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.
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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!
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Limited Company in Thailand: all info here.
Set up a Limited Company: Name and Logo
Be prepared: As soon as your lawyer is ready to start the process for you he will ask you for a company name and a logo.
You can provide 3 different company names in case the first one is already registered. The logo comes later, but prepare it quick because it will be needed to make the stamp that is so important in Thailand along with the Managing Director Signature. No stamp, no valid signature.
The logo can be only a picture or a drawing, basically the image that goes next to the name of your company on your company logo. Therefore, even if you are not sure about the name, you can think about and prepare the logo.
Else you may lose time later waiting for the logo to be prepared.
The stamp will be used along with your signature on all official documents, cheques, work permits copies, etc. Thai people love stamps and signatures. I have signed more documents in the last 2 years with my thai company than in my entire life before!
