Each year thousands of new people move to Thailand in order to set up their own small business. The government is very open to new businesses and they encourage entrepreneurship. There are numerous programs to help business people develop the right structure for their business, get it registered and operational. The Alien Occupation Law has been set in place for foreigners coming to Thailand to work or start a business. It is a type of Work Permit that must be obtained before starting work. There are three types of organizational structures for a business in Thailand. Those are discussed below.
This is a business type where one individual is the sole owner and responsible for all debts, operations and business dealings. This is the simplest business to set up and requires the least amount of paperwork and/or monetary investment. Regulations and requirements vary by industry or business type. There are several licenses and/or permits for a sole proprietorship. The business and the owner are considered one in the same. For instance, if you were to file bankruptcy in your personal finances, it would carry over to the business.
If you hire employees to work for you, there are withholding income taxes that must be taken out of each employee's salary. Tax preparation is usually easier and less expensive for this the sole proprietor than others.
One of the first things to do when opening any type of business is to register the business name. The name you choose must not be already in use. As you prepare your paperwork for this, you must list the names and personal information about each partner in the business. When registering your new partnership, you must submit a prescribed list of documents with the registrar at the Department of Business Development. The main branch of this is located in Bangkok, with other filing offices located in other provinces. See their website for the location of the office nearest to where your business will be situated.
The company will also need a tax ID card and VAT certificate and these can be obtained through the Central Filing Office of the Revenue Department in Bangkok. There are various accounting procedures that must be followed and these can be found in the Civil and Commercial code, as well as the Revenue Code and the Accounts Act. It's best to hire a local accountant who understands how to file the annual balance sheet with the Department of Revenue and Commercial Registration. Errors can be costly.
Two types of partnerships exist. An ordinary partnership is defined as all partners owning the company jointly and equally responsible for debts. A Limited Partnership is where one partner is only liable for an amount equal to his investment in the company. Both types must be registered with the Commercial Registrar's office. They must also file their taxes each year as a corporate entity. The business must be run by the partner who has unlimited liability. Fees range from 1,000 baht to 5,000 baht for registration.
The Factory Act
Administered by the Ministry of Industry, The Factory Act governs the construction and operation of factories, including safety and pollution-control requirements. Not all factories must be registered, but check with a local consultant to make sure before opening the doors of your business. Licenses may be valid for up to five years and can be renewed.
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