Hello there,

Here's hoping someone can point me in the right direction....

My husband and I recently purchased an existing Thai company including land and buildings which make up a small bungalow guesthouse type resort in Koh Samui. Following the required due diligence procedure, we completed the transaction in May and are now both directors of the company and our Thai lawyer is a shareholder. We are currently still living in the UK but are intending to move out to Samui sometime around Sept/October this year once the necessary renovation work to the property has been completed. We will be moving along with our 4 year old daughter who will be attending an international school in Samui.

We are now at the stage where we are trying to figure out what our best route is to take regarding visas/work permits but the advice we have received from our Thai lawyer has not only been very vague but has also raised some serious concerns!

We were originally intending for my husband to apply for a non B visa with a view to applying for his work permit once he arrives in Thailand whilst myself and our daughter would apply for Non O visas as his dependants. Once the work permit is issued, we were hoping to arrange for a 12 month extension on our visas. Alternatively we have also considered applying for an education visa for our daughter with me as her guardian so that our visas aren't reliant on my husbands. We understand that we would need 8 Thai staff if we both wanted to apply for work permits so that is why we have settled on the options mentioned above. The resort is quite small so 4 staff will be more than enough.

When I contacted our Thai lawyer recently to obtain the necessary documentation for my husband to apply for his Non B here in the UK, she stated that first it would be necessary to remove us both as directors and then replace us with her as a Thai director as 'the government will not deal with foreign director with no work permit'. She said we could then be put back on as directors once we are in Thailand and the work permit has been applied for. Our concern with this is that what evidence is there to prove our ownership of the business if we are removed as directors?? Obviously we have invested a considerable amount of money in the property and do not want to leave ourselves wide open to losing it! Do we really need to be removed as foreign directors whilst the visas are applied for? Surely if my husband is not currently living in Thailand then there would be no expectation for him to have a work permit at this stage? Furthermore wouldn't the fact that he is a director support his application for a non B visa as he would be coming to Thailand to work within his own company?

Any advice you can give me regarding this would be much appreciated.

A director is not the same as an owner. The owners / shareholders are listed in the company registration as filed with the DBD. In your case it's likely that your lawyer is listed as 51% owner and you and your husband together as 49% owners. The way your Thai lawyer should have set up the shares is that you have preferred shares which outweigh the Thai shares when voting. That way you keep control of the company.

To apply for the workpermit and the extension, the director has to sign many forms. Since you or your husband currently do not have a workpermit you cannot act as a director and thus not sign anything. Another complication is that government agencies are instructed to scrutinize new companies which have a foreign shareholding over 40% and when land/property is involved. The Thai shareholder may have to proof he/she actually co invested and put in the money and is not just acting as a nominee to circumvent Thai laws.

To prevent scrutiny it is better if a Thai is director during the first stages of setting up the company and applying for the necessary permits. When all is done you or your husband can then be made director.

In regards to your extension; be aware that an extension as a dependent stops the moment the extension for the main holder stops. So if your husband loses his workpermit for whatever reason, at the same moment his extension will be cancelled and so will yours and your child's. If you can proof the required funds in a Thai account (I think it's 500,000 THB) then I'd advise to have your child stay on an ED extension with you as her dependent. The International School will be able to help you with the paperwork, as they have many kids and parents staying on such extensions.

Good luck with your new Business!

Edited July 11, 20169 yr by Gulfsailor

Thanks for your comments Gulfsailor. So you think that as long as we have the majority shares in the company, that is enough to protect our interest and it shouldn't matter that we are removed as directors for the time being? Is there anything else we can do as an alternative?

I agree that the education/guardian visas are looking like the better option for me and my daughter. I will definitely contact the school about this, thank you.

Another point that is puzzling me is if my husband enters on a non B single, then applies for a work permit, will 90 days be enough time to complete the process and apply for the extension? Doesn't he need 4 Thai employees and to have paid them 3 months wages plus social security? Surely this isn't possible in the 90 days? Would he be better entering on a tourist visa then crossing the border to get a Non B later on?

Thanks for your comments Gulfsailor. So you think that as long as we have the majority shares in the company, that is enough to protect our interest and it shouldn't matter that we are removed as directors for the time being? Is there anything else we can do as an alternative?

I agree that the education/guardian visas are looking like the better option for me and my daughter. I will definitely contact the school about this, thank you.

i can't see how you currently would have the majority of the shares. At most you'd have 49% otherwise it wouldn't be a Thai company. To be a bit safer from unscrupulous lawyers (plenty of those around), you should get an undated pre signed transfer document for the Thai owned shares. Not really legal, but at least if your Thai partner wants to screw you, you can date the transfer and sign over the shares to another Thai. Or even better, if you know any Thai that you can trust and that person doesn't know your current Thai partner, ask that person to hold 2%, so it's divided 49-49-2.

In regards to your B visa question. Yes, unlikely the extension based on employment will be granted within the first 90 days due to employees not working long enough yet. So easier to just come in on a tourist visa / exempt entry, hire the workers (the Thai director will have to submit the papers at social security), then go to Penang and get a single entry Non-B visa. Alternatively you could try to get a one year multiple entry Non-B in your home country based on investment/business in Thailand. But then don't mention you will work for the business or that you will apply for a workpermit, otherwise you'll likely only get a single entry with the idea that you can get an extension of stay inside Thailand.

Thank you Gulfsailor, you've been really helpful.

Another point that is puzzling me is if my husband enters on a non B single, then applies for a work permit, will 90 days be enough time to complete the process and apply for the extension? Doesn't he need 4 Thai employees and to have paid them 3 months wages plus social security? Surely this isn't possible in the 90 days? Would he be better entering on a tourist visa then crossing the border to get a Non B later on?

The authorities here in Thailand understand that finding the right four employees takes time, therefore you can get a work permit without four employees but you will need to eventually fill the required slots.

The same situation occurs when one or more of your staff decides to quit and you are suddenly running a company with only two employees. They don't cancel your work permit, they simply require that you make a decent effort to find two replacement staff.

Good luck with your venture.

Thanks for your input Seanbck, much appreciated.

Hi Zanyzan

Take great care here as you are giving the Thai lawyer much more power over your future than you can possibly imagine.

I just sent you a PM.

P

I would consult another Lawfirm. You have Tila legal, Sunbelt Asia and Siam Legal.

Siam Legal has if I remember correctly foreign lawyers and I suggest you contact one or more to see if they verify what that lawyer says.

And I agree what gulfsailor said you want to be careful with giving the lawyer this much power over your business. I have heard more than once about how foreigners have been screwed out of their businesses.

Thanks P, I have sent you a PM.

Thank you for your comments Evalore.