SETTING UP A COMPANY: 

Rules for work permit holders. New companies wishing to have work permits need to show their share capital in the Bank? FOR EVERY FOREIGNER wishing to join an existing Thai company you must now show 2m baht in the bank when they go to register. For each additional foreigner you need to show 2m baht per each. Company rule came into being regarding share capital when forming a new company. You must show 2m baht in a Bank account. One work permit 2m baht and you need WP3 form from the labour Office to apply for a work permit and increases of 2m baht per work permit after that. A 1m baht company does exist again for foreigners regardless if married to Thais or not but you cannot use to have work permit and you will not get a non immigrant B visa as you need WP3 or Tor Tor 3 form if you go to Penang etc. THIS MEANS YOU MUST HAVE A COMPANY SET UP ALREADY. Please note all new companies now must have Company account under the Thai Director as well.

You are not allowed to form a Company just to hold a house or property under. The law states that you must carry on a business and in March 2006 the authorities set about investigating companies and their employees. A Company must file yearly audit; have 7 shareholders and the Thai workers. This old law was enforced on May 25th 2006 and now Companies who have properties must prove where the money came from & all new house sales under Companies will be looked at. With housing developments foreigners have benefited themselves on property sales so this practice is now under investigation and especially in high level property sales in Samui, Pattaya, Phuket. Many foreigners & small property owners are affected by this now but like anything if you do things right in Thailand you will be OK but always ask second opinions!!!! It may save you in the long run. 

In a company you need 7 partners & foreigners can only hold 49% shares but you can according to the investment control 100% via B.O.I. (Board of Investment) or if American have an Amity company. Foreigners as from 2001 can make up 6 out of 7 shareholders but Thais still hold 51% of the shares. What one does not know until they decide to form a company is that certain businesses are closed to foreigners. These businesses are categorized into 2 different areas with 3rd open. So when you form a company make sure it doesn't come under the following or write to us. 

The Alien Business Law (N.E.C. Announcement 281). Business activities falling in categories A & B are generally closed to foreigners. Under category C you must obtain a permit prior to commencing business. Businesses outside these categories are exempt. The Ministry of Commerce will also help applications of non trading offices.
Category A: 1.Agriculture: rice farming; salt farming. Commercial Business: Internal trade in local agriculture products, Land trade. Service business: Accounting, farming animals, architecture, advertising, brokerage, auctioning, Barber, hair dressing & beautician. Building industry.
Category B. 1. Agriculture Business: orchids, cultivation, animal husbandry including silk worm raising, timbering, fishing. 2. Industrial & Handicraft: Rice milling, Flour making, sugar, alcohol & non alcohol drinks, Ice cream, Pharmaceutical manufacturing, cold storage, timber, gold, silver and inlaid stone, wood carving, lacquer-ware, match making, cement etc, Dynamiting rocks, Manufacturing garments & shoes, Printing, newspaper publishing, silk weaving or silk printing, manufacture of finished products in silk.3. Commercial: all retailing not in category C. Ore trading not in Category C, selling food an drinks, trading of antiques & fine arts.4 Service Industry: Tour agency, Hotels except Hotel management, photography, laundering, dress making and service jobs.5. Land, water & ie.  transport.
Category C. You are allowed to do the following. Exporting, all wholesale trades not in A & B. retiling machinery, equipment & tools, selling food, beverages that promote tourism. Industrial & handicraft Business: manufacturing animal feeds, vegetable oil extraction, textile manufacturing, dyeing, fabric printing, glass ware manufacturing, making plates and bowls, stationary & printing paper, rock salt mining, mining. 
Service: anything not in A or B.

When forming a company you needed ex Thai shareholders (now changed to 6 foreigners & one Thai). Those early companies used lawyers who in turn used their staff as nominees or Thais off the streets. Once paid off then that's the end of those nominees, or you thought. However one must remember that if you make a yearly profit you must pay dividends to all the share holders. But, where are they: "the inevitable, my lawyer will take care of it"?? A lawyer is not an accountant so make sure you differentiate between having both when you start a Company. If you are not paying VAT, Social Welfare tax & no yearly audits you will be fined. If you own a property and use a company you must carry on a business & run into profit mode after 3 years.

One can transform a Thai company into a foreign firm. For some of these companies it is to risky to maintain the Thai status as the intention violates the Alien Business Law.  It is now difficult for small and medium foreign companies with capital registration of less than Thai Baht 100 million to get a wholesale license, service license and/or retail of machinery-equipment license as the application has to be approved by a 21 persons committee comprising of high-ranking authorities from various ministries etc. This committee will protect small and medium Thai Business.

COMPANY NAME: Cannot be a country or city name & must end with the words: Company Limited (Co. Ltd); Corporation Limited (Corp.Ltd); or Limited (Ltd).  

COSTS TO SET UP A THAI COMPANY: REMEMBER THE COSTS TO SETUP ARE DEARER IN BANGKOK THAN PATTAYA OR CHIANGMAI BUT THIS IS JUST A ROUGH GUIDE

2/. Accountant fees 3500 –5000 baht per month

3/. Work permit 9000-15,000 baht setup then 3000 baht per year without legal fee to present.

4/. Non immigrant visa  must leave the country 5000 baht with your company papers established not before.

5/. Office setup fees:

     a/. Rent or lease a building  10-20,000 baht per month. Deposit 3 months

     b/. 4 Thai staff salaries 4500 –15,000. Office workers approx 8-12,000 baht

         Computer staff min 10,000 baht ; salaries depend on skills and can be more.

     C/. Power & water with air cons  2500 baht min per month

     D Office furniture, redecorate, computers & furnishings 200,000+ baht

     E/. Telephone ADSL, /fax 2000 baht per month

     F/. Incidentals 2000 baht per month

6/. Taxes Withholding, VAT & social welfare tax min 7500 baht per month

7/. Transport 2000+ baht per month

8/. Food, water, waste, advertising costs etc 1000 baht per month

Your budget for the first year should be 1m + baht min depending on your location; rent; salaries and work. Every company setup is different as it depends on the licenses one must have and the work you wish to do. Time to take approx 1 month to setup with work permit say 4- 6 weeks. The above is a conservative estimate but be prepared to pay for what you want. After 1 year a foreigner can apply for a year visa but you really need your lawyer to assist you and costs may be 10,000 baht + to process your work permit and visa and pay government fees. You must have your yearly audit processed. The visa takes 3 months to process as you will be under consideration while the Immigration and commercial reg go thru your accounts etc. Yearly audit also can cost anything from 7000-25000 baht per year and you need this before you apply. Remember you still have to pay your living costs away from the Office, which will be separate from the above costs. Having a company can be a headache and only have what you need but to work in Thailand you need to be either employed by a Company with work permit or start your own. You do need a good honest accountant & one separate from your lawyer if possible who is a chartered accountant not just an office worker. Management is the prime requirement of any business here before you even think to start by recruiting off the street thinking you have the right person. One day they come to work the next day they disappear. However to every good business there is god management so the success is having the right people around you and doing everything properly from the start.

 We now offer a Thai work permit, Thai company & Thai limited partnership. Ask us for more information.