Company Set Up

[Rooo]

//Full newspaper quote removed per forum policy - lopburi3//

[ZZZ]

In the future, the Business Development Department plans to examine existing registered companies with foreign shareholders to determine whether they breach the new rules or not.

Guess present foreign land owners need to look over their arrangements, could be scary

[Charma]

Can we have the link?

[Rooo]

//Full newspaper quote removed per forum policy - lopburi3//

http://www.bangkokpost.com/Business/01Aug2006_biz03.php

Edited August 1, 2006 by Rooo

[Charma]

//Full newspaper quote removed per forum policy - lopburi3//

http://www.bangkokpost.com/Business/01Aug2006_biz03.php

Thanks Rooo. Interesting article. Seems to be a repeat of previous stories about this issue, but with a more determined tone. It will be interesting to see whether the commerce ministry proceed with this policy on 15 Aug. They state that they are going to apply it to NEW companies from that date. They also say that the business development department will examine existing companies in the future, but they do not say when.

Also surprising to see that they link/compare Taxin's shincorp sale with the Samui land stuff! Actually, if you look at the article as a whole, this may not just be an issue for foreigners buying land. I'm guessing that a lot of farang businesses in Thailand are controlled using nominee shareholders. Won't they be caught by this also?

[Rooo]

Charma,There was a directive earlier on to examine companies.This is hapenning now.My company has been investigated.I believe all is well,but will wait & see.No I am not a developer just build a single house.If you read the above link,there might be more investigations forthcoming.

[Charma]

Charma,There was a directive earlier on to examine companies.This is hapenning now.My company has been investigated.I believe all is well,but will wait & see.No I am not a developer just build a single house.If you read the above link,there might be more investigations forthcoming.

I did read the link and did mention in my post that existing companies were to be examined, but they did not know when. So did they interview your Thai shareholders and ask for proof of financial status etc? Would be interested to know.

[Rooo]

They met with my lawyer.I will get you exact details of their questions as soon as I meet with him.

[Charma]

They met with my lawyer.I will get you exact details of their questions as soon as I meet with him.

Cheers rooo. It will be very interesting to see how far they are taking this.

[highdiver]

They met with my lawyer.I will get you exact details of their questions as soon as I meet with him.

Rooo

please post your reply about this. I belive all those with companies will love to hear from your experience.

[Rooo]

One of the main things they check is Thai partners & purpose of company.They will also check activities.

One of the reasons mine was first cab of the rank so to speak,is my original accountant failed to submit the company returns ( 2004) to all the relevant departments,even though I paid for & signed all paper work.My existing Lawyer brought it to my attention & it was fixed.But I suppose it RED FLAGED the co.But of what he has been told they are going through several as per their instructions.

So be very aware & check that your co returns have been submitted to all relevant departments & get proof of it.

The other reason you will be investigated is if you stated on the original CO set up the purpose of the company is CONSTRUCTION , DEVELOPMENT, , you will be investigated , I truly believe these are another RED FLAG trigger.

Edited August 2, 2006 by Rooo

[John 1]

Roo,

How about posting the initials of the previous lawyer, not his name as that's illegal

[Rooo]

Roo,

How about posting the initials of the previous lawyer, not his name as that's illegal

The gist of it is, I used a separate accountacy firm,as to Lawyer / accountant.It only came to our attention when the lawyer/accountant (to whom I have changed to for accountancy ) tried to submit the 2005 return.Now I could have paid the previous accountant again & not known any different.So all I am saying if you are using 2 entities be careful.Get your lawyer to check that all returns have been submitted to relevant departments & that you have all the relevant receipts & aknowldgements.

[pyros]

Now , what exactly does this all mean . I mean , i started a company about 5 months ago , since i want to do something . The something can be various , from shop to farm , together with housing . Last time i was in Thailand i bought a motorbike , company name , because i wanted to see if this was trouble or not ( could have it in own name as you all know ) . Could future plans fall apart or not ( with starting something together with housing , if that was investigated ... well the Thai shareholders off course didn't put any money inside ) . I got time , and i'm not in a rush to do something but if there is some opportunity coming along ... well i would take it , but this could be trouble right ?????

[Rooo]

Now , what exactly does this all mean . I mean , i started a company about 5 months ago , since i want to do something . The something can be various , from shop to farm , together with housing . Last time i was in Thailand i bought a motorbike , company name , because i wanted to see if this was trouble or not ( could have it in own name as you all know ) . Could future plans fall apart or not ( with starting something together with housing , if that was investigated ... well the Thai shareholders off course didn't put any money inside ) . I got time , and i'm not in a rush to do something but if there is some opportunity coming along ... well i would take it , but this could be trouble right ?????

Pyros, it's simply means never put down the company purpose as something which you are not allowed to do eg:real estate development.Your lawyer should advise you that in the first instance,unless your CO was set up by say an accountant with no legal knowledge which happens in a lot of cases.

[Beachedwhale]

I agree.. and one of the other issues that you should be aware of is keeping a low profile. A key issue in the recent activity was that the developers put up a large sign, did a lot of advertising etc etc, which in many countries you would expect to happen. But here in Thailand being "in your face" is often construed as aggressive and unrespectful behaviour. Also as long as you are a "small operation" then you are unlikely to be impacted. The government is not after the retireees who are spending there well earned pension to build themselves a nice little home to retire in the warmth of Samui, they are after the large developers who are not getting proper licenses, who are making transactions and not paying taxes, who are corrupting the local officials by offerig them bribes etc. IMO the government does not want to stop the majority of farangs coming here and building etc, just the ones that are offensive or doing things illegally.

[Rooo]

A Royal Decree in 1973 listed 39 occupations and professions that were then prohibited to aliens. This list has been amended on several occasions by subsequent Royal Decrees, the latest one in 1979.

Labour

Work in agriculture, animal breeding, forestry, fishery or general farm supervision

Masonry, carpentry, or other construction work

Wood carving

Driving motor vehicles or non-motorized carriers, except for piloting international aircraft

Shop attendant

Auctioneering

Supervising, auditing or giving services in accounting, except occasional international auditing

Gem cutting and polishing

Hair cutting, hair dressing and beautician work

Hand weaving

Mat weaving or making of wares from reed, rattan, kenaf, straw or bamboo pulp

Manufacture of manual fibrous paper

Manufacture of lacquerware

Thai musical instrument production

Manufacture of nielloware

Goldsmith, silversmith and other precious metal work Manufacture of bronzeware

Thai doll making

Manufacture of mattresses and padded blankets

Alms bowl making

Manual silk product making

Buddha image making

Manufacture of knives

Paper and cloth umbrella fabrication

Shoemaking

Hat making

Brokerage or agency work, except in international business

Dressmaking

Pottery or ceramics

Manual cigarette rolling

Legal or litigation service

Clerical or secretarial work

Manual silk reeling and weaving

Thai character type-setting

Hawking business

Tourist guide or tour organizing agency

Architectural work

Civil engineering work

There is a more comprehensive one, just can't find at the moment.

Edited August 4, 2006 by Rooo

[pyros]

Well , everybody knows this . That is why people start a company in the 1st place ( why else would you start 1 ???? , if you can everything in your own name ) . I'm not in development and i don't want to be in development business . I just want to have some kind of business ( like a farm or a shop or something like that ) and a nice house . The profile is always low , i don't have 100 millions to spend and never will have that and a possible income will never be millions of THB . So , i state my question again . Could this new regulation be a problem ???

[Rooo]

I agree.. and one of the other issues that you should be aware of is keeping a low profile. A key issue in the recent activity was that the developers put up a large sign, did a lot of advertising etc etc, which in many countries you would expect to happen. But here in Thailand being "in your face" is often construed as aggressive and unrespectful behaviour. Also as long as you are a "small operation" then you are unlikely to be impacted. The government is not after the retireees who are spending there well earned pension to build themselves a nice little home to retire in the warmth of Samui, they are after the large developers who are not getting proper licenses, who are making transactions and not paying taxes, who are corrupting the local officials by offerig them bribes etc. IMO the government does not want to stop the majority of farangs coming here and building etc, just the ones that are offensive or doing things illegally.

I'm a retiree, didn't make a difference to them.NOT engaged in any business,single abode.Still didn't stop them.I mentioned previously the reasoning behind investigation.Once they start they just keep on pursuing their course.

[Rooo]

CORPORATECounsellorTILLEKE & GIBBINS

Proof of financing and its implications

Anew government directive that took effect on Aug 15 has implications for Thai nationals who are partners or shareholders with foreigners in a contemplated partnership or company. The directive was issued by the Office of Central Company and Partnership Registration of the Commerce Ministry. Known as Directive No 102/2549 re: Documentation in Support of Application for Partnerships and Limited Companies Registration, it applies to entities with the following structure or description:

http://www.bangkokpost.com/Business/18Aug2006_biz45.php

[Charma]

I asked the question on another thread about any "incidents" relating to this since the 15th August. None reported yet.

The critical opinion in the article for existing company based land owners is:

"It is anybody's guess what the ministry will do with existing partnerships or companies with foreign shareholders. We anticipate that it may conduct a random check and ask the Thai partners or shareholders to provide the documents stipulated in the new directive supporting their investment ability".

Basically, they don't have a clue as to what is going to happen. It could all quietly die until the next "scandal", or they could really start a crackdown. If it is the latter, real estate prices in Thailand will almost certainly be affected. There just are not enough bona fide sharehaolders to go round. It will then be up to "creative" lawyers to try and come up with different ways to skin the cat.