all the above,

can one get a work-permit with a company that has less than a 1,000,000 baht registered capital? and less than 4 thai employee.

is located in Bangkok area.

the company is registered for VAT

company is current on all taxes due

[SunbeltAsia]

can one get a work-permit with a company that has less than a 1,000,000 baht registered capital? and less than 4 thai employee.

is located in Bangkok area.

the company is registered for VAT

company is current on all taxes due

You can get a work permit by having even zero Thai employees but you must at least have one million Baht registered capital(if you are married to a Thai) Otherwise it must be 2 million Baht.

Easy to raise the registered capital so not a problem to do.

[Maestro]

You are in manufacturing and as long as you export this product. You as the foreigner can own this business 100%. You are not restricted to only have 49% of the shares.

I am sure you are right but I am wondering: if a company needs a minimum of 7 registered shareholders, how can one person own 100% of the shares?

---------------

Maestro

[Maestro]

You can get a work permit by having even zero Thai employees but you must at least have one million Baht registered capital(if you are married to a Thai)

What is the minimum percentage of registered capital that must be paid up?

---------------

Maestro

[SunbeltAsia]

You are in manufacturing and as long as you export this product. You as the foreigner can own this business 100%. You are not restricted to only have 49% of the shares.

I am sure you are right but I am wondering: if a company needs a minimum of 7 registered shareholders, how can one person own 100% of the shares?

---------------

Maestro

He can have 399,994 shares out of 400,000 shares. The other 6 shareholders can have shares with par value of 5 baht, which can be any nationality.

What is the minimum percentage of registered capital that must be paid up?

25%

www.lawyer.th.com

[Maestro]

He can have 399,994 shares out of 400,000 shares. The other 6 shareholders can have shares with par value of 5 baht, which can be any nationality.

What is the minimum percentage of registered capital that must be paid up?

25%

Thank you, Sunbelt. It is something I have been wondering about every time I read about company formation; now everything is clear.

...actually, I do have one more question. Are the names of the founding shareholders a matter of public record? Can anybody find out, from a government office, who they are?

---------------

Maestro

[rishi]

He can have 399,994 shares out of 400,000 shares. The other 6 shareholders can have shares with par value of 5 baht, which can be any nationality.

What is the minimum percentage of registered capital that must be paid up?

25%

Thank you, Sunbelt. It is something I have been wondering about every time I read about company formation; now everything is clear.

...actually, I do have one more question. Are the names of the founding shareholders a matter of public record? Can anybody find out, from a government office, who they are?

---------------

Maestro

That's an extremely public matter ... and if some official doesn't feel like checking the records, you're obliged to produce that list. If you can't, you pay a fine and/or go to jail.

I'm not quite sure, but I think that list is as public as the record of registered companies ... meaning that anyone, who knows where to go, can get that information.

[SunbeltAsia]

actually, I do have one more question. Are the names of the founding shareholders a matter of public record? Can anybody find out, from a government office, who they are?

Rishi is correct, it is public along with how much a company stated they made in profit and taxes paid.

Some folks because of this, have their shares in the Thai Limited company owned by a offshore company they control.

[simon43]

Greg, a quick question. You say that if a company manufactures something for export only, then a non-Thai can own 100% of the business, (which sounds like it makes life much less worrying!).

How is 'manufacturing' defined under Thai law? Does it refer to any item or are these stipulated within the law?

I ask because I have been thinking about manufacturing radio amateur and radio enthusiast antennas and accessories, only for export. From what you say, it sounds like this proposed (small) enterprise could be set up with me owning 100% of the business/shares.

Can you clarify please?

Thanks - Simon

[SunbeltAsia]

Greg, a quick question. You say that if a company manufactures something for export only, then a non-Thai can own 100% of the business, (which sounds like it makes life much less worrying!).

How is 'manufacturing' defined under Thai law? Does it refer to any item or are these stipulated within the law?

I ask because I have been thinking about manufacturing radio amateur and radio enthusiast antennas and accessories, only for export. From what you say, it sounds like this proposed (small) enterprise could be set up with me owning 100% of the business/shares.

Can you clarify please?

Thanks - Simon

Hi Simon,

If you are assembling it or doing any type of manufacturing, as long as the product is only for export. Foreigners can own 100% of the shares in most all cases.

The only Mfgs that don't qualify

Manufacturing sugar from sugarcane;

Production of crockery of Thai arts and culture;

Production of goldware, silverware, nielloware, bronzeware or lacquerware;

Production of Thai musical instruments;

Production of carved wood;

Making or casting Buddha images and monk alms bowls;

Mfg of:

firearms, ammunition, gun powder, explosives.

Accessories of firearms, ammunition, and explosives.

Armaments, ships, air-craft or military vehicles.

Equipment or components, all categories of war materials.

manufacturing radio amateur and radio enthusiast antennas and accessories, only for export.

Perfect. You as the foreigner can own 99.994% of the shares.

www.lawyer.th.com