We got a question from a client about corporate health
insurance policies. Thailand has Social Security system. The employer is required to deduct 5% (maximum
Baht 750) from the employee’s salary and match the amount from their pocket and
submit it to the Social Security Office. Social Security covers free medical
treatment for most diseases at the hospital the employee chooses when he first
joins the employer. Most companies in Thailand do not offer health insurance
for their employees. However, some big companies do and they seem to be
attractive employers to the job seekers.
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.
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.
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.
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).
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.
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.
Since the last decade, Thailand has been the biggest manufacturer of hard disk drives. Thailand offers low cost, literate, high quality labour and national infrastructure that facilitates the export market. The big digital companies are now manufacturing their products in Thailand to take advantages of these benefits. Some of the conditions and incentives that could help you are listed below.
BOI Activity 5.4.6 Manufacture of hard disk drive
Conditions:
– The areal density of hard disk drives must not be less than 2,000 gigabits per square inch.
– The cost of refurbishment of existing machines shall be regarded as an investment and will be taken into account in the calculation of corporate income tax exemption cap. The original cost of existing machines shall not be regarded as an investment.
Incentives:
An exemption of corporate tax for 8 years.
Exemption of import duties on machinery
Exemption of import duties on raw materials used in production for export
100% foreign ownership
Permit to own the land
Permit to bring skilled workers and experts into the Kingdom
Get in touch with us so we can help you set up your BOI Company in Thailand.
On 1 February 2018, a new visa was launched in Thailand which is known as the SMART Visa. This Visa was introduced to attract new talents and technologies in order to further develop the targeted industries. The SMART Visa program is designed to enhance Thailand’s attractiveness in drawing science and technology experts, senior executives, investors and start-ups. The SMART Visa focuses investment on the “10-S Curve Industries” or the country’s targeted industry.
The 10-S Curve industries or the targeted industries include:
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 biochemical
Digital
Medical hub
The SMART Visa has five different categories that a person can apply for:
SMART “T” Visa is for highly skilled professionals in the science and technology aiming to work in the targeted industries
SMART “I” for investors in companies using technology in manufacturing or delivering services of being in the targeted industries.
SMART “S” for foreign start-up entrepreneurs who wish to invest in the targets industries in Thailand.
SMART “E” for senior executives working the companies using technology and manufacturing or delivering services and being in the targeted industries.
SMART “O” for spouse and children of SMART visa holders.
In order to be eligible, applicants must obtain a qualification endorsement letter from the SMART Visa Unit. During the process, applicants will also need to go through a technical endorsement screening by the designated agencies after which a letter will be issued by the Thailand Board of Investments which the applicants use in order to apply for their SMART Visa.
The benefits of applying a SMART Visa instead of any other type of visa are:
The visa is valid for 4 years instead of the usual 1 year.
There is no requirement of work permit
Spouse and children will have the same rights as the SMART Visa holder in Thailand (only SMART T Visa allows the dependents to work in Thailand)
Extension of Visa (annual reporting instead of 90 days)
No re-entry permits
To see if you are eligible to apply for Thailand SMART Visa, contact us for initial consultation.
Thailand Investment Promotion for Software Park Business
As the digital way of life has now been touching all corners of the Thai society, the software industry is a very crucial driver for the country’s technological, social and economic development. With a very competitive market, Thailand is a very attractive software investment location for its skilled and affordable workforce, with programmers with a strong suit. If you are planning to invest in a Software Park business in Thailand, then the conditions and incentives below might help you.
Conditions:
Project must have high-speed fibre-optic main communication system throughout the area.
The main telecommunication system must have a high-speed cable from the software park to domestic and international telecommunication centre.
Continuous back-up of electricity supply must be installed.
The total area must not be less than 5,000 square meters.
Incentives to set up a software park in Thailand promoted by the board of investment are:
An 8 year exemption from corporate income tax
Exemption of import duties of machinery such as computers and software
Exemption of import duties on raw materials used in production for export
100% foreign ownership
Permit to own the land
Permit to bring skilled workers and experts to work in Thailand.
For further queries, please feel free to read the Thailand BOI information and contact MSNA to help you with your BOI company registration.
Companies in Thailand need to file their audited financial statements within 1 month after their Annual General Meeting (AGM) of shareholders. An AGM must be held by 4 months after the accounting year-end to approve the financial statements. BOI promoted companies need the statutory audit every year like their non-BOI counterparts.
Moreover, the BOI companies that are granted a corporate income tax exemption right can exercise that right in the year that they have profits only after they have complied with the conditions specific to their promoted projects. In filing for the BOI’s approval to exercise such right, they need a Thai CPA to audit their BOI operation to make sure that they have complied with the all conditions set out by the BOI. This auditor can be a different person from the one that performs the statutory audit for the company.
Filing the statutory audited financial statements must be done for every accounting year even when the company was just set up and the whole fiscal period has not completed 1 year. Fiscal year-end depends on the company’s policy. But once chosen, it cannot be changed without the approval of the Director General of the Revenue Department.
Audit for BOI companies has difference procedures than non-BOI companies. Contact MSNA Group for audit services.
