Advice On a Business Start-up

[monk213]

hello all. I have been in and around Thailand for nearly 5 years now and I am currently a student studying Thai. Back in my home country I had skills within graphic design from college, I have been thinking about starting an online business with another designer I know who lives in Spain. I have no intentions of doing this anytime soon, it could be 6 months it could be in 1 year.

What I need to know is the following.
>It will be online and there will be no office as such, all clients will be abroad so I am guessing I would still need a business visa?

>What would I need to get rolling, I have heard from people in the past talk of needing to hire 2 Thais and have 2 million baht?

>I am not sure exactly of how to go about this legally, I mean setting up the company and taxes etc.

Any help is greatly appreciated<
Regards Monk

[scorecard]

If you mean the requirements in terms of how to structure the company so that you can get a work permit, then yes there is a ratio of how many Thai employees compared to how many foreign employees.

But the ratio changes according to several scenarios and other TV members can provide more facts on this point.

There are other factors to consider, some examples:

- Who will OWN the company? By Thai law foreigners can only own 49% of the shares, which in essence could well mean that you, as the foreign shareholder don't have control of the company, and don't have control of what decisions it makes and what money it spends. This brings up a key word in business - RISK!

Also:

- Is the type of what work that you would perform on the list of jobs / occupations which are reserved for Thai nationals only?

Take a look at the pinned threads at the start of the ThaiVisa website, there's a lot of valuable information on this subject.

Edited January 13, 2015 by scorecard

[monk213]

If you mean the requirements in terms of how to structure the company so that you can get a work permit, then yes there is a ratio of how many Thai employees compared to how many foreign employees.

But the ratio changes according to several scenarios and other TV members can provide more facts on this point.

There are other factors to consider, some examples:

- Who will OWN the company? By Thai law foreigners can only own 49% of the shares, which in essence could well mean that you, as the foreign shareholder don't have control of the company, and don't have control of what decisions it makes and what money it spends. This brings up a key word in business - RISK!

Also:

- Is the type of what work that you would perform on the list of jobs / occupations which are reserved for Thai nationals only?

Take a look at the pinned threads at the start of the ThaiVisa website, there's a lot of valuable information on this subject.

Thanks for replying. The fact that Thailand will be the majority owner of my business, well my and another designer's business makes it an automatic no. I am not taking that risk and not even going to consider it for that matter.

I know3 this will now be going off of topic a little because I am going to ask what about Laos? Does anybody know what the laws and requirements are like there? I honestly do not need to rent an office or workplace, as long as I have my computer and the internet I am good to go

[richardt1808]

Two options:

1. If all of your clients are outside of Thailand and you receive all your payments outside of Thailand then you may consider locating the business in your home country. You could do your design work in your own private room and not have to worry about opening an actual office here. I'm sure that a lot of Journalists or others who do 'online' work do things this way. Obviously, you then will not have a work permit, so you would need another reason to justify your visa here, so perhaps continue with some limited studies to get another ed visa. You would then need to find a way to get your living expenses transferred into Thailand, plus you would obviously have to worry about your tax payments back home. Not an ideal scenario as nothing is fixed and you can't keep living like a student forever.

2. This is the legal way. You will need to open a Thai company as described above. This requires at least 3 people as signatories and the foreign shareholding cannot be more than 49%. To qualify for a work permit, you will need offices, Thai staff and 4 Million Baht in registered capital if you are not married to a Thai. This is probably way beyond what you can afford to do at this point, but hey, if it was easy then everyone would be doing it !

[SheungWan]

IMHO, if the business is your priority then either you move with your partner to whatever nascent Silicon Valley equivalent in Spain exists, whether probably in Madrid or Barcelona or alternately you both (assuming you have some seed money) go to the area around London's Silicon Roundabout and work out from there. If the business is not your priority and just some way to support a lifestyle in Thailand then since it is going to be quoting for a few jobs here and there internationally then no need to register a business in Thailand. Your only logistical issue will be transferring funds to Thailand when you need them.

[monk213]

Thanks to the previous 2 posters. Yeah I am writing off the idea of setting up a business here in Thailand, for my line of the work the rules they have in place just are nit practical. See, this is another way Thailand is shooting themselves in the foot, I would not be stealing work from Thai nationals as my client base would be abroad thus money would be coming into the country and spent here, thrust into the economy. If there were better laid our rules for people like me there would be a lot more business such as the one I have in mind having a chance and subsequently Thailand getting a nice boost to their economy. The problem is they are too greedy and cannot see that those rules should not apply for every single business plan that is thought up. Their loss.

I am either going to head to Europe when the time is right but that would be plan B, maybe even c actually, my first plan is check out the rules and regulations of neighboring countries because I love South East Asia too much to just return to Europe. I studied graphic design for a total of 5 years so I know what I am doing and it is not merely a way to get money to support my life style here. I want to go legit and get a design company going, I already have designed the logo and have the brand name / identity sorted out. Ah well, thanks a lot Thailand, your greedy ways have caused you more harm than good once more. Sure one persona and his possible business is nothing, but there are many many people in a similar situation as me and if they had a new set of laws then more would come.

[rwdrwdrwd]

Two options:

1. If all of your clients are outside of Thailand and you receive all your payments outside of Thailand then you may consider locating the business in your home country. You could do your design work in your own private room and not have to worry about opening an actual office here. I'm sure that a lot of Journalists or others who do 'online' work do things this way. Obviously, you then will not have a work permit, so you would need another reason to justify your visa here, so perhaps continue with some limited studies to get another ed visa. You would then need to find a way to get your living expenses transferred into Thailand, plus you would obviously have to worry about your tax payments back home. Not an ideal scenario as nothing is fixed and you can't keep living like a student forever.

2. This is the legal way. You will need to open a Thai company as described above. This requires at least 3 people as signatories and the foreign shareholding cannot be more than 49%. To qualify for a work permit, you will need offices, Thai staff and 4 Million Baht in registered capital if you are not married to a Thai. This is probably way beyond what you can afford to do at this point, but hey, if it was easy then everyone would be doing it !

Option 3 - same legal position as option 1 but much more profitable.

Set up a business in BVI with banking in Hong Kong, pay yourself in Dividends to a personal account in Singapore. 100% tax free both corporate and personal (unless you're a US citizen and earn > 100k a year) with zero business or personal (unless you're a US citizen) reporting required.

You're liable for Thai income tax on offshore income if you remit it to Thailand in the same year it is earned, so ideally you'd keep it out of Thailand until the next Jan 1st.

Edited January 15, 2015 by rwdrwdrwd

[SheungWan]

Thanks to the previous 2 posters. Yeah I am writing off the idea of setting up a business here in Thailand, for my line of the work the rules they have in place just are nit practical. See, this is another way Thailand is shooting themselves in the foot, I would not be stealing work from Thai nationals as my client base would be abroad thus money would be coming into the country and spent here, thrust into the economy. If there were better laid our rules for people like me there would be a lot more business such as the one I have in mind having a chance and subsequently Thailand getting a nice boost to their economy. The problem is they are too greedy and cannot see that those rules should not apply for every single business plan that is thought up. Their loss.

I am either going to head to Europe when the time is right but that would be plan B, maybe even c actually, my first plan is check out the rules and regulations of neighboring countries because I love South East Asia too much to just return to Europe. I studied graphic design for a total of 5 years so I know what I am doing and it is not merely a way to get money to support my life style here. I want to go legit and get a design company going, I already have designed the logo and have the brand name / identity sorted out. Ah well, thanks a lot Thailand, your greedy ways have caused you more harm than good once more. Sure one persona and his possible business is nothing, but there are many many people in a similar situation as me and if they had a new set of laws then more would come.

Sorry, but I think you are continuing to put the cart before the horse in wanting to prioritise Thailand and getting frustrated in the process. And one guesses might probably extend that frustration to another of the 'cheaper' countries. This is not essentially about rules and regulations. In reality, if you are not wanting to move back to the West then the practical alternatives are Hong Kong or Singapore where there are growing IT and graphics businesses. Tougher for you in establishing a business there, maybe tougher than the UK in some respects, but in life you can't have your cake and eat it.

[rwdrwdrwd]

If the business is 100% online, aside from potential visa questions in regard to residence and the need for a business structure to support that, the optimal jurisdiction for the business is the one with the best tax structure and least amount of fees and admin that clients will be willing to submit payment to.

Point being, nowhere is tougher than anywhere else aside from tax and administration (HK and Singapore being easier and cheaper than the UK, and BVI being easier and cheaper than all 3).

OP is looking to provide services online to remote clients, not to set up a company and office somewhere in the world serving local clients (which would likely be harder for a non native in HK, Singapore and BVI than in the EU) - the demand in the local market is irrelevant.

Edited January 15, 2015 by rwdrwdrwd

[monk213]

If the business is 100% online, aside from potential visa questions in regard to residence and the need for a business structure to support that, the optimal jurisdiction for the business is the one with the best tax structure and least amount of fees and admin that clients will be willing to submit payment to.

Point being, nowhere is tougher than anywhere else aside from tax and administration (HK and Singapore being easier and cheaper than the UK, and BVI being easier and cheaper than all 3).

OP is looking to provide services online to remote clients, not to set up a company and office somewhere in the world serving local clients (which would likely be harder for a non native in HK, Singapore and BVI than in the EU) - the demand in the local market is irrelevant.

The thing is I could technically work and set up a company using proxies and aliases and not go legit, that would be easy but I want to go legit. Obviously now Thailand has been written off as a possible location to work from because of what is required, what am I going to get those Thai nationals to do for a start, make me some tea and start my computer up on the morning and give me a foot rub? There should be a clear distinction between the person who wants to set up a bar or a restaurant and a person who can wake up, walk downstairs and have a multitude of clients at the touch of a keyboard, never needing to get dressed if they don't feel like it.

I haven't looked at neighboring countries yet, I need to because I really want to get this business going and need to find somewhere that will enable me to do that. UK is out of the question because I am not returning 'home' - I simply do not like it for a whole list of reasons, most of the EU also is probably out of the question because again I like SE Asia too much, it is like a catch 22.

Without looking back somebody suggested setting up the business in HK and going through the whole waiting for 1 year to bring the money back into Thailand, this is appealing. What would be the logistics of doing such a thing? I have the skills to work in such a field and I have a good head on my shoulders when it comes to money and business, however I am clueless about how to actually set up a business, who/where do I have to inquire, how do I register everything so it is all tax legal etc. Bah it is giving me a headache

[rwdrwdrwd]

It's pretty easy, loads of agents to do the bulk of the work for you. I used asiabs.com for my company setup, cost about $1500 all in.

BVI company / HK banking, which they do in addition to HK / HK is a perfectly legal and legitimate structure, and bears less admin.

You have to prepare supporting evidence regarding your planned business for banking, can simply be a CV showing your skills and experience. You also have to fly to HK to open a bank account, but I was in and out in 4 hours and have never been back - not tricky.

[monk213]

It's pretty easy, loads of agents to do the bulk of the work for you. I used asiabs.com for my company setup, cost about $1500 all in.

BVI company / HK banking, which they do in addition to HK / HK is a perfectly legal and legitimate structure, and bears less admin.

You have to prepare supporting evidence regarding your planned business for banking, can simply be a CV showing your skills and experience. You also have to fly to HK to open a bank account, but I was in and out in 4 hours and have never been back - not tricky.

Thanks for the advice, cut and dry just how I like it. Are there some agents that are there waiting to screw people over? That is probably a silly question as you find that in all sectors of business pretty much.

I know I am asking a lot, but I do need the advise of someone with experience. Can you bullet point what I need to do in order if that is possible? Like I said I already have the name, brand identity designed (that was easy considering my background skills) and I know where I want to head in terms of how the company will operate.

So after all of this I will legally be allowed to work from Thailand from my house and not have to worry about any authority issues if I go down the whole HK root and keeping the money in the account for 1 year?

[rwdrwdrwd]

It's pretty easy, loads of agents to do the bulk of the work for you. I used asiabs.com for my company setup, cost about $1500 all in.

BVI company / HK banking, which they do in addition to HK / HK is a perfectly legal and legitimate structure, and bears less admin.

You have to prepare supporting evidence regarding your planned business for banking, can simply be a CV showing your skills and experience. You also have to fly to HK to open a bank account, but I was in and out in 4 hours and have never been back - not tricky.

Thanks for the advice, cut and dry just how I like it. Are there some agents that are there waiting to screw people over? That is probably a silly question as you find that in all sectors of business pretty much.

I know I am asking a lot, but I do need the advise of someone with experience. Can you bullet point what I need to do in order if that is possible? Like I said I already have the name, brand identity designed (that was easy considering my background skills) and I know where I want to head in terms of how the company will operate.

So after all of this I will legally be allowed to work from Thailand from my house and not have to worry about any authority issues if I go down the whole HK root and keeping the money in the account for 1 year?

I'll PM you the steps, but in terms of your final point - tax wise as a Thai resident you are only liable for income tax on offshore income that is remitted to Thailand in the same year it is earned (if you don't send it until the next Jan 1st it is not taxable). But for the other query NO this will not legally entitle you to 'work' from Thailand, and neither will it aid in securing a Visa. There are regular arguments discussions on here regarding the legality of working online for non Thai entities wherin payment is made outside of Thailand, but the fact is that Thai law states that a work permit is required to 'work', and that 'working' is:

"Working" means a working by physical strength or knowledge whether or not intended for

wages or any other benefits.

http://thailaws.com/law/t_laws/tlaw0366.pdf

Given the lack of definition of working in the 'definition of working', that can quite literally be interpreted as 'walking down the street requires a work permit'. I interpret it as 'whether you are working is up to us on a case by case basis'

I am unaware of anybody ever being prosecuted when they work online for non Thai clients and are paid outside of Thailand, which many people do, but that could change.

If you want to be a 100% guarantee of legality rather than to rely on a lack of prior prosecution, and if you want to secure a visa on the basis of working, your only recourse is to have a Thai Work Permit either by being employed by a Thai company, or by starting your own (you could of course just use this to invoice a (your) BVI company just enough to pay your and your three new friends' salaries and income tax). If you have an existing successful business you can set up a representative office in Thailand, but you don't from the info you've given.

One alternative option that springs to mind that I always forget about is http://iglu.in.th/work/ - this would mean you can do business, have a work permit, and not worry about the admin or Thai employees.