Let The Buyer Beware
So, you’ve decided to get involved in a business in Thailand. You’ve been living here for a while, or you’re contemplating moving here and think that having a business might be the way to go to earn a living in the LOS. A quick scan of the local papers, such as the Bangkok Post, and you’ll find advertisements – in one dedicated section of the paper – for legal firms offering help in business formation and registration. The cost advertised, for doing as much, looks amazingly inexpensive. Some, advertise that it can be done for as little as twenty thousand baht. The reality is that it will cost you a lot more than advertised and I hope that my own recent experience, of dealing with a local – farang owned – legal firm, will be a warning to others.
I’ve been living here for a number of years now and decided that getting a proper visa would probably be a good idea. I work in a well paid profession and spend at least half of the year working overseas. For this reason I decided that I would go down the road of company registration and a non B category visa as I will probably be working for at least another eight years before retiring. I wasn’t actually looking at working in Thailand under the umbrella of my registered company. I just wanted the option, if need be, at some point in the future of being able to buy property under a company name.
With this in mind, I made an appointment with a well known, and well advertised, local, farang owned legal firm. The initial contact was all very friendly and, after outlining what it was that I wanted to do, I was given a brief run down on what would happen and presented with a bill for forty two thousand baht. At this point, the impression I had, from this company’s representative, was that the forty two thousand would be it and no more. I duly paid up and took my leave.
It was only later, when I’d had more time to think about it, that I realised that would not be it. What about things like minimum declared income tax, company taxes, VAT filing fees and company audits? It didn’t add up and, much to my disappointment, this, so called professional operation, hadn’t been completely up front about all the additional costs and, importantly, what the total costs were going to be.
With this in mind, a few days later I made an appointment to talk with them again. Once again, I was welcomed by the same smiling faces. I started asking questions and the smiling faces became not so smiling and not so friendly. An expert was ushered into the room to explain, in more depth, what the costs would be. It turns out that the total cost for the first year of operation – including the initial set-up fee – would be around 130,000 baht. This meant that the annual running costs, for using this company’s services and, not including visa runs / renewals, would work out at about another seventy to eighty thousand baht above my initial deposit. If I wanted a work permit then that was a whole different ball game and I would be looking at a total cost of somewhere in the vicinity of 250,000 baht. I said I needed some time to consider things and would be in touch. The expert, whose eyes were as shifty as any wheeler and dealer I’ve ever met in Thailand, smiled smugly and took his leave.
In hindsight, it could be said that I was naïve, that I hadn’t done my homework. There will be some that read this, who work in the same line of business as mentioned above, and say well, that’s business, it’s your own fault. The fact is that 42,000 baht isn’t a huge amount of money – it’s about one and a bit days pay for what I do. However, the thing that I can’t cop is this: here’s an operation that, purportedly, is a wholly professional business. They spend large amounts advertising that fact. From what I’ve seen they are neither professional nor are they entirely honest. Why not advertise / explain total costs right from the get go? What’s the hidden agenda?
During the conversation with the expert I discussed the possibility of changing tack and going for a retirement visa instead. I was told by the expert that, in some instances, it was possible to get a work permit on a retirement visa. It wasn’t ‘entirely legitimate’ but, ‘as long as your work permit endorsement was placed at the back of your passport, and the immigration authorities didn’t look there, when entering the country, then you’d be alright’. These were his words (or something to that effect). To say that my eyebrows were raised (when this was suggested) would be an understatement.
A few days afterwards I emailed the company to enquire what the situation would be if I wanted to get a retirement visa instead. No problems I was told, just fork up another 22,000 baht and everything will be sweet. If anyone wants to know the name of this company, email me.
The bottom line is this: when you see an ad in a local newspaper telling you that a company can be set up for 20,000 baht, it’s bollocks old sport.
Have fun and be good – if you can’t be good then be good at it.
The costs of setting up a company here and then all of the ongoing expenses ultimately mean that anyone wanting to set up a very small operation simply to be legal face much larger bills than they initially expected – and this can render the idea of doing so useless. Then there are the rules regarding a minimum number of employees, their social security contributions and it all starts to look like it is headed for the too hard basket.