The Foreign Business Act of 1999 has identified 3 lists of activities in which foreigners may be prohibited or restricted.

Business activities in List 1 are designated as “businesses prohibited to foreigners to operate due to special reasons. Meaning, foreigners or foreign owned companies are completely restricted from engaging in the activities in List 1. Such business activities are as follows:-

1. The Press, radio broadcasting station or radio and television station business
2. Rice farming, plantation or crop growing
3. Livestock farming
4. Forestry and timber processing from a natural forest
5. Fishery, only in respect of the catchment of aquatic animals in Thai waters and specific economic zones of Thailand
6. Extraction of Thai medicinal herbs
7. Trading and auction sale of antique objects of Thailand or objects of historical value of the country
8. Making or casting Buddha images and monk alms-bowls
9. Land trading

Although other activities that are not mentioned above may be permitted to foreigners, Section 6 of the Foreign Business Act states that foreigners may not operate any business within Thailand if he/she has been deported or whose deportation is pending or if he/she is entering and staying in Thailand without permission under the Immigration law or other laws.

Learn more about the Foreign Business Act and the business activities that you may be able to do in Thailand. Contact Thai Lawyers now for an online consultation.

Today, a client whom we helped register a 100% Myanmar owned export company in Thailand asked us if it is necessary for them to be registered in the VAT system. Here is our response:

Normally, a company is required to register into the VAT system if the gross sale has reached 1.8 million Baht in a year or the company hires foreigners and needs to apply for a work permit because the VAT registration certificate is one of the documents requested by the Thai immigration bureau. Anyway, the company may choose to register into the VAT system before that. And once you are registered into the VAT system, you have to submit your monthly VAT returns (PP.30) with or without sale transactions. You can decide to apply for VAT refund from the Revenue Department later but keep in mind that the tax officer will request to see all supporting documents before giving you the refund.

Thai Lawyers can help you register the company into the VAT system. MSNA Group can handle bookkeeping, accounting, tax filing and consultation on Thai taxes. We will ensure that you’re your documents are properly kept in files for easier reference when tax authorities request to see them. We can also assist you in representing your company with the Revenue Department especially when you apply for VAT refund. However, we will not be responsible to speed up the process because it is up to the tax officials when they can finish checking your documents and consider your application to claim VAT. You may find helpful information on what to do once a company is registered in the VAT system, and how withholding taxes in Thailand work.

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.

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.

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!

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.

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.

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.

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.