Hello,

(If there are mistakes in my English sorry my mothertongue is Dutch!)

After getting the door smacked in the face in the Isaan forum like so many first posters I did some reading, some more reading and after that even more reading. I understand that starting a business in Thailand the legal way is not a simple thing to do without careful planning. But I've got time to plan and I don't give up to easy when I got an idea in my head.

SO I have some questions.

The first plan was to get some experience on doing business in Thailand with some money I could easily loose. I have a degree (highschool) in hotel and restaurant, a certificate for small business management and I'm rather good at online marketing (but have no ambition to work in the field). I don't really want to open a restaurant so a guesthouse seemed like a good idea. I wanted to rent one for a year to get the experience and if it was successful good, if not go back home, work some more and come back to buy one putting in the experience I learned.

I have to say that my little certificate for small business management comes a little short when it comes to setting up a Thai company.

Now after reading everything I think I have to put that idea into the trash because of the 2mil bath I need for the workpermit. Am I correct or do I have other options. I assume if you want to run a guesthouse you will need to set up a company. I have a girlfriend in Thailand but I wouldn't feel comfortable letting her manage the entire operation while I'm praying to god for success.

The only good news I have read is that you now only need 3 Thais to set up a company. Is that correct?
A little question about the 2mil: You need to transfer this cash from your countries bankaccount to Thailand. So you put it in the bank and it's registered. Is there a limit you need to keep or can you use the major part to invest in your business?

I read this somewhere on the forum: "to get a work permit you must bring some expertise to the table, ideally something in short supply in Thailand" Would my degree in hotel and some work experiences in restaurants be enough to get the workpermit.

Here's another one: "a Thai Limited Company can be owned 100% by foreigners in the Hotel Management industry" If I buy a guesthouse which has 12 rooms would that mean I can accually own the darn thing 100%, even the land?? What does 100% mean in thai for falang exactly?

I have some creative ideas as how to run the guesthouse. I mean my online marketing skills count for something and I won't just be renting out the rooms I want to add a travel agency (or collect a commission), transport, food, drinks, renting stuff etc...

So the main question is: Even if I want to rent a guesthouse for a year to get some experience, I would still need 2mil because otherwise I couldn't work in it? I guess giving advice would also be considered working LOL?

Please enlighten me! Not that I don't have a clue but if there is a way I can get into renting a guesthouse for one year and try to make it successful without having to go trough all the trouble please tell me. If there isn't I'm just going to have to plan better I guess and maybe talk to some guesthouse owners.

Warm regards

Welcome back Timmy was it bad in Issan??

Hi Timmy! for what i could see, there are at least 2 owners trying to get rid of their establishment for every new entrepeneur trying to get into the business, i think if you don't want to commit financially what the law is asking for, then might be better to delegate someone else that you can really trust, taking as much precautions as you can, so, find an area you like and start asking "the boss" how much he would accept for you to take over, bear in mind that the guy next door might ask you much more or much less of the previous one, good luck to you!

That still means I dont get a workpermit right? When searching he internet I found out that some people are selling there companies for as less as 150.000Bath with workpermit included. How does that work? Do you need to stay in the same business?

It now seems to be that the business department wants to see cash in the bank when registering a company with foreign shareholders.

If you set up a company with just 3 Thai shareholders (e.g. your girlfriend as majority shareholder and 2 others as minority shareholders), they do not check on the cash balance.

Which means you register a 2 million Baht company with no ready cash on hand.

As the company papers will show 2 million registered capital, the company can support your work permit. It would be only 1 million if you were married to your girlfriend!

If you do put in yourself as a shareholder, I'm not sure how much of the capital has to be paid up, it will most likely not be the full 2 million. Anyway, the cash in the company accounts is freely available for investing etc after the company is registered.

To be able to get a work permit you'd need to have 4 employees on the books, with their social security contributions paid. The employees cannot be shareholders in the company, well they can, but those do not count towards the 4 employees needed! As a small upstart company you might beable to negotiate a bit with the labor department resulting in them agreeing to issue you a WP without the full 4 employees. No guarantees however.

Getting a work permit as managing director of the company you hold shares in is virtually always approved. You basically are allowed to oversee your investment. Especially if the business is a guesthouse and you hold a degree in that area.

Do understand that a work permit contains a detailed job description, and that's the only work you are allowed to do! As a managing director you are not allowed to serve customers a drink, you need Thai staff to do that!

Also, your newly created company will not be able to support a 1 year extension based on employment for you, as they would need two years worth of audited bookkeeping. Visa wise, your best chance is to get a multiple entry non immigrant B, which will see you do a border run every 90 days, for a total stay of just under 15 months.

I am not aware of 100% shareholding for foreigners in the hotel business.In anyway, 100% shareholding structures, where allowed, are always uch more complicated and time consuming (read expensive) to set up, and thay will never allow that company to own land.

The only 100% foreign companies allowed to own land AFAIK are all sponsored by the Board of Investment, and that means proper big investment!

Guess that answers most of your questions.

I'm running a guesthouse in Pattaya. Check my website and email me for more question. I don't want to sale it. Just can help you for some info.

House with 584 Square Meters Land (Width 15 Meter x Length 39 Meter)
is available for 6 years rent

Address: House no. 436/16 Pattaya Beach Road Soi 1 (opposite Sabai Lodge Hotel)

FOR Rent = Six Years Contract
First 3 Years = THB 30000.– Monthly
Last 3 Years = THB 40000.- Monthly

FOR Sale = THB 30M.
*For more information please contact owner directly at Tel. 081-8150137

hi tim,

You cant own commercial land in thailand, forget it lol.

I am kinda dutch too and the certificates you have dont mean anything in thailand.
Everything you'll do here is somewhere illegal.
It is also true that just about nobody makes money in thailand so if you purpose is to hang out with the girls and drink beer hole day you better just come here on holidays and dont loose as much money ass all the others.

Dont get me wrong i am thinking the same thing ( starting a guesthouse there) but it seems a long shot if you dont spend a lot ( really a lot) and then it still wouldnt be a good businessdeal.

Pm me maybe we could exchange ideas and knowledge.

good luck

yes you can invest your 2 mil after registering the company it is just the same ass starting a B.V in NL only a bit more expensive lol

to hire thai employers doesnt cost much deffinitely if one of hose is your GF

I must say that i still dont get the starting a company rules i have read tons of articles about thai rule. dam_n it if i comtinue like this i could become a lawyer there the work permit thing is complicated and a bit illegal i suppose but well who cares ass long ass thai government is ok with it

@ aras; funny statement that "just about nobody makes money in thailand". living in the south, i am surrounded by farangs doing business and most of them are pretty successfull with their own business...
cheers, CHFarang

If I am going to spend all this money I am not going to waste it on beer and girls . I do not drink beer btw so that is one problem solved.

I read on this forum somewhere that there is a special rule regardinding to hotel. I forgot exactly what it was but I believe If your guesthouse has over 12 rooms it is seen as a hotel and you can own it 100%.

Simply not possible.
What might be possible is that the company running the hotel might be 100% foreign owned, but this company will not be allowed to own the land the building stands on.
This company will have to lease the land...

Did a bit of research, and as I posted above, 100% shareholding would only be possible if your investment is BOI approved.

And the minimum they require is 100 rooms and at least 4 stars.

According to following article, in 2010 they will maybe relax the shareholding level in hotels to 70% foreign owned...

http://www.thephuketinsider.com/hotels/tha...ing-in-2010.php

Thats a bit out of my reach .

I would be happy with 70% however

The rules about 100% foreign ownership seem to vary depending upon wherebout the business is in Thailand

To be absolutely correct, it is the business of 'hotel management' where 100% foreign shareholding can be legal. However, what a hotel is in Bangkok is not the same as what a hotel is in Phuket! When I built my 'hotel' in Phuket, I was told that if it had more than 12 letting rooms, then it would be classed as a hotel, would have to pay the local 1% hotel tax, but that I would be allowed to own the management business of that hotel 100% without any Thai shareholders, (but still needed to have a Thai company registered with at least 3 shareholders). But as others have mentioned, we are talking about the hotel management, not ownership of the land on which the hotel is sitting.

The best option (for a small guesthouse), is to rent the land for 30 years, register this lease at the local amphur. Then register a Thai limited company where you have 2 Thai shareholders who hold the majority shareholding whilst you own no more than 39%. But you have preferential voting rights and can control the business. But you neither own the land nor the business, so no-one can lay that claim against you.

I could comment further, but let's see if my comments so far are useful to you.


Simon

This post has been edited by simon43: 2009-11-15 16:30:49