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Sunbelt Asia

Amity Treaty Companies And Work Permits

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We have been adamant that Amity Treaty Limited Companies or Limited Partnerships did not need three million Baht to get a work permit until August 30th 2009. However since early December 2006 the Labor Dept has insisted now the American Alien Company needed to show three million Baht in the bank. The bottom line is that the Labor Dept has the stamp.

We still had continued to fight the good fight. We have had numerous calls everyday to the US Government about this and the Thai Ministry level finally came around to the same line of thinking.

After August 30th 2009, Amity Treaty Companies will need to show 3 million Baht cash from overseas to get a work permit. The good news is till August 2009, it will be registered capital of 2 million Baht per work permit required.

We like to thank both sides for the solution.

www.sunbeltasiagroup.com

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"After August 30th 2009, Amity Treaty Companies will need to show 3 million Baht cash from overseas to get a work permit. The good news is till August 2009, it will be registered capital of 2 million Baht per work permit required."

How does that effect existing Amity Treaty Companies. Regarding showing 3 million baht in cash from overseas does that money have to stay in an account permanently, does it have to come in at once, or can money already brought in but no longer in the account be used?

Or are existing companies not subject to the new rules?

Thanks in advance.

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How does that effect existing Amity Treaty Companies. Regarding showing 3 million baht in cash from overseas does that money have to stay in an account permanently, does it have to come in at once, or can money already brought in but no longer in the account be used?
What they were doing in the last several months. Requiring that money was in the bank account once and then could be used as operating capital. They were looking at the companies bank account.

This only applied for new work permits the last several months, not with existing work permits.

However as I pointed out, until August 30th 2009, work permits for Amity treaty companies will be treated the same as Thai companies that they only need to have paid up capital of 2 million Baht. They are not looking at the bank account, as shares can be paid with equipment, inventory, service as well as cash.

Or are existing companies not subject to the new rules?

No new rules now until after August 30th 2009. The rule will be implemented that the registered capital must be 3 million Baht per work permit. The Labor Dept will check then if the registered capital is 3 million Baht and on new work permits will check if this money was ever in the bank account. Until August 30th 2009, no change.

What are the issues if any for an Amity Company as a sole proprietorship?

As of now... you have three different ways to qualify and none involve money in the bank. You only need to meet one criteria.

1. You employ 4 Thais ( 2 Thai employees if married to a Thai)

2. Your gross turnover the previous year was 700,000 Baht (350,000 Baht if married to a Thai)

3. You paid personal income tax of 50,000 Baht (25,000 Baht if married to a Thai

www.sunbeltasiagroup.com

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I'm an unmarried 51-year old American living full-time in Thailand with a Non-Immigrant O visa and an extension for retirement. (In more common shorthand used here on ThaiVisa by many posters: "I have a retirement visa.")

I live here full-time and do not now (nor have I ever) worked inThailand, nor had any type of visa other than my current Non-Immigrant O. (Never had B visa nor work permit, etc.) Therefore I have never paid taxes in Thailand.

Some friends who operate an interior decorating service in the USA have floated the idea of importing Thai decorating accessories and even possibly incorporating them into their own product line. As their friend in Thailand, to what extent can I legally help them with their business, if at all? I understood from the stern officer at Jomtien Immigrations that I cannot work in Thailand with the retirement extension. I am open to changing to a different type of visa.

Under the Amity Treaty I can own a sole proprietorship business with no Thai partners, but it requires transferring B2million to Thailand and, since I am not married and have not paid any taxes (much less B50,000), I would need to have four Thai employees.

Unless I strike a gold mine of an opportunity with my friends, I doubt the sole proprietorship with those pre-conditions is even remotely possible.

As much as I would like to be their point person in Thailand, helping find suppliers, shopping for materials, ensuring quality control, coordinating with manufacturers and export agents, etc, there really isn't a way to do it in a small, almost part-time, way, is there? I'm assuming I would need a work permit, but how can I get one?

Thanks to anyone who can bring me some clarity on the possibilities, if there are any, for me to get involved with my friends' business while living here in Thailand.

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Under the Amity Treaty I can own a sole proprietorship business with no Thai partners, but it requires transferring B2million to Thailand and, since I am not married and have not paid any taxes (much less B50,000), I would need to have four Thai employees.
A sole proprietorship does NOT require 2 million Baht or even one Baht investment. A Limited partnership or Limited Company does require registered capital of 2 million Baht.
As much as I would like to be their point person in Thailand, helping find suppliers, shopping for materials, ensuring quality control, coordinating with manufacturers and export agents, etc, there really isn't a way to do it in a small, almost part-time, way, is there? I'm assuming I would need a work permit, but how can I get one?

Have 4 Thai employees the first year. The second year go on the basis that you had turnover higher than 700,000 Baht or that you paid personal tax higher than 50K. First year expense for 4 Thai employees is around 265,000 ( including social tax).

www.sunbeltasiagroup.com

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A sole proprietorship does NOT require 2 million Baht or even one Baht investment. A Limited partnership or Limited Company does require registered capital of 2 million Baht.

Cripes. How could I have misread/mangled that so badly? It's B2m to get the work permit for me, right? Still not likely to materialize B2m for ANY reason.

Have 4 Thai employees the first year. The second year go on the basis that you had turnover higher than 700,000 Baht or that you paid personal tax higher than 50K. First year expense for 4 Thai employees is around 265,000 ( including social tax).

Thanks. At least I had *that* part right (about needing 4 Thai employees). Needing four people I don't need. <g> Maybe one or two, but actually I expected to do most of the work myself.

So I would need B2m (for my work permit) and another B265k for four employees the first year. I can't see that working for me. Too bad for my friends who want someone they know and trust to be their liason here in Thailand. I'm not looking for high-volume exports here, just occasional assistance to find (or have manufactured) products for my friends' decorating business. More like a part-time job, not a full-time job. Apparently such a scenario is not workable. Oh, well. Back to retirement.

Thanks for your presence here on the forum, Sunbelt. I'm sure *you* have a full-time job (actually with your restaurants: *many* full-time jobs) and yet you still have the time and effort to help us here.

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Cripes. How could I have misread/mangled that so badly? It's B2m to get the work permit for me, right? Still not likely to materialize B2m for ANY reason.

Once again. You do NOT NEED 2 million Baht registered capital for a work permit for a a sole proprietorship business or natural person. ( This means you or someone else is owning the business with no partners. )

Have partners with a Thai Limited Company or Limited partnership? You want a work permit? You then need 2 million Baht registered capital.

Thanks. At least I had *that* part right (about needing 4 Thai employees). Needing four people I don't need. <g> Maybe one or two, but actually I expected to do most of the work myself.
4 Thai employees is only one option with a sole proprietorship business. You also could qualify by paying 50K taxes last year or gross sale of 700K.

You do not need ANY Thai employees with a Limited Company or Limited Partnership.

So I would need B2m (for my work permit)

No you would not. You stated

Under the Amity Treaty I can own a sole proprietorship business with no Thai partners,

2 million Baht registered capital is NOT required.

and another B265k for four employees the first year. I can't see that working for me.
If you went with that option, that would be the cost.

Too bad for my friends who want someone they know and trust to be their liason here in Thailand. I'm not looking for high-volume exports here, just occasional assistance to find (or have manufactured) products for my friends' decorating business. More like a part-time job, not a full-time job. Apparently such a scenario is not workable. Oh, well. Back to retirement.

One other idea. Do a Thai Limited Partnership under Amity. You as the major partner could pay for your investment by providing a service for the partnership. Most people think paid up capital is cash. The contribution can also be equipment or service as per the Civil Commercial Code.

Your friend would pay for their portion with cash. As the limited partner they cannot use service, the contribution must be in money or other properties. You however as stated can use service as payment for your portion.

With a limited partnership, you do not need to employ 4 Thai employees to get the work permit.

Thanks for your presence here on the forum, Sunbelt. I'm sure *you* have a full-time job (actually with your restaurants: *many* full-time jobs) and yet you still have the time and effort to help us here.

You are welcome. Thank you for the warm thoughts.

www.sunbeltasiagroup.com

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Once again. You do NOT NEED 2 million Baht registered capital for a work permit for a a sole proprietorship business or natural person. ( This means you or someone else is owning the business with no partners. )

Have partners with a Thai Limited Company or Limited partnership? You want a work permit? You then need 2 million Baht registered capital.

Keep that piece of lumber in hand, I may need a few more head beatings before it sinks in.

This is the first thread I've read/followed regarding the Amity Treaty stuff, so please forgive me for being so dense. I didn't realize that a sole proprietorship was different than parntership, regarding getting the work permit. I missed the significance that you stated "Amity Treaty Limited Companies or Limited Partnerships" (to the exclusion of Sole Proprietorship) in the opening post. I was also getting tangled up in separating (a) establishing a business and (B) getting a work permit. Which, now I hope I understand correctly that I do not need a single baht (other than for fees) to do either, as long as I establish a sole proprietorship? i.e. I can do the paperwork and be in business for myself and have a work permit, with no Thai partners and no registered capital required.

4 Thai employees is only one option with a sole proprietorship business. You also could qualify by paying 50K taxes last year or gross sale of 700K.

You do not need ANY Thai employees with a Limited Company or Limited Partnership.

Since I have never paid taxes in Thailand, and for the first year the business will have no previous year's gross sales, the four Thai employees will be needed for the first year. Am I correct on that? (Or, is there a way to pay B50,000 in back taxes when I was not living in Thailand on a proper visa and with no work permit for the previous year?)

One other idea. Do a Thai Limited Partnership under Amity. You as the major partner could pay for your investment by providing a service for the partnership. Most people think paid up capital is cash. The contribution can also be equipment or service as per the Civil Commercial Code.

Your friend would pay for their portion with cash. As the limited partner they cannot use service, the contribution must be in money or other properties. You however as stated can use service as payment for your portion.

With a limited partnership, you do not need to employ 4 Thai employees to get the work permit.

Can the Thai Limited Partnership under Amity be comprised of all falang owners? i.e. Could I be the major partner and one or both of my American friends (living in USA) be the minor parnter(s)? For some reason, I was under the impression that in any partnership, that there had to be Thai partner(s). But, I honestly don't know where I got that idea from.

Regarding my work permit is it correct that:

(a) for Sole Proprietorship, I would need not capital investment shown, but in my particular set of circumstances I would need to have the Thai employees for the first year

(B) for Limited Partnership, I would not need any Thai employees, but would need B2m capital comprising:

(1) cash or value of contributed services (for me) and

(2) cash from my partner(s)

[edited because I pressed the "Add Reply" button too early...]

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Knowing what you all know about my personal situation now, would "Thai Representative Office or Regional Headquarters Office in Thailand" be more appropriate for me, if I wanted to be the point person for my American friends' business?

http://www.thaistartup.com/Representoffice.htm :

A Thai Representative or Regional Office may hire as many Thai employees as necessary, but for this type of registered entity, Thai employees are not required to justify several foreign work permits. At least one foreign manager must be domiciled inside Thailand, where this manager exercises signature authority on behalf of the overseas Head Office under a formal power of attorney from corporate CEO.

What they don't state, is what are the financial (or other) requirements to obtain the work permit.

I need to check what form of ownership my friends use for their business. I'm not sure if they are incorporated, which appears a requirement of this option.

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Keep that piece of lumber in hand, I may need a few more head beatings before it sinks in.
Sorry for the bold print. Had to highlight the difference and now you understand. :o
Since I have never paid taxes in Thailand, and for the first year the business will have no previous year's gross sales, the four Thai employees will be needed for the first year. Am I correct on that? (Or, is there a way to pay B50,000 in back taxes when I was not living in Thailand on a proper visa and with no work permit for the previous year?)

You can pay the tax of 50K for last year. In fact for 2006 it would be due this month. This is only one of the options required for a sole proprietorship.

Can the Thai Limited Partnership under Amity be comprised of all falang owners?
yes
i.e. Could I be the major partner and one or both of my American friends (living in USA) be the minor parnter(s)?

yes

For some reason, I was under the impression that in any partnership, that there had to be Thai partner(s). But, I honestly don't know where I got that idea from.
Amity Treaty Companies do not have that requirement.
(a) for Sole Proprietorship, I would need not capital investment shown, but in my particular set of circumstances I would need to have the Thai employees for the first year

Correct ( or pay 50K in tax)

(:D for Limited Partnership, I would not need any Thai employees, but would need B2m capital comprising:

(1) cash or value of contributed services (for me) and

(2) cash from my partner(s)

Correct

www.sunbeltasiagroup.com

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Since I have never paid taxes in Thailand, and for the first year the business will have no previous year's gross sales, the four Thai employees will be needed for the first year. Am I correct on that? (Or, is there a way to pay B50,000 in back taxes when I was not living in Thailand on a proper visa and with no work permit for the previous year?)

You can pay the tax of 50K for last year. In fact for 2006 it would be due this month. This is only one of the options required for a sole proprietorship.

I didn't officially live Thailand until my Non-Immigrant O visa was activated in Sept 2006 (with an extension for retirement), and never had income in Thailand. Can I still make a B50k tax payment for 2006?

What do I do, just walk into the revenue office, hand them B50k and say here, give me a receipt for B50k tax payment? This sounds too easy! :-) Actually, I was receiving income from my US employer for work performed outside of Thailand. Can I use that income as the basis for Thai taxation (while on a retirement extension)?

Also, I just ran across this thread ( https://www.thaivisa.com/forum/index.php?showtopic=49067 ) which contains a post dated 2005-10-30 by Steve at Indo-Siam saying:

My staff just spent two days and three trips to Work Permit office, trying to get a work permit for US Amity Treaty sole proprietor.

Final decision, without any doubt in their mind - a sole proprietorship is not an entity that is eligible to sponsor a work permit. Period. Decision by the deputy head of the office (or higher).

They went over every detail of a Thai/English three page description of every possible entity and method that was eligible for a work permit and "sole proprietor" is not an eligible entity (a Thai limited partnership is an eligible entity).

This is in keeping with the Thai theory (which is exactly opposite the western theory): In Thailand, EVERYTHING is forbidden/illegal, unless there is a specific law or regulation stating that it is allowed - and providding a procedure checklist for processing the action.

Sunbelt, is this old information? i.e. Have you more recent experience (since 10/2005) with sole proprietorships entitled to a work permit?

(I googled "amity treaty" thailand "sole proprietor" and 21 out of 22 hits were ThaiVisa forum threads.)

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Knowing what you all know about my personal situation now, would "Thai Representative Office or Regional Headquarters Office in Thailand" be more appropriate for me, if I wanted to be the point person for my American friends' business?

http://www.thaistartup.com/Representoffice.htm :

A Thai Representative or Regional Office may hire as many Thai employees as necessary, but for this type of registered entity, Thai employees are not required to justify several foreign work permits. At least one foreign manager must be domiciled inside Thailand, where this manager exercises signature authority on behalf of the overseas Head Office under a formal power of attorney from corporate CEO.

What they don't state, is what are the financial (or other) requirements to obtain the work permit.

I need to check what form of ownership my friends use for their business. I'm not sure if they are incorporated, which appears a requirement of this option.

As you'll see this won't work...

Scope of Representative Office Activities

“International trading business” means activities concerning:

.. The finding of sources of purchase of goods or services in Thailand for the head

office.

.. The checking and control of quality and quantity of goods purchased or hired for

manufacturing in Thailand by the head office.

.. The giving of advice on various aspects concerning goods of the head office sold to

agents or consumers in Thailand.

.. The propagation of information concerning new goods or services of the head office.

.. The report of movements of business in Thailand to the head office.

Activities that the Representative Offices cannot perform

- Preparing purchasing orders or payment for goods on behalf of the head office or its affiliated companies or any activities concerning purchasing.

- Shipment of goods of the head office or its affiliated companies already purchased.

- Checking and controlling the quality and quantity of goods for any companies that are not the head office or its affiliated companies.

- Performing after sale services concerning installation and maintenance.

- Giving advice concerning goods that are not produced or sold by the head office or its affiliated companies.

- Receiving purchasing and selling on behalf of the head office or its affiliated companies.

- Coordinating purchasing and selling on behalf of the head office or its affiliated companies.

- Propagation of information concerning previous goods or services that are already sold in Thailand.

- Carrying out activities as a middleman or agent between the customer in Thailand and the head office or its affiliated companies.

- Planning and coordinating with any organization for business on behalf of the head office.

- Acting as the representative in making any contract or any activities on behalf of the head office or its affiliated companies.

- Reporting information to any companies that are not the head office or its affiliated companies.

Conditions for Representative Office Permission

.. If the representative office employs foreign employee(s), the minimum capital

required to be brought in will be Baht 5 million (out of which Baht 1 million must be

remitted within the first 6 months, and total amount received shall reach Baht 2 million within the first year, and not less than Baht 1 million for every year thereafter until the Baht 5 million amount has been remitted in full).

Immigration and Work Permit Requirements for Representative Office

An application for work permit and application for a one-year visa may be filed after

entering Thailand with a valid non-immigrant business visa and permission to establish a

representative office is granted. The application for work permit and visa must be filed with

the One-Stop Service Center.

.. For the first year of operation, a maximum of three work permits will be issued, and

thereafter the total number of work permits will be limited to five, depending on necessity.

Regional Office

Scope

The activities of a regional Office are limited to the following

...Communicating, coordinating and directing, on behalf of the head office, the operation of branches and affiliates that are located in the region.

.... Providing services in consulting and management.

....Training and personal development

....Financial Management

....Marketing control and sales promotion planning

... Product Development

....Services in research and development

Activities that the Regional Office cannot perform

- Preparing purchasing orders or payment for goods on behalf of the head office or its affiliated companies or any activities concerning purchasing.

- Shipment of goods of the head office or its affiliated companies already purchased.

- Checking and controlling the quality and quantity of goods for any companies that are not the head office or its affiliated companies.

- Performing after sale services concerning installation and maintenance.

- Giving advice concerning goods that are not produced or sold by the head office or its affiliated companies.

- Receiving purchasing and selling on behalf of the head office or its affiliated companies.

- Coordinating purchasing and selling on behalf of the head office or its affiliated companies.

- Propagation of information concerning previous goods or services that are already sold in Thailand.

- Carrying out activities as a middleman or agent between the customer in Thailand and the head office or its affiliated companies.

- Planning and coordinating with any organization for business on behalf of the head office.

- Acting as the representative in making any contract or any activities on behalf of the head office or its affiliated companies.

- Reporting information to any companies that are not the head office or its affiliated companies.

It is also required that the regional office's head office must have at least one other branch or affiliate in the Asia region.

www.sunbeltasiagroup.com

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Sunbelt,

Thanks for you great answers!

I though the following was mandatory:

"You do not need ANY Thai employees with a Limited Company or Limited Partnership."

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Also, I just ran across this thread ( https://www.thaivisa.com/forum/index.php?showtopic=49067 ) which contains a post dated 2005-10-30 by Steve at Indo-Siam saying:

My staff just spent two days and three trips to Work Permit office, trying to get a work permit for US Amity Treaty sole proprietor.

Final decision, without any doubt in their mind - a sole proprietorship is not an entity that is eligible to sponsor a work permit. Period. Decision by the deputy head of the office (or higher).

They went over every detail of a Thai/English three page description of every possible entity and method that was eligible for a work permit and "sole proprietor" is not an eligible entity (a Thai limited partnership is an eligible entity).

This is in keeping with the Thai theory (which is exactly opposite the western theory): In Thailand, EVERYTHING is forbidden/illegal, unless there is a specific law or regulation stating that it is allowed - and providding a procedure checklist for processing the action.

Sunbelt, is this old information?

With all due respect to Steve, it is not correct. I'm not saying that it did not happen; however a work permit is allowed for a sole proprietorship( natural person) in Oct 2005 (as well as before Oct 2005 and after Oct 2005)

i.e. Have you more recent experience (since 10/2005) with sole proprietorships entitled to a work permit?
How bout yesterday? :o By the way, we have done around 130 work permits for natural employers in the past 90 days!
(I googled "amity treaty" thailand "sole proprietor" and 21 out of 22 hits were ThaiVisa forum threads.)

Thats all? :D

What do I do, just walk into the revenue office, hand them B50k and say here, give me a receipt for B50k tax payment? This sounds too easy! :-) Actually, I was receiving income from my US employer for work performed outside of Thailand. Can I use that income as the basis for Thai taxation (while on a retirement extension)?

The definition of Taxable Person

Taxpayers are classified into "resident" and "non-resident". "Resident" means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax (calendar) year. A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand. A non-resident is, however, subject to tax only on income from sources in Thailand.

If you are a resident, you need to file PND #91, if it was earned income from overseas which was brought into Thailand or you earned the funds inside Thailand.

www.sunbeltasiagroup.com

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