Doing Business in Thailand

Why Focus on this Subject?

Yes I know this matter is boring and you may wonder why to include it in this blog. When arriving in Thailand you will meet other foreigners who will tell you how easy it is to do business in Thailand. They will tell you that

“you don’t need to paid up the capital of your company” or

“you don’t need to keep accounting records” or

“you don’t  need to pay taxes” or

“you can keep double  accounting” and so on.

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Originally posted 2009-07-25 07:39:25.

This post is the continuation of yesterday post (Managing Tax Audits Part 1). But for the first visit, when tax officials will audit a company they will generally request it to send the documents at their office. Depending of the team auditing your company you will either be requested to send the documents first or to come for an interview first and then later to send the documents. Do not attend the interview yourself but send the accountant who is handling your company account or a tax lawyer if the issues are complexe. But the accountant should be your first choice.

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Originally posted 2009-10-09 04:41:43.

The private limited company is the legal vehicle that is the most commonly used by foreign investors in Thailand and we will hereinafter review the formalities of registration of a private limited company. In this article we will only review the conditions of incorporation of a Private Limited Company to the exclusion of nominees and Thai/foreign shareholders ratio which are discussed in other posts. [This post replace our previous post on the subject “How to register a company step by step”.

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Originally posted 2009-10-20 07:09:45.

Today in the newspaper was an article about the future of Elite Card which future will be decided tomorrow by the government. One of the options to be considered tomorrow by the cabinet would be to completely stop the program. The company has currently 2570 Members but in order to diminish the liability in case of closure there is already talks to disqualify some members that would not fulfill the qualifications to obtain the card.

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Originally posted 2009-11-16 03:58:00.

The Revenue Department is the largest source of income for the Thai Government representing up to 80% of its revenues. Now as a result of the 2008 crisis the Revenue Department underperformed in 2009 (180 Billion Baht below target) while on the other hand the Government committed huge amounts of funds to support the economy increasing the public debt.

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Originally posted 2009-12-21 04:53:57.

Thailand and Retirees a match made in heaven?

One of the first paradoxes of the offshore real estate market is this: Most buyers are retirees or people preparing for retirement, and Thailand has become over the years one of their preferred destinations because of course of its exotic beauty, unique culture, friendly people but also because of its modern infrastructures, the high quality of health services and of course the reasonable costs of living.

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Originally posted 2009-07-27 09:45:37.

What is the Withholding Tax?

Withholding Tax is a tax collected by a deduction made on a payment when said payment is made. The payer who will remit it to the Revenue Department on behalf of the payee collects the tax. The tax the payer collect and remit to the Revenue Department on behalf of the payee will become a credit that will apply against the income tax (personal or corporate) due by the payee.

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Originally posted 2009-07-25 15:44:49.

Is Real Estate truly the most secure investment?

When the time come to invest most people tend to consider real estate as the most secure long term investment.

This is true for many reasons, one of which being that while companies may go out of business real estate properties will exist forever. In addition, but for period of bump like the current crisis, the average price of properties will appreciate over the long term steadily.

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Originally posted 2009-07-27 05:57:28.

This is the third of a series of posts about Thai private limited company corporate documents translated in English.

The articles of associations of your company are another important corporate document of your company. As a matter of fact the decision on the content of the company articles of associations is actually taken during the statutory meeting.

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Originally posted 2009-09-07 10:22:26.

There is a lot of confusion as to minimal capital requirements when doing business in Thailand and I will try to clarify this issue in this post.

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Originally posted 2009-09-28 05:31:43.

Pursuant to Thai Immigration Law; any foreign citizen who wishes to enter the Kingdom of Thailand is in principle required to obtain a Visa from a Royal Thai Embassy or a Royal Thai Consulate-General prior to entering Thailand.

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Originally posted 2009-07-29 10:42:10.

I told my business owners clients that this year would be a bad one for all of us not only because we have to survive amid the context of the global economic downturn and the political crisis but also because economical crisis’s do not only affect companies they also affect the Thai Revenue Department and this year was a bad one for the Revenue Department with collections that will fall short of the target by Bt170 billion (first estimation was a shortfall of 300 billions) THB.

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Originally posted 2009-09-24 05:17:58.

Are employees in Thailand well protected by the law and is it easy to terminate an employee with or without cause?

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Originally posted 2009-11-21 07:04:25.

What is the BOI?

The Board of Investment or BOI is an agency set-up by the government to provide investment incentives to foreign or local investors that invest in promoted or priorities activities.

The two main objectives of the BOI are to decentralize Thailand Industrial’s base and to attract special types of investment (priority activities). Read more…

Originally posted 2009-07-21 12:51:10.

What are the activities eligible for promotion under section 4 of the BOI list?

Reminder: As you already know the Board of Investment is the agency in charge of promoting certain sectors of Thai economy. As such the BOI role is among other to determine:

What are the activities which are eligible for promotion

What are the conditions attached to said promotion

What are the privileges attached to said business activity

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Originally posted 2009-08-05 14:46:31.

Working without a work permit is not something someone should take lightly as the penalties applicable are quite harsh.

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Originally posted 2009-11-26 02:57:42.

In a previous post I explained step by step the formalities to incorporate a Thai Limited Company. Many readers have contacted me to request whether I could also post the english translation of Thai Limited Company documents for information. Today and the next few days I will post the translations of the main corporate documents of a Thai Private Limited company. Please note that this is an unofficial translation only.

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Originally posted 2009-09-03 14:40:40.

This morning in the Bangkok Post was an interesting article about the tightening of insurance shareholding rules by Sorachon Boonsong a Thai lawyer. In substance, Khun Sorachon comment on a ruling from the Council of State dated of 14 September 2009 in relation to the new shareholding requirements of the amended Life and Non Life Assurance Act.

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Originally posted 2009-09-23 04:15:46.

In several of my previous posts I have commented on the too short lease period duration in Thailand by comparison to other Asian countries but I had to date to provide to my readers any basis for comparison which I have done now with a table comparing the lease duration period in 13 Asian countries including Thailand.

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Originally posted 2009-10-02 03:14:08.

As previously explained, the Thai Civil and Commercial Code recognizes possessory rights and/or ownership rights and there are several kinds of documents to evidence various levels of rights to land, ranging from documents evidencing mere squatters or occupation rights to full ownership rights.

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Originally posted 2009-09-16 04:12:16.

The first option available to a foreign investor who wants to start a business in Thailand is to register a non-trading legal vehicle (for example Representative Office). Hereinafter we will discuss the characteristics on Non-Trading Legal Vehicles the most common of which is the Representative Office. [this post is an updated version that replace one of my first posts]

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Originally posted 2009-10-15 00:09:26.

Should you be wary to do business with Thai people?

Not really because Thai people are honest. There are always exceptions of course but as a foreigner coming to do business in Thailand you have to be more wary of citizens from your own country than from Thais.

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Originally posted 2009-07-24 04:10:21.

Is Thai Legal System Different?

If I had to qualify the Thai legal system, I would say that Thailand is a country ruled by Civil Law with a touch of Common Law. Civil law is one of the predominant system of law in the world. The other being common law, which is the legal system developed among Anglo-Saxons people.

The main difference between the two systems is that civil law is laid down from abstract rules and judges must apply those rules to the various cases before them. Read more…

Originally posted 2009-07-23 05:17:20.

One of the reasons I’m calling the nominee scrutiny a “Witch Hunt” is because one of the declared target of said inquiry will be the “Thai wife”. Yes, the Thai wife, not the Thai Spouse. There is gender discrimination in this whole Thai wife business that i do not like at all.

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Originally posted 2009-10-29 02:14:36.

In today and tomorrow post I will comment on the Global Corruption Barometer 2009 just published by the World Bank. Overall, 70 countries were surveyed, 12 of which are Asian countries (Brunei, Cambodia, Hong Kong, India, Indonesia, Japan, Malaysia, Pakistan, Philippines, Singapore, South Korea).

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Originally posted 2009-09-30 04:55:13.

What is the current legal definition of a Foreigner?

In this post I will discuss how the concept of “foreigner” is defined by the Thai Foreign Business Act (formerly “Alien Business Act”) as well as the changes that the Thai Government wanted to bring to this definition in December 2007. While the attempt to change the definition of the FBA definition of the term of foreigner ultimately failed the fact is that it was the second such attempt since the enforcement of the FBA and that Foreign Investor coming to Thailand should keep in mind that said matters could resurface at any time in the future. Read more…

Originally posted 2009-07-21 12:25:37.

The Land tenure and access to land ownership issues

While surfing the internet I found a post on a Thai forum. I found the questions asked by this person under the username of “Samuisoul” interesting because they address two of the first issues that a careful investor should consider prior to purchase real estate into a foreign country.

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Originally posted 2009-07-26 00:44:12.

Being involved in an accident is not fun when you are living in your own country where you have a grasp of what your legal rights are but it is even worth when you are in a foreign country like in Thailand. Not one day pass without a foreign resident or tourist being involved in a car, bike, trucks, bus or even boat accident. What should you do if you are involved into an accident?

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Originally posted 2009-12-22 10:21:42.

The infamous blacklist

There are a lot of lists most of us dreamt to be on (fortune list, most influent people, most eligible bachelor and so on….) but there is one you definitively don’t want to be on, Thailand immigration blacklist.

Note: I would be unfair to Thailand if I did not state that Thailand is not the only country with an immigration blacklist. All countries have one.

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Originally posted 2009-08-08 06:36:36.

Dear Readers, for those of you in BKK I will be given a speech on Wednesday 28  2009 at 15:15 pm at Arnoma Hotel Bangkok on “Laws and Regulations Related to Trans-national Real Estate Investment” during “The 4^th CERTIFIED INTERNATIONAL PROPERTY EXPERT (CIPE)” workshop organised by the Thai Appraisal Fundation. To register please follow this link:

http://www.thaiappraisal.org/english/international/cipe.php

Yours Sincerely Rene Philippe

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Originally posted 2009-10-27 04:59:56.