Do I need a work permit to supervise the 49% of shares of my company ?

[JohnnyBKK]

Hello,

 

I want to set up a thai company, I will have 49% of shares only. Do I need a work permit to supervise operations ? Only looking and giving advice, no work involded.

 

Best regards,

[dbrenn]

You don't need a work permit to own shares. You do need a work permit to perform any kind of work at the company you own. Supervising operations would count as work if you acted as an employee or director, working in any capacity whatsoever. All you can legally do without permission to work is sit on the sidelines, using your shareholder voting rights to hire and fire directors to manage the business on your behalf. 

 

So, yes, you need a work permit to work.

Edited July 1, 2017 by dbrenn

[Rastaputin]

Makes me wonder if signing documents and/or hiring and firing Directors, exercising your voting rights, etc. would be considered working as well? Is there are clear definition of the accepted actions by shareholders without Work Permit?

[Srikcir]

27 minutes ago, Rastaputin said:

exercising your voting rights

As a minority shareholder you don't have many rights to be concerned about.

[natway09]

My strong suggestion would be to get one anyway in particular with all the hoo haa going on at present.

[williamgeorgeallen]

33 minutes ago, natway09 said:

My strong suggestion would be to get one anyway in particular with all the hoo haa going on at present.

better not get involved with a business in thailand. although i left thailand last year i still have a 49% share in a business there. the guy managing  the business has the work permit i had because he actually runs the operation. most foreigners who have 49% shares in companies dont have work permits because they are very expensive or they are difficult or impossible to get. if you have 49% of the business just dont go there when it is open for business and you will be fine. make sure you have good accountants and a good lawyer. if you are in pattaya PM me and i will give you the details of mine.

[khunPer]

To my knowledge you don't need a Work Permit to be shareholder and Director (Member of the Board) in a Thai company limited – I'm shareholder and director myself – but you cannot perform any actual or physical work; i.e. you can sign an annual statement, and presumable also Meeting Reports, but you can for example not write a bank deposit slip or withdrawal slip (only sign it) on behalf of the company. Best to have a Thai director employed for daily business management.

 

It's a question of a careful balance – and knowing how the local authorities work – might also depend of kind of business, how much the authorities will check.

[Arkady]

3 hours ago, Rastaputin said:

Makes me wonder if signing documents and/or hiring and firing Directors, exercising your voting rights, etc. would be considered working as well? Is there are clear definition of the accepted actions by shareholders without Work Permit?

As with many things in Thailand the correct answer is probably it depends. I was a director of a company of which I owned 40% indirectly through an offshore company for some years. I was the sole authorised signatory and had no work permit for that company for the first few years.  I managed to file accounts with the Revenue Department, set up utilities bills, open a bank account and purchase land.  The only objection I ever encountered due to lack of WP was with Bangkok Bank which refused to open a bank account, unless I produced a WP in the name of that company.  However, a trip across the road to KBANK resolved that issue very satisfactorily.  

 

Bear in mind that things change and, for example, the land purchase could no longer be easily done through this format, regardless of whether the foreign director had a WP or not.  I seem to recall that, on the advice of my lawyer I reduced the foreign shareholding to 20% just before submitting the docs to the Land Office and gave temporary power of attorney to the non-authorised Thai director, so that a farang would not have to stand at the counter and sign all the documents but I was still the sole authorised director in the company affidavit. Anyway this is irrelevant since the  2006 letter from the Interior Minister to Land Offices instructing them to scrutinise companies with foreign shareholders and directors more closely. 

 

You can probably do all the things I did, except buy land, as a director without WP but certain private sector or government organisations, or individuals working in them,  might decide to demand a WP.  In the case of the private sector, you can usually find an alternative, as I did.  If it is say the Revenue Department, you will have to either get a WP or appoint a Thai authorised director.  In some cases giving temporarly power of attorney to a Thai to sign might do.

 

Whether all of this is strictly legal or not is a matter of opinion.  The definition of work in the 2008 Working of Aliens Act, which has just been scrapped and replaced with an unworkable Royal Decree was extremely broad.  But the definition in the new decree is slightly narrower requiring the performance of work or a profession with or without remuneration, rather than the somewhat ridiculous definition in the old act of just expending mental or physical effort, (e.g. digging your own garden or filling in your tax returns).   However, even under the new decree, it is quite likely that administrating a company would be considered work.  But the only cases I have ever heard of where foreigners were prosecuted were those who had made enemies of the kind of wealthy Thais who have lawyers on permanent retention to file criminal defamation charges and the foreigners targetted were those who sat on the boards of subsidiaries without realising they should get a WP for their additional jobs, even if without salary.  The other cases I have head of were foreigners who were rejected for permanent residence for having second jobs without WP.   I have never heard of a foreigner being prosecuted for doing what the OP is thinking of doing.  That doesn't mean it could never happen. 

[chickenrunCM]

3 hours ago, Srikcir said:

As a minority shareholder you don't have many rights to be concerned about.

your 49% can have all the voting rights in the company, you can have fully controll about the company. 

you need only the right company setup contract

[david555]

I would not ever risk it to make a ( fake ) company to own a house .....like the intention is with a just shares company no real trading ...., a "future cash cow " to become when the authority's go after the bypass for the so many " company houses ....".

[YetAnother]

On 7/1/2017 at 7:51 PM, dbrenn said:

You don't need a work permit to own shares. You do need a work permit to perform any kind of work at the company you own. Supervising operations would count as work if you acted as an employee or director, working in any capacity whatsoever. All you can legally do without permission to work is sit on the sidelines, using your shareholder voting rights to hire and fire directors to manage the business on your behalf. 

 

So, yes, you need a work permit to work.

my friend is in this situation; ho doesnt 'work' in any classic sense but he does collect money

[Tilacme]

The OP did not specify the scale of his intended business but there is the Board of Investment route for foreign investment.

[Srikcir]

If OP believes in the Thai economy growing this year and next, maybe he should simply consider investing in the SET. At least shares are protected by SET regulations and laws.

[Pilotman]

debren is right. I own 48% of our company but I have no executive role. That is in the hands of the Thai holders of the other 52% , my wife and daughter. However, no strategic  decision  can be made unless I , plus one of the others, agree, that is, I can't be out voted on strategic issues. Again, this is not work and I cannot involve myself in the day to day running of the company.     

[Tilacme]

7 minutes ago, Pilotman said:

debren is right. I own 48% of our company but I have no executive role. That is in the hands of the Thai holders of the other 52% , my wife and daughter. However, no strategic  decision  can be made unless I , plus one of the others, agree, that is, I can't be out voted on strategic issues. Again, this is not work and I cannot involve myself in the day to day running of the company.     

A fine example of family values.

[WhizBang]

Do NOT invest any money in Thailand that you are prepared to lose.  And by lose, I mean 110% of it.

[Tilacme]

5 minutes ago, WhizBang said:

Do NOT invest any money in Thailand that you are prepared to lose.  And by lose, I mean 110% of it.

So your advise is to invest all money you are prepared to lose in Thailand.

[Pilotman]

32 minutes ago, Tilacme said:

A fine example of family values.

It just makes sense.  I have 30 years of business experience to call on, they have very little .  

[Tilacme]

2 minutes ago, Pilotman said:

It just makes sense.  I have 30 years of business experience to call on, they have very little .  

Yes you are correct, my apologies if any offence was taken.