Setting Up A Company Elsewhere

[poorfarang]

Sunbelt: When you talk about BOI you mention that I would need to invest 1 million baht, where does that 1 million baht actually go?

And 8 year tax break, meaning, NO taxes for 8 years?

Sounds like an ideal setup if you get aproved.

EDIT: Can you also buy land under this setup?

Edited June 22, 2006 by poorfarang

[SunbeltAsia]

It would have been better if you just left the question unanswered. Alternatively, saying that you were wrong in the past, learned from your mistakes, and now give correct advice would have been honourable as well.

What mistake? We always have said no nominees. Our advice is 100% the same as it was 4 years ago. Nothing has changed one iota.

I know for a fact that your employees function as shareholders in companies you set up, without investing anything. You don't really want me to give names or upload documents, do you?

You better be glad it wasn't the case. If it was, you may have to pay a fine from 100,000 to 1,000,000 Baht and imprisonment of up to three years using a nominee, the same penalty as the Thai national. No Thai shareholder if it was someone we knew , ever was a nominee. You are confusing a shareholder versus a nominee. A nominee signs a share transfer and proxy votes. A shareholder buys the shares with cash or non cash such as service, equipment, inventory and has votes. If they don't have the funds on that date to invest, or had provided the service or equipment, they had 60 days to pay for the shares as it was a loan that was registered.

If you want a extra security step of protection, and if was cash the loan was based on, you as the foreigner should have a bank slip showing that 25% of the paid up capital had been transferred into the account of the borrower ( Thai national), who then transferred the funds into the company bank account. Rather than you transferring the money for the Thai national into the companies bank account yourself.

I don't know who you are, but if you set up a company with us. Go to our office on Friday, if in your file, the Thai national did not have the money and you do NOT find a loan agreement that the Thai National signed with the pledge of their shares as the security for the loan and their Id card, Sunbelt will owe you 100,000 baht. I'm that positive that every case, is told the same. Even if you have a copy of the agreement, it does not matter as three copies are signed with the pledge. One copy is not kept at the office for extra protection in case of natural disaster.

Go back to your retainer and check the professional fees and you'll see you were charged 3,000 Baht for this loan documentation. Go back to your notes and you'll remember it being explained not to use nominees and if you needed other possible shareholders, why they would not be nominees.

That's just nonsense. A person whos invests money or equivalent is entitled to be a shareholder with rights. A person who receives money to sign his name is not entitled to anything.

If they are a nominee and the company was set up with common shares. You'll find out you as the foreigner have no rights. The Thai nominee has all the rights and you can be kicked out as the MD and the company taken over. Cause that is how 90% of the Thai limited companies with Thai nominees were set up by other firms. Standard By-laws and no control for the foreigner except being the MD. The shareholders decide who the Directors are.

I invested myself over 2 million Baht for 5% of the shares in a Limited company. Do I have any rights? Not much according to the by-laws of the company. I knew that going in but took the shot because of trust. We'll see once the company sells, if my trust was justified. If I get screwed, nothing I can do.

[SunbeltAsia]

Sunbelt: When you talk about BOI you mention that I would need to invest 1 million baht, where does that 1 million baht actually go?

And 8 year tax break, meaning, NO taxes for 8 years?

Sounds like an ideal setup if you get aproved.

EDIT: Can you also buy land under this setup?

The million Baht goes into your companies bank account.

Correct no taxes for 8 years but it could stretch to 13 years.

If the company lost money in the first 3 years. Year 4 and year 5, you use those losses to offset profits. The BOI tax holiday can kick in year 6 to year 13.

You can buy land for your business and if approved, for the personal residence of the MD.

[poorfarang]

Wow, That sounds great.

If your planning on bringing in a lot of cash then the tax break will be huge. I like not giving away 30% of my money for 8 years.

So the 1 million goes into the company account, to be used for company expenses. So the "companys money" will always remain in the companys account and I would only be able to spend my salary? Please excuse my ignorance but this is all very new to me.

What is the total cost for setting up a BOI and how long does it usually take? Unless I am missing something - this looks like the best way to go about it.

[~G~]

You are confusing a shareholder versus a nominee. A nominee signs a share transfer and proxy votes. A shareholder buys the shares with cash or non cash such as service, equipment, inventory and has votes. If they don't have the funds on that date to invest, or had provided the service or equipment, they had 60 days to pay for the shares as it was a loan that was registered.

First of all, I was referring to your advice of having real Thai investors as shareholders, not for the legal tricks to make people somehow qualify as investors-to-be, whose investment will be or not be received in some point in the future. If the company were to be investigated, the loan agreement itself might not be enough as evidence that this loan actually took place. Where is the money? hunfreds of thousands of baht just given in cash? Transferring the money to their account and then to the company's might do the trick, but then again, many of the companies don't actually pay-in all the capital at this stage anyway, right?

Second, if the major difference is having a loan agreement, once the 60 days are over and the shareholders did not pay, where do the shares go? The foreigner cannot keep the shares because he will own over 49%. They can't keep them either, because it's against the agreement. According to company documents they are still shareholders. According to the loan agreement the shares are not theír's. Who owns the shares? Do you call that a stable arrangement? Or should the foregiener keep moving the shares, signing loan agreements again and again every 60 days?

[SunbeltAsia]

If your planning on bringing in a lot of cash then the tax break will be huge. I like not giving away 30% of my money for 8 years.

It is a good deal but so you know on non BOI companies, the tax rate for less than 5 million Baht registered capital is 15% on the 1st million, from 1 million to 3 million it is 25% and over 3 million Baht, it is 30%.

If a company has more than 5 million Baht registered capital, it is 30% flat tax.

So the 1 million goes into the company account, to be used for company expenses. So the "companys money" will always remain in the companys account and I would only be able to spend my salary? Please excuse my ignorance but this is all very new to me.

It can be spent on computers, deposit, leasehold improvement, salaries, any type of operating or capital expenses.

What is the total cost for setting up a BOI and how long does it usually take? Unless I am missing something - this looks like the best way to go about it.

For a company this size it takes 2 months for approval. The professional fees are 69,000 Baht. You can apply before you set up a Thai company or set the company up and then apply. I would wait till you were approved and then set up the company. Remember the one million Baht is “ IT elated type business”. If you are looking to invest in a bigger or different type project you need to invest more, your debt/equity ratio can be no more than 3/1

The cost of Thai company set up can be found here.

http://www.lawyer.th.com/fees.asp

By the way, you can not use a Limited Partnership for a BOI company.

[SunbeltAsia]

First of all, I was referring to your advice of having real Thai investors as shareholders, not for the legal tricks to make people somehow qualify as investors-to-be, whose investment will be or not be received in some point in the future. If the company were to be investigated, the loan agreement itself might not be enough as evidence that this loan actually took place. Where is the money? hunfreds of thousands of baht just given in cash? Transferring the money to their account and then to the company's might do the trick, but then again, many of the companies don't actually pay-in all the capital at this stage anyway, right?

Our organization specialize in linking Thai investors and foreigners together. Some Thais have funds to invest and some do not at that point but have other benefits to the foreigner. Embassies commercial services and chambers of commerce may also assist in finding JV partners which one party may bring connections and sweat equity and the other party the know-how and funds.

There is no difference between a shareholder that invests or a shareholder that buys shares with a loan or pays for 75% of the shares with non-cash such as service. Just depends on the by-laws, what their rights are.

As for a nominee, it is clear this will not work, as we have always stated You must have proof then that it was a shareholder and not a nominee. Did they have the opportunity to invest? Did they do so and how? if it was a loan, was their an agreement? Was money paid by the Lender?

.

The % of paid up capital is a minimum of 25 percent of the company's registered capital, which must be paid by the shareholders within 60 days, however no proof of payment is required by the Commercial Registrar's Office. This usually becomes an issue at the time of the company's first audit. The remaining 75% of the shares can be paid in non cash.

Second, if the major difference is having a loan agreement, once the 60 days are over and the shareholders did not pay, where do the shares go? The foreigner cannot keep the shares because he will own over 49%. They can't keep them either, because it's against the agreement. According to company documents they are still shareholders. According to the loan agreement the shares are not theír's. Who owns the shares? Do you call that a stable arrangement? Or should the foregiener keep moving the shares, signing loan agreements again and again every 60 days?

When that happens, the Lender has the option to extend the loan agreement, call in the pledge and transfer the shares to another Thai national/ juristic person( These shares can be transferred at whatever price as they already were paid for) or work out another arrangement with the borrower to pay for the loan in labor. Just like the bank, the lender calls the shots what he wants to do with the default. The borrower is at the mercy of the Lender. Sometimes the shares are reassign and other times the loan is extended and the shareholder remains as one, as they still owe the funds to the Lender.

[~G~]

Our organization specialize in linking Thai investors and foreigners together.

Interesting fact might be that most of the investors you find are eager to invest in so many companies, but most default on their loans...

When that happens, the Lender has the option to extend the loan agreement, call in the pledge and transfer the shares to another Thai national/ juristic person( These shares can be transferred at whatever price as they already were paid for) or work out another arrangement with the borrower to pay for the loan in labor.

Extend the loan agreement? Can that be done unilaterly or should the borrower be involved and sign as well? If so, the lender is practically at the mercy of the borrower, or otherwise he has to keep switching shareholders every 60 days.

And what happens, legally, if he does none of the above? Who do the shares belong to? I assume they just float in space??

Edited June 23, 2006 by ~G~

[SunbeltAsia]

Extend the loan agreement? Can that be done unilaterly or should the borrower be involved and sign as well? If so, the lender is practically at the mercy of the borrower, or otherwise he has to keep switching shareholders every 60 days.

It is done unilaterally, in that it is the decision of the lender to extend the loan.

And what happens, legally, if he does none of the above? Who do the shares belong to? I assume they just float in space??

The shares belong to the shareholders, who are registered at the Ministry of Commerce.

[~G~]

And what happens, legally, if he does none of the above? Who do the shares belong to? I assume they just float in space??

The shares belong to the shareholders, who are registered at the Ministry of Commerce.

If this is so, the loan agreement makes no difference. The borrowers defaulted, but they still get to keep the shares. This loan agreement is an unstable and unsatisfactory arrangment.

I can only conclude that having the company borrow money from the MD, and never have more assets than the worth of this loan, is quite neccessary to protect the foreign investor in case the company is investigated and forced to be dissovled. However, the tax implications in this case will not be favourable at all.

Edited June 24, 2006 by ~G~

[poorfarang]

~G~ : Do you run a competing law firm or something?

Bkk: Have you progressed yet? What road do you think you will go down?

[~G~]

~G~ : Do you run a competing law firm or something?

poorfarang - no, my company does not provide any legal services, nor does it compete with sunbelt in any way, nor does it have any commercial interest in this debate. I do not like to see that Sunbelt preaches one thing and does another, namely telling people to use real investors as shareholders (which is not practical) and in reality assigns their staff as shareholders for the majority of companies they set up (whether they sign loan agreements or not is not relevant).

If you have noticed, bkkmadness has indicated that he got the same advice from sunbelt in the past (namely, that sunbelt will provide the shareholders). If you will do a search through the forum I am sure you will find other similars posts.

Why don't they openly say their staff function as shareholders in most companies they set up? Is it because this potentially means the set up is not as stable as it is claimed to be? Over a thounsand companies were set up that way, if the way they were set up cannot be openly discussed are all of those companies potentially unstable?

Edited June 24, 2006 by ~G~

[SunbeltAsia]

G,

We have always preached not to use nominees. We have on file thousands of e-mails that state the same thing, not to use nominees. If you got a e-mail from us about setting up a company, we would of been stating the same. In a meeting you would of been told the same thing. Bkkmadness I’m sure if e-mailed us, got the same warning e-mail from us. Not to use nominees. Go back in our posts for the last 3 years on Thaivisa" Don't use nominees"

If you needed a shareholder to invest. Could they could of been a staff member? Yes. They are higher paid than most Thai lawyers in Thailand, because they work very hard. Because of this, they are not poor. Have they ever invested their own cash in even some of my own businesses. Yes with hard cold cash. Do friends of staff members invest? Yes. Do clients friends invest? Yes. Do clients friends of friends invest? Yes.

I myself have invested in clients businesses. In fact 14 of them I have my own money in the shares of clients companies. Do I invest in every company that comes, my way? No. Have I introduce a opportunity to a friend? Yes. Have some friends invested? Yes. Have clients invested? Yes

Have I myself, ever signed a loan agreement to invest in a business? Yes

Has my wife invested her own money in clients business? Yes. Has friends of hers invested? Yes. Has she ever signed a loan to invest? Yes She just borrow one million Baht the other day and will be doing another loan, next week to invest in a Italian restaurant with friends of hers. I myself had to co-sign two loans for her in the past month for a condo she is buying.

Has anybody ever invested but did not have cash at that point? Yes many times.

If you feel that your company was set up illegal and you in fact have used nominees. Then lets go down to the police station or the Ministry of Commerce and let them decide if you have nominees. If they felt it was, they will give you time period to find a shareholder that would not be a nominee.

For 2,500 Baht registration fee, and over 40 pieces of paper that have to be typed and filed, it would be pretty stupid to use nominees so everyone involved is sitting in a Thai prison for three years for that amount of work. If our staff thought or myself, prison was involved, they or we would NOT be a shareholder in any company for even 25 billion Baht. Over 5 years ago, we asked the Commercial Service if a loan can be involved for a Thai or a foreigner to acquire the shares and would they be considered a nominee? Two years ago I was in a seminar attended by a number of Legal firms and it was reiterated that a loan is allowed for a Thai or a foreigner to acquire the shares.

Is their a conflict of interest for a staff person or myself to invest in a clients project? No

As to over 1,000 Companies set up by our firm, that you state" staff members are shareholders." It, in fact, would be less than 5% of the companies, that anybody from our firm have ever acquired shares in a clients business!

Most clients that are foreigners have set up a company with their own shareholders( Most know at least one Thai and this is all they need) Amity Treaty companies, BOI companies, applied for the Alien Business License or do holding and operating companies.

For you continue this rant that Sunbelt staff was involved in something illegal. Believe me Thaivisa is not just read by foreigners. We could not be more in the spotlight, if we had the sun on us.

Government officials are aware of Thai visa and one zillion per cent about our firm. If in two years, the staff, and myself, our in prison by being a nominee for one company or 50 companies, it would make a lot of competitors happy. We were the first to lower professional fees charged in the industry over 80% lower. You would be happy as well, serves Sunbelt right with their pompous attitude with not being a nominee.

But being open and the forefront, it would be very stupid if we were doing something illegal for our clients. Loans are not illegal. It is not in the Civil Commercial code or the Foreign Business act, that a Thai cannot sign a loan agreement with a foreigner. A loan has to be done in with the spirit of the law, and not to circumvent the Foreign Business act. You were charged 3,00 baht for this documentation. Nobody pays this money without knowing or asking why do I have to loan money?

If you feel different that it is not stable , than by all means replace the shareholder you are unhappy with or apply for a Alien Business License. If you feel its illegal on a loan agreement, go with one of our lawyers to the government office and they will advise you, that a loan agreement is legal, to acquire shares. ( Even if it’s a staff member, the man in tenbucktoo or even myself who is holding the shares)

[poorfarang]

Good explaination, maybe now we can get back on track...

[poorfarang]

So lets say my internet company is bringing in 1 million baht a month in Revinue (mostly profit)

At the end of the year that equals about 12 million in profit. Can the company buy a nice house, a Benz, a speedboat, a few big bikes, a Jet ski, and a few big bottles of beer chang thus making the profit less then 1 million baht, which would then only require 15% taxation?

Whats the best way to take advantage of as much money as you can?

[SunbeltAsia]

So lets say my internet company is bringing in 1 million baht a month in Revinue (mostly profit)

At the end of the year that equals about 12 million in profit. Can the company buy a nice house, a Benz, a speedboat, a few big bikes, a Jet ski, and a few big bottles of beer chang thus making the profit less then 1 million baht, which would then only require 15% taxation?

Whats the best way to take advantage of as much money as you can?

If a business buys equipment, house, car it must then depreciate the cost of the equipment, house, car over a life defined by the Thai Revenue Department. You simply can't go out and spend 12 million on assets and deduct that as a immediate write-off.

If the house is to be used by the MD and he is not paying rent, he needs to pay personal tax on that benefit. If the car is for his personal use, that is as well to be put as a benefit and taxed( if its strictly for business travel, then that’s another issue) The bikes and jet skis were these for clients use on weekend, for employee use or the Md's personal use? Personal use and it’s a benefit to be taxed. Beer.. you are only able to deduct entertainment expenses up to 0.3% of gross receipt but not exceeding 10 million Baht

Many small businesses have a advantage over a individual as they can deduct tolls, gasoline, maintenance on a car if its for business use. A trip to Singapore can be written off if it was to meet clients.

At the end of the day, everyone has their own stance on taxes. We have always strongly advocated to pay our fair taxes due and not take advantage of offshore billings, etc. . Every business I’m involved in, we pay taxes. This is what the government looks at, " is your company making money and giving them nothing in return?"

By the way, nobody can be El Presidente and just spend money, unless he has the votes to do so. The MD has to to be accountable to the shareholders.

[poorfarang]

"If a business buys equipment, house, car it must then depreciate the cost of the equipment, house, car over a life defined by the Thai Revenue Department."

Can you explain this further? Are you saying it is spreadout over many years?

So is it better for the MD to pay a very small amount as rent to stay in the company estate or for him to use it free and pay taxes on it for personal use?

So once everything is done and setup It sounds like you really need to get someone to take care of the books and be marking down all of these expenses and finding as many breaks as you can. Does your company provided these services as well? What can someone expect to pay for service like this?

Thanks for the contenued help.

[~G~]

If you needed a shareholder to invest. Could they could of been a staff member? Yes.

Well, I am glad to see that you are finally open about it, and that takes away many of my concerns.

If you feel that your company was set up illegal and you in fact have used nominees. Then lets go down to the police station or the Ministry of Commerce and let them decide if you have nominees. If they felt it was, they will give you time period to find a shareholder that would not be a nominee.

I may very well do that, just to make sure, altough I believe no one in the police or in MoC will give any written approval, and a verbal one does not mean a lot.

For you continue this rant that Sunbelt staff was involved in something illegal. Believe me Thaivisa is not just read by foreigners. We could not be more in the spotlight, if we had the sun on us.

I am not talking about illegalities but about the grey areas. The issue here, as far as I am concerned, is not Sunbelt and the Thai law - it is the extent in which a foreigner can be confident about their rights in those set ups, in case his company is to be investigated, for whatever reason.

We are talking about setting up a companies that can potentially hold the vast majority of the resources of the person who sets it up, or about companies who may grow and become very big - if a tiny thing in the set up process is not 1,000% secure, or if a shareholder that did not invest thinks he may grab something of that by using lawyers that might present another views than yours, and there is even a tiny doubt in the mind of MoC officials or whoever is responsible, that can be a problem. If a set up can be discussed openly, it means that there is no place for worries for anyone setting up a company, if it does not, it does not neccessarily add to the trust in such set ups.

Government officials are aware of Thai visa and one zillion per cent about our firm. If in two years, the staff, and myself, our in prison by being a nominee for one company or 50 companies... You would be happy as well, serves Sunbelt right with their pompous attitude with not being a nominee.

That is where you are mistaken. This is absolutely the last thing I wish to see. There is nothing I hate to see more than a failed business, especially here. There is nothing I like to see more than a successful business, and this includes sunbelt as well of course.

If you feel its illegal on a loan agreement, go with one of our lawyers to the government office and they will advise you, that a loan agreement is legal, to acquire shares.

Again, I am not talking about illegalities but about the small details that can always be debated in lawsuits. I am sure your lawyers will say everything is OK, but I have already heard other professionals here saying that in some kind of loans in Thailand, when a person defaults on a loan, a legal process (in court) is required to get the secured asset, not automatically. Take for example a theoretical case in which a shareholder claims that since he/she did not pay the loan, and the shares were not moved by the end of the term, then that shows the MD practically agrees (acceptance by behavour/action) to let them keep the shares without paying the loan. I don't know the Thai law well enough to know if this kind of argument can hold here, but I do know it can hold in other countries.

[~G~]

So is it better for the MD to pay a very small amount as rent to stay in the company estate or for him to use it free and pay taxes on it for personal use?

You will be paying personal tax on expenses for personal use - If your salary is 50,000 baht and the company pays rent for you in the sum of 20,000 baht, you will be taxed for income of 70,000 baht. It is exactly the same as if you have a salary of 70,000 baht and pay the rent yourself from the salary.

So once everything is done and setup It sounds like you really need to get someone to take care of the books and be marking down all of these expenses and finding as many breaks as you can.

This is what Tax advisors are for. Some accountants include that in their services.

[Digger]

So is it better for the MD to pay a very small amount as rent to stay in the company estate or for him to use it free and pay taxes on it for personal use?

You will be paying personal tax on expenses for personal use - If your salary is 50,000 baht and the company pays rent for you in the sum of 20,000 baht, you will be taxed for income of 70,000 baht. It is exactly the same as if you have a salary of 70,000 baht and pay the rent yourself from the salary.

So once everything is done and setup It sounds like you really need to get someone to take care of the books and be marking down all of these expenses and finding as many breaks as you can.

This is what Tax advisors are for. Some accountants include that in their services.

And the interesting angle on expatriatte housing concerns VAT and witholding taxes. I am still surprised at how many companies take a employees lease contract in their name and then proceed to try and recover VAT and deduct witholding taxes, thereby making it appear a 'company' expense - when infact 99% of auditors that know what they are doing refuse to sign off on this procedure as its in clear breach of the law - i.e its a personal benefit not a genuine company expense which they can expense and recover VAT. To avoid any problems, your better of taking a lease in your name and then leasing from the company and increasing your salary by the same amount as the notional rent your paying. Also the notional rent has to have some credibility, i.e not much chance of getting away with paying 20,000 month for a 10,000,000 baht fully furnished house with a pool.

[~G~]

And the interesting angle on expatriatte housing concerns VAT and witholding taxes. I am still surprised at how many companies take a employees lease contract in their name and then proceed to try and recover VAT and deduct witholding taxes, thereby making it appear a 'company' expense - when infact 99% of auditors that know what they are doing refuse to sign off on this procedure as its in clear breach of the law - i.e its a personal benefit not a genuine company expense which they can expense and recover VAT.

There is no VAT on rent - you may be referring to cases in which the whole thing comes as a "service package"?

[poorfarang]

Well if the company buys a house cant the MD stay there free of charge as part of his expat package? G you said something like this on page 1.

[~G~]

Well if the company buys a house cant the MD stay there free of charge as part of his expat package? G you said something like this on page 1.

Remember that whenever you mention things like "Expat Package" the implications are benefits to an individual, which should be considered as part of his income and taxed accordingly.

Having said that, I am not sure how exactly it should be treated in this case. I assume others will reply.

Just pay attention to the fact that the issue of land holding companies have become more sensitive lately.

[SunbeltAsia]

"If a business buys equipment, house, car it must then depreciate the cost of the equipment, house, car over a life defined by the Thai Revenue Department."

Can you explain this further? Are you saying it is spreadout over many years?

yes

Durable Building has 5% depreciation per year.

Passenger car or bus with no more than 10 passengers capacity depreciated at the rate of 20% but the depreciable value is limited to one million Baht

Computer.: ( SME... Your company has less than 5 million Baht registered capital): initial allowance of 40 % on the date of acquisition and the residual can be depreciated over 3 years

So is it better for the MD to pay a very small amount as rent to stay in the company estate or for him to use it free and pay taxes on it for personal use?

"G" is correct, on paper it doesn't matter.

So once everything is done and setup It sounds like you really need to get someone to take care of the books and be marking down all of these expenses and finding as many breaks as you can. Does your company provided these services as well? What can someone expect to pay for service like this?

A very thin line between tax avoidance and tax planning. Our expertise is not in tax planning and certainly we don't advocate tax avoidance. For filing, our firm is better and much cheaper than most but nothing compared to Western Standards. Even the big firms don't come close to Western Standards even though they charge professional fees like it. I don't know one good firm to reco for tax planning, most have their hands full just getting all the filing done on time.

Thai accountants as rule don't think outside the box and when it comes to tax planning, its " how much do you want to pay this year?" We don't advocate that type of advice so our accountants just file the withholding tax, Vat, Social Fund filings every month. At least with our firm, you'll find at the end of the month, the light is still on at 2 or 3 a.m. in the morning and six out of 11 accountants are still hard at work.

Most foreigners use Quick Books UK version and do a PL/ Balance sheet themselves every month and give this to the auditor. Its cheaper and much faster. I know big name companies that charge over 70K per month for a simple monthly trail balance on a SME and they are 15 months behind.

may very well do that, just to make sure, altough I believe no one in the police or in MoC will give any written approval, and a verbal one does not mean a lot.

PM me with the name of your company. What is good today or next year, may not be good in 5 years as the regulations change. If you want to be 1000% secure and get something in writing or with you owning the shares 100%. This will mean an Alien Business License. An application for a Foreign Business License is submitted to the Ministry of Commerce (MOC) together with all required documents and information.

Factors considered by the Committee when reviewing applications are:

The advantages and disadvantages to the nation’s safety and security;

Economic and social development;

Public order, good morals, art, culture and traditions of the country;

Natural resources, conservation, energy and environment, consumer protection, size of the enterprises, employment; and

Technology transfer and research and development.

It takes on average 90 days or more to get approval.

[poorfarang]

Sunbelt, what is your sucess rate for starting BOI companys? It would suck to spend that cash only to find out that the company wasnt aproved.

[SunbeltAsia]

Sunbelt, what is your sucess rate for starting BOI companys? It would suck to spend that cash only to find out that the company wasnt aproved.

You can apply for BOI approval before you set up the company. We have a 100% success rate, with some very large projects them have been approved. We have a good idea , if you will be accepted but to be on the safe side, go for BOI approval before you invest.

www.lawyer.th.com

[Chang_paarp]

With our hypothetical Merc in the above example.

Could you claim a % as business the rest as personal use?

I can use the Ausie example, you can claim any % of vehicle costs as a business expence, however, you have to substansiate it. This involves keeping a log book of every trip. The most common persissable way is to keep the log book for 3 months and use the % to extrapolate for the rest of the financial year. Of course if you are planning some extended and verifiable business trips during the year it is best to to ensure that your log book covers this period.

It is recomended that you use several different pens over the period and never just fill it out all in one go. We are told the tax office has access to forensic folk that the police would kill for, and will use them if they get upset with you.

A similar method is used when claiming a % of rent and domestic bills. If you have a 200sq m house and the office occupies 20sq m you can claim 10% of costs. If you want to claim more than that you have to substansiate it. This is not recomended for homes that are owned as there would be capital gains payable for those areas.

[~G~]

I can use the Ausie example, you can claim any % of vehicle costs as a business expence, however, you have to substansiate it.

Proper documentation makes everything much easier. For example, even with small expenses such as Taxi trasnportation, we specify the destination and the purpose of the trip in the payment voucher. It is more credible than just writing a sum with no explanation.

[Digger]

And the interesting angle on expatriatte housing concerns VAT and witholding taxes. I am still surprised at how many companies take a employees lease contract in their name and then proceed to try and recover VAT and deduct witholding taxes, thereby making it appear a 'company' expense - when infact 99% of auditors that know what they are doing refuse to sign off on this procedure as its in clear breach of the law - i.e its a personal benefit not a genuine company expense which they can expense and recover VAT.

There is no VAT on rent - you may be referring to cases in which the whole thing comes as a "service package"?

Depends how savvy your landlord is and how much rent is involved. For example most larger places (eg whole blocks of apts) which are rented out, you are charged seperate amounts for the Rent for the unit, service charge for communal facilities and service charge/rent for the furniture. Reason being is that VAT applies to the services and furniture element but not to the rent, however on the rent you have to pay a rental tax which I believe is somewhere around 12.5% of the rent income. Therefore you often see rental contracts that show rent as 10% of the total, service fees, 45% and furniture 45% - VAT is paid at 7.5% which is cheaper than the rent tax at 12.5% but as I say it depends on how clued up your landlord is and if he is above or below the tax collectors radar screen.

[Digger]

I can use the Ausie example, you can claim any % of vehicle costs as a business expence, however, you have to substansiate it.

Proper documentation makes everything much easier. For example, even with small expenses such as Taxi trasnportation, we specify the destination and the purpose of the trip in the payment voucher. It is more credible than just writing a sum with no explanation.

I'd be curious how many of these types of 'expenses' get past your accountant and included in your audited expenses. My experience is that unless its a correct tax invoice or other detailed correctly made out receipt, it just falls out of the audited expenses and never gets included. You may be doing a lot of work for nothing on these small value things.