Business set up

[pe7e]

I remember reading some time ago that if business was only engaged in export it could be owned by farangs, ie no Thai shareholders. Is there any truth in this? or maybe an element of fact. Are work permits any easier to get for establishing a company soley engaged in export? or do the standard rules apply ie 2 mill baht and 4 Thai employees?

Thanks ::

[StoneSoup]

Hi pe7e -

 

You are blending together pieces of several different rules.

 

An already established overseas company can open an office in Thailand - called either a Branch Office, or Representattive Office, or Regional/Headquarters Office (depending on its role), and - AS LONG AS IT DOES NOT EARN REVENUE INSIDE THAILAND - that office can be run by a farang, with no other Thai ownership involved. As it earns no revenue, this type of office also pays no taxes. The manager is effectively an "ambassador" for the overseas company, with the manager representing the home office via a power of attourney. For this type of office, you must bring in 2 million baht first year, one million baht for each of the next three years. This kind of office need not register as a company - it need only register as an Alien Business operating in Thailand - the Alien Business License costs 42,000 baht, plus processing fees. But - forming this type of officerequiresextensive documentation about the parent company - notarized and authenticated by the Thai embassy in the home office country.

 

There is another route that allows full foreign ownership in connection with export activity - this is BOI promotion of a company. In this case, you follow all regular rules about registering a company, then obtain BOI promotion. Full foreign ownership is allowed. But - unless you are in software or similar high-tech pursuits, the BOI will only promote well-funded operations.

 

If you are just a guy on the street, wanting to export stuff to make a buck (say, selling on Ebay), you don't need to do anything - as long as the money you make is not being directly remitted to Thailand, and then paid to you as a defacto salary from a Thai bank account.

 

Concerning work permits and entry permit extensions - regardless of all the special programs, in most cases, the person accepting your application at the Thai Ministry will simply apply the same old "default" screens - totally ignoring the special cases. The Labor Ministry will want to see evidence of four Thai employess and 2 million baht remitted into a company account, in order to approve an application for one farang. You must get a work permit in order to obtain an entry permit extension based on employment.

 

There are all sorts of shadowy stories about ways to "beat the system" and occasionally people do manage to circumvent policy. But this is unpredictable, and the downside can be significant if something goes wrong.

 

If and when you decide to open a conventional Thai Private Company Limited, my company is available to assist (and sponsors this section of the board, as displayed above). But - our business is efficiently assisting with compliance - we are not in the "dodgy work around" business.

 

Good luck!

Stone Soup

[pe7e]

Thanks for the comprehensive reply, much appreciated.

 

<If you are just a guy on the street, wanting to export stuff to make a buck (say, selling on Ebay), you don't need to do anything - as long as the money you make is not being directly remitted to Thailand, and then paid to you as a defacto salary from a Thai bank account.>

 

Would the above advice still be ok if the value of goods sent abroad was around 70,000 bt month or more?

Payment for these goods would be made direct to a UK account.

[StoneSoup]

Thailand is happy to have visiting toursists/businessmen buy lots of things here, and ship them overseas.

 

Where things might get touchy would be if you were shipping again a Letter of Credit, whereby the business transaction was involving direct remittances into Thailand.

 

As long as you are bringing your own cash into Thailand to buy things and export them, no one cares.

 

The only penalty you will pay will be that you will probably not be able to file to recover VAT paid - but even if you have a legitimate company, this is a crap shoot at best - stories of rebates taking years to come back.

 

The other risk is if a Thai vendor cheats you, you have less "standing" to obtain legal redress - but that's also a crap shoot here.

 

If you will regularly make big shipments, it might be a good idea to work with a Thai logistics company - they then become the shipper of record.

 

Cheers!

SS

 

[pe7e]

<If you will regularly make big shipments, it might be a good idea to work with a Thai logistics company - they then become the shipper of record. >

 

 

Again many thanks, this clears the way for stage 1, if this works as expected I will almost certainly need your services to establish a Thai company in the future. Do you have any recomendation as to a logistics company, or are they all similar? I do need dedependability regarding delivery, my dealings with the Thai post office as been less than satisfactory. Initial expected weekly level will be 20 - 30 small, but quite valuable parcels (about the size of a telephone) to UK destinations.

[StoneSoup]

It sounds like you are just sending out many very small parcels, to individual addressees overseas.

 

For that, an agent is probably no advantage.

 

You can figure out UPS / FEDEX / Airborne Express / TNT on your own. All have fairly smooth operations here.

 

I remember your posts a while back about financing trips here via taking suitcases of Sukhumvit T-shirts back to UK.

 

When the time comes, you can contact me at info@indo-siam.com

 

Good luck !

SS