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% company ownership by alien


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As I understand it there are 3 categories of Ltd companies categorised by the Board of Investment for farangs. US citizens have their own special rules by the way.

'A' is totally prohibited to foreign involvement (property, professions etc)and 'B' is open to farangs but must be 51% Thai owned. Category 'C' can be fully foreign owned. So far so good.

However, 'C' contained 'sale and promotion of food and beverage for the promotion of tourism' which surely includes bars and restaurants. However, everyone I talk to in the indiustry has a wife or Thai owning 51%.

Can anyone explain the ins and outs? The 51% Thai ownership condition is banded about as gospel but that is categorically not true as far as I have been able to establish, although it celarly applies in ceretain situations. However, there is clearly something of a grey area or is there something i am not grasping?

Thanks for any advice anyone can give.

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If you would like to have 51% or more you will require Board Of Investment (BOI) approval. Such approvals are generally granted if you meet transparent criteria related to your business size and objective. So, other than a (majority-) Thai owned company you have to discuss your business plan with an official.

Transparent criteria that certainly will be applied is the minimum investment. I am the owner of a small BOI approved software company and have paid up THB 20 million (which is the minimum). Other is the staffing with foreigners. And you should prove the add-value of your company to the Thai market place. If you plan a venture for which there is abundant supply better forget applying at BOI.

Do not take it for granted that you are to receive residency in return for investing. For all foreigners on the payroll including yourself as manager/owner you need to justify why not a Thai and what your replacement plan for a Thai looks like. Sure, they do not make a lot of fuss and perhaps a perk is that you are granted a three year - in country extendable - visa. And you get to deal with the BOI visa office on Ratchadapisek Road which unlike the normal immigration police processes visa and work permit applications real time in five minutes. They even bring you coffee. I read stories on this board that the regular visa office (never been there) has not a good customer service.

Your business will also get a tax holiday.

Without BOI promotion you will be stuck with majority Thai ownership.

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The only fully foreign owned companies in Thailand that I know of are owned by US citizens. There are also a lot of business categories that are opened only to Thai citizens. In my limited experience there seem to be many gray areas in the Thai business law. Are the businesses you refer to owned by Americans or foreigners of other nationalities? US ciizenship does not restrict someone from opening a 51% Thai owned company and it's a lot easier to start a business in Thailand this way. Remember, Thailand is not the US and if an American small-business owner did have some problems with the government his recourse would be limited. The treaty that the US has with Thailand is called "The Treaty of Amity and Economic Relations". I opened my business under this treaty because I could and I've already had the experience of business partners before. I did want total control and was willing to endure that additional hassle of this type of business registration.

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Thanks guys. It seems that although the 51% rule can be avoided, probably not in my case with a small trading outfit that is nothing out of the ordinary. I am told by someone I work with who also has his own company that these rules apply to formation but that after formation it is possible to buy these shares back to regain control. Any experience of this?

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There is a book that you can pick up at Asia Books called "Start Up and Stay Up in Thailand" by Roy Tomizawa. I think it has some good case studies and lessons learned.

Good luck!

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