Starting a Business in Thailand
If you intend to do business in Thailand, then start a business is necessary, but not particularly difficult.
Thailand is a country with a capitalist free market, with a bureaucracy rather flexible.
The legal system of taxes on businesses and citizens are largely based on U.S. and European countries. Most foreigners find reasonable and easy to integrate.
Start a business in Thailand, before any application to handle a business or goodwill. The most important is that the company is financially viable, and that the market is clearly defined for your products or services. The registration process of the company is the “easy” to follow.
The problem of ownership of the company.
The laws in Thailand are quite nationalist. In most cases, the company must be owned “majority” by the Thais, as shareholders.
That means the company can be owned in more than 49% by foreigners.
This is by far the biggest problem for many foreigners.
The exceptions – the majority foreign ownership – require a specific license (“Foreign Business License”) from the Ministry of Commerce, normally obtained through the Investment Committee (Board of Investment, BOL), based on large investments of money, a large number of Thai employees, or through technology transfer to Thailand (as in the energy sector). The business sector also has a lot.
However, the managers of the company, decisions are not necessarily lost by not being the “majority owner. There are simple measures by which foreigners can completely control a business.
For example, you have 40% stake, and the Thais have 60%:
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You’re the only Manager
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You are the sole signatory authority. By the laws of business, all decisions must be signed by the manager.
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Units may have different weights in voting, for example, some units may have a voting power of 2 times (or more). Note that this feature may change with new laws being.
You can also
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Establish a quorum of shareholders of 61% (minimum presence of shareholders necessary for the validity of a decision).Thus, by law, there is no decision possible without your presence, and therefore unable to appoint a new manager.
With some firms, it is common for foreigners to buy shares of Thai shareholders, just after starting a business. So you can once again become the majority shareholder, but in view of the law, you’re in illegality (a less serious problem according to these firms as a minority shareholder). The Thai shareholders “abandoning” their units with contracts signed but not dated. In the eyes of the law, the shares can not be neglected without an owner. Keep share non-transferable and non-dated in a safe deposit box is a risk of flight.And it is asked to report any transfer of shares in an Annual Report.
Another questionable tactic is to have a law firm you getting the shareholders who will meet you “never”, and do not even know.This is sometimes presented as “if you do not even know, it’s another layer of security.” It is illegal. Additionally, if your company becomes viable and prosperous one day, and you have a “regrettable accident”, guess who will recover the capital and ownership of the company. Can you really trust these people?
This is not to exaggerate the plots, they are generally rare. But it is vital to know the risks, and thus save you additional stress.
It is also advisable to clarify in a will where will the wealth of a company in case of death.
Pitfalls to avoid
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It is inadvisable to create a company in order to have a long term visa in Thailand or buy a property on behalf of the company (since foreigners can not own land in Thailand with some exceptions). These companies are illegal and are discouraged by the Thai government. It’s also a lot of formalities and costs. All things considered, it is better to jump the border to renew his visa and to obtain leases on the land 30 years (extendable to 60 years or over) who are both of legal remedies.
Of course, there are many lawyers who will be delighted cons of cash you make legal arrangements “legal”. However, you will be responsible for assembly, and strength to regularly use these experts, because of changes in regulations, in the end this may be very expensive.
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Do not believe everything you hear on the bribes, which are sometimes urban legend. For example, brokers ask for bribes for doing normal things. The bribes are NOT required for conventional procedures, and asking the dealer to put them often in his pocket.
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It is illegal to work as individuals in Thailand without work permits (a booklet resembling a passport) and a tax ID (a plastic card).
Once the company created, then you can apply for a work permit to work legally and get paid by your company.
You must maintain a ratio of employees Thai / foreign employees (typically 4:1, but it depends on the sector), and show enough capital to start.
You can not just create a company come and do your work team of strangers. The number of work permits will be based on your number of employees Thai, and your investment (2 million baht capital provisioned by a work permit if you are not married in Thailand).
Many foreigners working without permits, often to test the market. However, it is not without risk and it is usually temporary.
There are also those who work for themselves via the Internet or a company outside Thailand. They are generally not worried.
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Concerning export activities, it is obviously only if it relates to volumes more consistent (and not a few samples by mail), a start-up is required.
Language
One problem is that laws, forms, and instructions are in Thai language. Everything must be forwarded to the Thai government.To do business, it is necessary to have a professional translator if you do not master the written language.
English is of course essential in business today, and remains the second language in Thailand.
