cost running a company

sonmic · Posted: Mon Feb 19, 2007 10:35 pm Post subject: cost running a company

As we are novices to the company biz, and our lawyer in Bangkok does not seem too much help, we are scrabbling bits of information together.

We only heard a couple of months ago that one has to file taxes once a year, by that time our company had already existed for almost two years.
Our laywer has finally send us a financial statement of 2005 with an audited balance sheet fro 2005 and proceeded to bill us for 21.000 bht!

This seems a bit steep and a I can´t help noticing that our laywer started out really helpful and reasonably priced to being very difficult to contact and even harder to get a reply and more and more expensive.

Does anybody know what you need to do very year to maintain a company and what the normal cost for that would be.

Additionally, is it possible to change lawyer at this stage (after having set up the company and having him and his staff onboard as nominee shareholders-have some thai onboard we actually know personally as well)?

Jockey · Ace Joined: 27 Jan 2003 Posts: 1639

21,000 baht is a normal fee for a company to do your yearly accounts and pay taxes. The figures are usually between 20 to 25,000. More if you have a 2 million baht company. A few years back it was apparently a lot cheaper (about half this amount), but like everything else, prices and fees go up!

Of course you can change lawyers and you can also change the shareholders too. For each new shareholder you will need a passport sized photo and a signed photo copy of their ID, plus their current address. Your new lawyer will do the rest for you. The administration costs for changing shareholders should be about 5,000 baht.

I'll now post this and wait for other posters to tell me I'm wrong - TIT after all!

big jimmy · Specialist Joined: 05 Sep 2006 Posts: 150

Cost me 15.000 baht to file my company accounts for the year...I had to upgrade my company share holding to 2,500,000 which cost me 17,000 baht..I am told I will pay about 15,000 baht in taxes for the year....hope that helps...

sonmic · Posted: Tue Feb 20, 2007 12:31 am Post subject:

thanks Jockey and Jimmy, your feedback is very welcome and helps creating a more complete picture. I just looked at the co. papers and it appears that we have a one million bht co. Jimmy, what do you mean by "had to upgrade " to a higher amount?

Also found out that it was stated in the minutes of the statutory meeting (where we were not present) that an auditor was appointed and that his renumeration was stipulated 20.000 bht per annum. So I suppose that serves us right for not reading the small print. To be honest , it seemed so much info at that time and only now that I start to learn to understand things a bit better. But better late than never...

big jimmy · Specialist Joined: 05 Sep 2006 Posts: 150

sonmic

If you have a 1,000,000 million baht co then it is treated as a shell company, basically a vehicle to just buy your house , no need to file tax returns ....the 2,500,000 co means you are a trading company, you have to file tax returns and show that you have traded thru the year... it also entitles you to apply for one work permit , whether you get one or not is niether here nor there, but I was advised to go down this route as an extra precaution...If I am paying taxes on my company then I hope it gives me a slight added protection against govt rules . Of course they change the rules all the time but I always feel govts tend to leave tax payers alone and go after those who don't pay taxes. They may go after shell companies in the future or they may not, who knows. Just my opinion..you pays your money and you make your choice...

Jockey · Ace Joined: 27 Jan 2003 Posts: 1639

johnnyk · Guru Joined: 02 Sep 2005 Posts: 896

No matter the capitalization, show some biz activity and pay some tax.
It keeps the right people happy. Think of it as a bit of insurance.

barrys · Posted: Tue Feb 20, 2007 11:48 am Post subject:

I have two limited companies:
1 x 1 million baht, which I set up to buy a property
1 x 2 million baht for the boat cruise company.

I have to file annual returns for both companies.

A 2 million baht company does entitle you to apply for a work permit on the condition that the company has at least 4 Thai employees who are registered as paying income tax and social insurance. The granting of the work permit is by no means automatic though.

I would advise anyone applying for a work permit to do so through a reputable law office for a variety of reasons:
1. the myriad of paperwork, which entails a few visits to Prachuab and seems to increase with each visit
2. the law office knows the people there and the ropes
3. it probably works out cheaper - my law office charged me a flat rate of THB 8,500 to do everything from start to finish - all I had to do was go to Prachaub once for the interview, accompanied by a competent member of staff from the law office. The law office staff had to go to Prachuab at least four times to my knolwedge
4. go not take your Thai wife/GF with you to the interview as an interpreter/assistant etc. The official(s) tend to ask veiled questions as to what one has been doing here up to that moment and it would be easy to slip up and give an answer that could disqualify you straightaway. The law office staff have experience with this and intercede at the appropriate time
_________________
Barry Stone
Mermaid Cruises
Tel. 032-632223 (office)
084-8007400 (mobile)

www.huahincruises.com

Burger · Ace Joined: 19 Apr 2004 Posts: 1113 Location: Hua Hin

Big Jimmy wrote:

Burger · Ace Joined: 19 Apr 2004 Posts: 1113 Location: Hua Hin

Beguine · Member Joined: 05 Jun 2006 Posts: 54

B25,000 is OK for the annual accounts and audit. Bear in mind that the accountant has to pay the auditor at least B8000. I would advise you to tell the accountant that you don't want the accounts qualified. Most Thai auditors qualify the accounts of farang shell companies (without telling them) to avoid any legal liablility. They write an auditor's statement, the opening page of your financial statements that go to the Commerce Ministry and Revenue Dept, saying that they were unable to inspect the documents necessary to verify the accounts because the company's management refused to provide them (even though you did). This is an open invitation for you to be inspected for tax fraud and breaches of the FBA. It is illegal to be a director of a company without a work permit. To get one you need to be registered for VAT and to maintain your VAT registration you need to have some VATable sales and expenses and file for VAT every month. If not, you could be fined and/or have your VAT registration withdrawn which means no work permit renewal. The Commerce Ministry can close down a company without any activity for three years but not before the Revenue Dept would have tried to make a case of tax fraud (i.e. they assume the company actually had profitable business but chose not to report it.) Officials in Prachuap and elsewhere may be lax in enforcing these laws but, if you are in breach, you are vulnerable to a crack down, a complaint from a Thai who is pissed off with or jealous of you or your wife (they have to follow up on all complaints by law), or just a random inspection. Use of a 1 million baht company to apply for a work permit on the grounds of having a Thai wife is not recommended, particularly if the company owns land. You are drawing attention to yourself as being married to a Thai and you don't want this to be taken into consideration re the FBA or Land Code which may be interpreted such that your wife's shares in the company are deemed as common property of a Thai married to a foreigner and therefore foreign owned. I would also advise against having a Thai wife change her surname, if you plan to live in Thailand with her (the law was amended a few years ago giving wives a choice of keeping their maiden names). Why flag the point that she is a "mia farang" in her dealings with other Thais? The latter points about Thai wives are just my opinion.