Thailand Visa: The Non-Immigrant Investment Visa
The concept of the investment visa is not new in Thailand.
For example, after the crisis of 1997 an investment visa with a ceiling of not less than 3,000,000 THB of investment was created as an incentive to help Thai developers to sell their stock of condominiums units’ leftover of the crisis to foreign investors. This visa was discontinued in October 2006 once Thai economy picked up.
Note: Discontinued only means that new applications for this particular investment visa were not accepted after the 1st October 2006 but foreign investors who have invested not less than 3,000,000 THB, have entered Thailand and received a permission to stay before the 1st October 2006 and have since then renewed their visas each year without any interruption are still benefiting from this promotion.
Now as a result of Thai political crisis and the world economic crisis Thailand has reintroduced the concept of the investment visa. The only difference with the former investment visa is that the minimum investment ceiling has been increased from 3,000,000 THB to 10,000,000 THB.
Is the new investment visa a good thing?
The new investment visa is very welcome because it permit to fill a gap in Thai visa offer.
Indeed for the past 3 years we did not have a real visa alternative to offer to wealthy foreign citizens below 50 years old that wanted to live in Thailand on a long term basis without working. Now this gap is filled and this is a good news for everyone.
Of course the minimum investment ceiling has been increased a lot (from 3,000,000 THB to 10,000,000 THB) but with new condominium units pricing ranging from 80,000, 100,000, 125,000 and even 350,000 THB per sqm most investors purchasing condominiums or leasing houses in Thailand will fulfill the minimum investment criteria.
And if the condominium you purchase cost less than 10,000,000 THB then you will still have the option to combine two types of investments to reach the ceiling (for example a condominium of 7,000,000 THB and state bonds of 3,000,000 THB).
Conditions to obtain the new investment visa
The foreign investor that wishes to obtain a one year visa investment must:
(1) have been granted a non-immigrant visa (Non Immigrant); and
(2) have evidence of transferring funds into Thailand of no less than Baht 10 million; and
(i) have evidence of investing in the purchase or rental of a condominium unit for a period of no less than 3 years issued by a relevant agency or government, at a purchase or rental price of no less than Baht 10 million; or
(ii) must have evidence of investing in the form of a fixed deposit of no less than Baht 10 million with a bank which is registered in Thailand and has Thai nationals holding more than 50 percent of its shares; or
(iii) must have evidence of investing in the purchase of government or state enterprise bonds of no less than Baht 10 million; or
(iv) must have evidence of making an investment as set out in criteria (3), (4), or (5) with a total value of not less than Baht 10 million.
Note: The only catch is that this promotion only apply to foreign investors that have invested after the 25 November 2008 and onward. Those that have purchased condominium units between the 1st October 2006 and the 25 November 2008 do unfortunately not qualify.
Documents requirements
As always you will need
- Passport or travel document with validity of not less than 6 months;
- Completed visa application form.
- Recent passport-sized photograph (4 x 6 cm) of the applicant taken within the past 6 months.
- Documents to support that you have indeed invested 10,000,000 THB in Thailand (such as Foreign Exchange Transfer Form, Bank Credit Advice, Sale and Purchase Agreement and Title Deed and so on….)
If you fulfill all the conditions mentioned above and if you are able to provide all the documents required you will be able to receive each year a one year extension period for as long as you maintain your investment in Thailand.
Note: passport requirement validity of not less than 6 months is for when you apply for the 90 days Non Immigrant Visa at the Thai Embassy. When you apply for the one year extension period at the Thai Embassy you will need 18 months of validity at least.
Warning
The documents listed above are the minimal requirements applicable and the fact that you have provided all the documents requested does not always guarantee a favorable outcome.
—
Article from “Doing Business in Thailand”, by Rene-Philippe DUBOUT, lawyer since 1990.
© Copyrights 2009 – Rene Philippe Dubout
You want to start a limited company in Thailand? Contact us now.
Business in Thailand: Introduction to Thai VAT
Thai accounting is very specific, and so is VAT. The “Doing Business in Thailand” blog gives you a quick introduction about how VAT works in Thailand. Here is an excerpt:
“The VAT system was introduced in Thailand in 1992 that is to say at the same time than the Special Business Tax (SBT). In a nutshell most transactions (exchange of goods or services) that are occurring in Thailand are either subjected to VAT or to the SBT.The principle of VAT is simple, any business which having a turnover of more than 1,800,000 THB per annum, and that is not subject to the Special Business Tax, must register for VAT within 30 days of the date they reach 1,800,000 THB in sales.
[...]
What transactions are subjected to the VAT rate of 7%?
Thailand official VAT rate is actually 10% not 7%. But VAT rate was reduced to 7% as part of the economic measures taken following the crisis of 1997. The reduced rate of 7% has been since then confirmed every year.
Are subjected to the 7% VAT rate all sales of goods or services rendered in Thailand and all import of goods (but for exempted goods). Imported goods are subjected to both custom duties and VAT.
Note that they are different rates of VAT depending of the type or nature of the transaction.
[...]
What are the Transactions exempted from VAT?
Are exempted from the VAT the sale of goods which is not an export, or provision of services under (1) Section 81 (1) which includes sale of agricultural produce, animal and animal feeds, fertilizer, chemical products for eradicating weeds, sale of newspaper, inland transport service, rental of immovable property; or under (2) Section 81 (2) such as sale of agricultural produce, animal and animal feeds, fertilizer, chemical products for eradicating weeds, sale of newspaper, etc.
Finally are exempted from the VAT small business where tax base does not exceed 1,800,000 Baht.
Are VAT refunds easy to obtain?
A lot of businessmen are complaining (with reason) about the Revenue Department slowness when coming to VAT refund. Yes it takes times and it is not a pleasant process.
One of the reasons it’s takes so much time to get refund is because Thai Revenue Department has been when the system was first implemented defrauded of hundred millions THB of fake taxes refund. The second reason is that Thai Revenue Department is not different from the tax administration in your own country, always eager to collect money more reluctant to refund it.
[...]
Article from “Doing Business in Thailand”, by Rene-Philippe DUBOUT, lawyer since 1990.
© Copyrights 2009 – Rene Philippe Dubout
To go further read the full article here. More info about Company set-up in Thailand here.
Limited Company: withholding tax
The withholding tax is one of the nightmares of an entrepreneur in Thailand. At least it is a nightmare for me! Not only the withholding tax but all the taxes that one has to deduct before payment, including the income tax for salary.
The withholding tax is a tax that one has to deduct of the payment for a certain kind of services. The tax vary between 1 and 3% depending on the kind of service. Not only one has to remember to not pay the tax (the invoice does mention the full price to pay and does not deduct any tax) but one has also to know how much to deduct per kind of service! And then, one has to prepare a document to give to the service provider, together with an invoice receipt. This document proves that the tax has been withhold. The invoice receipt confirms that the invoice has been paid!
Regarding salaries it’s the same. One has to deduct the income tax from each and every salary. If the salary changes one month from the other (commission for sales staff for instance), one has to calculate the salary and the income tax every month!
A (good) accountant is very much appreciated.
—
Limited Company in Thailand: all info here.
Limited Company: how many Thai employees?
“Do I need 4 Thai employees?”
Ask the question 10 times and you will get 10 different answers. Which is true with many other regulations in Thailand, but this one being probably the most typical.
From what I understood (and what I’m actually experiencing) the answers is “Yes, but”.
Yes, officially one needs to have 4 employees for 1 work permit. 8 for 2. 12 for 3. No discount here. And there may be sometimes when they actually control it.
But as of today, one doesn’t really need the 4 Thai employees.
The thing is that IF your company has 4 Thai employees per Work Permit and IF your company makes profit, after the first year of activity you can get a 1 year Work Permit and no need to leave the country for 1 year. Whereas if you don’t have 4 Thai employees and/or if you don’t make profit, you keep on getting a 3 months WP and the obligation to accomplish a Visa Run every 3 months and renew your WP.
I’ve heard that this may change and that they may require you to have 4 employees in any case. But we hear so many things…
Note: the minimum salary for your 4 thai employees is 6000 baht per month. Each!
—
Limited Company in Thailand: all info here.
Limited Company: chosing a Bank
This is a difficult part. Thai banks don’t offer the standards of western banks or banks from other Asian countries like Singapore or Hong Kong, especially in term of wire transfer, international payments and Internet banking.
One thing particulary anoying for instance is that it is never mentioned on your account summary, when you receive a payment, where it comes from. You have to look at your invoices and find the closest amount (the amount is never exactly the same as it seems that the Thai banks always take a minimal fee) to find out.
From my own experience, I have been very disapointed with Bangkok Bank and I recommend Kasikorn Bank. Kasikorn bank offers good services and a pretty good Internet banking solution.
Set up of a Limited Company in Thailand: how much?
As I run a company in Thailand, I though it would be interesting to publish a few posts about setting up, running and managing a company here. This is the first of a serie of posts about this topic. Check also the “Set up a company” page in the “Work” section for more information. The page is still a draft but I will add more information days after days.
First thing to know. To set up a company in Thailand costs money. Money for the capital and money for the lawyer. And also a few expenses.
The official minimum capital for a Limited Company in Thailand is 2 million baht (i will only talk in baht here as the equivalent amount in euro or US dollars changes all the time), but you can start by delivering only 25% of it. That is still 500 000 baht.
The lawyer will charge you around 30 000 baht for the Company Registration (Company’s name registration, Statutory statement, Company seal, Company social security registration, Company VAT registration, etc.). He will also charge you anywhere between 10 000 and 30 000 baht for the Work Permit (the price can be very different from one lawyer to the next, therefore you should compare).
You will have to provide an address for the Company. This is one of the most important thing at the beginning. If you rent an apartment and want to make it your company address, you need the authorisation of the owner. Else you will have to rent a place, that will be a minimum of 5000 baht per month.
Add the internet, phone, electricity, etc. bills, that is another 5000 baht per month.
And last but not least, for a good start, a good accountant. Accounting is difficult in Thailand and I suggest a good accountant. Mine charge me 6000 baht per month.
Let’s summarize the costs for a start:
500 000 baht (company capital) + 30 000 baht company setup + 15 000 baht work permit + 10 000 baht first month rent and expenses + 6000 baht first month accounting, this is 561 000 baht.
In my opinion, one shouldn’t start a company in Thailand with less than 600 000 baht available. Note: this is the money to start, then there is the running budget. This will be the topic of the next post.
—
Limited Company in Thailand: all info here.
