The road to working for your own business legally

**9999** · 11-01-2012, 02:56 PM

For the last 2 years my mrs has been doing sporadic work from home for an overseas client, off the books and clandestine. Well, it started sporadic, and grew into her and a friend working almost full time on this stuff.

They must be doing something right as now their customer wants work done that would require an additional 4 full time employees.

We talked and agreed that they're best off going legit, starting a company, paying tax, and using the building blocks to expand in the same arena and seek new clients.

The business will be in mine and mrs name (mrs 51%, me 49%) and would like the option of selling or issuing shares and diluting our stakes if necessary or prudent.

I think this business has potential and want to be part of it. So looking to play the game until I can work for the company over here legally, in whatever capacity Thai Law allows me to.

So...I'm pretty clueless right now. Haven't even searched TV (hopefully don't need to go there). Now I know full well things can go tits up and there's a billion pitfalls etc etc, just after the facts and hearing from people with experience. Mrs is pretty clued up (she reckons) after speaking with lawyers, accountants, friends etc. whereas my consultations have barely gone past the bar stool.

And LT, mate, if you're reading this, you're the kind of guy that could probably be of some help here so hope you don't hold any grudges pertaining to our past shit-fight.

So, from what little I understand, here's what I think resemble the steps I need to take (no doubt a fishing net - full of holes - of a plan)

* Get a proper Visa. I'm married with a child but still doing tourist visas. Need to change this to a Non-B, marriage visa or something.

* Register the company as mrs being holding 51% and myself 49% of the shares.

* Sit idly by as the business thrives and after a year be able to show all records of a business employing more than 6 Thais and growing, in an industry actively advocated by the Thai Government (in this case out-sourcing office work from overseas).

* After a year go to the powers that be and show that I have been a silent investor, and justify a position in the company for myself that would enable me to further grow the business bringing foreign money into Thailand.

* Get approved for work permit and whatever type of visa it is these farang business types that get around here legitimately have.

Dreaming? Maybe. But nothing to lose really, as the business is already there and profiting as soon as we register a company and open the doors. So why not have a crack?

There's a lot of specifics I need to cover, like what visa to get, how much does a work permit cost, how much does the business need to be making, etc etc.

Just tossing this out there for the TDers to chew on and no doubt take the absolute piss out of.

**dirtydog** · 11-01-2012, 03:05 PM

Originally Posted by 9999

I think this business has potential and want to be part of it.

Why bother, it is expanding without you so why even get involved in something you aren't involved in and is doing okay without you.

**Ratchaburi** · 11-01-2012, 04:41 PM

Originally Posted by dirtydog

Originally Posted by 9999

I think this business has potential and want to be part of it.

Why bother, it is expanding without you so why even get involved in something you aren't involved in and is doing okay without you.

Yes the dog is right.
You can own your percent of the Company but don't work for it.
If you get a work permit you will need a salary of 60,000b per month.
When it comes to renew your Visa they will look at Company profit.
If they think that the profit is to small they wil not renew your Visa.

**jamescollister** · 11-01-2012, 05:45 PM

OP Sme or BOI departments. If they think it's winner they will help. Jim

**9999** · 11-01-2012, 06:41 PM

Originally Posted by dirtydog

Why bother, it is expanding without you so why even get involved in something you aren't involved in

I expect it to expand more if I have an active hand in running it.

**dirtydog** · 11-01-2012, 06:50 PM

^So you have run your own businesses before then?

**9999** · 11-01-2012, 07:05 PM

^ Well that depends on what you call 'running a business'.

I have the ability to source the work, or a specific type of work anyway. The Thai ladys don't. The type of work is simple but also takes a certain amount knowledge overseeing it. I'm not gonna spell out my business model anyway, just after answers and feedback relating to the OP.

FarangRed · 11-01-2012, 07:54 PM

Go and see a lawyer a farang one if you can find, you don't even know what visa you need,

**Butterfly** · 11-01-2012, 07:58 PM

what kind of business ?

registering a company is not difficult, you would still need 2M THB to show though for the capital formation

**forreachingme** · 11-01-2012, 08:03 PM

Open an Off Shore company registered in Hong Kong, let customer pay in a Hong Kong based Bank account, transfer payment online from there, works for me in Phils, let all the employees be self employed under a contract from the HK company.

Cost less then 1'000 Us to register the company and bank account, will not solve your possible visa issue, but will solve you tons of Thai paper work !

FarangRed · 11-01-2012, 08:12 PM

Originally Posted by forreachingme

Open an Off Shore company registered in Hong Kong, let customer pay in a Hong Kong based Bank account, transfer payment online from there, works for me in Phils, let all the employees be self employed under a contract from the HK company.

Cost less then 1'000 Us to register the company and bank account, will not solve your possible visa issue, but will solve you tons of Thai paper work !

Thats to technical that is for him, he don't even know what visa to get

**9999** · 11-01-2012, 10:49 PM

Originally Posted by Butterfly

what kind of business ?

In a broad sense it's 'out-sourcing'.

Originally Posted by Butterfly

registering a company is not difficult, you would still need 2M THB to show though for the capital formation

Care to elaborate on the difference between a company and a business (like a bar of cafe) in Thailand?

If I do this it needs to be able to expand, so I gotta show 2M bt for the kind of structure I want?

I'm pretty clueless about this in my own country so pretty much in the dark here.

Originally Posted by FarangRed

Thats to technical that is for him, he don't even know what visa to get

Yes, the dodgy boiler room formula is way too technimacal for the likes of me.

What visa do I get? Well that's pretty obvious really which is the end goal. It's going about getting there I'm more asking about. Your helpful contributions are appreciated FR. Seeing a lawyer never crossed my mind

This is just the infant stages of educating myself to the feasibility of what I want to do. It may be a pie in the sky. It could also possibly turn out well.

Anyway TD is as good a place as any to start. There are people here in business who know the score. I certainly wouldn't go see some sleazy farang lawyer in Thailand completely in the dark first off the bat. That comes after being pwned by the TD bring down brigade

**dirtydog** · 11-01-2012, 10:54 PM

Originally Posted by 9999

If I do this it needs to be able to expand, so I gotta show 2M bt for the kind of structure I want?

For the work permit the company has to have a registered capital of 2mill baht.

Originally Posted by 9999

Care to elaborate on the difference between a company and a business (like a bar of cafe) in Thailand?

Your fuked, a company has ltd after its name, it has directors, it has a summary of the businesses it is involved with, many bars are held in company names, many are not.

**9999** · 11-01-2012, 11:08 PM

^ So do I go business or company?

The 2M is referring to the capitalization of the company?

So if I have a company that 'they' perceive to be worth more the 2M bt I can proceed?

What if it's just a share of a muma-pop business that is worth 2M? Do they dish out work permits for those?

**dirtydog** · 11-01-2012, 11:16 PM

Company if you want to get a work permit, the 2 mill is the registered capital of the company, you choose how much the registered capital is, ie 2mill for one work permit, or more if you want 2 work permits, etc etc.

**9999** · 11-01-2012, 11:24 PM

I just saw that a Thai limited company requires a minimum of 7 share holders. Is that true? I can't just starting a company with me and the mrs?

**dirtydog** · 11-01-2012, 11:26 PM

Think they brought the number of shareholders down to 4 or so, so you need two proxies, normally your lawyer and one of his staff, they sign their shares over to you.

**9999** · 12-01-2012, 12:06 AM

I see you need to dump 500K or so from outside Thailand to show the 2M capital.

Are there options to turn a Thai Partnership business into a company?

If I invest (x) into a small partnership and after a year that business is now worth (y), if the increase in (x) and (y) amounts to capitalization greater than 2M for my share of the business, does that not count for a work permit?

This is something along the lines of how the mrs is trying to hash it out. Show good business income, turn it into a company and gets me a working permit. Probably way off the mark she knows more about it than me and I'm probably misunderstanding.

I'm trying to ignore everything I've heard from the Thais and mrs and figure it out.

After doing a bit of reading it seems pretty straight forward to set up a LTD company if you put up the cash, cross the t's and dot the i's. Especially if the business is legitimate and operable from day one. This wasn't the way we wanted to go about it but so far seems the easiest and possibly only way to go.

It would be nice if we could roll with what we have and just build. We don't need any more capital as the assets and income are there. Parking 500K, or even a quarter of that in this would make no business sense. Is there a way around it?

**9999** · 12-01-2012, 12:22 AM

Originally Posted by dirtydog

Think they brought the number of shareholders down to 4 or so,

Actually looks like it might be 3 now.

**dirtydog** · 12-01-2012, 12:28 AM

Originally Posted by 9999

I see you need to dump 500K or so from outside Thailand to show the 2M capital.

Where did you see that? That would mean the majority of Thai companies would never be able to employ a farang, if a company is registered with a 2mill capital it can employ a farang, regardless of where the money comes from.

Just set up a small partnership for your missus, costs around 2k baht, if at a later date you want to go ltd then that isn't a problem, use a lawyer for that and the work permit it costs around 30k baht, or do it yourself for under 10k baht.

**Breny** · 12-01-2012, 12:32 AM

Stay as you are 9999, if its not broke don't fix it.

**Marmite the Dog** · 12-01-2012, 08:21 AM

Your missus can work legit and only have to pay 3% tax.

If you dick around with this Ltd company bollocks it will cost you more time, effort and a lot more money in taxes.

Keep your head down and just help out in the background or with the overseas contacts.

**Butterfly** · 12-01-2012, 08:45 AM

with the LTD structure, you will have to pay VAT and fill out forms for taxes etc...

there is also another option, the "non-for profit association", basically all revenues are taxed at 3% regardless of costs. If you expect to have a high profit margin because of very low cost, the 3% is actually cheap compared to the regulatory 33% on profit.

A lot of small for profit organization uses that structure because of its simplicity and tax savings. It used to be a tax free situation too, but that was closed because too successful and abused by the locals, so now the 3% is taxed on revenues only.

**Butterfly** · 12-01-2012, 08:51 AM

Originally Posted by 9999

So if I have a company that 'they' perceive to be worth more the 2M bt I can proceed?

it's not perceived, money has to be deposited in the company account. Contrary to what others are saying, you can't get back the money because it's company capital. A lot of people do get the money back but they are using illegal and "fake" costs to justify the money back.

That money is not lost, the capital is needed as an equity tranches to absorb future losses and ensure the company will continue to operate. It's also needed to "setup" the company assets (buying machines, offices etc...) and usually capital needs to be "augmented" after a few years to reflect those new needs and growth of the company.

Profits can be injected back into the capital to re-enforce the company self-sufficiency.

**taxexile** · 12-01-2012, 09:10 AM

^
i think 9999 is starting to get a headache.

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