SETTING UP A COMPANY:
NEW DIRECTIVE JUNE 2002: new rules for work permit holders. New companies wishing to have work permits need to show their share capital in the Bank? FOR EVERY FOREIGNER wishing to join an existing Thai company you must now show 2m baht in the bank when they go to register. For each additional foreigner you need to show 2m baht per each.
A new Company rule came into being regarding share capital when forming a new company. You must show 2m baht in a Bank account. One work permit 2m baht and increases of 2m baht per wprk permit after that. A 1m baht company no longer exists for foreigners married to Thais.
In a company you need 7 partners & foreigners can only hold 49% shares but you can according to the investment control 100% via B.O.I. (Board of Investment) or if American have an Amity company. Foreigners as from 2001 can make up 6 out of 7 shareholders but Thais still hold 51% of the shares. What one does not know until they decide to form a company is that certain businesses are closed to foreigners. These businesses are categorized into 2 different areas with 3rd open. So when you form a company make sure it doesn't come under the following or write to us.
The Alien Business Law (N.E.C. Announcement 281). Business activities falling in categories A & B are generally closed to foreigners. Under category C you must obtain a permit prior to commencing business. Businesses outside these categories are exempt. The Ministry of Commerce will also help applications of non trading offices.
Category A: 1.Agriculture: rice farming; salt farming. Commercial Business: Internal trade in local agriculture products, Land trade. Service business: Accounting, farming animals, architecture, advertising, brokerage, auctioning, Barber, hair dressing & beautician. Building industry.
Category B. 1. Agriculture Business: orchids, cultivation, animal husbandry including silk worm raising, timbering, fishing. 2. Industrial & Handicraft: Rice milling, Flour making, sugar, alcohol & non alcohol drinks, Ice cream, Pharmaceutical manufacturing, cold storage, timber, gold, silver and inlaid stone, wood carving, lacquer-ware, match making, cement etc, Dynamiting rocks, Manufacturing garments & shoes, Printing, newspaper publishing, silk weaving or silk printing, manufacture of finished products in silk.3. Commercial: all retailing not in category C. Ore trading not in Category C, selling food an drinks, trading of antiques & fine arts.4 Service Industry: Tour agency, Hotels except Hotel management, photography, laundering, dress making and service jobs.5. Land, water & ie. transport.
Category C. You are allowed to do the following. Exporting, all wholesale trades not in A & B. retiling machinery, equipment & tools, selling food, beverages that promote tourism. Industrial & handicraft Business: manufacturing animal feeds, vegetable oil extraction, textile manufacturing, dyeing, fabric printing, glass ware manufacturing, making plates and bowls, stationary & printing paper, rock salt mining, mining.
Service: anything not in A or B.
Foreigners setting up a company need to set up a 2m baht Company for one work permit. If you want 2 foreigners employed then you need a 3,000,001plus baht company. Cost for share registration is 5500 baht per 1m baht.
As of April 1st 2002 all Thai Companies must register for Social Welfare tax on all employees including the foreigners who hold work permit. failure will mean loss of work permit & or fine.You must pay 3% tax on employees wages each month & 3% government fee. eg Say you earn 10,000 baht a month =3% twice. Then you have one employee on say 6000 baht & then 2 others on 5000 baht again taxed at 6% = 1560 baht to pay each month.
Costs 20,000 baht although Bangkok is usually more. Our price do not include Govt fees & ID tax code for you or VAT reg. If you use our services we outline in English each step you are paying for & no hidden costs are included. We welcome any questions or queries you have.

When forming a company you needed ex Thai shareholders (now changed to 6 foreigners & one Thai). Those early companies used lawyers who in turn used their staff as nominees or Thais off the streets. Once paid off then that's the end of those nominees, or you thought. However one must remember that if you make a yearly profit you must pay dividends to all the share holders. But, where are they: "the inevitable, my lawyer will take care of it"?? A lawyer is not an accountant so make sure you differentiate between having both when you start a Company. if you are not paying VAT, Social Welfare tax & no yearly audits you will be fined.
One can transform a Thai company into a foreign firm. For some of these companies it is to risky to maintain the Thai status as the intention violates the Alien Business Law. It is now difficult for small and medium foreign companies with capital registration of less than Thai Baht 100 million to get a wholesale license, service license and/or retail of machinery-equipment license as the application has to be approved by a 21 persons committee comprising of high-ranking authorities from various ministries etc. This committee will protect small and medium Thai Business.
COMPANY NAME: Cannot be a country or city name & must end with the words: Company Limited (Co. Ltd); Corporation Limited (Corp.Ltd); or Limited (Ltd).

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