Thread: Start importing business

^ sounds suspicious,

Originally Posted by Perota

Does anybody has, or know someone who has , ever tried this before ?

Yes, but only personal household items.

Originally Posted by Perota

And it should be perfectly legal !!!

Completely illegal. The stuff you propose to import is commercial not personal. If they rumble you'll find it confiscated.

So lets get this right. You want to import agricultural items made in mainland China via Hong Kong but are seeking to arrange it so that you will book your profits there whilst at the same time seeking to avoid paying any import tax and duties here in Thailand. You sound just the sort of guy that a developing nation is looking for.

Originally Posted by rtwo

Originally Posted by Perota

And it should be perfectly legal !!!

Completely illegal. The stuff you propose to import is commercial not personal. If they rumble you'll find it confiscated.

So lets get this right. You want to import agricultural items made in mainland China via Hong Kong but are seeking to arrange it so that you will book your profits there whilst at the same time seeking to avoid paying any import tax and duties here in Thailand. You sound just the sort of guy that a developing nation is looking for.

Thank you for your reply, but is it a personal or a professional opinion? As I said, this information was given to me by a forwarder, a professional importer. I am a bit surprised too that's why I am looking for a second opinion. Sometime the law has some tolerance, just wanted to confirm ...

And to get things right, what I want to import is not made in Thailand. I want to offer better quality and cheaper price (previous posts) that what people get now. Regarding the tax, duties and profit, it's normal business practice, nothing outstanding, nothing worse than what local importer are currently doing. Actually, as a foreigner, I will probably have to pay more taxes than them. What I am looking for, it's just a way to test the market without investing too much money from the beginning.
Actually, after talking with local potential customers, they are now so much excited that if I can't find a way to take this project to the end, it will be such a major lost of face to my wife and I that we will have no other choice than to sell the house and move to Alaska.
In fact, that just what a developing nation needs, some competition, to push the prices down and the quality up.

But enough of me. Talking about you, what have you done lately to help this developing nation ?

One thing I would advise on is the structure your company. Thai law only allows 49% ownership by a foreigner or alien as we are often referred to in legal terms.

If you do structure the company here simply seek good legal advice and follow these simple rules.

Structure your company so you own 49%.
The remaining 51% among:
One Thai whom you know and trust with 11%
Four others with 10% each.
This makes 51% Thai ownership.

Make sure the five Thais don't know each other.

In the articles of association make it so a 60% vote is required for any decision/transaction to be made.

You and the one you trust have the 60% to effectively control.
If he balks, you have his signed resignation in the safe, just date it and get a new guy.

What most people here are failing to understand is that shareholding votes isn't the only way to control businesses or extract value from them.

The concepts are simple - you can specify what can or can't be decided by shareholder majority votes and what needs to be decided by other mechanisms, the documentation and structures just need to be prepared quite carefully.

The particular measures will vary from situation to situation and therefore personalised, professional advice is absolutely necessary but anyone who has set up their company in a robust manner and has access to good legal and corporate advice shouldn't lose any sleep but should merely amend their corporate documentation over the next couple of years to reflect the changes that may have to be made in shareholding structures.

^while I would agree with your advice that legal advice be sought, your post contains a number of errors.

First of all, a foreigner can own 100% of a business in Thailand, provided that the business of the business is not regulated under the Foreign Business Act or some other form of restriction. Even in that case, you may find there are exemptions under certain trade agreements or investment incentive laws. While I would agree that most businesses in Thailand will be subject to one or other of the many laws in place to restrict foreign ownership, to state that foreigners can only own 49% of a company is incorrect. An example of a case where things may go the other way would be with a real estate development company. In such a case, depending on the nature of the business, you may find you - as a foreigner - are limited to 40% ownership. However, if you have BoI approval, you may be allowed to own 100%.

Two, if you make an agreement with another person to vote in a certain manner collectively at shareholder meetings of the company, then it is highly likely you will be considered to be "acting in concert". If that were to be the case, your collective shareholding will be lumped together and will be seen as one block of shares. Moreover, if the other person you trust is a spouse or relative, then it is likely that you will be seen as a "related party" and, again, your shareholding will be deemed to be held collectively.

Third, it is illegal under the provisions of the Civil and Commercial Code to have a signed but undated share transfer certificate. Moreover, even where you do have a signed but undated share transfer certificate, this will not cover you in the event of the death of the shareholder, as the share will be deemed to be part of the estate of the deceased.

Fourth, effective 1 July 2008, the requirement to have 7 shareholders will be reduced to 3.

^
Import export is not BOI approved and I do agree some business falls outside the 49%/51% split but it also wise on occasions whereby you relinquish power to use methods that are indefinite in legal arguments

how's the export business going, any updates??