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Archives for Foreign business in Thailand

Representative Office in Thailand Wants to Earn Income

What do we mean by “Representative Office in Thailand wants to earn income”? Many foreign companies first started their operation in Thailand as a representative office. They thought they only wanted to do the business activities that do not involve earning incomes, which are one or more of the below. Later they want to start selling their products/services in the country.

The activities that are allowed to be engaged by a Representative Office:

1) To report the business movements in Thailand to the head office or affiliated company or the group company;

2) To give advice on various aspects pertaining to the goods distributed by the head office or affiliated company or the group company to the distributors or the users;

3) To seek for the supply source of goods or services in Thailand for the head office or affiliated company or the group company;

4) To inspect and control the quality and quantity of the goods that the head office or affiliated company or the group company purchased or hired to manufacture in Thailand;

5) To disseminate the information in relation to the new goods or services of the head office or affiliated company or the group company.

When the head office overseas wants to change its course in Thailand, they need to apply for a foreign business license to operate their income earning activities. Then they need to cancel their representative office status. A representative office cannot be transformed into a branch office. This is because a representative office does not need to obtain a foreign business license. It just needs to notify the Department of Business Development who will issue a document called “Certificate of the Identification Number of the Juristic Person established under foreign laws which operates in Thailand”. However, a branch office of a foreign company, to operate their business in the Kingdom, needs to apply for a foreign business license.

MSNA Group has been helping foreigners set up their branch office, representative office, Thai limited company and BOI promoted company for 25 years. Consult with us for your business needs today.

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Opening a restaurant in Thailand

Opening a restaurant in Thailand

You might already thought about opening a restaurant in Thailand to contribute your unique taste in the “Kitchen of the World”. Well, that’s a good idea, but here are some pitfalls you should wonder about.

No matter what type of business you are attempting to run, Thai company registration laws apply to you and vary depending on your type of business.

The bad news that you can’t just easily and legally run a 100% foreign owned restaurant in Thailand, because  the bar and restaurant ownership in Thailand is subject to the rules and regulations contained within the Foreign Business Act.

The only one way is to find Thai partner who you can trust and open a Thai company. That means the majority of shares in this company must be owned by that Thai citizen. And you as a foreigner can only own up to 49% of that company. This limit can be exceeded or exempted for certain business activities, if a Foreign Business License is granted, but not in this case.

The process of opening a restaurant in Thailand

The process begins with reserving the name of the company with the Department of Business Development. You have to submit a minimum of three company names which follow current ministry regulations. The DBD will choose then one out of the three.

Next, the promoters must file a Memorandum of Association with the Commercial Registration Department. If you are going to have foreign workers, some requirements must be met:  2 million baht minimum registered capital and 4 Thai employees per one work permit for foreigner.

After filling a Memorandum of Association directors should submit an application within 3 months to register the company.

Once registration is finished, the company can begin the process of getting business licenses and start the operation of its new business. For restaurant, you have to get food license from FDA Thailand as well as alcohol license, in case you want to sell beer and other sprits.

If you have personal questions, don’t hesitate to contact ThaiLawyers – qualified English speaking lawyers that can help you to go through entire process of registration step by step.

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How to Write a Business Plan For Your New Startup

So you have a new idea and are excited about it. We want to hear about it too. Here we want to talk about how to write a business plan for your new startup. We will cover most of the things that your future investors and lenders need to see so that they understand your vision. If you don’t know how to write a business plan for your new startup, it is OK. We can help you do it.  With our help, it is very likely that you will be able to get funding.

Normally a startup business plan has a one-page Executive Summary in the beginning, which is a summary of the whole business plan. Some readers only read the executive summary and can make a decision already. The business plan should have at least the following topics:

  1. The Company or your background
  2. Mission & vision

– Mission – Describe your organization’s mission

– Vision – Describe your organization’s vision

  • Management team – List the people behind the idea and briefly describe their role.
  • Products / services – Describe features and benefits of your products and services.
  • Technology and innovation applied – Explain why your startup is innovative.
  • Industry description/ competition/ trends

– Industry description – Explain how your startup impacts to the targeted industry*.

– Competition – Who are your competitors (company or business)? How is your product/service different from others? What can you do better that really matters to consumers or profitability?

– Trends – How do you see the overall trend affect your product/services?

  • Marketing & sales strategies

– Marketing strategies – Who are your target customers? How are you going to promote and distribute your products/services?

Sales strategies – How are you going to get customers or clients to buy your products/services?

  • Financial plan/ Exit strategy/ Funds required

– Financial Plan – Explain funding & investment plan. How are you going to seek funding? What are you going to do with the money?

– Exit strategy

– Funds required

  1. Revenue model – Explain how the startup is going to make money, the average price of sales or services the startup will receive and from which group of customers, etc.
  2. Growth strategies – Explain your growth objectives and how you intend to develop your startup business.

Contact MSNA Group for our expert advice because we know how to write a business plan for your new startup!

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100% Foreign Owned Company to Sell Software in Thailand

Many foreign companies want to enter the Thai market to sell their software or platform. Some want to just hire an employee in The Kingdom and do the business. Others want to set up 100% foreign owned company to sell software in Thailand. Both violate the Foreign Business Law. If you want to retail or wholesale your software and do not want to have majority Thai partners in your company, you will need to obtain a Foreign Business License for your 100% foreign owned company to sell software in Thailand. Most likely you will not get approved because Thai majority companies can sell software too. You need to be able to prove why Thailand needs your foreign majority company to do the business that Thai people can do.

Now we want to point out the law; Numbers 14 and 15 from Schedule 3 annexed to Thailand Foreign Business Law, are about retail and wholesale of goods:

14. Retail of goods of all kinds having the total minimum capital less than Baht 100,000,000 or having the minimum capital of each shop less than Baht 20,000,000; and

15. Wholesale of goods of all kinds having the minimum capital of each shop less than Baht 100,000,000.

If you can have Baht 100M capital, then you can have 100% foreign owned company to sell software in Thailand. However, most likely, you do not want to set up a company with Baht 100M capital. That means you will not be able to own the majority of your company in Thailand for doing such business.

Now, if you want to develop software or platforms in Thailand, you may be eligible to apply for the Board of Investment promotion, which will allow you to sell the software you make. Read here for how we answered questions about Thailand BOI companies for software developers.

Talk to MSNA Group today to discuss many solutions that we have for you.

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Companies From India Got BOI for 100% Foreign Ownership

Some of our clients, companies from Indore, India, got BOI to operate as 100% foreign ownership companies, with MSNA Group’s assistance. One got the BOI promotion for software activity for the software development business. Another one got the Board of Investment approval to operate in Thailand with 100% foreign ownership in the Trade and Investment Support Office category for their telecommunication engineering business. Hear what our clients say about working with MSNA Group:

“We are entities based in Indore, India, in the businesses of Software, Digital translation and Telecom Network Infrastructure.  We have been using Thai Lawyers Ltd./MSNA Group to set up our Thailand BOI companies since 2017. It is always a wonderful experience with the many services offered by MSNA Group. – Mr. Manmohan Saxena, Financial Controller, Diaspark Infotech Private Limited

We thank you so much for your business. Our team enjoy working with you too. We strive to have our clients’ most satisfaction.

Foreigners looking to have 100% foreign ownership in their business in Thailand, please contact ThaiLawyers or MSNA Group. We have solutions for you. Whether you are in the service business, IT, manufacturing, engineering, etc., you may be able to get a BOI company, which will allow 100% foreign ownership and many work permits.

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Accounting for BOI companies with various sources of incomes

Accounting for BOI companies with various sources of incomes

Most people misunderstand and assume that with the BOI status, they can receive incomes from many different sources. We want to explain here that having a BOI promoted company does not always mean you can always do any businesses and earn incomes from different sources. But in case you can (explain down here), you want to read further about accounting for BOI companies with various sources of incomes.

Thailand Foreign Business Law allows foreigners to do certain business activities. For most business activities, if you do not want to have a Thai majority partner, you need to get a permission to operate the business. One way for foreigners to own their business 100% is to get a BOI promotion whose main purpose is to promote investment in the businesses that truly benefit Thailand. The companies with BOI promotion can operate only the business activities that the BOI approved on the BOI certificates.

Now assuming that your company’s major shareholders are Thai, you may still want to get the BOI promotion for the tax benefits; corporate income tax exemption, machinery import duties reduction, etc. The benefits granted by the BOI are only for the business activities approved by the BOI. However, as a Thai company, you will be able to do other business activities too. This is when you have to be careful in your bookkeeping. In doing accounting for BOI companies with various sources of incomes, you need to separate the incomes and expenses into BOI business and non-BOI business. For the expenses that are paid for the whole company (benefiting both BOI and non-BOI businesses), you will have to allocate them using the most reasonable method. If 40% of the office space is used for the BOI business and 60% is for the non-BOI business, then you will allocate rents accordingly. If specific employees only work for your BOI business, then their salaries will be allocated to the BOI business while the other employees’ salaries will go to non-BOI business.

Contact us today to find out if your business is eligible for BOI promotion or if you need help with accounting.

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Providing Motion Picture Support Services in Thailand

motion picture support services

Providing Motion Picture Support Services in Thailand

Foreigners who want to do the business of providing support services to motion picture business in Thailand can apply for BOI promotion under activity ”7.21 – Motion picture support services” to get distinct benefits and be able to have 100% foreign owned company in Thailand.

 

What support services can get a BOI certificate

Here is the short overview of conditions you have to comply with in order to get a BOI certificate:

“Motion picture support services shall include documentaries, television programs, animation and commercials, which have a scope of business, as follows:

  • Rental services of movie production equipment and/or movie production props must have main equipment machinery, such as camera, grip equipment, light set, etc.
  • Film development and duplication services must have main equipment/ machinery, such as film development machine, film duplication machine, digital film duplication machine, etc.
  • Sound recording services must have main equipment/machinery, such as digital sound recorder, digital sound editing machine, digital sound mixing machine, etc.
  • Picture technical services must have machines and equipment capable of creating special pictures that are not possible with cameras. The service providers must have main equipment and machinery, such as standard definition/high definition digital recorders, editing suites, digital compositing and special effect creation, etc.
  • Coordination services for foreign movie production in Thailand must include coordinating with related government agencies for permits, location scouting and sourcing of staff and movie equipment. “

 

What to do to get the BOI Certificate

On the BOI website, you can download an application form. There are a lot of numbers and details that you will have to spend a lot of time and energy on trying to understand them and making them the way the BOI want to see and will approve your project. We suggest you get expert help from Thai Lawyers Ltd. so you can focus on getting clients and opening up new markets and making lots of money quickly.

 

Register a company

While waiting for the approval for Thailand BOI, company registration process can be started.

You can take a look at fully explained process of company registration here.

 

What else

Once you registered a company and got your BOI certificate you can start to conduct your business activity. However, you still need to apply for a Foreign Business Certificate to comply with Thailand Foreign Business Law.

Contact us today for consultation and read a similar article on how to set up a film production company in Thailand.

 

 

 

 

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Franchise Food Business in Thailand

food franchise in thailand

Franchise Food Business in Thailand

Anyone wanting to become a franchisor must have been operating their business for at least 2 years.

 

As a franchisee, here are the two ways you can operate your franchised business in Thailand:

  • Register a Thai company with 51% shares held by Thai shareholders.
  • If you do not have Thai partners to hold the majority shares in your business, then as a foreigner majority company, you will have to get a Foreign Business License, which is not easy to get.

 

After registering a company, you should:

  • Sign an agreement with the franchisor, who is the owner of the brand and know-how.
  • Apply with the Ministry of Public Health for the license to operate the place for cooking. This is so that you can have a cooking place in your restaurant.
  • Submit sign board tax at District Office where your restaurant is located within 15 days after putting your sign board up.
  • Register into VAT system and Social Security system.

 

These steps above take a lot of time and effort. Consult with MSNA Group, who will give you the best advice so you can spend time and energy on things that are more important.

 

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Manufacturing plastic products from recycled plastic

Manufacturing plastic products from recycled plastic

Manufacturing plastic products from recycled plastic

Thailand is strengthening its role as a leading global hub of plastics manufacturer, with makers placing greater emphasis on value-added and environment-friendly products. The Thai plastics industry is growing consistently, and demand in the vigorous domestic economy is the key driver.

 

To promote sustainable growth in the plastics industry together with protection of the environment, the BOI classifies projects in the manufacture of eco-friendly plastics as priority activities of special importance to the country. Therefore, these are given maximum investment incentives.

 

The only condition that a business needs to follow in order to become a manufacturer for plastic products from the recycled plastics is that it must have plastic forming process using domestic plastic raw materials only.

 

The incentives that can be given to this project are those under A4 category which includes:

  • 3 years of corporate tax exemption
  • Exemption of import duties on machinery
  • Exemption of import duties on raw materials used in the production for exports
  • 100% foreign business ownership
  • Permit to own land
  • Permit to bring skilled workers and expert to work into the Kingdom.

 

If you are planning to register your business in Thailand, please do not hesitate to contact MSNA for more information. We are experienced in BOI application, setting up a company, getting Foreign Business Certificate, visa and work permit application.

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Opening a Business in Thailand

Opening a Business in Thailand

Opening a Business in Thailand

Do you want to open a company in Thailand but don’t really know how to proceed or the process might seem difficult? Do not worry, we at MSNA can give you the best solution.

The procedures depend on the type of company that you will set up. Let’s discuss it in details.

 

A. Registering a Thai company with 51% shares held by Thai shareholder

Pros:

  • Your company can do business right after registration.
  • The process is much easier because you don’t need to get special license.

Cons:

  • If you want to hire foreigners to work, your company must have 2 million Baht capital and hire 4 Thai employees in order to apply for one work permit.

How to register:

  • You need at least 3 shareholders (if you have 2 foreigners, then you need 1 Thai).
  • The number of shares to be held by Thai must be at least 51%. This Thai shareholder must show proof of funds (at least 6 months update of bank statement showing enough money to buy the amount of shares they will hold).
  • Please read the steps here

 

B. Other options:

If new Thai limited company will be doing only export activities from Thailand or manufacturing goods in Thailand, then it can be foreign majority owned without obtaining a Foreign Business License.

  • Get BOI certificate (Board of Investment)

Pros:

  • It would be fine if you don’t have a Thai partner as long as your business activity falls under any category of eligible activities for BOI promotion.
  • Tax exemption such as corporate income tax, tariff exemption or reduction on import machinery and raw material (depending on the company’s activity).
  • Non-Tax privileges such as permission to own land, permission to bring foreign expert to work on the promoted projects, exemption on foreign ownership of companies and exemption from work permit and visa rules.

Cons:

  • Not all activities are eligible to obtain a BOI certificate. Please checkout Foreign Business law here 
  • If your company’s activity is not in this list, you will need to get Foreign Business License.

How to register:

  • The process to get BOI is summarized here

 

Registering a business in Thailand can be troublesome but we at MSNA can make it convenient for you. Contact us now for initial consultation.

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