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Posts by Thailand BOI expert

Changing Accounting Year-End

When your company considers changing accounting year-end, for example from 31 August to be 31 December of every year, you need to get approval from both the Revenue Department and the Department of Business Development. Mostly, the documents you need for changing accounting year-end are as follows:

1. Copy of company affidavit;

2. Copy of Minute of Statutory Meeting (This is the document you made when you registered the company. It says whether or not the company has adopted Articles of Association) or copy of the company’s Articles of Association (which most likely says when the accounting year-end is);

3. Minute of shareholders’ meeting with the resolution to change the accounting year-end;

4. Copy of the latest Corporate Income Tax Return and audited financial statements

5. Others

For the Revenue Department you will need to write a letter explain why you want to change your company’s accounting year-end and say what your first accounting period will be once they approve your new accounting year-end. After the RD has checked all your documents, they will approve it and send a letter to the company within a few weeks/months.

After you got the letter of approval from the RD, you will submit online some forms with more or less the above set of documents for changing accounting year-end to the DBD.

Once the DBD approves, you will be able to change your accounting year-end. However, no set of accounts will be for more than 12 months. From the example, if your current accounting year-end is 31 August and you have been approved to change it to 31 December of every year, here are what you will do (now is September 2021):

1. The financial year ended 31 August 2021 – you need to submit the audited financials and corporate income tax return to the Revenue Department within 150 days from 31 August 2021. However, for the Department of Business Development, you need to hold an AGM to approve the audited financials within 31 Dec 2021 and submit it within one month from the AGM date.

2. For the following accounting period, because the DBD’s approval comes out before 31 December 2021, then you will have to close the accounts as of 31 December 2021 within about 5 months about end of May 2022.

Note that if the DBD’s approval comes out after 31 December 2021, then you will close the accounts as of 31 August 2022, then 31 December 2022.

Consult with MSNA Group, your trusted Thai accountants who speak fluent English and have been in the business servicing international business community for over 25 years.

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Smart Visas and Targeted Industries

Foreigners wanting to work or invest in Thailand wonder what smart visas and targeted industries are. Smart Visas were designed to attract experts, investors, executives and startups entrepreneurs wishing to work or invest in the targeted industries in Thailand. Smart Visas allows 6 month to 4-year permit to stay in the country without having a work permit. Here are the four types of smart visas:

  1. SMART “T” (Talent):
    1. Highly skilled professionals in the targeted industries. In this case, the Employers in Thailand must be endorsed for being engaged in the targeted industries by relevant government agencies such as the National Innovation Agency and Digital Economy Promotion Agency.
    1. Experts working in government agencies / higher education institutions / specialized training institutions / Alternative Dispute Resolution (In case of experts working for a government agency, a higher education institution and a specialized training institution in the private sector, the applicant must have expertise in the fields of science and technology in the targeted industries.
  2. SMART “I” (Investor) : Investors in technology-based business in the targeted industries
  3. SMART “E” (Executive) : Senior executives in technology-based companies in the targeted industries
  4. SMART “S” (Startup) : Technology-based startup entrepreneurs in the targeted industries
  5. SAMRT “O” (Other) : Spouse and legitimate children of Smart Visa holders

The above paragraph mentioned the targeted industries many times. They are the industries that the Board of Investment targets to promote in different zones or different times. As of September 2021, the targeted industries are:

  • Next-Generation Automotive
  • Smart Electronics
  • Affluent, Medical and Wellness Tourism
  • Agriculture and Biotechnology
  • Food for the Future
  • Automation and  Robotics
  • Aviation and Logistics
  • Biofuels and Biochemicals
  • Digital
  • Medical Hub
  • Human Resource Development in Science and Technology
  • Environmental Management and Renewable Energy

Contact MSNA Group for your smart visa needs today. We are an expert in BOI promotion process and smart visas, and Thailand work permit.

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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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Smart Visa and Work Permit

Thailand Board of Investment offers a smart visa program in many categories. Smart visa and work permit are two different things. You may think that you have a smart visa, and work permit will never be needed.  Remember that if you want to work for another company, you will need a work permit. Here in this article we want to explain about cancelling a smart visa and getting a work permit to work with another company.

Because your smart visa is related to Board of Investment (BOI) approval, you can cancel it and ask for your stay to remain for upto 21 days after the cancellation. Before doing this cancellation, your new employer company must already have prepared for the new position with the BOI’s single window system. Make sure to study the steps of transferring work permits from a BOI company to another BOI company for a better understanding. Basically, they need to get an approval for your new position first if they have not had it already. Then you process your smart visa cancellation in advance to still have 21 days for your stay. After that your new employer will be able to get the approval from the BOI to fill you into that position.

Most foreigners find smart visa and work permit related issues so complicated. Be it Thailand BOI company registration, smart visa and work permit application, we will guide you through all the steps and make everything so easy for you. We have been in the business of BOI consulting for over 25 years.

Please contact MSNA Group for questions about smart visa and work permit.

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Americans Can Sell Products in Thailand?

Due to the Treaty of Amity between Thailand and USA, signed on May 29, 1966, Americans can sell products in Thailand. The treaty gives, not only Thai and American nationals, the right to enter the opposite party’s territory for business and investment purposes, but also business entities engaging in commercial enterprises in the opposite party’s territory. Therefore both corporate and individual Americans can sell products in Thailand. In fact they can do most businesses in Thailand without having to have majority Thai partners.

Note that there are important exceptions like the fact that the Treaty of Amity allows both parties to impose restrictions on letting the citizens of the opposite party engage in the reserved businesses of communications, transportation, fiduciary functions, banking involving depository functions, land ownership, exploitation of land or other natural resources and domestic trade in indigenous agricultural products.

Non-Americans do not enjoy the same rights as they have to get Thai nationals to be their majority partner. Or they have to obtain a Foreign Business License in order to do business as a foreigner in Thailand. They may be able to get the Board of Investment Promotion for their business if it is one in the eligible activities, which will enable them to have the majority foreign ownership of the business. Whether Americans or not, the BOI promotion is always the best way for foreigners to do business in Thailand. It gives the right to own land for the foreigners, the right to sponsors many work permits without the infamous ratio of THB 2M capital and 4 Thai employees for each expat, import tax exemption or reduction and corporate tax exemption in many cases, etc. Of course there are more conditions to be met than non-BOI companies.

You want to work with MSNA Group for your Treaty of Amity business needs. You may be able to get the BOI promotion for your American business. We have many solutions for you.

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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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Making Payment to a Singapore Company from Thailand

Today we got a question about making payment to a Singapore company from Thailand. The invoice is for research services rendered in Singapore for use in Thailand. For this we look into the double taxation treaty between Thailand and Singapore. The vendor does not have a permanent establishment in Thailand, so in this case Singapore, not Thailand, should get the tax from the business profits. Therefore when the Thai company makes payment to the Singaporean company, it does not have to withhold tax to submit to the Thai Revenue Department.

The next thing to really consider is whether the Thai company has to submit VAT on behalf of the Singaporean company. Since the research services were rendered in Singapore and the result of the work was to be used in Thailand, VAT must be submitted with Form PP36 by the 7th of the month following the payment. If the Thai company is VAT registered, it can use the receipt of PP36 as one of its input tax invoices and claim back the amount of VAT in the Form PP30 of the same month as PP36 submission.

Looking for a great team of Thai accountants who speak fluent English at reasonable prices? Contact us today.

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Writing Off Debts By Companies

Here we want to talk about writing off debts by companies which can happen when the creditors are related to the company (shareholders, group companies, etc). Thai accountant should know how to treat writing off debts by companies on the accounting books. You have to recognize the amounts as the company’s income. They are part of the profit to calculate corporate income tax for the year.

When you are closing down a Thai limited Company, most likely the company still has liabilities in its accounting books. You need to send a registered mail to each creditor to let them know you have decided to close down. This is so that if they have money owed by the company, they will know where to contact the liquidator. If you do not pay any of the debts, it will become an income. The treatment is the same as writing off debts by companies.

Do you need to pay VAT on the income recognized from writing off debts? Thai Tax Law does not impose VAT on revenue from forgiven debts as it is not compensation from selling goods or services. To summarize, when writing off debts by companies, you need to consider how much corporate tax the company will pay. In case of closing down the company, if you choose to leave the liabilities on the books, the Thai revenue department will make you recognize them as incomes which may make the company have a profit, thus pay tax, anyway.

For accounting, audit, closing down companies, etc., contact MSNA Group now.

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