a business with less than 4 employees?

[lepitw]

Hello,

I am making research regarding opening a small business as a foreigner in Thailand and have met a few lawyers to answer my questions, but only one of them gave me a solution (an attractive solution) to scale down the charges and avoid having to need all 4 employees. Here it is. I hope someone can confirm the possibility and legallity of such an option.

My lawyer assures me that IF:

- I get a non imm B visa from Laos, and then a multiple entry from Penang

- I get my work permit from labour office

- I leave the country on a boarder run every three months (rather than extending the visa at the immigration)

Then:

- I can legally run my business without employees

- I do not have to pay taxes.

No other lawyers offered that option.

My question is: is this legal? has anyone done it? how can i get a work permit prior to proving I employ 4 thai citizens? are there any risks in doing that?

My interests lies in opening a small family run business of producing and transforming organic foods, and having 4 full time employees right from the start is too heavy a charge in my P&L. That is why I am looking for solutions to start small and safe and eventually grow in the coming years to employ more people.

Thank you for your help.

[nzexpat]

Anything that "appears to good to be true" is usually expensive garbage !

[asiaexpat]

Your hopes are dashed. First, you need a valid reason with documentation to get a Non-B visa. Second, if you had a Non-b visa from Laos, Penang can not alter it to a multiple entry. Third, without company documentation you will not get a Work Permit.

Anyone earning wages, profits or in kind in Thailand owe taxes to the Thai Revenue.

Wake up and smell the roses.

[blackcab]

You could possibly get a multiple entry Non Immigrant B visa. This would be valid for 1 year, but you would be obliged to leave the country every 90 days and then return.

I don't think it's conceivable that you would get a work permit. While there is no minimum salary requirement you do need to employ Thai staff. In most circumstances, you need to employ 4 Thai staff.

You also need to consider what job the work permit would be issued for, as you need to specifically state why the particular job in question cannot be done by a Thai person. This is why (teaching excluded) most work permits are only issued for management positions (such as business development manager/general manager) or very specialised and often niche positions such as procurement specialist/oil and gas specialist/app writer, etc.

In my opinion, slicing and dicing organic vegetables isn't going to cut it.

As for not paying taxes: If your company is registered with the DBD you are required to report your income and your profit/loss. As a small business you won't have to pay any tax on the first 300,000 baht profit anyway.

[wayned]

By say "family run business" what do you mean? Are you married to a Thai? If so, the rules change and I think that you only need 2 employees.

[Langsuan Man]

Ask the Lawyer already told you that what My lawyer told you was bogus

I would listen to him and not the pundits here

[ColdSingha]

By say "family run business" what do you mean? Are you married to a Thai? If so, the rules change and I think that you only need 2 employees.

i'm married and was told i would still need 4 employees (hua hin)

[bigt3116]

Penang will only issue a multi-Non-B if you have a work permit with at least 8 months remaining.

[BritTim]

It is always worth mentioning your nationality when asking these kinds of questions. If you happen to be a US citizen, under the Treaty of Amity between Thailand and the US, you can create a sole proprietorship, and this will be your best option.

[yankee99]

By say "family run business" what do you mean? Are you married to a Thai? If so, the rules change and I think that you only need 2 employees.

i'm married and was told i would still need 4 employees (hua hin)

True

[yankee99]

It is always worth mentioning your nationality when asking these kinds of questions. If you happen to be a US citizen, under the Treaty of Amity between Thailand and the US, you can create a sole proprietorship, and this will be your best option.

He'll still need 4 employees for a wp and have to pay taxes

[Soutpeel]

the lawyer is talking rubbish and one suspects he is talking about "ghost" employees in the business in other words your are paying the income tax and SS for people you dont actually employ or work for someone else, most likely the lawyer ?

Further how are youy getting around the 49/51% ownership rules ? "I can legally run my business without employees" tell me its not the lawyer or someone associated with him who will have the 51% Thai stake in the co ?

[recycler]

Your lawyer should hand in his lawyer license if he has any!

Maybe you should look at Myanmar or Cambodia for you small family run business, they are a lot less restrictive than Thailand.

[konying]

It is semi true .you do need 4 staff to obtain work permit, however do not really need to keep all 4 once it's granted as no one checks on number of employees.

You then again need 4 staff to get extension of stay based on business and work.

After granted, again no one checks on number of employees.

[TravelerEastWest]

Married to a Thai citizen you normally only need 2 staff and 1 million capital, unless the law has changed?

[Colin1958]

Why not just put it in your wife's name as a Thai business, that won't help you with work permit though unless you can become an employee with specialization in organic food science or something.

[realenglish1]

Get a new Lawyer

[ikbenhet]

I am doing this already for 6 years now.

No problems with the labor office and no problems in Penang for the yearly nonB visa.

And no staff on the payroll and no they are not added and removed for the visa and work permit.

And yes i do pay tax and yes Penang needs a valid work permit with at least 8 months validity.

edit: and I know several others who do this. A few for more than 15 years already.

Edited April 30, 2015 by ikbenhet

[itsuptome]

I had been under the impression that the procedure was to first acquire a non-B based on a registered business in Thailand, and then show the tax receipts for 4 employees to obtain your first (and I'm guessing all subsequent) extensions. Which makes sense: you don't have to have the 4 employees before you start conducting business, but by the time you're up for your extension you do.

In theory if you could acquire a multi-entry non-B you could then exit and re-enter the country on it and you would never have to show the tax receipts for your employees. I was advised by a expat manager of a BOI company about a similar loophole; I believe BOI grants a 1 year non-B so you have a year to get the employees on payroll (and they are flexible about the work permit ratio anyway).

I don't think an organic farm is likely to qualify for BOI but you might want to do a little reading on it because it is a much friendlier program.

At any rate the multi-entry non-B as proposed above seems like a stretch to me, even if my understanding of the process is correct, it seems like there are a lot of ways that that could fail. It's clearly not how Immigration intends for the visa to be used.

But hell, you can go down to lower Sukhumvit and ask a Nigerian coke dealer to show you a legit work permit and he'll do it. They set up the company structure and they just pay the tax for the 4 employees, they never actually hire them. Not legal but they get away with it for years. There are a lot of small businesses that are doing something more legitimate than selling coke which are also doing this, I've met them. Not something I would recommend you do just saying it happens.

Also this is editorializing and it's not anything that hasn't been said before but the 4 employees requirement discourages so much foreign investment in Thailand. This is another one of the reasons it's a country of beer bars paying uneducated girls a pittance, and not a country of skilled professionals doing white collar work for overseas employers. If two foreign partners want to open up an office here they need to put 8 Thais to work - in a skilled white collar profession this may be 30k-60k per head excepting the admin staff, so you are now talking about 10 people and perhaps 5 million baht in annual salary expense (that's $160K USD). This is not chump change, you could argue it's not a lot but it makes Thailand look a lot less cheap compared to the expat's home country or many other countries. It is protectionist scope overreach on the part of Immigration that damages the economy.

No offense to anyone who runs a beer bar.

I would take the proposed structure to one or two of your other lawyers and see what they think. I am almost certain that is not a fully above-board way to do things. The reality on the ground for expats doing business in Thailand is that doing things totally in line with the rules means a much higher capital overhead and so many are bending the rules here and there. I would not advise it though...

[guavagirl]

You need to show proof that you paid your yearly taxes and your staff's social security to be able to renew your work permit.

[jimmiejackson]

Seems like many responders seem to be missing the point. What the lawyer has suggested makes sense.

1 - register company with DBD

2 - go to Laos and using company paperwork get a single entry Non Imm B visa (check recent reports of whether you need to get a WP3 form or not first - if you do step 2 will be "apply for work permit")

3 - Apply for and get a work permit issued (usually in the first year they will issue a work permit (in Bangkok at least) without SSF receipts for Thai staff, for subsequent years I don't know as never done it without SSF receipts)

4 - Go to Penang with company paperwork and issued WP and get a multiple entry Non Imm B visa

5 - Leave Thailand at least once every 90 days (as you will get a 90 day entry stamp every time you enter) until the "Enter before date" on the visa expires. Done properly this will give you a maximum of 15 months in Thailand.

Rinse and repeat. The only sticking point is whether or not the work permit will be renewed to be able to continue (and of course whether Penang change the rules or not).

[jimmiejackson]

Out of interest are you an export only company or rep office? How does the labor department not want to see your SSF contributions for Thai staff? Or are they (for some unknown reason...) convinced they shouldn't ask?

I am doing this already for 6 years now.

No problems with the labor office and no problems in Penang for the yearly nonB visa.

And no staff on the payroll and no they are not added and removed for the visa and work permit.

And yes i do pay tax and yes Penang needs a valid work permit with at least 8 months validity.

edit: and I know several others who do this. A few for more than 15 years already.

[ikbenhet]

Out of interest are you an export only company or rep office? How does the labor department not want to see your SSF contributions for Thai staff? Or are they (for some unknown reason...) convinced they shouldn't ask?

I am doing this already for 6 years now.

No problems with the labor office and no problems in Penang for the yearly nonB visa.

And no staff on the payroll and no they are not added and removed for the visa and work permit.

And yes i do pay tax and yes Penang needs a valid work permit with at least 8 months validity.

edit: and I know several others who do this. A few for more than 15 years already.

I have a small IT services company.

Work permit is taking care of by my accountant.

Non-B Visa and all the papers needed for it I do myself.

I have no idea why they do not ask about the Thai staff, I only know they do not ask.

I also asked one of my friends who does the work permit papers by herself, if she add not existing staff but she says no.

Also hasn't been asked about it by the labor office.

edit: I vaguely do remember being told by the bureau that took care of the initial business registration that this route isn't available for all businesses but IT was one of them.

Edited April 30, 2015 by ikbenhet

[jimmiejackson]

Interesting, they must feel there is no need in your case - probably because you aren't selling physical goods locally.

Out of interest are you an export only company or rep office? How does the labor department not want to see your SSF contributions for Thai staff? Or are they (for some unknown reason...) convinced they shouldn't ask?

I am doing this already for 6 years now.

No problems with the labor office and no problems in Penang for the yearly nonB visa.

And no staff on the payroll and no they are not added and removed for the visa and work permit.

And yes i do pay tax and yes Penang needs a valid work permit with at least 8 months validity.

edit: and I know several others who do this. A few for more than 15 years already.

I have a small IT services company.

Work permit is taking care of by my accountant.

Non-B Visa and all the papers needed for it I do myself.

I have no idea why they do not ask about the Thai staff, I only know they do not ask.

I also asked one of my friends who does the work permit papers by herself, if she add not existing staff but she says no.

Also hasn't been asked about it by the labor office.

[eddie61]

Why would you want to do this in Thailand?

- Torturous immigration/work permit laws.

- poorly skilled labour force for relatively high costs.

- tax authorities that will set out to fleece you from the word go. IE the tax laws (VAT refunds, losses carried forward etc), are not actually real. Try claiming losses carried forward or VAT refunds for exports......

If you don't have personal reasons to start a business in Thailand, head next door. I ran businesses here for 20+ years, and would say Thailand was good, but is no longer good for small startups.

The reason is that years ago it was so lawless that everything went, and you could slip between the cracks. Now, there are laws for everything, but most of the bureaucracy is crooked, so it takes money to survive.

I don't recommend Thailand; look around the neighbourhood..

Edited April 30, 2015 by eddie61

[blackcab]

3 - Apply for and get a work permit issued (usually in the first year they will issue a work permit (in Bangkok at least) without SSF receipts for Thai staff, for subsequent years I don't know as never done it without SSF receipts)

Absolutely untrue. You must show as a minimum the first months Social Fund receipts when you apply.

[akaika]

There is a lot of good information here. At least good questions. It is always difficult when 2 posters seem to have such strong affirmations that the same thing will 'work' and be 'impossible' and it is too bad that the details of these are not made more clear for others.

Too many suggestions to go to another country though... Doesn't anyone consider that if a person wanted to open a business in Cambodia they might post in the 'opening a business in Cambodia' forum? and after getting all the answers in this forum they could make up their own mind if they wanted to stay or go themselves?

[akaika]

You could possibly get a multiple entry Non Immigrant B visa. This would be valid for 1 year, but you would be obliged to leave the country every 90 days and then return.

What about the online reporting they have now? Wouldn't this satisfy the 90 day reporting?

[beechguy]

You could possibly get a multiple entry Non Immigrant B visa. This would be valid for 1 year, but you would be obliged to leave the country every 90 days and then return.

What about the online reporting they have now? Wouldn't this satisfy the 90 day reporting?

No. With a Multi-Entry Visa, you are stamped permitted to stay 90 days, the must leave the country, or get an extension of permission to stay. Nothing to do with the 90 day address reports.

[asean]

The lawyer is lying to you or he has no idea of the law.